Universal Service Obligation in Telecommunications

Abstract

The chapter studies service of general economic interest (SGEI) in the telecommunications sector, which has been translated as universal service obligations (USO). The ideal of universal service was deeply rooted in the organisation of the sector under the traditional public service model. The EU liberalisation process transformed this sector from state monopolies to competitive markets. It was in this process that USO provision began to be regulated at the EU level. It finds that SGEI was largely a by-product of the liberalisation process. It was defined very narrowly during the market liberalisation process, limited to physical access to telephony network. It remained largely unchanged until now. It is submitted that USO as defined by EU law has become obsolete and meaningless, as is shown by the steady decline in the subscription rate to fixed telephone. Instead, the focus of EU law has been on ensuring that USO funding is competition neutral.