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
Comments and suggestions received from Michael Crew and the discussants, Brenda Kahn and Richard Simnet are gratefully acknowledged.
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Spiegel, M. (2000). Universal Service Obligation. In: Crew, M.A. (eds) Expanding Competition in Regulated Industries. Topics in Regulatory Economics and Policy Series, vol 37. Springer, Boston, MA. https://doi.org/10.1007/978-1-4757-3192-7_5
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DOI: https://doi.org/10.1007/978-1-4757-3192-7_5
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