Universal Service Obligation in the Age of Broadband

The saturation of telephony in major urban areas and the political pressures to accelerate broadband facilities into rural areas are leading to the inclusion of rural broadband within the universal service obligation (USO) agenda. There are questions on the extent to which broadband should be included in the USO schema. This article aims to explore the conceptual foundations underpinning the inclusion of broadband within the USO, and thereby to create a framework within which some of these questions can be examined. Two criteria for service inclusion are highlighted: information and communication technology (ICT) as an enabler for development and as a positive externality. In light of these criteria, the importance of building networks aligned to the ability to use of the target population is emphasized. At the same time, the merit of building out fiber-optic networks in advance of absorptive capability is also discussed using the criteria of temporality of build-out and the performance discontinuities of different generations of technologies. This creates a rationale for the build-out of fiber-optic networks using the USO funds. Along with the fiber-optic network, a frugal wireless network is also advocated to immediately stem the digital divide and prepare the population for high-speed connectivity. The telecom infrastructure as per this approach is both commercially and environmentally viable.