Universal Service Policies as Wealth Redistribution


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Type of work: Article (academic)


Digital Divide | Economics | ICT Infrastructure


This article, which offers a critical reassessment of the underlying rationale for universal service policies, argues that public policies designed to promote universal telecommunications access are simply a form of wealth redistribution. By reconceptualizing universal service subsidies in this way, one can obtain a more realistic assessment of the proper scope and limits of universal service policies. Universal service policies, at best, can play a supplementary role. Economic reforms that encourage investment and promote robust competition are more fundamental to the development of an ubiquitous infrastructure than government subsidies. The redistribution of wealth via telecommunications can ameliorate inequalities, but it cannot eliminate their causes, and advocates should stop pretending that it can. Furthermore, universal service advocates must become more aware of the political and economic risks and pitfalls that are inherent in the process of wealth redistribution.