Universal service and public access in the networked society

Telecommunications Policy

Volumn 21, Issue 9-10, 1997, Pages 829-843

  Xavier, Patrick ^a  

^a SWINBURNE UNIVERSITY OF TECHNOLOGY   (Australia)

Author keywords

[No Author keywords available]

Indexed keywords

COMPETITION; INFORMATION TECHNOLOGY; PUBLIC POLICY; TELECOMMUNICATION CONTROL; TELECOMMUNICATION EQUIPMENT; TELECOMMUNICATION NETWORKS; BROADCASTING; COMPUTER NETWORKS; ECONOMIC AND SOCIAL EFFECTS; INTERNATIONAL COOPERATION; MARKETING;

UNIVERSAL SERVICE OBLIGATIONS (USO); NETWORKED SOCIETY;

TELECOMMUNICATION SERVICES; TELECOMMUNICATION;

EID: 0031260769     PISSN: 03085961     EISSN: None     Source Type: Journal    
DOI: 10.1016/s0308-5961(97)00050-5     Document Type: Article

References (28)

1. The provision of universal service in telecommunications is also considered to have important 'externality' benefits (that are not recognized by suppliers and would, accordingly, result in undersupply of the service). As new customers join the network, the value of being on the network increases for all customers because they can - either actually or potentially - access a larger number of other users. It is also argued that other externalities exist since telecommunications, as a means of communication, can provide an alternative to services such as transport, thereby avoiding the costs of pollution and congestion. Also there may be benefits from access to a telephone in case of emergency and in helping to reduce crime. (See eg OFTEL Universal Telecommunications Services: Proposed Arrangements for Universal Service in the UK from 1997 Office of Telecommunications, London, February 1997, p 8).
2. Perhaps the clearest way to further explain the concept of universal service in telecommunications is to describe its practical requirements. The provision of uneconomic telephony services subject to universal service obligations has generally been through cross-subsidization usually through relatively high long distance charges and low charges for local access and use. In a number of countries universal service obligations require a telecommunications operator to: (1) meet all reasonable demands for basic telephone service, including rural and remote areas; (2) provide public payphone boxes in specified numbers, geographical distribution and serviceability; (3) prohibit the use of prices (or other terms and conditions) which discriminate against certain groups, including people in rural areas; (4) provide special (eg residential low-user) scheme which recognize the problems of low income customers; (5) provide free directory information services for blind and disabled people; (6) provide free public emergency call services; (7) provide priority fault repair services for long term sick and disabled people; (8) provide text relay services for deaf people; (9) provide special telephones for the hearing-impaired; (10) provide facilities for hearing-impaired people in public call boxes. While the above universal service requirements pertain to a basic voice grade service, it is notable that the telecommunication line supplied has also enabled low-grade access to facsimile, E-mail and Internet services.
3. The question about what upgrading, if any, is required to the scope of USOs in response to rapid technological advances is being addressed in a number of countries. Those whose concerns are driving this reconsideration of USO coverage can be usefully categorized into: • people without access to the standard telephone service; • people with access to the standard telephone service but who regard their level of voice telephony service as inadequate; • people with access to the standard telephone service but who regard their level of service as inadequate because it delivers inadequate performance for services other than voice telephony, such as facsimile, data and access to the Internet; and • people with access to the standard telephone service delivering acceptable performance for services other than voice telephony, such as facsimile, E-mail-data and access to the Internet, electronic commerce and educational applications, but who want further enhancements or new services. For a more detailed discussion see Australian Department of Communications and the Arts, Report of the Standard Telephone Service Review Group. December 1996. Internet site http://www.dca.gov.au)
4. To mention just three from this journal: Blackman, C 'Universal service-obligation or opportunity?' Telecommunications Policy, 1995, 19(3), 171-176; Compaine, BM and Weinraub, MJ 'Universal access to online services: an examination of the issue' Telecommunications Policy, 1997, 21(1), 15-33; and Noam, EM 'Beyond liberalization III: Reforming universal service' Telecommunications Policy, 1996, 20(1), 3-10.
5. To mention just three from this journal: Blackman, C 'Universal service-obligation or opportunity?' Telecommunications Policy, 1995, 19(3), 171-176; Compaine, BM and Weinraub, MJ 'Universal access to online services: an examination of the issue' Telecommunications Policy, 1997, 21(1), 15-33; and Noam, EM 'Beyond liberalization III: Reforming universal service' Telecommunications Policy, 1996, 20(1), 3-10.
6. To mention just three from this journal: Blackman, C 'Universal service-obligation or opportunity?' Telecommunications Policy, 1995, 19(3), 171-176; Compaine, BM and Weinraub, MJ 'Universal access to online services: an examination of the issue' Telecommunications Policy, 1997, 21(1), 15-33; and Noam, EM 'Beyond liberalization III: Reforming universal service' Telecommunications Policy, 1996, 20(1), 3-10.
7. Australian Bureau of Transport and Communications Economics Communications Futures: Final Report Australian Government Publishing Service, Canberra (1995).
8. Federal-State Joint Board on Universal Service, Recommended Decision. Before the Federal Communications Commission, Adopted 7 November 1996.
9. Canadian Government Building the Information Society: Moving Canada into the 21st Century, Ottawa (1996).
10. OFTEL Universal Telecommunications Services: A Consultative Document on Universal Service in the UK from 1997. Office of Telecommunications, London (1995).
11. BT Universal Telecommunications Services in the UK from 1997 BT London (1996). BT's response to OFTEL's consultative document.
12. Australian Department of Communications and the Arts op cit December 1996.
13. Broadband Services Expert Group Networking Australia's Future: The Final Report of the Broadband Services Expert Group Australian Government Publishing Services, Canberra (1994).
14. BT op cit Ref 9.
15. Australian Department of Communications and the Arts, December 1996.
16. Murroni, C Universal Service Obligations in Telecommunications Institute for Public Policy Research, London (1996).
17. Australian Department of Communications and the Arts, December 1996.
18. Australian Department of Communications and the Arts, December 1996.
19. For an indication of such benefits see Ref 1. It should be noted, however, that while the existence of external benefits may support an argument for payment of a government subsidy, it does not justify mandating provision of a loss-making service at supplier cost.
20. While still open to criticism, the fact that it is now less specific on the technology to be used makes this policy at least an improvement on the policy announced by the same government (soon after its election) that Telstra would be subjected to accelerated roll-out, wider coverage and price cap requirements for its ISDN service. The concern here is the extent to which such technology-specific government requirements can distort technological and competitive neutrality. The Australian Telecommunications Act 1997 also confirms as a USO the requirement that untimed local calls for non-voice (eg facsimile and data) as well as voice calls be provided to residential customers. Business has been given the legislated right to untimed local voice calls. This approach is intended to facilitate community access to, and use of, data services like the Internet, while addressing subsidy issues and potential network congestion by controlling business usage. While consumers will have ongoing access to current Telstra local call zones, they will also be able to benefit from the ability of service providers to offer alternative local call zones. In addition, a scheme is to be put in place by 1 January 1998 to give the approximately 16000 customers who do not currently have access to untimed local calls, because of their remote geographic isolation, benefits comparable to those available to customers benefiting from untimed local calls. (Australian Department of Communications and the Arts Overview of Australia's New Telecommunications Legislation Paper presented by Tom Dale to the 1997 IIC Telecommunications Forum, Tokyo, 21-22 April 1997.)
21. Australian Department of Communications and the Arts, April 1997.
22. See, for instance, UK Government Building the Information society: a national strategy HMSO, London (1996).
23. Australian Department of Communications and the Arts, December 1996.
24. For instance, the UK Cable Communications Association offers free broadband connection to every school passed. In the US, in January 1997, Time-Warner Cable unveiled a free educational package of material for bringing cable TV and high-speed Internet access technologies into classrooms in its service areas as it upgrades its network. In addition to free connections, Time-Warner plans to provide workshops to teach educators how to use the new technologies (Telecommunications Reports, 13 January 1997). In Australia, the telecommunication carriers, Telstra and Optus, have implemented various initiatives in relation to the provision of higher level services to particular community access points.
25. OFTEL Universal Telecommunications Services: Proposed arrangements for Universal Service in the UK from 1997 Office of Telecommunications, London (1997).
26. The Swedish approach is similar. The former monopoly, Telia is required by its license to provide universal service while other operators do not have USOs. With Telia's net costs for universal service estimated to be fairly low (about 1 per cent of the revenues from the telephony service), despite the onset of competition other operators will not be required to contribute to the financing of Telia's USO. However, if the situation changes, for example, if Telia's revenue from telephony services decreases significantly due to stronger competition, or if the USO becomes too big a burden for Telia, other operators would be required to contribute to USO financing through a universal service fund.
27. OFTEL Information Highways: Improving access for schools, colleges and public access points. The report of OFTEL's Task Force on the Telecommunications Industry Office of Telecommunications and London (1997). Other Task Force recommendations were that the telecommunications industry should: (1) Initiate discussions with representatives of the further education sector to better understand the telecommunications requirements of these colleges and to identify measures which help meet the needs of these colleges including access to appropriate bandwidth on terms which are affordable. (2) Initiate discussions with representatives of the Library and Information Commission and the Library Association to better understand the telecommunications requirements of public libraries and develop packages to meet identified needs. (3) Play its part in actively promoting and disseminating the benefits of external telecommunications links to schools, further education colleges and public libraries. (4) Develop charges which are predictable and controllable to enable effective budgeting of on-line expenditure (the inability to do so is currently seen to be a major impediment to many schools, colleges and libraries using on-line services). (5) Allow schools, further education colleges and public libraries to purchase network connections separately from services so that they are free to choose which company they buy services from and are not tied into taking service from the company providing the network connection. (6) Work in partnership with software producers, equipment manufactures and others to ensure that schools, further education colleges and public libraries have the full range of services they need and can access them in a user-friendly way. But, as the Task Force itself recognized, telecommunication links are just one aspect of what is required to use advanced services effectively. The public access approach raises questions about how the rest of any overall package for schools might be made available, including: (1) internal networking; (2) end user equipment; (3) user training, support and maintenance; and (4) applications and services.
28. The report of OFTEL's Task Force on Information Highways: Improving Access for Schools, Colleges and Public Access Points (op cit Ref 25, 8) argues that providing schools colleges and public libraries with telecommunication links to advanced services can bring significant benefits: (1) to the UK economy through the development of the technological skills base; (2) to learners through, for example, access to a rich variety of up-to-the minute material not available locally; access to interactive learning; access to remote specialist teaching; use of sophisticated software such as integrated learning systems which tailor work programs to the needs of individual students which some studies have shown can lead to considerable learning gains; providing mainstream and other improved opportunities for those with special educational needs; and developing individual IT skills; (3) to teachers for training, advice and support, resource material for lessons and the sharing of ideas with peers; (4) to the management and administration of schools, colleges and libraries by, for example, enabling the two-way exchange of information with external organizations on-line, organizing time-tables, improving security and providing remote management of information and communications technology when resources are not available on-site; (5) to those without access at home who stand to lose out in the information revolution unless they can access services elsewhere; and (6) to the telecommunications industry and other industry sectors involved in the provision of information and communications technology which stand to benefit from an expanded market.