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Recent evidence suggests that increasing overall service coverage and promoting access to telecommunications services have a high economic benefit. Overall, it is estimated that a ten percent increase in mobile telephony penetration could increase economic growth by 0.81 percent in developing countries, whereas a ten percent increase in broadband penetration could increase economic growth by 1.4 percent. In rural and low-income areas in particular, not only do basic telephony services and broadband access allow population to connect with relatives and friends, but they have also introduced a dramatic increase in productivity and in many cases have become the only way for small and medium enterprises in rural areas to access national and, in some cases, global markets. Moreover, the impact of access to telecommunications in rural areas on health, education, disaster management, and local governments has allowed better and more rapid responses, improved coordination, and more effective public management. It is therefore worthwhile to take a second look at all possible policy options, both conventional mechanisms (some of which underutilized) as well as new approaches, to determine whether some of them may be relevant for the emerging agenda of universal broadband access. This paper will first address the necessary conditions required to adopt a more ambitious universal access policy in developing countries. After that, a brief account of the main relevant trends in the industry will be made, followed by a description of twelve different mechanisms for project implementation and six different mechanisms for funding of universal access strategies. Then, an evaluation of the mechanisms will be carried out to identify the most suitable ones. Finally, some recommendations to policy makers on implementation of the preferred mechanisms are also drawn from the analysis.

This paper analyzes whether repealing net neutrality (NN) improves or decreases the capacity of a regulator to make internet service providers (ISPs) extend broadband coverage through universal service obligations (USOs). We model a two-sided market where a monopolistic ISP links content providers (CPs) to end users with a broadband network of a given bandwidth. A regulator determines whether to subject the ISP to NN or to allow it to supply paid priority (P) services to CPs. She can also impose a broadband USO to the ISP: She can mandate the broadband market coverage. We show that the greater is the network bandwidth, the more likely is the repeal of NN to increase ISP profits and social welfare. Regulation can still be necessary, however, as there are bandwidth ranges for which the ISP would benefit from a repeal of NN while such a repeal is detrimental to society.

The main aim of this paper is to perform efficiency and productivity analysis of Universal Service Obligation (USO) based on the Malmquist Productivity Indices (MPI) analysis. The study focuses on 29 Designated Operators (DOs) and two isolated periods, the years 2003 and 2017. There is a clear trend of workforce reduction (12%). Considering the postal services, the data confirm a general trend that the letter-post is in decline (30%) and the parcels are on the rise (52%). Considering the financial results, both costs and revenues are increased; however, there is a higher increase of revenue (33.13%) compared to the cost (32.61%). Further, the results of implemented methodology are twofold. Firstly, a progress is determined at the average level of all observed DOs according to the efficiency and productivity indicators. Among other, the results indicate the increase of productivity for both input MPI (3.5%) and output MPI (8%). However, there are significant variations of efficiency and productivity at the individual level. Secondly, the aim of research was also to examine the sources of productivity changes by considering postal market liberalization, ownership, marketing services and e-commerce. Our findings show that the last three specified variables contribute to the explanation of productivity change. First published online 28 February 2020

We examine the impact of the universal service policy that was applied to the Spanish airline market during the period 2001-2009. Our analysis shows that routes that benefit from price discounts that were granted by the government to island residents enjoy higher demand than the rest of the country's domestic routes. However, the lower elasticity of demand of these routes allows airlines to set higher prices. We also find that airlines that operate inter-island routes on which their services are regulated by price caps and frequency floors charge lower prices and schedule higher flight frequencies than is the case on unregulated routes. Overall, our analysis suggests that price discounts for island residents help guarantee the profitability of routes that are regulated by public service obligations.

The financing of universal service has traditionally relied on granting the universal service provider a reserved area. Together with growing electronic substitution, current liberalization policies promoting competitive entry may put the traditional universal service at risk. Hence, there is an increased interest in estimating the cost of universal service provision. The 3rd EC Postal Directive proposes a calculation approach to separately determine the net cost of a universal service obligation and to compensate the universal service provider (USP). This paper discusses the interaction between universal service costing and financing and shows that the EC approach may result in distorted results. It also quantifies the effects based on a model calibration with Swiss data. The results show that separate costing and financing leads to a considerable under-compensation of the USP if there is a compensation fund to which every operator contributes. The USP is over-compensated if it is exempt from contributing to the fund (pay or play mechanism). The problem of under- or overcompensation can be resolved by an integrated computation of the net cost that includes the competitive effects of the financing mechanism. Such an integrated approach results in a fair compensation of the USP.

On 17 December 2020, the Court of Justice brought an end to the Inpost saga, following the compatibility assessment by the Commission – and the subsequent appeal before the General Court – of an aid scheme for universal service obligations in the postal sector. Together, these decisions and judgments provide the opportunity to reflect on three more general issues of State aid law. First, the acceptable calculation method of ‘an unfair financial burden’ should be highlighted, a key notion in the Postal Services Directive. Second, the rules of interaction between non-State aid provisions of EU law and the aid analysis will be revisited. Third, and finally, the connection between the transparency requirements of the SGEI Framework and the public service inquiry has to be clarified.

This book suggests an ecosystem approach to broadband policy that could help in the design of strategies, policies, and programs that support network expansion, have the potential to transform economies, improve the quality and range of services, enable application development, and broaden adoption among users. To identify emerging best practices to nurture this ecosystem, this volume analyzes the Republic of Korea and other leading broadband markets. It identifies three building blocks to support the growth of the broadband ecosystem: defining visionary but flexible strategies, using competition to promote market growth, and facilitating demand. An important but often neglected building block is demand facilitation. This includes raising awareness about the benefits of broadband and improving affordability and accessibility for the largest number of users. Successful countries have often focused on creating a suite of useful applications that increase the relevance of broadband to the widest base of users. Programs to mainstream information and communication technology (ICT) use in education, health, or government have been common.

As in other sectors, competition in finance matters for allocative, productive and dynamic efficiency. Theory suggests, however, that unfettered competition is not first best given the special features of finance. I review these analytics and describe how to assess the degree of competition in markets for financial services. Existing research shows that the degree of competition greatly varies across markets, largely driven by barriers to entry and exit. I argue that changes in financial services industries require updated competition policies and institutional arrangements, but that practices still fall short. Furthermore, I show that developing countries face some specific competition challenges.

We discuss the ongoing liberalization process in the market for addressed letter mail in Switzerland. The paper assesses the impact of the liberalization on the financial viability of various universal service obligations with and without access to the incumbent's downstream delivery network for customers and competitors. We propose a calibrated model of the Swiss letter market offering theoretical insights into the mechanics ofmarket opening alongwith quantitative conclusions bearing direct policy relevance. It turns out that full market opening would require a sharply reduced uso with respect to the frequency and the coverage of delivery or a sharp price increase.

Global economic forces have been prompting the institutional changes in the public sector based on the market-oriented principles and such changes greatly have affected the postal savings system in Japan. Postal savings system’s public roles were fundamentally changed because of current administrative reform undertakings. In this article, firstly the role of collecting savings from ordinary citizens for fiscal policies was reviewed and the assessment of this public role is conducted. Secondly, abolishment of Universal Service Obligation due to the privatization of the postal savings system and the possible occurrence of Financial Exclusion are analyzed.