Abstract
This chapter deals with the question what makes telecommunications services so particular so as to explain their special regulatory treatment. It studies why telecommunications services are considered to be services of public interest by identifying what characteristics or values are attached to these services so as to signify public interest in them. In this context, it further discusses traditional models for telecommunications provision and regulation. The chapter draws on the theory of social embeddedness of markets developed by Karl Polanyi and puts both the existence of markets and the necessity of their regulation in a broader political-economic context. The chapter focuses on the instrument of universal service that is widely used for social embeddedness of liberalised competitive markets for telecommunications services. It studies its history and development as a regulatory concept that is effective and flexible and can be used at different stages of technological and market development. Various forms of universal service bear witness to its responsiveness to various social needs in terms of Polanyi’s social embeddedness thesis. The capability of socially embedding the telecommunications market with the help of the universal service regulatory concept is further tested by studying whether and how it responds to social considerations.
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Notes
- 1.
- 2.
Communication from the Commission to the Council and the European Parliament. Green Paper on Services of general interest COM (2003) 270 final, p. 6.
- 3.
See Krajewski 2011, p. 8.
- 4.
Zacharias 2008, p. 59.
- 5.
- 6.
See respectively Article 14, 106 para 2 TFEU, Article 36 ECFR and Communication from the Commission to the Council and the European Parliament. Services of General Interest in Europe, OJ C 281/3 of 26.09.1996; Communication from the Commission to the Council and the European Parliament. Services of General Interest in Europe, OJ C 17/4 of 19.01.2001; Communication from the Commission to the Council and the European Parliament. Green Paper on services of general interest. COM(2003) 270 final of 21.05.2003; Communication from the Commission to the Council and the European Parliament. White Paper on services of general interest. COM(2004) 374 final of 12.05.2004.
- 7.
- 8.
See Krajewski 2011, pp. 74–107.
- 9.
Communication from the Commission to the Council and the European Parliament. Green Paper on services of general interest. COM(2003) 270 final, No. 15–19.
- 10.
For a summary of terminological semantic complications see Krajewski 2011, pp. 9–10.
- 11.
For other reasons see Scott 2000, p. 313.
- 12.
Van de Walle 2008, p. 258.
- 13.
A concise discussion of the notion of service in the relevant context can be found in Krajewski 2011, pp. 120–121.
- 14.
Krajewski 2011, pp. 121–124.
- 15.
- 16.
The term “policymakers” is chosen as a neutral description of whoever determines the public interest. Obviously, in different societies different groups may take this decision.
- 17.
- 18.
Exemplary for the development of the notion of public service in the UK and the USA is Stone 1991, pp. 27–38.
- 19.
- 20.
Krajewski 2011, p. 130.
- 21.
Idem.
- 22.
For example, in Germany. See Viotto 2009, pp. 28–47.
- 23.
Stone 1991, pp. 31–32.
- 24.
Samuelson 1954, p. 387.
- 25.
Mankiw 2004, pp. 225–226.
- 26.
- 27.
- 28.
Krajewski 2003, p. 344.
- 29.
Musgrave introduced the concept of a merit good/merit want in: Musgrave 1956.
- 30.
Compare Pulsipher 2007, p. 153.
- 31.
Ver Eecke 2007, p. 331.
- 32.
Head 2007, p. 118.
- 33.
See, for example, McLure 2007, pp. 73–83.
- 34.
Musgrave 1956, pp. 37–38.
- 35.
Ver Eecke 2007, pp. 327–347.
- 36.
See the entry on merit goods by Richard Musgrave in: Eatwell et al. 1987, pp. 452–453.
- 37.
Eatwell et al. 1987, pp. 452–453.
- 38.
- 39.
Charles et al. 2011.
- 40.
Idem, p. 86.
- 41.
Idem, p. 86.
- 42.
- 43.
Hulsink 1999, pp. 2–3.
- 44.
Mankiw 2004, pp. 321–328.
- 45.
Krajewski 2011, p. 358.
- 46.
- 47.
Krajewski 2011, p. 357.
- 48.
Buchanan 1965.
- 49.
Sandler and Tschirhart 1997, p. 335.
- 50.
- 51.
- 52.
Bauer 1999, pp. 331–332.
- 53.
- 54.
Franzius 2009, pp. 39–42.
- 55.
Black 2002, p. 8.
- 56.
Idem, p. 8.
- 57.
Idem, p. 8.
- 58.
Prosser 2010, p. 2.
- 59.
Ogus 2004, p. 1.
- 60.
Prosser 2010, pp. 4–5.
- 61.
Black 2002, p. 20.
- 62.
Prosser 2010, p. 5.
- 63.
Similarly Krajewski 2011, pp. 354–356.
- 64.
For a longer list of regulatory instruments and their detailed description see Ogus 2004.
- 65.
Nielsen 2008.
- 66.
Beckert 2007, p. 7.
- 67.
- 68.
Polanyi 2001, p. 74.
- 69.
Idem, pp. 67–68, 145–146.
- 70.
Idem, pp. 71–72.
- 71.
Idem, pp. 75–76.
- 72.
Idem, pp. 76–77.
- 73.
Idem, p. 79.
- 74.
Caporaso and Tarrow 2009, pp. 598–599.
- 75.
Polanyi 2001, pp. 79 and 136–139.
- 76.
Ebner 2011, pp. 33–34.
- 77.
- 78.
On the status of the document see Appellate Body Report, United States—Measures Affecting the Cross-Border Supply of Gambling and Betting Services (US—Gambling), WT/DS285/AB/R, adopted 20 April 2005.
- 79.
The classification by the GATT Secretariat corresponds to the version CPCprov. Currently, there is the fourth version CPC Ver. 2. http://unstats.un.org/unsd/cr/registry/regcst.asp?Cl=9&Lg=1.
- 80.
For clarification of the terms see Recital 7 Commission Directive 2002/77/EC of 16 September 2002 on competition in the markets for electronic communications networks and services, OJ L 249/21 of 17.09.2002; Burri-Nenova 2007, Chap. 4, Sect. 3.2.2.
- 81.
Article 2(c) Directive 2002/21/EC of the European Parliament and the Council of 7 March 2002 on a common regulatory framework for electronic communications networks and services (Framework Directive), OJ L 108/33 of 24.04.2002.
- 82.
Horak 2007, p. 482.
- 83.
See the article “telecommunication” in Encyclopaedia Britannica Online Academic Edition, 2012. http://www.britannica.com/EBchecked/topic/585799/telecommunications.
- 84.
Horak 2007, p. 112; see the article “Media convergence” in Encyclopaedia Britannica Online Academic Edition, 2012. http://www.britannica.com/EBchecked/topic/1425043/media-convergence.
- 85.
For information on the introduction of telecommunications (telegraph and telephone) in different countries see Noam 1992.
- 86.
Schenk et al. 1996, pp. 33–36. Eli Noam wrote and edited several publications studying various national telecommunications systems. These studies demonstrate that the absolute majority of countries have employed one of the versions of a public monopoly system, well known to us from our familiar domestic environment, either as a part of the colonial heritage (Africa, some countries of Latin America and Asia) or following the example or under the influence of developed Western countries (some countries in Latin America and Asia) or due to similar political and economic considerations and developments. For more information see Noam 1997, 1998, 1999; Campbell 1995.
- 87.
Hulsink 1999, p. 5.
- 88.
- 89.
- 90.
Pipe 1990, p. 109.
- 91.
- 92.
- 93.
Frühbrodt 2002, p. 64.
- 94.
Idem, p. 64.
- 95.
Idem, p. 37.
- 96.
Langenfurth 2000, p. 97.
- 97.
On the use of the named services see the following articles in Encyclopædia Britannica Online Academic Edition, 2012: “telex” http://www.britannica.com/EBchecked/topic/586267/telex, “telegraph” http://www.britannica.com/EBchecked/topic/585850/telegraph.
- 98.
For more information see Bronckers and Larouche 2008, pp. 323–324.
- 99.
Note by the Secretariat “Trade in telecommunications services”, MTN.GNS/W/52 of 19.05.1989, paras 9–10.
- 100.
Note by the Secretariat “Services Sectoral classification list”, MTN.GNS/W/120 of 10.07.1991.
- 101.
Decision on Negotiations on Basic Telecommunications Services of 15 April 1994, para 1.
- 102.
See negotiations documents: MTN.GNS/TEL/1, paras 23–26, 39–44; MTN.GNS/TEL/2, paras 104–136.
- 103.
See, for example, GATS/SC/46 (Japan), GATS/SC/90 (USA), GATS/SC/31 (EC) and other.
- 104.
See similar criticism in the Communication from the EC TN/S/W/27, S/CSC/W/44, para 4.
- 105.
Bronckers and Larouche 2008, p. 325.
- 106.
See GATS/SC/31/Suppl.3. The EC explicitly excludes broadcasting from telecommunications services.
- 107.
See GATS/SC/46 and GATS/SC/46/Suppl. 2.
- 108.
Bronckers and Larouche 2008, p. 325.
- 109.
Article 2(c) of the Framework Directive; Article 1 Directive 98/34/EC of the European Parliament and of the Council of 22 June 1998 laying down a procedure for the provision of information in the field of technical standards and regulations, OJ L 204/37 of 21.07.1998.
- 110.
Drake and Nicolaïdis write that, in the 1980s “the shift to a trade discourse was a revolution in social ontology: it redefined how governments thought about the nature of services, their movement across the borders, their roles in society, and the objectives and principles according to which they should be governed”. See Drake and Nicolaïdis 1992, p. 38.
- 111.
- 112.
Dordick 1990, pp. 230–231.
- 113.
- 114.
On the reasons for interconnection refusal see Mueller 1997c, pp. 43–53.
- 115.
- 116.
AT&T (American Telephone and Telegraph) was first formed as a subsidiary of Bell Company for long-distance service. In 1899 AT&T was restructured as the holding company of regional operating companies, research and development, manufacturing and long-distance services operator. Thus, AT&T and Bell System became synonymous. For more information see Friedlander 1995, pp. 3–9, 26.
- 117.
Mueller 1993, p. 363.
- 118.
Dordick 1990, p. 230.
- 119.
For a detailed analysis of Vail’s doctrine see Mueller 1997c, pp. 96–103.
- 120.
- 121.
Mueller 1993, p. 365.
- 122.
Friedlander 1995, p. 77.
- 123.
The theory of telephony as a natural monopoly was successfully contested in the scientific research carried out in the 1970s–1980s. For a literature overview see Friedlander 1995, pp. 53–71.
- 124.
Mueller 1997c, pp. 150–164.
- 125.
In Mueller 1997b, p. 42, an example of a report to the Congress is given that stated that the Telecommunications Act did not change existing law.
- 126.
The production of terminal equipment was deregulated, new long-distance carriers were authorised, private microwave networks were legalised. See: Mueller 1997b.
- 127.
For a list of the publications produced see Friedlander 1995, pp. 4–5.
- 128.
Mueller 1993, pp. 366–367.
- 129.
- 130.
In reality, the Preamble refers to the creation of a separate regulatory body for telecommunications, Federal Communications Commission. See Mueller 1997c, pp. 150–159.
- 131.
Telecommunications Act of 1996, Pub. LA. No. 104-104, 110 Stat. 56 (1996). An electronic version can be downloaded from the website of the Federal Communications Commission: http://transition.fcc.gov/telecom.html.
- 132.
Bauer 1999, p. 332.
- 133.
- 134.
See Sect. 3.2.2.2.
- 135.
- 136.
- 137.
See Krajewski 2011, pp. 27–34.
- 138.
Schweitzer 2001/2002, pp. 74–81.
- 139.
Krajewski 2011, pp. 44, 46.
- 140.
See Krajewski 2011, p. 53.
- 141.
See Sect. 3.2.
- 142.
At the same time, the case law on common callings is regarded as a predecessor of the essential facilities doctrine in EU competition law. See Beckmerhagen 2002.
- 143.
Communication from the Commission to the Council and the European Parliament. Towards a Dynamic European Economy—Green Paper on the Development of a Common Market for Telecommunications Services and Equipment, COM(87) 290 final of 30 June 1987.
- 144.
Idem, p. 14.
- 145.
Idem, p. 27.
- 146.
Idem, pp. 34–35.
- 147.
Idem, p. 66.
- 148.
Idem, pp. 66–67.
- 149.
Voice telephone service is meant. See Communication from the Commission to the Council and the European Parliament. Towards a Dynamic European Economy—Green Paper on the Development of a Common Market for Telecommunications Services and Equipment, COM(87) 290 final of 30 June 1987, p. 77.
- 150.
Idem, p. 79.
- 151.
Idem, pp. 67, 74, 75.
- 152.
See para 3 Council Resolution 88/C 257/01 of 30 June 1988 on the development of the common market for telecommunications services and equipment up to 1992, OJ C 257/1 of 4.10.1988; Article 3 Commission Directive 90/388/EEC of 28 June 1990 on competition in the markets for telecommunications services, OJ L 192/10 of 24.07.1990.
- 153.
Communication from the Commission. 1992 Review of the situation in the telecommunications services sector. SEC(92) 1048 final of 21 October 1992.
- 154.
- 155.
- 156.
Communication from the Commission. 1992 Review of the situation in the telecommunications services sector. SEC(92) 1048 final of 21 October 1992, p. 23.
- 157.
Idem, p. 23.
- 158.
Idem, p. 23.
- 159.
Idem, p. 31.
- 160.
Idem, p. 31.
- 161.
Idem, pp. 32–33.
- 162.
Idem, p. 24.
- 163.
Eliassen and From 2009, p. 245.
- 164.
Idem, p. 246.
- 165.
Communication from the Commission to the Council and European Parliament on the consultation on the Review of the situation in the telecommunications services sector, COM(93) 159 final of 28 April 1993, p. 9.
- 166.
Idem, p. 21.
- 167.
Idem, p. 9.
- 168.
Idem, p. 22.
- 169.
Idem, p. 23.
- 170.
Communication from the Commission to the Council, the European Parliament and the Economic and Social Committee. Developing universal service for telecommunications in a competitive environment. COM(93) 543 final of 15 November 1993.
- 171.
Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions on the second periodic review of the scope of universal service in electronic communications networks and services in accordance with Article 15 of Directive 2002/22/EC, COM(2008) 572 final of 25 September 2008, p. 8; Fetzer 2011, p. 708.
- 172.
Compare Jayakar and Sawhney 2004, pp. 341–342.
- 173.
See, for instance, Article 1 of the Universal Service Directive.
- 174.
Burri-Nenova 2006b, p. 8.
- 175.
The latter aspect is often called accessibility in the context of universal service. See Goggin and Newell 2000, pp. 127–133.
- 176.
For more details see Sect. 3.1.
- 177.
Shafiul Alam Bhuiyan 2004, p. 270.
- 178.
- 179.
- 180.
- 181.
Vogelsang 2013, p. 48.
- 182.
- 183.
- 184.
See Saunders et al. 1994, pp. 16–18. For examples see pp. 22–29.
- 185.
Cited in the Report of the Independent Commission for World Wide Telecommunications Development of the International Telecommunications Union “The Missing Link”, December 1984, pp. 9–10.
- 186.
Bar and Riis 2000, p. 101.
- 187.
Bar and Riis 2000, pp. 101–103.
- 188.
Bar and Riis 2000, p. 103.
- 189.
- 190.
- 191.
Harker 2013, p. 16; Broadband Commission (2013). Report on the State of Broadband 2013: Universalizing Broadband, p. 54.
- 192.
Oǧuz 2013, p. 15.
- 193.
- 194.
- 195.
Nihoul and Rodford 2004, p. 505.
- 196.
- 197.
Jaeger 2006, p. 121.
- 198.
- 199.
- 200.
Milne 1998, see in particular Table 1 on p. 776.
- 201.
A more detailed discussion of Claire Milne’s findings and an actual application of her theory can be found in Chap. 5. Here a short outline of her theory seems to be sufficient for the purpose of this concluding section in order to present universal service as a “black box” whose content changes under the influence of external factors.
- 202.
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Batura, O. (2016). Liberalisation of Telecommunications Services: Social Embedding of the Liberalised Market as a Regulatory Challenge. In: Universal Service in WTO and EU law. Legal Issues of Services of General Interest. T.M.C. Asser Press, The Hague. https://doi.org/10.1007/978-94-6265-081-7_2
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