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Regulatory Framework for Universal Service in India — Can We Learn from EU

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Interventions by way of Universal Service Funds (USF) are considered to be relatively less market distorting among various means used to bridge the access gap in telecommunications. At least in theory, they are not inconsistent with competition and competitive neutrality. However, in practice this has always not been the case. It is the author’s contention that this difficulty arises more from the manner in which USFs are implemented, which in turn depends partly on their regulatory frameworks, rather than from an inherent problem with the concept of USFs. Particularly, in developing countries like India with less than perfectly efficient institutions, appropriate ex ante regulatory frameworks assume importance. To explore if India could take a leaf from the European Commission’s (EC) book as far as universal service regulation is concerned, a comparative study of the impact of the legal frameworks for universal service in India and the European Union has been carried out with the resultant indication being that India could usefully emulate elements of EC’s ex ante regulation.


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