Broadband Universal Service: A Future Path for Europe?

Paper in proceeding, 2008

The phenomenon of broadband penetration growth which could be observed over time has increased year by year. Today, broadband is increasingly becoming an issue for universal service in advanced economies. Switzerland has been the first country to include broadband connections as part of the universal service obligation, since 1 January, 2008, although at modest speeds, and with some exceptions. In the United States, the Federal-State Joint Board on Universal Service has urged the FCC to consider including broadband as part of universal service. In Europe, , the recent EC communication on universal service specifically suggests for the European Union to analyse and discuss broadband as part of the future universal service obligation. In many OECD countries there have also been targeted broadband support programmes for rural and disadvantaged areas for a number of years. The list could be made quite long, and includes countries such as Australia, New Zealand, Korea, Turkey, Czech Republic, Sweden, Norway, Ireland, Scotland, Spain, the United States, and many more. These programmes have typically involved support for construction of broadband infrastructure, either as direct state aid or as partial contributions from applicable universal service funds. The growing number of targeted broadband support programs raises the question if and when it will be possible to expand broadband into a universal service obligation (USO). Against this back-drop, this paper will provide an overview of current state and trends of universal service with focus on broadband access in European Union. First the paper will provide a brief market overview of broadband, and also briefly define the USO concept. The paper will then provide an historical overview of the universal service concept in the European legislation, with particular attention to early initiatives and discussions related to the implementation of a possible B-USO. The paper will emphasize that the current discussion on a future B-USO has long standing antecedents, running back to the 1987 Green Paper. The paper will moreover analyze the previous USO review, carried out in 2005-2006, and summarize views from stakeholder and Member States. The prospect of a B-USO must however be seen in the context of other initiatives and emphasis on broadband as a means to achieve a more dynamic European economy, and therefore various policy initiatives related to broadband are summarized. The paper will also offer some issues to consider for a broadband USO, from a general standpoint. As a conclusion, the paper will identify selected issues in implementing such a regulation.