Convergence is challenging traditional universal service policies and the means by which universal service objectives are currently met. Universal service was initially an obligation imposed on the monopoly operator that concentrated on the provision of voice telephony, requiring operators to expand coverage to provide services in remote and underserved areas. Incumbent operators typically cross-subsidized the cost of their universal service obligations with revenues derived from other services. With the introduction of competition and new technologies, regulators substituted this implicit cross-subsidization with a requirement that all or some operators contribute a percentage of their revenues to a universal service fund.
The primary question confronting regulators in jurisdictions where a universal service contribution system exists, is whether operators offering converged services such as VoIP, should have universal service obligations, and whether they should contribute on the same basis as traditionally established operators. Most countries have not imposed universal service obligations on service operators using new technologies due to concerns that such obligations would inhibit their development and the development of new technologies and new market players. However, this trend seems to be shifting as more traffic shifts from public switched telephone networks to IP-protocol networks. In Canada, for example, universal service requirements have been imposed on all service providers, including VoIP providers. Canada’s approach is consistent with its technology-neutral policy to VoIP, equating such providers to traditional voice operators, provided the service is offered through access to the public switched telephone network (therefore, excluding PC-to-PC VoIP).1
In addition, as IP technologies are gaining importance, regulators are modifying the Universal Service obligations to include narrowband and broadband Internet access. For example, of the 93 countries that responded to the ITU’s annual regulatory survey, 27 included narrowband Internet service in the universal service definition and 11 included high-speed Internet.
Figure 4-B: Universal Service Worldwide3
ENDNOTES
1 CRTC, Telecom Decision 2005-28, Regulatory framework for voice communication services using Internet Protocol, 12 May 2005, at http://www.crtc.gc.ca/archive/ENG/Decisions/2005/dt2005-28.pdf.
2 ITU World Telecommunication Regulatory Database 2005.
3 ITU World Telecommunication Regulatory Database 2005.