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Endogenous financing of the universal service

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  • Ilie, Laura
  • Losada, Ramiro

Abstract

We address the question of endogenous financing of the Universal Service Obligations and we compare it with the exogenous financing. A fund is created and fed through a tax firms pay. We show that the way these funds are implemented by the current regulatory regimes at work goes against the social welfare. We propose a new way of implementing the fund that improves welfare. Moreover, we challenge the proportionality payment principle as it leads to lower welfare.

Suggested Citation

  • Ilie, Laura & Losada, Ramiro, 2004. "Endogenous financing of the universal service," UC3M Working papers. Economics we044116, Universidad Carlos III de Madrid. Departamento de Economía.
    • Handle: RePEc:cte:werepe:we044116
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    References listed on IDEAS

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    1. Caillaud, Bernard & Tirole, Jean, 2004. "Essential facility financing and market structure," Journal of Public Economics, Elsevier, vol. 88(3-4), pages 667-694, March.
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    8. Jean-Jacques Laffont & Jean Tirole, 2001. "Competition in Telecommunications," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262621509, April.
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    Cited by:

    1. Mirabel, F. & Poudou, J.-C. & Roland, M., 2009. "Universal service obligations: The role of subsidization schemes," Information Economics and Policy, Elsevier, vol. 21(1), pages 1-9, February.
    2. Poudou Jean-Christophe & Roland Michel & Thomas Lionel, 2009. "Universal Service Obligations and Competition with Asymmetric Information," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 9(1), pages 1-25, October.

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