Digital Bharat Nidhi (DBN)

India’s Department of Telecommunications (DoT) released draft rules for the Digital Bharat Nidhi (DBN) on July 4. The goal is to improve and expand efforts to connect people to the Internet, especially in rural, remote, and poor urban areas.
This plan changes the current Universal Service Obligation Fund (USOF) by moving money to help make phone services more accessible and broad.

What is the Universal Service Obligation Fund (USOF)?
The USOF was created in 2003 to improve telecom services in parts of the country that don’t make a lot of money. It is funded by a 5% tax on telecom operators’ adjusted gross revenue (AGR).

Objectives:

Expand telecom networks: DBN funds will be used to encourage private companies to set up infrastructure in areas where it might not be commercially viable for them. This will increase network coverage and improve access.
Promote affordability: The initiative aims to make telecom services more affordable in underserved regions, potentially through subsidies or other programs.
Support R&D: DBN will also fund research and development (R&D) in telecommunication technologies and products. This can lead to innovations that improve network efficiency and service delivery in remote locations.
Pilot projects and consultancy: The fund can be used to support pilot projects that test new technologies or approaches to improve connectivity. Additionally, consultancy and advisory services can be funded to identify and address specific challenges in different regions.
Introduce new technologies: DBN can support the introduction of next-generation telecommunication technologies like 5G in underserved areas. This will bridge the gap and ensure these regions are not left behind in the digital revolution.
Inclusive access: The draft rules for DBN emphasize targeted access for disadvantaged groups like women, people with disabilities, and economically weaker sections.
Current Status:

• The DBN was established through the Telecommunication Act, 2023.
  The Department of Telecommunications (DoT) released draft rules for its administration in July 2024. These draft rules are currently open for public feedback until August 3rd, 2024.
  The DBN is a significant step towards achieving the vision of a digitally connected India. Its success will depend on the effective implementation of the program and its ability to address the specific challenges faced in different regions.

 About The Universal Service Obligation Fund (USOF) :

It  is being replaced by the Digital Bharat Nidhi (DBN)/ It played a key role in bridging the digital divide in India.

Functioning:

• USOF was a pool of funds collected through a levy on the revenue earned by telecom operators.
• This levy was deposited in the government’s Consolidated Fund of India and then used for USOF projects after parliamentary approval.
• USOF provided financial support (subsidies) to telecom service providers in the form of Net Cost or Viability Gap Funding (VGF).
• This VGF helped to bridge the gap between the cost of providing services in these areas and the revenue that could be generated.