NOFN/BBNL-Back to Square One Almost

I have not written for a while. Been busy in another sphere of regulation. However, I was drawn back to my much neglected blog by TRAI’s recent Consultation paper on Implementation Model for BharatNet (BBNL has been rechristened BharatNet.)

So, after almost five precious years down the line and with nothing to show except inflated project estimates and an unnecessary bureaucracy created by way of BBNL, India’s National Optic Fibre Network (NOFN) plan is being subject to public consultation. Its almost a case of reinventing the wheel which is right there in front of you by way of the existing regulatory structure of India’s Universal service Obligation Fund (USOF). USOF Rules require the Government to provide incentive to telecom operators (public/private) to venture into commercially non viable rural telecommunications by way of subsidy to close the viability gap. The projects are to be designed with appropriate bidding units in mind (state/district etc.), subsidy benchmarking is to be carried out and projects are awarded through reverse bidding with the subsidy benchmark acting as the upper limit.

Had this been adhered to 5 years ago, we would have had the village to block level OFC laid out on open access basis by now. Different segments  (say state wise village to block level OFC, if states had been chosen as the bidding unit) would have been owned by different operators but connected at the district level to existing nation wide networks. This would have provided much needed OFC back haul at village level to telecom operators who often had to rely on unreliable microwave back haul, and provided a strong impetus to large/niche/small players in the rural broadband space.

Even now the TRAI paper talks about Build Own Operate and Transfer as the one option that would come closest to the USOF model. Why transfer. Why must the Government own telecoms infrastructure in a liberalised environment and be saddled with this depreciating asset? The whole philosophy of Universal Service has been lost in translation in the Indian scenario.   The creation and compulsion of  continued survival of BBNL is perhaps the reason why the Government cannot discard the concept of ownership. This goes against international best practices that point to smart, targeted use of universal service funds to incentivise operators and then leaving them to manage their business.The idea was never to create Government owned assets or to use the USOF to pay salaries to a bureaucratic organisation like BBNL. Unless our goals are clear , we will never get this right.

Please also see my previous posts on NOFN and BBNL.