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Subject: AEJ 95 MartinB CTP Universal service and the NII
From: Elliott Parker <[log in to unmask]>
Reply-To:AEJMC Conference Papers <[log in to unmask]>
Date:Sun, 28 Jan 1996 19:56:23 EST
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       Universal Service and the National Information
                       Infrastructure
 
          A critical examination of the literature
 
 
 
 
 
                      Brennon M. Martin
 
                  School of Communications
               University of Washington, DS-40
                  Seattle, Washington 98195
 
                        (206)543-2660
                  [log in to unmask]
Universal Service and the NII:  a critical examination of
the literature
 
 
 
 
 
 
 
 
 
 
 
 
                          Abstract
 
     This paper examines the existing literature on the
 
topic of providing universal service to the National
 
Information Infrastructure.  The examination is built around
 
a number of questions that must be answered in order to form
 
coherent, socially-responsible policy.  The analysis focuses
 
on the absence of an empirical approach to these questions,
 
proposes areas of study that would benefit from a behavioral
 
treatment, and concludes by offering a research question
 
with which to begin.
 
 
23
Universal Service and the NII:  a critical examination of
the literature
     The convergence of the telephone, television, and
 
traditional publishing industries represented by the
 
creation of an electronic National Information
 
Infrastructure, known as the NII, the Information
 
Superhighway, or simply the Net, presents policy-makers with
 
interesting and sometimes troublesome dilemmas.  The problem
 
originates from the disparate traditions with which these
 
industries have been governed in the past.  Ithiel de Sola
 
Pool first outlined these traditions as non-interference
 
(traditional publishing), scarcity (broadcast television and
 
radio), and common-carrier (telephone).
 
     In the common-carrier tradition, telephone service was
 
allowed to develop into a natural monopoly based on the
 
argument that one company could most efficiently serve the
 
population allowing each customer to be connected to every
 
other customer.  One of the consequences of the telephone
 
monopoly was the emergence of the concept of universal
 
telephone service, the idea that service should be available
 
to everyone at a reasonable cost.  In order to fund this
 
service, a complex system of internal cross-subsidies was
 
created, whereby customers who could afford to pay more,
 
such as businesses, contributed to a fund to subsidize those
 
who could not otherwise afford service, such as those in
 
rural areas where connection costs are higher.
 
     As telecommunications technology has evolved, the
 
argument that a monopoly is necessary for complete
 
interconnectivity has fallen away. The modified final
 
judgment in the AT&T antitrust case allowed competition in
 
the long-distance business, and several bills presently on
 
the floor of Congress include provisions to introduce
 
competition in the local market.  This evolution in the
 
industry has also prompted a renewed debate over the idea of
 
universal service.  Many telecommunications companies
 
(telcos) have begun to upgrade their networks to high-
 
bandwidth, fiber-optic technology, which allows more
 
digitized information to flow than traditional, analog-based
 
transmission over copper wires.  The transition to fiber is
 
nearly complete at the national, regional, and state levels.
 
What is under debate is the local loop, also called the last
 
mile, which is the connection from the home to the first
 
switching station.
 
     With a fiber-optic connection, a customer would be able
 
to send and receive voice, video, and data simultaneously
 
over several channels.  In other words, one wire could carry
 
an interactive television signal, a video phone call, and a
 
computer terminal connection to a distant database all at
 
the same time.  Installing fiber optics in the local loop,
 
known as fiber-to-the-curb (FTTC), is very expensive
 
relative to the national and regional fiber network.  The
 
costs beg the question whether or not such an expenditure is
 
warranted for the wealthy, much less for those who would
 
require a subsidized connection.  FTTC, of course, is not
 
the only possible high-bandwidth connection;1 but the debate
 
is not focused so much on the technologies as on the
 
services the technologies would enable.  At issue is a
 
question of whether people have a right to a high-speed
 
connection to the Net, demanded by the interests of equity,
 
or whether such a connection is a privilege for those who
 
can afford it.
 
     Several questions have been addressed in great detail
 
in the literature, but concrete answers have remained
 
elusive:  What is the historical precedent for universal
 
telecommunications service?  How should universal service be
 
defined?  What does a cost/benefit analysis of universal
 
service look like?  How should universal service be funded?
 
What is the role of the government in establishing universal
 
service in a competitive system?  In a regulated monopoly?
 
     The research up to this point has remained theoretical
 
and polemical.  What is needed is an empirical approach to
 
the question of universal telecom service.  The problem, of
 
course, lies in the abstract nature of the question itself.
 
Researchers need to pay attention to relevant issues that
 
may be operationalized in order to evaluate the merits of
 
implementing or not implementing universal service of
 
advanced telecom technologies.  Before addressing these
 
questions, it is first necessary to examine the theoretical
 
arguments for and against universal service to determine
 
what questions remain unanswered.
 
Historical precedents
 
     The Bell system was founded on broad lines of "One
     System," "One Policy," "Universal Service," on the idea
     that no aggregation of isolated independent systems not
     under common control, however well built or equipped,
     could give the country the service.  One system with a
     common policy, common purpose, and common action;
     comprehensive, universal, interdependent,
     intercommunicating like the highway system of the
     country, extending from every door to every other door,
     affording electrical communication of every kind, from
     every one at every place to every one at every other
     place.  (Dordick 230, quoting Theodore Vail in the 1910
     AT&T annual report)
 
     This often-quoted passage by Theodore Vail, former
 
president of AT&T, has been cited as the origin of the
 
concept of universal telecom service as a fundamental right.
 
Herbert S. Dordick has argued that policy-makers should
 
endorse universal service based on historical precedent.
 
According to Dordick, it is important to examine how the
 
telephone became a corporate tradition at AT&T and a
 
perceived consumer right in the USA.  When Vail originally
 
joined the Bell system in 1885, he sought to extend phone
 
service universally, but his concept of "universal" was of
 
"everywhere" not "everyone."  By working to achieve the
 
interconnection of the local exchanges, which allowed the
 
provision of long distance service, Vail recognized that the
 
"seeds of a broader concept of `universal service' were
 
planted (230)."
 
     By 1910, the concept evolved to mean everyone, not just
 
everywhere.  Susan G. Hadden and Edward Lenert point out
 
that Vail's concept of widespread telephone access at
 
reasonable rates had become accepted public policy by the
 
time the 1934 Communications Act was passed which calls for
 
regulation "to make, so far as possible, to all peoples of
 
the United States a rapid, efficient, nation-wide, and world-
 
wide wire and radio communication service with adequate
 
facilities at reasonable charge" (cited in Hadden and Lenert
 
132).  Dordick concludes that regulators must develop
 
policies that will permit the development of broadband
 
digital services while maintaining Vail's goal of universal
 
service and the tradition established in US policy.
 
     Harmeet Sawhney takes a somewhat different approach.
 
He argues that the repertoire of experience is a useful
 
resource in that society has been faced with the problem of
 
providing a service to all its citizens in the past, namely
 
telephones, education, and suffrage.  According to  Sawhney,
 
universal service will result from the "overlapping
 
consensus" of unlikely groups.  Universal telephone service,
 
for example, emerged not from any sort of benign good will
 
but rather from fierce competition and the drive to gobble
 
up territory, followed by Theodore Vail's move to eliminate
 
competition and establish a regulated monopoly.
 
     Universal education, likewise, emerged from a desire to
 
unify the country and "Americanize" the growing immigrant
 
population, not from any enlightened vision.  Sawhney argues
 
that universal service is an incremental process,
 
illustrated by the development of universal suffrage in
 
which certain groups were given the right to vote often so
 
that a certain group or individual could retain or win
 
power, not as an extension of a right.  When one section of
 
the country loosened its restrictions, pressure came to bear
 
on other parts of the country to do the same.  Universal Net
 
service, likewise, will be an incremental process driven by
 
the competition of companies to claim territory and be the
 
first to offer service in a given area (Sawhney 387).
 
     According to Dordick, history tells us that policy-
 
makers should make universal telecom service a priority
 
because past policy has generated a perceived human right to
 
such service.  According to Sawhney, history tells us that
 
universal service will emerge from natural processes of
 
competition as an unexpected by-product requiring no special
 
government interference.  One question that neither author
 
has addressed is whether there are any inherent differences
 
between the new technologies and the examples each has used
 
for illustration.  How appropriate is each example for
 
illumination of current issues?  The example of the
 
telephone seems like a good start, but broadband
 
communications systems offer much more than point-to-point
 
connection of voice lines.  Universal education and
 
universal suffrage, however, cannot be taken as appropriate
 
precedents at face value.  In order to answer these
 
questions, it is first necessary to analyze what is meant by
 
universal advanced telecommunications service -- what is
 
included?  what is excluded?
 
Defining universal service
 
     The debate over how universal service should be defined
 
turns to a great extent on what services will be available
 
over the network.  At present there are three models that
 
could emerge.  The first is an entertainment-based model in
 
which the principal services include video dial tone (VDT,
 
essentially a video telephone), video on demand (VOD, a sort
 
of on-line Blockbuster Video), a glorified Home Shopping
 
Network, and other consumer-driven services designed to make
 
spending money as easy as a phone call.  The second
 
possibility is a public-interest/educational-based model in
 
which the principal services include distance learning
 
projects, government information access, telecommuting or
 
work-at-home arrangements, and other information-retrieval
 
projects designed to increase the flow of educational and
 
public information.  The third possibility is some
 
combination of the first two models.2
 
     Steven Titch has, perhaps, summarized objections to
 
subsidized provision of universal service in the first model
 
most succinctly:
 
 
          "Now, as convergence begins to shake out, and we
     see Bell Atlantic teaming with Tele-Communications,
     Inc. and BellSouth raising hundreds of millions for a
     piece of the Paramount action, it's clear that even the
     Bell regional holding companies know that
     entertainment, not the information services they touted
     in the past, will drive broadband services on the
     consumer level.  Given this fact, it is questionable to
     what extent, how much, if any, residential broadband
     access should be subsidized."  (40).
 
     Titch argues that policy makers should subtly re-focus
 
the goal in order to avert the creation of a class of
 
information-poor.  The idea that part of the nation, i.e.
 
the wealthy, would be wired with advanced systems while the
 
rest of the nation would be left behind has been a
 
frequently voiced argument in support of universal service.
 
This argument rests on the assumption that there are certain
 
benefits, economic and otherwise, to having access to these
 
technologies that would give those who are connected an
 
unfair advantage over those who are not.  According to
 
Titch, these disparities can be avoided not by ensuring
 
universal access to broadband, but by ensuring universal
 
access to the benefits of broadband (40).
 
     Following a similar argument, Heather Hudson suggests
 
in an article for Telecommunications Policy that a
 
multilevel definition of universal service is acceptable
 
because not all services are required by households.  Some
 
may serve the needs of all just fine at the community or
 
institutional level.  She suggests that what is needed at
 
the household level (level 1) is service sufficient for
 
voice, data, and fax at transmission speeds no more than
 
9600 bits per second (bps).  For levels 2 and 3, she
 
suggests Internet access and broadband applications.
 
     John Browning, in article for Wired magazine, argues
 
universal service is an outdated concept because there are
 
more types of information (voice, video, data) flowing over
 
more types of channels (wires, fiber optics, and airwaves)
 
to more than one standard receiver and because "intelligence
 
is fast migrating to computers on the network's periphery --
 
and many of those computers are owned by customers rather
 
than service providers."  He suggests that the idea of
 
universal service should be scrapped for open access, which
 
would require big network operators to make available to
 
everybody, on a non-discriminatory basis, whatever services
 
they do provide as well as the technologies required for the
 
use of the services.
 
     Susan Hadden, Chairman of the Policy Committee of the
 
Alliance for Public Technology (APT), argued before the
 
Senate Committee on Commerce, Science, and Transportation
 
that the goals for universal service should not be stated in
 
terms of specific technologies, because technologies change,
 
but rather in terms of capabilities and functions.  Her
 
testimony provides eight such goals.
 
z    connectivity -- full capabilities of the network should
  reach everyone
z    switching and broad bandwidth -- capability of carrying
  two-way voice, data, video, and graphic signals3
z    openness -- users can send as well as receive and can
tailor their searches for information to their own needs
z    interoperability -- compatibility between systems
z    accessibility -- ability to use the network, regardless
  of disability or functional limitation
z    usability -- ease of finding information
z    privacy, security, and reliability
z    essential information services -- personalized health
care and job training
 
In Media Studies Journal, Hudson echoes the argument that
 
the goal for universal service should be stated in terms of
 
capabilities although she does not go as far as the APT in
 
her support for ensuring access at the household level to
 
the more advanced services.
 
     Sawhney, however, argues that the current emphasis on
 
the development of a new definition for universal service is
 
a misdirected effort because it is so unlikely that a
 
definition could ever be formulated that will be acceptable
 
to everybody.  "Even if it is possible to forge a
 
universally acceptable definition, it will have limited
 
utility in the political arena, because the players are
 
likely to pursue their own private interests in spite of
 
their public support for the new definition of universal
 
service" (389).
 
     In short, questions remain unanswered regarding the
 
structure of the NII so deciding what services should be
 
made available to all may prove to be impossible until the
 
make-up of the system is more concrete.  Although Hudson
 
argues that goals should be stated in terms of capabilities,
 
not technologies, in one source, she contradicts herself by
 
specifying a data transmission rate in another source.
 
Another problem with Hudson's argument is the fact that she
 
does not recognize that the data transmission rate she
 
specifies as appropriate for the household level is more
 
than sufficient for most information available on the
 
Internet, which she reserves for the community or
 
institutional level.
 
     The APT stands by its belief that supporting universal
 
service is the only way to avoid the creation of an
 
information poor.  There is no empirical evidence, however,
 
to support or to refute this argument.  Before answering
 
questions about the structure of the system, it is first
 
necessary to answer questions about the costs and benefits
 
of an electronic infrastructure.  Steven Titch suggests that
 
the telcos should be asking, "What are the social benefits
 
of an information highway?  What services are necessary to
 
growth and learning?  What applications can the public
 
sector encourage?" (40).  Also, does the net provide
 
tangible benefits to those with access?  If so, how?  How
 
much access is required to take advantage of these benefits?
 
By examining the arguments that have been made for and
 
against the possible benefits of universal telecom service,
 
it is possible to generate a list of research ideas with
 
which to begin a more empirical investigation.
 
The bottom line
 
     The discourse on costs and benefits of universal
 
telecom service takes place on three levels:  that of the
 
individual, in the welfare and rights issues as well as
 
consumer issues;  the community level, on the benefits to
 
the business economy and the polity; and the  humanitarian
 
level, in quasi-religious themes emphasizing the capacity
 
for technology to bring peoples together in natural harmony.
 
By examining the arguments on each level, it is possible to
 
determine what questions remain unanswered and where an
 
empirical investigation of these issues may begin.
 
     At the humanitarian level, the hope is to facilitate
 
the union of humankind.  This argument stems from the fact
 
that the root of the words "communication" and "communion"
 
is communis, a shared participation in a common experience
 
with strong religious overtones.  The meaning was later
 
extended to include the exchange of information and
 
materials and then the technologies which made the exchange
 
possible.  Originally the connotation was a "hope for
 
oneness with God," but the meaning has become more
 
mechanistic.   As Sawhney points out, this hope for oneness
 
has lingered on to become a recurring theme in the
 
discussions on new communication technologies.   "Within
 
this context, the communication technologies, both
 
telecommunication and transportation, are viewed as the
 
physical links that make the communion possible" (381-382).
 
Obviously, the problem with this argument is that it is
 
impossible to quantify in any way.  Determining the cost or
 
the benefits to society in tangible terms is necessarily one
 
objective of policy makers.  Arguments that fail to address
 
these issues specifically, however moving the notion may be
 
spiritually, often fall on deaf ears.  This problem with
 
quantification occurs within the arguments on the community
 
level as well.
 
     Hudson has identified four major national goals of the
 
US government:  (1) a strong and diversified economy, (2)
 
universal access to quality health care and education, (3)
 
the opportunity for all Americans to develop their talents,
 
and (4) protection of the environment.  Although these goals
 
may be debatable, the purpose is not to question them here.
 
She argues that research, without specifying exactly which
 
research, shows how information and telecom technologies can
 
help reach these goals by identifying the necessary
 
components of an information-based society:  a citizenry who
 
seeks out information rather than passively consuming it,
 
industries that view information as a key to their
 
competitive strategy, public and non-profit organizations
 
that use communication technology to improve equal access to
 
their services, and policies designed to overcome barriers
 
to opportunity (Hudson, "Toward Universal Access" 138).
 
     These components touch on issues related both to the
 
benefits to the business economy and to the more efficient
 
operation of democratic processes.  Universal service is
 
viewed as a way to allow the whole system, economic and
 
political, to function more efficiently.  The network
 
externalities argument says that each additional subscriber
 
increases the value of the entire network because each of
 
the other subscribers can now access the newest.  Extending
 
the service to all, therefore, is likely to be more
 
beneficial than costly.
 
     This same argument has been used in the debate over
 
other universal services to justify the financial
 
expenditure. Universal services are seen as a magical
 
solution to social reform as in the case of universal
 
education to end poverty and social unrest and rural
 
electrification to improve the quality of rural life and
 
stem the flow of people to the cities.  Following this
 
argument, the Net is viewed as the vehicle into the
 
information age with increased economic activity and more
 
cost-efficient education and medical services.  "...[T]he
 
tax for universal service is not a levy on the rich for the
 
benefit of the poor.  It is the cost borne by society for
 
its own benefit" (Sawhney 380).
 
     Hadden and Lenert argue that the concept of universal
 
service is closely linked to the public nature of the
 
network.  Essentially, their argument becomes a chicken-and-
 
egg question:  universal service is inherently public
 
because it is transmitted via a switched and wired network,
 
and using this network for universal service enhances the
 
public character of the network.  Universal service,
 
therefore is inherently public and enhances public values.
 
     Hadden and Lenert mistakenly discuss universal service
 
as if it is a thing, a product, instead of a service.
 
Technology does not support universal service.  Universal
 
service is the providing of access to technology to
 
everyone.  Yes, universal service is inherently public, but
 
the public nature of a technology that is available to all
 
is embedded only in the fact that it is available to all.
 
Otherwise, a certain technology would have no inherently
 
public aspect.
 
     To the US Senate, Hadden outlines the benefits of
 
universal service as more efficient government services,
 
improved health care, improved education, improved
 
lifestyles, telecommuting, more efficient courts, more
 
efficient markets, and increased First Amendment rights.
 
The opportunity costs, the costs of not providing universal
 
service, are the diminished size of the market, a
 
marginalized population, and a failure to meet national
 
goals in education and health.  "Taking all these arguments
 
together, we can see that the benefits of ensuring that
 
everyone has switched broadband telecommunications services
 
in the home far outweigh the costs."  She concludes also
 
that the costs of creating a population of information poor
 
by not providing universal service are "too great for our
 
nation to bear."
 
     In spite of Hadden's conclusions that the benefits to
 
the community "far outweigh the costs,"  the math is, quite
 
simply, a bit more complex.  Measuring the costs of
 
implementing the technology to make universal service
 
possible is easy, and the costs are very high.  Measuring
 
the benefits to society and the opportunity costs , however,
 
is very difficult, if not impossible.  The lists that Hadden
 
provides seem to make sense when viewed theoretically, but
 
theoretical assumptions and cost/benefit conclusions are
 
entirely different matters.
 
     Measuring the opportunity costs is not necessarily a
 
problem inherent to the provision of universal services in
 
general.  In the case of universal medical coverage for
 
example, the lack of such a service for patients who cannot
 
afford a regular doctor leads to more expensive emergency
 
care that is paid for by higher medical bills for those who
 
can pay, as Sawhney demonstrates.  Perhaps these costs to
 
the community can be quantified in the case of universal
 
telecom services, at least in relative terms if not more
 
specific amounts.  In order to make these determinations at
 
the community level, however, it is necessary to determine
 
the relative costs and benefits to the individual.
 
     On the level of the individual, there are basically two
 
concepts that are important to understanding the discourse:
 
the individual as a consumer and the individual as a
 
citizen.  In the former, the question is how does access to
 
advanced telecom technologies affect the market efficiency
 
and behavior of a person.  For the latter, the question is
 
how does access affect the ability of a person to
 
participate in the political process and how does access
 
affect the ability of a person to get information from the
 
government relevant to his or her needs.4
 
     Embedded in the concept of the individual as a citizen
 
is the notion of telecommunications service as a human
 
right.  If this service is accepted as a right, the
 
cost/benefit analysis is relegated to a secondary
 
consideration (Sawhney 379).  Tom Valovic suggests, however,
 
that the discussion about extending universal service to
 
advanced telecom capabilities is impractical given the
 
slippage in universal local service in recent years:  the
 
percentage of households without phones almost doubled
 
between 1988 and 1992 in key metropolitan areas surveyed by
 
the FCC, and 50% of phones in the New York LATA (local
 
access and transport area) did not have touch-tone
 
capability as of 1991 (6).  Following this argument, the
 
cost/benefit analysis cannot become a secondary
 
consideration given the current fiscal situation.
 
     Steven Meyers has summarized the situation from a human
 
rights viewpoint by classifying four categories of "drivers"
 
on the information highway:  primes, boonies, no-knows, and
 
forget-its.  Primes are those individuals who live in urban
 
areas with easy access to the Net and much enthusiasm for
 
getting involved in it from an early stage.  Boonies would
 
like to get on-line, but they live in areas where access is
 
limited.  No-knows have never even heard about the Net, or
 
they do not know what services are available, but they would
 
probably get involved if they discovered its possibilities.
 
Forget-its do not know about the Net, do not want to know
 
about it, and would never have any interest whatsoever in
 
getting on-line.
 
     Meyers contends that there are simply some members of
 
the citizenry who would never have any use for the
 
electronic infrastructure.  "The problem I have with
 
universal access is the implication that the network should
 
accommodate every potential user, regardless of the level of
 
driving skill....  No matter how wide the road, there will
 
always be bystanders" (174).
 
     This view, also known as the Aunt Sally argument, is
 
refuted by Hadden and others at the APT.  Aunt Sally is who
 
Meyers would classify as a forget-it, but Hadden insists
 
that Aunt Sally, and everyone else who thinks that they do
 
not want access, is really a no-know.  By explaining to Aunt
 
Sally that she could visit her doctor without traveling to
 
the county seat or visually check-up on her children who
 
live two hours away, Hadden would convince Aunt Sally, and
 
the US Senate, that the Net can benefit every individual
 
regardless of location or socio-economic status and that
 
every individual as a right to this service.
 
     These arguments, however, assume that the information
 
infrastructure will take on  the form previously referred to
 
as the public-interest, or educational, model.  The concept
 
of the individual as a consumer assumes that the Net will
 
develop in a different fashion, following the entertainment
 
model.  If the goal of service providers is purely one of
 
market efficiency and profit seeking based on entertainment,
 
then what rights do individuals have to VOD or affordable
 
video games?  Focusing on the individual as a consumer
 
effectively removes the universal service debate from the
 
human rights arena and places it firmly in the hands of
 
accountants.
 
     Given the strong and growing presence of educators and
 
researchers on the Net at present time, it is unlikely that
 
the system will develop along a purely entertainment-based
 
model.  This statement is not meant to say that the
 
commercialization of the Net is unlikely; the current hands-
 
off approach being adopted by the Clinton administration
 
would predict that the development of the infrastructure
 
itself will be driven by commercial interests.  Development
 
by for-profit organizations does not condemn the Net to 500
 
channels showing Terminator 2, five minutes apart.  The
 
history of the development of the radio broadcast industry
 
demonstrates the power of commercial interests over non-
 
profit groups, but the non-profit presence on the Net is
 
much more established in number of participants at this
 
point than it ever was in the radio spectrum.5
 
     The cost/benefit analysis of the NII is far from
 
complete.  At the level of the  community and of the
 
individual, theory and much of the literature indicates that
 
the benefits of extending telecom service universally might
 
exceed the costs of doing so (or of not doing so), but the
 
evidence is inconclusive.  More research is needed,
 
beginning with the individual.  Does an individual increase
 
his productivity at work as well as his level of
 
participation in the community by gaining access to the
 
services available on the Net?  If so, how?  At the level of
 
the community, researches might ask, does the efficiency of
 
government improve by ensuring individual access to services
 
via the Net?  If so, how?
 
The Research Question, Implications, and Conclusions
 
     From a behavioral perspective, it would be interesting
 
and instructive to determine how participation in the
 
democratic process is affected by access to the Net by
 
identifying the steps involved in certain types of
 
participation such as writing a letter, volunteering on a
 
campaign, voting, and discussing political issues with
 
others.  After identifying these steps, the question becomes
 
one of determining what prompts a person to take action and
 
how Net access reduces or increases the probability that
 
participation will occur.  If Net access is found to
 
increase the likelihood of democratic participation, how
 
does this participation benefit society?  Of what
 
consequence is this form of participation?  Upon finding
 
positive answers to these questions, i.e. that access does
 
increase participation resulting in a social benefit, then
 
universal service might be accepted as a prudent policy goal
 
for law-makers.
 
     If universal service is accepted as a goal, the next
 
question becomes one of its funding.  In this debate, there
 
are essentially two questions:  who pays, and who gets paid?
 
As Browning points out, a system cannot label the "have-
 
nots" without labeling the "haves."  Dean Miller contends
 
that the problem is not whether universal service of
 
advanced telecom applications is a worthy goal.  The problem
 
is that the goal of universal service has been traditionally
 
pursued through regulated monopolies. There is near
 
universal consensus, however, that increased competition in
 
the telecom business will lead to enhanced benefits for
 
consumers.
 
     Although there is near universal consensus on the
 
benefits of competition, agreement is not complete.  In a
 
four-part series for Telephony, Barbara J. Farrah and Mike
 
D. Maxwell argue that the telecom industry is in the midst
 
of a transition from a technology paradigm to a market
 
paradigm, in which there is a greater emphasis on developing
 
applications that blend capabilities with the market's needs
 
rather than developing products that blend technology with
 
market technology.  This argument, echoed in part by David
 
Rand Irvin, is based of the idea that the industry has
 
previously operated under a set of incorrect assumptions
 
that America's declining ability to compete is connected to
 
declining technology.  By breaking up the monopolies and
 
stimulating competition, policy makers will stimulate the
 
production of technology needed to become global
 
competitors.  Farrah and Maxwell argue that the US is not
 
being beaten by better technology; the US is being beaten by
 
better applications of technology developed in the US.  They
 
contend that the key to US success is an end to the system
 
of regulated competition, dissolution of the modified final
 
judgment, and establishment of a new regulatory structure
 
for issues related to the Net.
 
     Given current anti-monopoly sentiment, the action
 
Farrah and Maxwell propose is highly unlikely at this point
 
even though they make a strong argument.  If a regulated
 
monopoly does develop around the Net in the future, it is
 
more likely to result from the incremental process described
 
by Sawhney, mirroring the development of the telephone
 
monopoly.
 
     In a survey of CEOs of major industries involved in the
 
creation of the Net, consensus emerged that one of several
 
obstacles to the creation of the National Information
 
Infrastructure was the lack of innovative funding mechanisms
 
(Pelton 34).  In her testimony before the US Senate, Susan
 
Hadden outlined several possibilities:  (1) a NetTrans
 
Account, a sort of value-added tax developed by Eli Noam;
 
(2) a tax on all equipment used on the NII, proposed by
 
Michael Einhorn; (3) a universal service trust fund in which
 
each user pays a small amount on his or her monthly bill;
 
(4) a gross receipts tax, as used in Maryland; and (5)
 
moving the spectrum allocation auction fund to serve as a
 
nucleus for universal service.  As the situation is today,
 
universal local service is slipping, and the system of cross-
 
subsidies is proving insufficient with the changes in
 
regulatory structure.  Creating a financing structure for
 
implementing universal service to the Net could well prove
 
to be the most challenging aspect to the problem.
 
     While the US debates these issues, other governments
 
are moving forward with plans to implement policy.  Naqi
 
Jaffery points to the greater authority of the Canadian
 
government than of the US government to shape the nation's
 
telecom policy.  In March of 1994, the Canadian government
 
announced plans to establish an advisory council to help
 
formulate and implement the national network, guided by
 
three policy objectives:  "to create jobs through innovation
 
and investment in Canada, to reinforce Canadian sovereignty
 
and cultural identity, and to ensure universal access at
 
reasonable costs" (47).
 
     Given the economic situation in the US and worldwide,
 
the huge expense necessary to create the infrastructure to
 
support the Net may not be justified unless tangible
 
benefits to society can be identified.  A program of
 
empirical research might give as much attention to
 
"community rights" as "individual rights" by examining how
 
benefits to the individual manifest themselves in the
 
collectivity.  With such an approach, theory may be
 
supported by evidence rather than supposition.
 
                         APPENDIX 1
             HIGH-SPEED LOCAL LOOP TECHNOLOGIES
 
Transmissi  Media       Performanc  Key Cost     Leading
on System   Configurat  e           and Time     Industry
            ion         Capabiliti  to Market    Players
                        es          Issues
Asymmetric  Twisted     1.544-2     Uses         AT&T
Digital     pair from   Mbps VOD    existing     Paradyne,
Subscriber  the         and POTs    cable        Amati
Line        central     today.  3   plant for    Corp.,
(ADSL)      office to   Mbps in     low-cost,    Bell
            the home    mid-1995,   incrementa   Atlantic,
            (existing   6 Mbps in   l market     Goldstar,
            local       late 1995.  entry.       NEC,
            loop)       Live        Requires     Westell
                        broadcast   ADSL         Internatio
                        in 1995.    digital      nal.
                                    set-top
                                    box and
                                    ADSL
                                    electronic
                                    s in
                                    central
                                    office
                                    ($400-$600
                                    per line
                                    in volume
                                    production
                                    ).
Hybrid      Star        750 Mhz of  For          ADC
Fiber/Coax  configurat  services    telcos,      Telecommun
(HFC)       ion.        spectrum    HFC          ica-tions,
            Fiber from  for 100     requires     Ameritech,
            the switch  channels    significan   AT&T
            to optical  of analog   t initial    Network
            distributi  NTSC        investment   Systems/An
            on node,    video.      for new      tec, First
            coax to     Optional    cable        Pacific
            the home.   digital     plant and    Networks,
                        channels    long-term    Ericsson/R
                        for         build-out.   aynet.
                        compressed  Costs to
                        video,      $500 -$1K
                        POTs, or    to pass
                        data        home and
                        services.   $1K-$2K
                                    per
                                    subscriber
                                    based on
                                    the take
                                    rate.
Fiber to    Fiber from  Highest     End-to-end   BroadBand
the Curb    the switch  bandwidth   fiber is     Technologi
(FTTC)      to the      option      the most     es, NYNEX.
            home.       capable of  expensive
                        155 Mbps    cable
                        bandwidth   plant
                        to and      upgrade,
                        from the    typically
                        home.       $1K-$2K to
                                    pass each
                                    home.
                                    Requires
                                    longest
                                    time to
                                    deploy.
                                    Supports
                                    few
                                    subscriber
                                    s per
                                    optical
                                    pedestal
                                    (8 to 12).
Direct      Ku Band.    Broadcast   Satellite    Hughes
Broadcast               only        deployment   Network
Satellite               applicatio  .  Reaches   Systems.
                        ns.         areas too
                                    impractica
                                    l or
                                    expensive
                                    to wire.
Local       28 Ghz      Primarily   Practical    Bell
Multipoint  microwave   broadcast.  in high-     Atlantic,
Distributi  and         Interactiv  density      CellularVi
on System   microcell   e services  areas that   sion.
            architecht  planned.    are
            ure.                    difficult
                                    or
                                    expensive
                                    to wire
                                    (parts of
                                    New York
                                    City).
 From "Broadband in the Local Loop" by Barry W. Phillips in
           Telecommunications, November 1994, p.38
                        Bibliography
 
Brock, Gerald W.  Telecommunication Policy for the
     Information Age.  Cambridge, MA:  Harvard UP, 1994.
 
Brown, F. B.   "Bridge Across Saskatchewan:  Equal access to
     information for all residents."  Educational and
     Training Technology International.  27 (1990):  305-17.
 
Browning, John.  "Universal Service (An Idea Whose Time is
     Past)."  Wired.  Sept. 1994:  Web Archives.
 
----------.  "Universal Access, not Universal Service." Wall
     Street Journal. 7 Sept 1994, western ed.:  A12.
 
Compaine, Benjamin M. Ed.  Understanding New Media:  Trends
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     Cambridge, Mass.:  Ballinger, 1984.
 
Cook, Robin.  "Byte-sized Revolution."  New Statesman and
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Crawford, John R.  "Economy Will Benefit from Deregulation;
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de Sola Pool, Ithiel.  Technologies of Freedom.  Cambridge,
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     (1994):  333-50.
 
Farrah, Barbara J. and Mike D. Maxwell.  "Market-based
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     80.
 
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     153-154.
 
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     Telecommunications. Oct 1994:  47.
 
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McChesney, Robert W.  "The Battle for the US Airwaves, 1928-
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Meyers, Stephen J.  "Universal Access?  Take the high road."
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Titch, Steven.  "Universal Access:  It's not Beavis and
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     8.
_______________________________
1 For a comparison table of high-speed, local-loop
technologies, see Appendix 1.
2In "Contrasting Models:  Two states blaze trails on the
high-tech frontier," Mike Mills examines the experiments of
North Carolina and California, the former following the
public-access model and the latter following the
entertainment model.
3 "The debate about universal service has been reopened
precisely because it is feasible to offer these features,
and a consensus seems to be emerging that they are also
desirable" (Hadden, "Written Testimony").
4Both of these concepts carry collectivity implications in
that each is part of a kind of collectivity, e.g., consumer
access may be essential to an effective "consumer society."
5See "The Battle for the US Airwaves, 1928-1935" by Robert
W. McChesney in Journal of Communication, volume 40.

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