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The future of the USO - Economic rationale for universal services and implications for a future-oriented USO

Author

Listed:
  • Christian Jaag
  • Urs Trinkner
Abstract
Universal service obligations (USO) in the postal sector currently enjoy considerable attention among politicians, practitioners and academics. The primary areas of interest have been the viability, costing and funding of the USO in a completely liberalized market. However, the purpose and the scope of the USO itself have so far not been questioned fundamentally. In this paper we first analyze the possible rationale for USO from an economic point of view. Then, we discuss the impact of converging postal and telecommunications markets on potential alternative means to provide USO in a more efficient way.

Suggested Citation

  • Christian Jaag & Urs Trinkner, 2011. "The future of the USO - Economic rationale for universal services and implications for a future-oriented USO," Working Papers 0026, Swiss Economics.
    • Handle: RePEc:chc:wpaper:0026
    as

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    File URL: http://www.swiss-economics.ch/RePEc/files/0026JaagTrinkner.pdf
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    References listed on IDEAS

    as
    1. Jean‐Charles Rochet & Jean Tirole, 2006. "Two‐sided markets: a progress report," RAND Journal of Economics, RAND Corporation, vol. 37(3), pages 645-667, September.
    2. Christian Jaag & Helmut Dietl & Urs Trinkner & Oliver Furst, 2012. "Defending Mail Markets Against New Entrants: An Application of the Defender Model," Chapters, in: Michael A. Crew & Paul R. Kleindorfer (ed.), Multi-Modal Competition and the Future of Mail, chapter 17, Edward Elgar Publishing.
    3. Martin Maegli & Christian Jaag & Martin Koller & Urs Trinkner, 2011. "Postal Markets and Electronic Substitution: Implications for Regulatory Practices and Institutions in Europe," Chapters, in: Michael A. Crew & Paul R. Kleindorfer (ed.), Reinventing the Postal Sector in an Electronic Age, chapter 8, Edward Elgar Publishing.
    4. M. Maegli & C. Jaag & M. Koller & U. Trinkner, 2010. "Postal Markets and Electronic Substitution: What is the Impact of Intermodal Competition on Regulatory Practices and Institutions?," Competition and Regulation in Network Industries, Intersentia, vol. 11(4), pages 382-398, December.
    5. Michael A. Crew & Paul R. Kleindorfer (ed.), 2008. "Competition and Regulation in the Postal and Delivery Sector," Books, Edward Elgar Publishing, number 12875.
    6. H. Cremer & F. Gasmi & A. Grimaud & J. J. Laffont, 2001. "Universal Service: An economic perspective," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 72(1), pages 5-43, March.
    7. R. H. Coase, 2013. "The Problem of Social Cost," Journal of Law and Economics, University of Chicago Press, vol. 56(4), pages 837-877.
    8. Crew, Michael A & Kleindorfer, Paul R, 2002. "Regulatory Economics: Twenty Years of Progress?," Journal of Regulatory Economics, Springer, vol. 21(1), pages 5-22, January.
    9. Matthias Finger & Rolf W. Künneke (ed.), 2011. "International Handbook of Network Industries," Books, Edward Elgar Publishing, number 12961.
    10. Helmuth Cremer & Philippe De Donder & François Boldron & Bernard Roy, 2008. "Social Costs and Benefits of the Universal Service Obligation in the Postal Market," Chapters, in: Michael A. Crew & Paul R. Kleindorfer (ed.), Competition and Regulation in the Postal and Delivery Sector, chapter 2, Edward Elgar Publishing.
    11. Knieps, Günter, 2002. "Does the system of letter conveyance constitute a bottleneck resource?," Discussion Papers 88, University of Freiburg, Institute for Transport Economics and Regional Policy.
    12. Christian Jaag & Urs Trinkner, 2008. "Pricing in Competitive Two-Sided Mail Markets," Chapters, in: Michael A. Crew & Paul R. Kleindorfer (ed.), Competition and Regulation in the Postal and Delivery Sector, chapter 10, Edward Elgar Publishing.
    13. Jaag Christian, 2011. "Entry Deterrence and the Calculation of the Net Cost of Universal Service Obligations," Review of Network Economics, De Gruyter, vol. 10(1), pages 1-19, March.
    14. Jean-Charles Rochet Author-Email:rochet@cict.fr Author-Workplace-Name: IDEI, University of Toulouse & Jean Tirole Author-Email: tirole@cict.fr Author-Workplace-Name: IDEI, University of Toulouse, 2006. "Two-Sided Markets: A Progress Report," RAND Journal of Economics, The RAND Corporation, vol. 37(3), pages 645-667, Autumn.
    15. Crew, Michael A & Kleindorfer, Paul R, 1998. "Efficient Entry, Monopoly, and the Universal Service Obligation in Postal Service," Journal of Regulatory Economics, Springer, vol. 14(2), pages 103-125, September.
    16. Christian Jaag & Urs Trinkner, 2011. "The interaction between universal service costing and financing in the postal sector: a calibrated approach," Journal of Regulatory Economics, Springer, vol. 39(1), pages 89-110, February.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Christian Jaag & Urs Trinkner & Jeffrey Yusof, 2014. "Assessment of EU Postal Sector Policy during the Second Barroso Administration (2010-2014)," Working Papers 0050, Swiss Economics.
    2. Christian Jaag & Helmut Dietl, 2011. "Postal and Regulatory Reform in Intermodal Competition," Working Papers 0031, Swiss Economics.
    3. Poudou, Jean-Christophe & Roland, Michel, 2014. "Efficiency of uniform pricing in universal service obligations," International Journal of Industrial Organization, Elsevier, vol. 37(C), pages 141-152.
    4. Christian Jaag & Florian Stahl & Benoit Stroelin, 2011. "Commercial and Regulatory Aspects of Reverse Hybrid Mail," Working Papers 0030, Swiss Economics.
    5. Gautier Axel & Poudou Jean-Christophe, 2014. "Reforming the Postal Universal Service," Review of Network Economics, De Gruyter, vol. 13(4), pages 453-477, December.
    6. Jaag Christian, 2011. "What is an Unfair Burden? Compensating the Net Cost of Universal Service Provision," Review of Network Economics, De Gruyter, vol. 10(3), pages 1-32, September.
    7. Urs Trinkner & Bernd Holznagel & Christian Jaag & Helmut Dietl & Haller Andreas, 2012. "Möglichkeiten eines gemeinsam definierten Universaldienst Post und Telekommunikation aus ökonomischer und juristischer Sicht," Studies and Reports, Swiss Economics, pages 1-79, September.
    8. Jaag, Christian, 2014. "Postal-sector policy: From monopoly to regulated competition and beyond," Utilities Policy, Elsevier, vol. 31(C), pages 266-277.
    9. Christian Jaag, 2013. "Intellectual Property Rights and the Future of Universal Service Obligations in Communications," Working Papers 0040, Swiss Economics.
    10. Hasbi, Maude, 2015. "Universal service obligations and public payphone use: Is regulation still necessary in the era of mobile telephony?," Telecommunications Policy, Elsevier, vol. 39(5), pages 421-435.

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    More about this item

    Keywords

    Universal service; USO; covergence; postal sector;
    All these keywords.

    JEL classification:

    • L43 - Industrial Organization - - Antitrust Issues and Policies - - - Legal Monopolies and Regulation or Deregulation
    • L50 - Industrial Organization - - Regulation and Industrial Policy - - - General
    • L87 - Industrial Organization - - Industry Studies: Services - - - Postal and Delivery Services

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