Universal service in the European Union

Government Information Quarterly

Volumn 16, Issue 4, 1999, Pages 329-343

  Bauer, Johannes M ^a  

^a MICHIGAN STATE UNIVERSITY   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

EID: 0033475214     PISSN: 0740624X     EISSN: None     Source Type: Journal    
DOI: 10.1016/S0740-624X(00)86838-0     Document Type: Article

References (32)

1. After the Maastricht Treaty of the European Communities changed their name to "European Union." The term "European Community" is now used to refer to the former European Economic Community, 1992.
2. In 1996, the difference between urban and rural areas varied from a factor of 1.2 in Germany to 2.9 in Finland. See International Telecommunication Union, World Telecommunications Development Report 1998 (Geneva, 1998), pp. A28-A31.
3. The Scandinavian countries. (Sweden, Finland, and Norway) had agreed early on to a regional wireless standard and experienced the most rapid growth. Nevertheless, growth rates in Europe have exploded after the recent liberalization. The EU average growth rate for mobile phones between 1997 and 1998 was 66%, with peaks in Portugal (148%) and Austria (121%).
4. Between 1984 and 1998, public assets in telephone companies worth more than $100 billion were sold by European governments. The majority of these sales were carried out during the past three years. For a more detailed discussion see Johannes M. Bauer, "Telecom Privatization in Europe: Patterns and Effects," unpublished manuscript, Department of Telecommunications, Michigan State University East Lansing, MI, 1999.
5. See Organization for Economic Co-operation and Development, Communications Outlook (Paris, 1997) and Eurodata Foundation. T-Basket (London, 1999).
6. See Organization for Economic Co-operation and Development, Communications Outlook (Paris, 1997) and Eurodata Foundation. T-Basket (London, 1999).
7. Eli M. Noam, Telecommunications in Europe (New York: Oxford University Press, 1992) provides a detailed overview of the evolution of public-private sector relations in European telecommunications.
8. See Marcellus S. Snow, "The state as stopgap: Social economy and sustainability of monopoly in the telecommunications sector," Review of Social Economy, 46 (April 1988): 1-23.
9. For a general discussion of this approach see Theo Thiemeyer, "Deregulation in the perspective of the German gemeinwirtschaftslehre," Journal of Institutional and Theoretical Economics, 139 (October 1983): 405-418.
10. See Yair Aharoni, The Evolution and Management of State Owned Enterprises (Cambridge, MA: Ballinger, 1986); John Vickers & George Yarrow. Privatization: An Economic Analysis (Cambridge, MA:MIT Press, 1988).
11. See Yair Aharoni, The Evolution and Management of State Owned Enterprises (Cambridge, MA:Ballinger, 1986); John Vickers & George Yarrow. Privatization: An Economic Analysis (Cambridge, MA: MIT Press, 1988).
12. Often, failure and success follow each other. For example, the French publicly switched telephone network was of rather poor quality until the mid-1970s. However, in an ambitious modernization strategy, France Telecom leapfrogged a generation of technology and built a fully digital network by the 1980s. The upgraded network allowed the development of the Minitel system as a public platform for many business applications. The Minitel also illustrates the disadvantages of commitment to large infrastructure project as is has likely slowed the migration of French users to the next generation of network platform, the Internet.
13. For a more detailed discussion of EU policies see European Commission, Directorate general XIII, Status Report on European Telecommunications Policy (Brussels, March 1999) available at http://www.ispo.cec.be. See also the discussion in Thomas Kiessling & Yves Blondel, "The EU regulatoryframework in telecommunications: A critical analysis," Telecommunications Policy, 22 (1998): 571-592.
14. For a more detailed discussion of EU policies see European Commission, Directorate general XIII, Statusreport on European Telecommunications Policy (Brussels, March 1999) available at http://www.ispo.cec.be. See also the discussion in Thomas Kiessling & Yves Blondel, "The EU regulatory framework in telecommunications: A critical analysis," Telecommunications Policy, 22 (1998): 571-592.
15. The initial document is European Commission, Developing Universal Service for Telecommunications in a Competitive Environment: Communication to the Council and European Parliament, COM (93) 543 (Brussels: Commission of the European Communities, November 15, 1993).
16. See also the examples provided by Milton Mueller, "Universal service as an appropriability problem: A new framework for analysis," in Toward a Competitive Telecommunication Industry, edited by G. W. Brock (Mahwah, NJ: Lawrence Erlbaum Publishers, 1995), pp. 225-243.
17. This aspect is highlighted by William H. Melody, "Telecom reform: Progress and prospects," Telecommunications Policy, 23 (1999): 7-34.
18. The current pattern of technological change requires network upgrades that affect the common cost component of local networks. Thus, there is an upward pressure on access prices while usage prices tend to fall. See Melody, "Telecom Reform."
19. See the discussion in Harmeet Sawhney, "Universal service: Prosaic motives and great ideals," in Toward a Competitive Telecommunications Industry, pp. 205-224. See also Jan Van Cuilenburg & Pascal Verhoest, "Free and equal access: In search of policy models for converging communication systems," TelecomMunications Policy, 22 (1998): 171-181.
20. See the discussion in Harmeet Sawhney, "Universal service: Prosaic motives and great ideals," in Towarda Competitive Telecommunications Industry, pp. 205-224. See also Jan Van Cuilenburg & Pascal Verhoest, "Free and equal access: In search of policy models for converging communication systems," Telecommunications Policy, 22 (1998): 171-181.
21. Universal service obligations (USOs) are defined in the European Commission's Directives on Full Competition (1996), Interconnection (1997), and on Voice Telephony (revised 1998). For a detailed discussion of the legislative history of universal service in Europe see European Commission, First Monitoring Report on Universal Service in Telecommunications in the European Union, Communications from the Commission to the European Parliament, Council, Economic and Social Committee and Committee of the Regions (Brussels: CEC, February 1998). Available: http://www.ispo.cec.be.
22. The EU uses a variety of promotional measures, including funding for research and development (R&D), support for new applications such as electronic commerce, and the dissemination of information to advance a better understanding of information technologies. The Trans-European Networks (TEN) initiative supports the deployment of advanced networks across Europe. The most recent of a series of R&D initiatives, the Fifth Framework Programme (1998-2002), earmarks several billion Euros for projects emphasizing, among others, the creation of a user-friendly information society and new methods for work in an era of electronic commerce. The framework program Promoting the Information Society in Europe (PROMISE) encompasses several additional initiatives to stimulate the information society in Europe.
23. This emphasis has deflected attention from an alternative notion of universal service as an infrastructure investment for the evolution of open communications system. For arguments in support of this approach see Stephen Garnham, James Cornford, & Simon Marvin, "The socio-economic benefits of a universal telephone network: A comment," Telecommunications Policy, 20 (1996): 3-10.
24. See Kiessling & Blondel, "The EU Regulatory Framework in Telecommunications," p. 589, note 107.
25. National estimates of the magnitude of funding needed to compensate operators for universal service obligations range between 0.8% of the turnover of BT in the United Kingdom to 5.5% of the turnover of France Telecom in France and KPN in the Netherlands. See European Commission, "Monitoring Report," p. 17.
26. The introduction of full competition was delayed for Greece (2001), Ireland (2000), Portugal (2000), and Spain (December 1998).
27. Data on the status of the European Information Society are published and updated regularly at http://www.ispo.cec.be/esis/ and http://www.ispo.cec.be/polls/.
28. It is likely that information access will become bifurcated into freely available and commercially priced information. The boundaries between these two subsets can be shaped by public policy and will have a tremendous impact on the openness of the emerging information society.
29. It is interesting to note that the Commission endorsed a universal service financing model that channels funds to service providers and not to individuals. Such an approach may have undesirable distributional effects, subsidizing low and high-income users indiscriminately.
30. Milton Mueller has provided arguments and supporting evidence for the beneficial impact of competition on the expansion of networks. See, for example, Milton Mueller, Universal Service: Competition, Interconnection, and Monopoly in the Making of the American Telephone System (Cambridge, MA: MIT Press; Washington, D.C.: AEI Press, 1997). On the other hand, several authors have expressed doubts as to whether competition has indeed accelerated the diffusion of networks and services.
31. See, for example, Jill Hills, "Universal service: Liberalization and privatization of telecommunications," Telecommunications Policy, 13 (1989): 129-144.
32. See Natascha Just & Michael Latzer, "The European Policy Response to Convergence with Special Consideration of Competition Policy and Market Power Control," unpublished manuscript (Vienna: Austrian Academy of Sciences, 1999).