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USO fund cleared

New Delhi, July 10: The Cabinet today approved an amendment to the Indian Telegraph Act to give statutory validity to the two-year-old Universal Service Obligation (USO) Fund, a corpus created to help telecom firms provide services in unviable mostly rural areas.

The USO Fund, which today exists as a body managed by an administrator, will now be able to invite bids from private telecom companies which want allocation of resources from the fund to complete village public telephone (VPT) projects.

If a company quotes the lowest capital investment for providing communications facilities in a village, it will get the necessary financial support from the fund.

Communications minister Arun Shourie said the amendment in The Indian Telegraph Act of 1885 would be initiated through a bill in the monsoon session of Parliament. Till date, the government has collected Rs 1760 crore by levying a USO fee of 5 per cent of the total licence fee.

The government has already allocated Rs 300 crore out of the fund. BSNL has received Rs 296 crore with the remaining Rs 4 crore being distributed to Bharti, Reliance, Tata, HFCL, Shyam and Hughes Telecom.

The Cabinet also approved the allocation of Rs 65 crore annually to the controversial Media Lab Asia project that faced a financial crunch after the exit of Massachusetts Institute of Technology from the project.

The steering committee of Media Lab Asia has also been reconstituted with members from the ministry of human resource development, Indian Institute of Technology, and ministry of science and technology forming part of the new committee.

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