Universal Service Obligations and Public Payphone Use: Is Regulation Still Necessary in the Era of Mobile Telephony?
28 Pages Posted: 23 Sep 2014
Date Written: September 1, 2014
In this paper, we analyse empirically whether universal service obligations for the provision of public payphones is still relevant in the European electronic communications market. We use micro-level data on 106,989 households from 27 EU countries, during the period 2005 to 2009. We first estimate the impact of universal service obligations on public payphone use. Then, we set up a counterfactual scenario to predict the average use of public payphones if no universal service obligations were imposed in the EU countries. We find that universal service obligations do not have any significant impact on public payphone use. Only coverage obligations, i.e., when the law imposes a minimum number of payphones depending on the density of population, have a positive, though low, impact on payphone use. Our counterfactual model predicts that if universal service obligations had been absent, between 2005 and 2009 public payphone use would have been 15 percent lower.
Keywords: Universal Service Obligations, Public Payphones.
JEL Classification: L51, L96
Suggested Citation: Suggested Citation