74 No. 37261 GOVERNMENT GAZETTE, 24 JANUARY 2014 9.2.1 The Universal Service and Access Fund Section 87 of the ECA establishes the Universal Service and Access Fund (USAF). Section 89 requires every holder of a licence granted in terms of the Act to make a contribution to the USAF, which must not exceed 1% of the licensee's annual turnover. The purpose of the USAF is to subsidise various activities and sections of the population in attaining UAS including: Assisting needy people in meeting the cost of accessing electronic communications and broadcasting services; Financing the construction of communications infrastructure in underserviced areas; Subsidising the procurement of communication services and access to infrastructure by public schools and further education institutions; and Financing the establishment of broadcasting centres and electronic communication access centres. The utilisation of funds in the USAF for some of the above purposes is dependent on the development of certain regulations. For instance, section 90 of the ECA obligates USAASA to provide incentives to electronic communications network service licensees to construct, operate and maintain electronic communications networks in under-serviced areas through the award of project grants. However, before this can happen, ICASA is required to prescribe regulations defining under-serviced areas eligible for construction payments from the USAF. 9.2.2 The Education Rate (E-Rate) To address the affordability of accessing services by specific institutions, the ECA empowers ICASA to prescribe regulations regarding the E-Rate. According to the SADC USF implementation guidelines, an E-Rate can be used to address universal access challenges for schools that already have an infrastructure connection. However, quality bandwidth and the existence of one or several ISPs in the desired geographical areas for the schools to choose from are important factors for the success of an E-Rate programme. 9.2.3 Underserviced Area Licences (USALs) Underserviced Area Licences (USALs) were issued in terms of the 2001 Telecommunications Amendment Act. The idea behind USALs was to extend telecommunication services in under-serviced areas, that is, those areas with a teledensity of less than 5%. As indicated above, service exclusion may arise because users may be living in areas that are uneconomical to serve or have low population density. USALs were also an attempt at promoting entry by SMEs, historically disadvantaged persons, and women in the telecommunications sector. The Minister of Communications identified 27 areas that were declared as under-serviced. USALs were subsidised from the USAF to the tune of R15 million each to roll out infrastructure over a period of three years. 9.2.4 Universal Service and Access Obligations Universal service and access obligations (USAO) refer to various obligations imposed on licensees, related to either their service or spectrum licences. The rationale for USAO stems from the general recognition that in their absence there will be a significant number of people who are excluded from specific services, such as telecommunications, broadcasting or postal services. There are various types of obligations that together or individually are generally referred to as universal service and access obligations. Examples include the following: universal 70 This gazette is also available free online at www.gpwonline.co.za