IS UNIVERSAL SERVICE JUSTIFIED BY THE PUBLIC INTEREST? FROM THE EARLY DAYS TO THE DIGITAL AGE

Abstract

It is commonly accepted that universal service is clearly justified by reference to the public interest, and this understanding stems from the natural monopoly paradigm. However, telecommunications monopolies have never been ‘natural’, and the alternative to regulation has always been a competitive marketplace. The liberalisation movement had a chance to create a genuinely competitive industry but failed to do so. This article argues that the universal service dogma has played a significant role in the formation of the ordered competition regime of modern telecommunications, and explains this phenomenon in terms of public choice theory.