Universal service obligations and competition

Philippe Choné, Laurent Flochel and A. Perrot
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Laurent Flochel: EPEE - Centre d'Etudes des Politiques Economiques - UEVE - Université d'Évry-Val-d'Essonne

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Abstract: We provide some elements to assess and compare various regulatory rules for the allocation and funding of universal service obligations (USOs). We restrict ourselves to ubiquity and spatial non discrimination constraints. We examine the welfare consequences of two systems: First, a regulation where USOs are imposed only on the incumbent firm (restricted-entry regulation) and second, a 'pay or play' rule where the entrant may serve non profitable users. Whereas pay or play regulation dominates when only the ubiquity constraint is at work, this result no longer holds when non discrimination is added. (C) 2000 Elsevier Science B.V. All rights reserved.We provide some elements to assess and compare various regulatory rules for the allocation and funding of universal service obligations (USOs). We restrict ourselves to ubiquity and spatial non discrimination constraints. We examine the welfare consequences of two systems: First, a regulation where USOs are imposed only on the incumbent firm (restricted-entry regulation) and second, a `pay or play' rule where the entrant may serve non profitable users. Whereas pay or play regulation dominates when only the ubiquity constraint is at work, this result no longer holds when non discrimination is added.

Keywords: Cross-subsidies; Equal access; Network utilities; Regulation; Universal service obligations (search for similar items in EconPapers)
Date: 2000-09
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Citations: View citations in EconPapers (28)

Published in Information Economics and Policy, 2000, 12 (3), pp.249--259. ⟨10.1016/S0167-6245(00)00014-7⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-02878018

DOI: 10.1016/S0167-6245(00)00014-7

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