The ‘state’ of universal service

Universal telecommunication service: A world perspective

“…A methodology is then suggested to cost out the appropriate comparison. Rosston and Wimmer (2000) find that in the United States, universal service programs that tie subsidies to cost of service have little effect on penetration, while at the same time generating large taxes and the expected distortions. They opt for targeted programs for the poor that focus on those who are on the edge of departing or joining the network.…”

Funding Universal Service: The Effect of Telecommunications Subsidy Programs on Competition and Retail Prices

“…Specifically addressing high cost support, Rosston and Wimmer (2000) argue that subsidies for high cost areas are inherently discriminatory. High cost areas (in terms of telecommunications provision) can include wealthy estates and remote vacation or secondary homes, while low cost areas are generally more urban and therefore may have a greater number of low income households.…”

Universal(ly Bad) Service: Providing Infrastructure Services to Rural and Poor Urban Consumers

“…Unless low-income households happen to be concentrated in highcost areas and have infrastructure connections, they will not benefit from subsidies for high-cost areas. For example, in a study of universal service in the telecommunications sector in the United States, Rosston and Wimmer (2000) find that cost-based programs do a poor job of targeting subsidies to low-income households. Even though rural poverty is a serious problem in many developing countries, the extremely low level of infrastructure coverage in rural areas (see Table 2) makes it highly unlikely that poor households will be the main beneficiaries of redistribution to rural areas.…”