Competitively Neutral Universal Service Obligations

[en] Universal service obligations impose specific costs on the universal service provider and the latter may call for an appropriate compensation. Most often, a two-step procedure is put forward to finance the universal service in a competitive environment. Firstly, the cost of the universal service is assessed; secondly, the provider must be compensated for this cost. We argue that this procedure is problematic because the implementation of a compensation scheme affects the behavior of market participants and leads to an overcompensation of the universal service provider. We put forward an alternative approach to this problem that fully acknowledges the distortions that result from the compensation mechanism.

Research center :

CREPP - Centre de Recherche en Économie Publique et de la Population - ULiège

Disciplines :

Microeconomics

Author, co-author :

Gautier, Axel ; Université de Liège - ULiège > HEC-Ecole de gestion : UER > Economie industrielle

Wauthy, Xavier

Language :

English

Title :

Competitively Neutral Universal Service Obligations

Publication date :

2012

Journal title :

Information Economics and Policy

ISSN :

0167-6245

eISSN :

1873-5975

Publisher :

Elsevier Science

Volume :

Pages :

254-261

Peer reviewed :

Peer Reviewed verified by ORBi

Available on ORBi :

since 26 March 2012

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Bibliography

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