Universal Telecommunications Service in China: Trade Liberalization, Subsidy, and Technology in the Making of Information Equality in the Broadband Era
29 Pages Posted: 29 Jan 2007
This article does not assume that the telephone system, much less a digital broadband network, will reach into every home with a uniform grade of service in China. Nor does this article suggest that universal telecommunications policy in China should aim to have all Chinese schoolchildren bring their own laptop computers to school. However, given the importance of information technologies in the future, the existing technological gap can produce a permanent underclass and further expand the chasm between the information haves and the have-nots. It is essential that access to powerful information technologies is provided in every classroom, library, and other places where people from all backgrounds gather. Some telecommunications monopolies have done a good job of providing universal service. Taiwan, for example, has a well-developed telecommunications sector with about forty main lines per 100 inhabitants, a system built by a government monopoly. U.S. policymakers, on the other hand, have achieved high levels of telephone connectivity through the implementation of two critical initiatives: a pro-competition legal framework and a universal service financing mechanism. The former has resulted in lower prices for consumers of telephone services, and the latter has helped ensure that most Americans can enjoy affordable access.
In the case of China, when China Telecom monopolized the telephone market, it covered its universal service obligations by subsidizing rural services with income from its more profitable urban branches. Now that the monopoly is being broken up, the country can no longer depend on this method to finance rural services. The Chinese government must adopt a more economically sensible policy approach to attaining universal service. As of today, it is certain that a universal service fund mechanism will be introduced in China, but specifics are still being ironed out. It remains to be seen in what detail the Chinese law will design its universal service mechanism.
Keywords: WTO, GATS, Telecommunications, China, Universal Service
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