Provision of universal service and access over IP networks in Japan

Abstract

Universal service is governed by a regulatory framework that guarantees nationwide access to basic telephone service over the public switched telephone network (PSTN). The ongoing network migration to IP networks, however, poses the question of how the existing framework would accommodate this change. Taking the case of Japan, this paper presents an overview of Japan’s universal service system under the network migration and argues the importance of assessing consumer preference for universal service in adapting the system to this new environment. After describing the existing system including the universal service fund and the impacts of the transition to IP networks, the government’s responses to cope with the change are reviewed. A system of universal access is proposed which is designed to ensure access rather than a specific service. To realize a new regulatory framework for universal access, studies will be necessary on issues such as the scope of universal access and ensuring sufficient compensation. Emphasizing the importance to evaluate consumer preference or willingness-to-pay for universal access, an empirical analysis in an experimental framework is conducted, which examines whether consumers are willing to accept the additional burden of sustaining universal access if they are well informed about the issue. Finally, challenges for future studies on universal access are referred.