Universal Service Obligations and Providers

An alternative to creating a fund for expanding telecommunications access in un-served areas is to impose universal service obligations directly on operators. The advantage of this approach is that it avoids the delay and overhead costs associated with administering a universal service fund. It also makes sense when there is only one operator with an exclusive right to serve a given area.

This approach can be problematic, however, if the telecommunications market is liberalized. Imposing obligations on just one operator may place an unfair burden on that operator (usually the incumbent). Or, looked at another way, it proffers what can be perceived as an unfair advantage to operators not covered by the mandate.

The Bahamas Telecommunications Sector Policy of 2001 designated that the Bahamas Telecommunications Company (BTC), as the dominant provider, would carry out universal service obligations for the duration of its exclusivity period. Among its universal service obligations, BTC had to provide free Internet access to all schools.As the pertinent legal language explained:

“8.2 Government supports the principle identified by the 1995 United Nations Social Summit, that universal access to basic education and lifelong educational opportunities are preconditions for economic and human development. It is proposed therefore that as part of universal service, Internet access will be provided free of charge to:
(a) all public and church-operated schools…
8.4 Initially, and for the duration of the Exclusivity Period, any obligation to provide universal service will be imposed upon BTC as the dominant provider… Initially BTC will be obliged to:
provide Internet access, inclusive of the supporting telecommunications services, to all schools free of charge.

120 Telecommunications Sector Policy 2001 (revised October 2002), Commonwealth of the Bahamas, Article 8.4, available at http://www.pucbahamas.gov.bs/download/telecom_sec_policy.pdf.

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