Talk:Universal service

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More recently, Congress sensed a growing technological and telecommunication divide between America's urban and rural regions. While basic telephone service is far more ubiquitous (nearly 95 percent of all U.S. households have telephone service today), higher bandwidth telecommunication services and Internet access were lacking. In part, the Telecommunications Act of 1996 was passed to improve telecommunication access to America's schools, libraries and rural health care providers, as well as promote open access and competition among telecommunication companies (telcos). Compared to urban settings, higher bandwidth services, such as ISDN, frame relay, and T-1, are often so expensive in rural regions their costs prohibit use. The 1996 Act created a mechanism of discounts to encourage higher bandwidth and Internet usage.[1]

Pulled from lead of article, could be put back in. Iamtfc 16:08, 2 October 2007 (UTC)

Former "origins" section[edit]

The following is the text of the "origins" section as of the below date, which is extremely non-NPOV; it basically assumes "universal service" was merely a front for the Bell System monopoly. I'm about to rewrite it drastically, but just to be safe I'm copying it here (modifying it only to move the section heading one more level down and add an extra signature afterwards). --RBBrittain (talk) 19:55, 14 June 2009 (UTC)

Origins of the term "universal service"[edit]

It is tempting to believe that the concept of “universal service,” a guaranteed baseline level of telephone service, has been a longstanding precept of US telecommunications policy. The preamble of the Communications Act of 1934, declares that the purpose of the Act is “to make available, so far as possible, to all the people of the United States, a rapid, efficient, Nation-wide, and world-wide wire and radio communication service with adequate facilities at reasonable charges.” The term “Universal Service” itself predates the 1934 Act, and was first coined by AT&T President Theodore Vail in a 1907 speech: “one system, one policy, universal service.” Milton Mueller's scholarship has almost singlehandedly shown that Vail’s “universal service” meant something much different than the current understanding.

For Vail, Universal Service was the opposite of Dual Service. In 1907, AT&T’s Bell companies competed for subscribers against hundreds of independent telephone companies, though rarely more than one in a single market. The independent companies entered the market for telephone services when the original Bell telephone patents expired in January, 1894. The Bell companies’ policy of focusing on business use, and thus connecting only major metropolitan centers left plenty of opportunities for independent telephone companies, particularly in smaller cities and for residential subscribers. For the most part, the telephone network of the Bell companies did not interconnect with the local independent companies’ network: a subscriber on the AT&T network could not call a neighbor whose telephone service was provided by the local independent company, and vice versa. For customers such as businesses who needed to be available to customers on both networks, this meant paying for service from both telephone companies: dual service.

The idea of non-interconnecting telephone service seems unwieldy and redundant today, but at the time it had many advocates. Dual service meant that telephone companies competed on characteristics other than price alone, first and foremost, the scope of their network. This created incentives to reduce the cost of access, to interconnect with non-competing networks (usually in distant cities), and most importantly, to connect and provide service to underserved markets. A telephone company that offered connections to distant customers might be more attractive, particularly in a time of rapid rural-urban migration when many customers had family members in small rural towns. The market structure created incentives to wire the countryside. The result was that by 1920, while 30% of American households had telephone service, 38.7% of American farms had telephones. Telephone service was more common in the country than the city.

In this context, universal service was not about providing every home with telephone service at affordable rate: dual service was proving remarkably effective at this, as contemporary regulators were well aware. Instead, universal service was Vail’s vision of ending the intense competition between Bell companies and independents, and submitting the resultant telephone monopoly to government regulation. Vail was certain that a government-regulated monopoly would be more profitable than competing with the independent phone companies. Universal service also conveniently undercut the independent telephone companies’ efforts to construct a long distance network that would compete against the lucrative Bell long distance network. By lobbying state governments to require interconnection, or by allowing independents to connect to the Bell network with liberal licensing terms, AT&T could undercut the profitability of the long distance intercity connections being built by the Independents. In some markets where independents had a commanding lead in the number of subscribers, establishing universal service meant conceding the market and selling out to the local independent. By 1920, a combination of Bell company buyouts, regulatory change (under intense lobbying from the Bell companies) and competition had eliminated dual service, clearing the way for the Federal regulatory framework for telephony codified in the Communications Act of 1934.

--Above copied here by: --RBBrittain (talk) 19:55, 14 June 2009 (UTC)