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Universal Service Obligation

Price and Quantity Regulation
  • Menahem Spiegel
Chapter
Part of the Topics in Regulatory Economics and Policy Series book series (TREP, volume 37)

Abstract

The Universal Service Obligation (USO) is a regulation often imposed on the providers of network services. In the case of the telephone network, the Universal Service Obligation regulation can be traced back to the Communication Act of 1934. Where this act charged the FCC to provide all people of the United State a rapid and efficient telecommunication network facility. As stated, the main principle of this regulation is the requirement that the provider of the network services will make available the basic telecommunication services to all the customers residing within its exclusive territory. The practical meaning (profit wise) of this policy is that the provider of network services is not allowed to select his customers just according to their contribution to his profits but must serve all customers even if some of them are generating negative profits. That is, some customers must be served at a price “bellow” cost.1

Keywords

Network Service Service Area Telecommunication Network Production Center Total Profit 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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Copyright information

© Springer Science+Business Media New York 2000

Authors and Affiliations

  • Menahem Spiegel
    • 1
  1. 1.Department of Finance and Economics Graduate School of ManagementRutgers UniversityUSA

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