How does the change from USOF to Digital Bharat Nidhi under the Telecommunications Act, 2023 change India's approach to universal service obligations?

The Universal Service Obligation Fund (USOF) was created under the Indian Telegraph (Amendment) Act, 2003, with effect from 1 April 2002. It was renamed Digital Bharat Nidhi (DBN) under the Telecommunications Act, 2023 [1]. The change is more than a new name. Universal service used to mean subsidising rural telephony infrastructure. It now means digital inclusion that is judged by outcomes.

1. Legal and institutional shift

• DBN rests on a new statute, not the colonial-era Telegraph Act. It works as an attached office of DoT [1].
• The Telecommunications (Administration of DBN) Rules, 2024 set out how the fund is run [3].

2. Wider scope

• The focus moves from village telephones to broadband, R&D, pilot projects and new technologies, for underserved rural, remote and urban areas.
• It supports area-targeted schemes: the 4G Saturation Project and mobile coverage for LWE areas, Aspirational Districts, the North East and islands [1].

3. From building assets to using them

• The Amended BharatNet Program costs ₹1,39,579 crore, of which only ₹42,847 crore is capital spending. The rest pays 10 years of running costs (OPEX) [2].
• The Tamil Nadu Utilisation Agreement (Oct 2026) subsidises the use of the network. It targets more than 5 lakh rural home fibre (FTTH) connections [1]. By Dec 2025 there were only 808 such connections [4].
• This answers the CAG's finding that only 17.91% of BharatNet bandwidth was used. The CAG recommended SLA-linked funding, i.e. payment tied to service-level performance [5].

4. Cooperative federalism

• Under the State-led model, States can choose their own agency over BSNL. Tamil Nadu chose TANFINET, and the agreement is a three-way pact between DBN, the State and TANFINET [1].

5. Gaps that remain

• The Parliamentary Standing Committee found that only about 30% of Gram Panchayats had a working BharatNet connection [3].
• It flagged tendering delays and weak capacity in implementing agencies [3].

A new name changes nothing unless the funding is designed differently. DBN's real change is that universal service is now measured by active users rather than kilometres of cable laid. To keep this on track, DBN should pay for each active connection, run regular State-wise audits as the Committee advised, and support demand through devices and digital skills. That would move India towards SDG 9.c's goal of universal, affordable internet access.