Universal service : Liberalization and privatization of telecommunications

Liberalization in the UK and the divestiture of AT&T in the USA ended the system of cross-subsidization historically associated with 'universal service'. This article discusses 'universal service', its past relationship with tariff policy and the impact of liberalization and privatization on its conceptualization. The original claims that liberalization and privatization would increase telephone penetration have not been borne out. Based on such experience, it seems unlikely that privatization policies will themselves extend 'universal service' to the majority population in Third-World countries in terms of penetration, usage or geographical equity. Indeed, where 'universal service' is the goal, the evidence suggests that committed government policy is essential.