Universal Service Fund faces problems

JAMAICA’S YAWNING digital divide, running along traditional economic fault lines, is being starkly highlighted in schools as the island restarts a stalled education system with online classes. There are growing fears of poor children in underperforming schools, with limited access to technology, being left further behind because of the COVID-19 pandemic.

But even as the authorities search for solutions to this immediate concern, there is a clear need for a robust and honest assessment not only of its 15 years of existence, but of the future of the Universal Service Fund (USF) – the government agency that was to spearhead the closing of the connectivity gap. As it is currently structured, the USF’s circumstance doesn’t look at all bright.

Transmitted largely by people who are close to each other, and without a vaccine against the disease, the most effective way to slow the spread of the coronavirus is by limiting mingling – physical distancing. That, for schools, has largely meant an absence of, or very limited physical classes.

There is a pivot to online teaching and learning. The problem, however, is that tens of thousands of children have no computers, or live in homes without or have intermittent connection to the Internet. The situation is similar for hundreds of schools, especially in inner-city and rural communities.

This situation, as this newspaper underscored in its reports on Sunday, disproportionately impacts schools with large numbers of students who are ill-prepared for either primary or secondary education and whose parents often struggle for their livelihoods.

THE AIM

A case in point is Holy Trinity High School in Kingston, where last week only 45 per cent of its 1,162 students logged on for classes, and only 60 per cent of the grade 7 (first form) intakes did so for orientation. Usually, according to teachers at Holy Trinity, more than half of its first-formers require much remedial effort to prepare them for secondary education. In other words, students at Holy Trinity, and many more across Jamaica, often start with a deficit, which will probably grow worse if, in this environment, they are without the technological tools to access their education.

The USF was designed to ameliorate, and preferably prevent, situations such as these. Indeed, it is currently funding the provision of 40,000 tablet computers to children on the Government’s welfare programme, as well as 25,000 for teachers. The Government will also provide J$20,000 subsidy vouchers to a further 36,000 children who are not on welfare but fall just outside the requirements for it.

Even with these interventions, experts note, scores of thousands of students will have neither computers nor smartphones, or only infrequently. If they do, Internet connections will often be dodgy, either because it isn’t available in their communities or their parents can’t afford to pay for it consistently.

When the USF’s predecessor, the Universal Access Fund, was started in 2005, the aim was, by and large, to make access to the Internet, as the name suggests – universal. Its focus would be community and school-based.

The USF’s income is from a US$0.03 levy on all foreign calls to mobile telephone calls in Jamaica, US$0.02 on calls to landlines, plus a three per cent tax on certain products and services provided by domestic telecoms. The agency has provided computer laboratories in several schools, established computer/Internet access points in some communities and established Wi-Fi hotspots in a handful of public spaces. Several years ago, it also distributed 30,000 tablets to schools in a pilot project under the Government’s eLearning project.

DWINDLING INCOME

Until relatively recently, however, the school programme appeared to have stalled. There have also been questions about the efficiency with which USF and its partner agencies have managed their affairs, as well as concerns that the Fund may have strayed from its core mission. These are matters worthy of analysis and debate. The agency, though, faces a larger and potential existentialism problem. It’s a matter of if it will have the money with which to pursue its mandate.

For example, in the 2010/11 fiscal year, five years after its establishment, the USF collected J$1.2 billion in levy payments. Five years later, the 2015/16 financial year, that had increased 29 per cent to J$1.55 billion, or seven per cent higher than the previous year. Since then, however, its earnings have dived – J$1.3 billion in 2016/17 and J$972 million in 2017/18. In 2018/19, the last year for which the USF’s accounts are publicly available, revenue was J$591.18 million, 39 per cent lower than the previous year’s and 59 per cent of what it projected to collect. Put more starkly, in 2018/19, the USF’s take from the levy was only 38 per cent of what it was three years earlier.

The problem for the agency is Voice over Internet Protocol (VoIP). In other words, rather than using their phones to make switched calls, people are increasingly moving to data traffic, utilising facilities such as WhatsApp, Facebook and other messaging and video-chat services. There are fewer regular landlines and mobile calls to tax.

The USF still has over $13 billion in assets, but the business model, clearly, isn’t sustainable. The conversation should now be about whether it should continue as is until it dies, or if there is appetite for shifting the basis of the tax. Or maybe there are other ways to fund the scheme.