Universal service and the Telecommunications Act of 1996 - The fact after the act

Three goals of the 1996 Telecommunications Act are competition, efficiency, and explicit mechanisms to further universal service, The new universal service policies violate these goals, review the policies (support for high-cost and rural areas, low-income subscribers, and educational and medical institutions, and the funding mechanism) and detect the influence of various interest groups and the regulators' desire to protect their policies from public scrutiny. The new policies will require $4-12 billion per year to fund and create inefficiency of $1.2-4.0 billion per year from revenue taxation. A more efficient tax scheme would increase total surplus, (C) 1998 Elsevier Science Ltd, All rights reserved.