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Efficiency of uniform pricing in universal service obligations

Author

Listed:
  • Jean-Christophe Poudou

    (LAMETA - Laboratoire Montpelliérain d'Économie Théorique et Appliquée - UM1 - Université Montpellier 1 - UPVM - Université Paul-Valéry - Montpellier 3 - INRA - Institut National de la Recherche Agronomique - Montpellier SupAgro - Centre international d'études supérieures en sciences agronomiques - UM - Université de Montpellier - CNRS - Centre National de la Recherche Scientifique - Montpellier SupAgro - Institut national d’études supérieures agronomiques de Montpellier, Labex Entreprendre - UM - Université de Montpellier)

  • Michel Roland

    (ULaval - Université Laval [Québec], Centre de Recherche en économie de l'Environnement, de l'Agroalimentaire, des Transports et de l'Énergie (CREATE) - ULaval - Université Laval [Québec])

Abstract

We provide an efficiency justi cation for the imposition of the uniform pricing constraint in universal service obligations (USO), where USO are de fined as a set of constraints imposed on fi rms belonging to a network industry. Besides the uniform pricing (UP) constraint, which is an obligation to serve all consumers at an identical price, constraints considered are the coverage constraint (CC), an obligation imposed to one of the firms to serve a given segment of the market, as well as the license constraint (LC), a minimum or a maximum coverage restriction imposed on entrants. We show that adding the UP constraint to both a CC and a LC brings an increase in welfare. Our contribution comes from the full recognition of the role of a LC in well-designed USO and we illustrate this role with the particular case of linear demand.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Jean-Christophe Poudou & Michel Roland, 2014. "Efficiency of uniform pricing in universal service obligations," Post-Print hal-01810762, HAL.
    • Handle: RePEc:hal:journl:hal-01810762
    DOI: 10.1016/j.ijindorg.2014.08.006
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    Cited by:

    1. Axel Gautier & Jean-Christophe Poudou & Michel Roland, 2024. "Net Neutrality and Universal Service Obligations: It’s All About Bandwidth," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 64(4), pages 581-614, June.
    2. Axel Gautier & Jean-Christophe Poudou & Michel Roland, 2022. "Net Neutrality and Universal Service Obligations," Working Papers hal-03609917, HAL.
    3. Houpis, George & Serdarevic, Goran & Vetterle, Jonas, 2016. "Supply-side measures for policy makers to promote mobile broadband coverage," 27th European Regional ITS Conference, Cambridge (UK) 2016 148674, International Telecommunications Society (ITS).
    4. Poudou, Jean-Christophe & Roland, Michel, 2017. "Equity justifications for universal service obligations," International Journal of Industrial Organization, Elsevier, vol. 52(C), pages 63-95.
    5. Leszek Borowiec, 2021. "Direct subsidies and compensation funds in financing of universal postal services," Entrepreneurship and Sustainability Issues, VsI Entrepreneurship and Sustainability Center, vol. 8(3), pages 545-564, March.

    More about this item

    JEL classification:

    • L43 - Industrial Organization - - Antitrust Issues and Policies - - - Legal Monopolies and Regulation or Deregulation
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • K23 - Law and Economics - - Regulation and Business Law - - - Regulated Industries and Administrative Law

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