What is an Unfair Burden? Compensating the Net Cost of Universal Service Provision

Jaag, Christian

doi:10.2202/1446-9022.1225

Cited by 12 publications

(8 citation statements)

References 13 publications

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“…Let θ c m denote the optimal solution: as the objective function is strictly increasing, 18 we have θ c m = min{{θ m Π(θ d , θ m ) = 0} , 1}. Then one can state:…”

Section: CCmentioning

confidence: 99%

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Equity justifications for universal service obligations

Poudou

Roland

2017

International Journal of Industrial Organization

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Equity is often invoked as a possible justification for the imposition of universal service obligations (USOs). However, no previous analysis supports a formal link between equity and USO. In this paper, we describe the extent to which the imposition of USOs in oligopolistic network industries can meet the objectives of an inequality-averse regulator. We show that USOs can be used for equity purposes provided that the regulator is able to control the competitive structure of the industry. We also show that the uniform pricing constraint, which is an obligation to offer the same price conditions to all consumers, is welfare-enhancing but rather surprisingly, it does not necessarily improve equity.

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“…Let θ c m denote the optimal solution: as the objective function is strictly increasing, 18 we have θ c m = min{{θ m Π(θ d , θ m ) = 0} , 1}. Then one can state:…”

Section: CCmentioning

confidence: 99%

“…Kind [13], Gautier and Minuzo [14], Gautier and Paolini [15], Gautier and Wauthy [16], [17], and Jaag [18].…”

Section: Introductionmentioning

confidence: 99%

Equity justifications for universal service obligations

Poudou

Roland

2017

International Journal of Industrial Organization

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“…In particular, the provisions aim to prevent member states from raising new barriers to entry resulting from competitors having to contribute to financing USO. See [56], [57] on the competitive effects of USO and various financing mechanisms, and [58] for an overview of financing instruments. The main funding mechanisms compliant with the Third Postal Directive are external financing, and a compensation fund to which postal operators are obliged to contribute.…”

Section: The Financing Of Universal Service Obligationsmentioning

confidence: 99%

Postal-sector policy: From monopoly to regulated competition and beyond

Jaag¹

2014

Utilities Policy

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This paper discusses the main aspects of the competitive and regulatory state of the postal sector. It presents the different models for postal competition and regulation in the EU and the US and their history, together with their implications on regulation, with a focus on universal services and network access. While postal monopolies used to be the main source of funding for universal service obligations, the need for alternative funding sources after full liberalization has increased the interest of regulators and the public in knowing the cost of these obligations. In parallel, new means of electronic communication and consumer needs call the traditional scope of universal services into question. This paper outlines the economic rationale of current policies and directions for future postal regulation to strengthen the postal services' commercial viability in a competitive age, while safeguarding their relevant characteristics for the economy. Market regulation Universal Service regulation Designation Financing mechanism Costing (calculation of net cost) Market equilibrium Definition of obligations Flanking measures Market access regulation Network access and price regulation Interconnection, interoperability

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“…Therefore, a broader notion of unfairness may take into account the effect of the USO and other regulation on all affected parties. Jaag (2011a) argues that the choice of a fairness criterion is to be based on equity rather than on efficiency considerations. In general, any criterion results in a different distribution of burdens across taxpayers, customers, and ratepayers.…”

Section: Introductionmentioning

confidence: 99%