ETO Home
Telework
Teletrade
Telecooperation
Links
Definitions
FAQs
Events
Search
Feedback
Discussion
Site management
Page updated:
4 February 1997
Page owner:
ETO Site Team
Should Internet Access Become Part of "Universal Service" Requirements?
This is one of three linked questions raised as part of a study for the European Commission (DGXIII) in June 1996. The others are:
- Should the Internet be Regulated and if so,
How?
- What effects will the growth of the Internet have on the telecommunications sector, especially for data and voice transmission?
The importance of the Internet: What are the indicators for an universal service and is the Internet a potential candidate? Universal Service means that every European Government would be obliged to offer Internet like telephone and post services to every private household and company
Universal service shouldn't be defined as "Governments offering the service universally" but as regulation that requires licensed service providers to offer a particular service universally. Europe is liberalising its telecommunications regime and this means Governments can only control what is available to whom through requiring service providers to meet certain requirements in exchange for a license to operate in the relevant market. This can make "Universal Service" regulation very complex. It could also lead to the provision of multiple services where only one may be required. One way round this is to invite one service provider to handle Universal Service for a particular market sector and require competing providers to contribute to the costs of that.
It may be inappropriate to regard the Internet as a potential candidate for a Universal Service since anyone with a telephone line can have Internet service on an equal basis so long as there is an Internet access point within local call distance. In countries with open telecommunications environments this seems to be taken care of by the market, since suppliers who want to get a good share of the market, automatically want to advertise that they can provide local points of presence to all telephone users. The cost of adding Internet to an existing telephone connection is small. The cost of providing a local point of presence is also small, if there is a competitive telecoms environment.
The challenge of introducing the Universal Service concept into Internet access supply is that a new Internet access supplier may set up in only one place and offer services to anyone world wide, the consumer then has to choose between suppliers, for example between:
- a local supplier offering a very low basic charge for access at only
one point
- a mutlinational supplier offering a higher charge for access at many points
The area that needs more attention from a Universal Service perspective is basic telecommunications price performance. For example at some stage we probably need to make ISDN access a universal service requirement, since there is a big difference between Internet access at the highest analogue level (with 28.8 kbps modems and slow connect, disconnect) and via ISDN (with 2x64kbps and fast connect, disconnect). If ISDN access is available much cheaper to City centre residents with lots of suppliers competing for their business and much more expensively to rural communities with only one supplier, then the rural communities are severely disadvantaged.
The question of Universal Service is very complex in an open telecommunications market and cannot be answered neatly in a few lines! For example the Internet issue is further complicated by the probability that telecom pricing will move away from distance pricing towards "level of performance" pricing and/or pattern-of-use pricing. In this case the notion of "local points of presence" will be less significant, but the low volume user could be disadvantaged compared with the higher volume users - for example unemployed people versus successful teleworkers.
One reason for worrying about Universal Service is the problem of excluded users and the information "haves" and information "have nots". But there are other ways of tackling this problem and Universal Service may not the the best mechanism. Full Internet access means having a high performance PC in the home, with a high performance telecom link - ISDN or better. If we assume that within a few years most homes will have PCs and Internet access just as today most homes have television and a phone, then it may be better to provide for the "have nots" through social security mechanisms rather than through telecom regulation.
Another concern is the problem of whole regions and countries that have an inadequate telecommunications infrastructure and/or inadequate or overpriced connection to the global networks. Such countries may not attract the same level of commercial investment as more "telecom developed" ones and so there might always be a problem of poor access linked to high prices - a vicious spiral. But Universal Access regulation won't solve this, it needs purposeful national strategies supported by the International community through assistance programmes.