UNIVERSAL SERVICE PROBLEM

• Goal of Low Basic Service Prices

  High Degree of Rate Averaging

  Two Sources of Historical Universal Service Subsidy

  Explicit:     About $1B

  Implicit:     $5B - $19B

  • Toll/Access to Local

    
    

  • Business to Residence

    
    

  • Urban to Rural

  
  

  Telecom Act of 1996 Changed Everything

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