Universal Service, A New Look at an Old Concept : Broadband Access as a Universal Service in Europe

Universal Service would appear to be a dying concept. In most European countries, Universal Service – once a cornerstone of government intervention in the communications sector – has been narrowed down dramatically over the last ten years. A major reason for this is the assumption that Universal Service only serves to support the position of the incumbent and therefore restricts competition. Also, policymakers are convinced that (infrastructure) competition will make maintaining the regulation of Universal Service unnecessary. A final step in the process of diminishing the scope of Universal Service is the recent Universal Service Directive, which limits such service to basic voice telephony (with fax and minimal internet access capabilities). This paper does not intend to deal extensively with all the relevant aspects of Universal Service, but seeks primarily a regulatory/policy approach. Another limitation is its main focus on broadband internet access (although this indirectly covers several related issues such as convergence). The paper starts by formulating the definition of Universal Service and outlining the changes in the concept of Universal Service from a historical, policy and regulatory perspective. By doing so, a distinction is made between Universal Service in a strict regulatory sense and such service in a policy/public interest sense. The paper reveals that competition arguments have dominated the debate and that the public interest aspects have been relegated to the background. The most relevant driver behind this development is the European Union’s involvement with the communications sector. Attention is given to the fact that the EU policy as such has not led to an improvement or extension of Universal Service. Furthermore, owing to the optimistic views on the results of competition, safeguards with regard to Universal Service have been abolished or insufficiently dealt with (quality of service/consumer protection, safety, continuity etc.). The paper then looks into the possibilities for further developing Universal Service within the present regulatory and policy context. Here, the emphasis is on the limitations of the Universal Services Directive on the one hand, and on European ambitions to have broadband access widely available on the other. Within the present context, the inclusion of broadband internet access as a Universal Service is possible in a policy/public interest sense. However, financing from a Universal Service fund is not permissible. The Universal Service Directive will have to be evaluated in 2005. The paper promotes a revival of the concept of Universal Service and argues that, based on present policies and the development of the market, the Universal Service concept should be extended to broadband internet access. Such an extension would have to be implemented by member states that meet the applicable criteria