NEWS – The Department of Telecommunication released draft rules for the administration of Digital Bharat Nidhi (DBN) for a 30-day public consultation

HIGHLIGHTS

• DBN replaced the Universal Service Obligation Fund (USOF) through the Telecommunications Act, 2023, which was passed by Parliament and received presidential assent in December.

Establishment and Purpose

• The USOF was established to provide telecom services in remote and rural areas at affordable prices through a universal access levy.
• Sections 24 to 26 of the Telecommunications Act, which renamed the USOF as DBN and defined its funding, came into effect on June 26, 2023.

Funding and Administration

• Section 25: Payments received for DBN will first be credited to the Consolidated Fund of India and then transferred to the DBN by the central government (upon parliamentary approval).
• Funds are designated exclusively to:
  • Provide access to telecommunication services in underserved rural, remote, and urban areas.
  • Support pilot projects and consultancy assistance.
  • Support research and development.
  • Support the introduction of new telecom services, technologies, and products.

Proposed Rule Changes

• The proposed rules aim to replace rules 523 to 527 of the Indian Telegraph Rules, 1951, which governed USOF operations.
• New rules will not override existing arrangements until their expiry.

Administrative Structure

• The central government will appoint an “administrator” of the DBN.
• The administrator will select “DBN implementers” through bidding or invitation of applications from eligible persons.
• DBN implementers, upon receiving funding, must offer services to underserved areas in an open and non-discriminatory manner and comply with instructions from the DBN administrator.

Selection and Implementation

• DBN implementers will be selected through bidding to improve access to established telecom services in underserved areas, similar to USOF rules.
• A new provision allows for selection through application for research and development of new or emerging telecom technologies.

Administrator’s Powers

• The administrator will have the authority to:
  • Formulate bidding and application procedures.
  • Disburse funds.
  • Specify terms related to assets created through DBN funds.

Key Omissions in New Rules

• Definitions of financial terms such as “capital recovery”, “net cost”, and “revenue” have been removed.
• Definitions of technical terms like “village public telephone”, “secondary switching area”, and “broadband connectivity” have been omitted.