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Regulation of Communications Markets

Development of Universal and Rural Service Schemes

It is an economic reality that telecommunications services are more costly to provide in some areas than others and consequently service providers will naturally choose to focus on more profitable services and coverage. This can mean that, without suitable regulatory safeguards, the needs of less prosperous users or those in difficult-to-serve locations might be neglected or even ignored altogether.

Universal and Rural Service Schemes are a popular tool by which governments and regulators can ensure a minimum level of guaranteed service Rural Telecoms, ŠiStockphoto.com/Don Bayleyconsistent with preventing social exclusion, promoting regional development, and ensuring the means of basic communication for all citizens.

Defining this minimum level of service requires consideration of the services to be provided, by what means, and to what geographical locations. Social and economic objectives, demography and topology, technological considerations, and the costs of provision relative to the spending power of target users will all have a part to play in determining the shape of universal service provision.

An implicit component of the concept of universal service is that individual customers should not be unduly disadvantaged by geographical location or income level. Similarly, whilst it is clearly unfair to expect established network operators to provide socially-driven services regardless of cost or return, the development of a competitive market sector will not be best-served by the non-selective imposition of onerous universal service obligations constituting a powerful deterrent to market entry. An appropriate means is thus required for apportioning universal service responsibilities amongst those operators best-placed to discharge them, whilst simultaneously providing an equitable and sustainable method of financing such responsibilities without placing undue burdens upon individual operators.

InterConnect Communications can assist policymakers and regulators in the creation and implementation of an effective regulatory regime for the provision of universal service at affordable prices. As well as assisting with policy and legislative aspects, we can help quantify the likely costs of service provision and suggest suitable budgetary and funding mechanisms. We can advise on the organisational structures needed to administer and monitor universal service activities and, if necessary, assist with the training of regulatory staff. Last but not least, we can support the implementation process through the development of formal guidelines, procedures and contract documents.