Universal Service Policies
for the Public Interest Sector
Susan G. Hadden
Professor, LBJ School of Public Affairs, University of Texas at Austin
Everyone is probably now aware that decisions about telecommunications policy made (or, more likely, not made) in the next few months will affect the way we send and receive information for the next several decades. Less often mentioned, however, are the effects that these decisions will have on the public interest sector and, more generally, on the functioning of democracy well into the next century. I suggest in this paper some of the costs of not achieving expanded universal service as well as features that should eventually be included in any definition of expanded universal service.
Communications Policy Working Paper #3 published by the Benton Foundation.
Here are two alternative (admittedly extreme) visions of the future:
1. Television offers 500 or more channels. On every channel, people can use their remote controls in a Nintendo-like fashion to design and order a pizza, to purchase a suit or a car, or to find out the latest headlines and weather. Of course, the user must know which channel offers Mr. Gatti's pizza, and which channel offers the local brand. On some channels, health information is available, but you cannot tell whether it is provided by a particular doctor seeking your business or by the American Cancer Society. In short, people will be limited to responding to messages selected by others.
For example, during the 1992 presidential campaign, Ross Perot offered a version of teledemocracy when he defined the policy choices and then allowed proponents and opponents to speak. At the end of the debate, the audience could vote "yes" or "no." No provision was made for alternative policies or compromise positions between the two defined by the tele-autocrat.
2. The home InfoTelâ„¢, a TV-like apparatus operated by a remote control device (or voice, or keyboard, or other methods at the user's discretion) lets the user select the desired category of activity: entertainment, shopping, games, information, or-and this is the crucial one-originating information. Public interest groups could upload (or create a virtual location for) information on their current activities, send tailored information to people in particular neighborhoods, communities, or states, or put up photographs or movies illustrating a problem they hope people will take action on. Members of the PTA could send messages to other members without even knowing who they are by just "addressing" their remarks to "PTA-schoolname." Everyone with his/her name on that list would get the mail, which could include a rendition by the school band, the latest budget figures, or photos of a field trip to the art museum. In short, everyone on the network could provide information as well as receive it-and could direct their information to interested people.
One last example to contrast the two versions of our telecommunications future:
Owners of a tiny bed-and-breakfast cannot afford to advertise in the newspaper and so are found by accident or when people stop at the local tourist office. They could, in the second version, make a home video of their place to show its features and upload it along with a menu and a number that viewers could automatically dial for reservations. Everyone who asks for "hotels, Austin" will see this listing along with that of the Sheraton and the Radisson. In the first version, however, these people would have to make an agreement with operators of one of the 500 channels to include their advertising, and the channel operators would probably ask for a large fee in advance plus a percent of every booking-an arrangement which only larger hotel chains could afford. Even if the owners decided they could afford the arrangement, people seeking information about this bed and breakfast would reach it primarily by chance.
In short, one version offers real openness and interactivity, while the other offers a limited form of interactivity in which people are always treated as "consumers," selecting among predetermined choices-whether the marketplace is goods or ideas. In that marketplace, I suggest, the ideas of public interest groups will receive short shrift. They will be reduced to using snail mail, print, and other cheap but unpopular forms of communication that limit their audiences to people who step forward and identify themselves-little progress over current communication methods.
Before discussing openness and other features of the network that provide the kind of universal service we all need, I want to mention a final nightmare: a world where some people have full, open, and interactive service and others do not. I think the differences between these two groups will be larger than the differences between those with and without telephones. I call this the access issue (see Working Paper 1).
Thus, universal service has two components: universality, recognition that the benefits of the network are greater if more people are on it, and fairness, ensuring that people who would otherwise not be able to participate in the widespread service are able to do so.
Features of Universal Service
First, I justify discussing universal service as network features, not technologies or companies. Technology is changing so fast (as are business relationships) that if we set policy in terms of specific technologies we will always be behind. If we discuss capabilities, however, we can take advantage of competition among technologies to deliver the features we want at the lowest possible cost. There are lots of reasons, however, that we continue to talk in terms of technologies, even though they are now outdated: one important one is that those are the terms in which present policies are framed, and it is hard to get out of the old way of thinking. Another, I regret to say, is that the various companies have a stake in keeping us thinking along old lines while they pursue new activities completely outside the regulatory framework, because then they can present us with a fait accompli, such as a network of limited interactivity offering entertainment to the exclusion of public services.
In any case, I believe it to be most effective to start with a list of features we want the network to exhibit, then test all regulatory and deregulation proposals to see whether they get us closer to achieving this goal. I also believe that we can think of some of these features as building on others, so we may have an expanding definition of universal service. I would illustrate this by drawing concentric circles, with network features at the core, then openness surrounding it, then access, then content.
Features of the network
These features are the ones we hear about, and because they are now technically feasible, the whole issue of expanded universal service arises.
- Broadband--able to carry video signals in both directions along with voice and data
- Switched--allows any user to connect to any other user (like the present telephone network)
- Compatible--allows users/networks with different equipment or information formats to communicate (many people call this feature "interoperability")* 1
- Secure and reliable--protect privacy while ensuring continuous, high-quality operation
This is a separate topic, but one of considerable importance to users. People will not "visit" their doctors, become literate as adults, ask for information about sexually transmitted diseases, or do lots of other things if the entire transaction is accessible by other people (or if they have to conduct their activities in an institutional setting such as a library where people can look over their shoulders). If people are on the network to receive medical monitoring, do their jobs, and conduct other critical business, the network cannot repeatedly fail.
Characteristics of network operations
Openness is my idiosyncratic term for allowing any person to originate information in any format.*
This is the feature I implicitly described in detail at the beginning of my remarks. Why do we need government to ensure openness? Public services such as health care, personal messages, PTA-like interactions are less lucrative, but create a lot of demand for carrying capacity. Entertainment pays-whether for creators of entertainment or carriers. Thus, public services are unlikely to be provided without some public intervention or incentive.
Thinking about initiating messages, like the telephone, raises the question of rates: Will the new universal service define a certain number of hours on the network, with different "rates" for voice only, data only, or video with voice? A kind of message unit system? Will the rates be related to bandwidth, time, distance? These are important questions because certain rate structures might put poor people and public interest groups at a disadvantage for sending and receiving messages in the easiest-to-use, most interesting format-video.
Features enhancing access
Directories. Often called gateways. Provide easy searching among information provided by others and yourself.*
Directories are a crucial adjunct of openness. If anyone can upload information (I use this phrase loosely, because what will probably happen is that the information will be stored in lots of dispersed locations-like distributed computing today), then it is important that other people be able to find that information. I envision two modes: people providing information or services find the directory where they want to be and place a pointer there, then pay a fee to the directory owner (like the yellow pages). Or the system is very smart and when you "upload" your information, you enter a couple of key words and the system automatically creates the pointer. Market incentives for providing this kind of service are not clear, but perhaps if openness is required, companies will want to offer this service. It seems that different information providers (different "channels" of information) would likely help users to search only their information, and not make known "competing" information on another "channel." So presumably there will be a continuing government role to ensure that rates are reasonable if the directory is a monopoly, or that searches are comprehensive if there are several yellow pages services. Loosely speaking, governments ensure that directories are interoperable. Private providers might offer more sophisticated searching tools for a fee.
Reasonable cost. Subsidized rates for basic service, or expanded universal service funds.*
In contrast to the present situation, in which the local telephone companies contribute to a universal service fund based on their relative sizes, all commercial information providers as well as the carriers (if these are different) will have to contribute. Although we will surely expect basic costs to rise if more services are available, we must take into account that people are already paying for cable TV, telephone, and movie rentals and are purchasing televisions, radios, and VCRs. Thus a comparison with the cost of basic local telephone service alone is not sufficient-we must compare expanded universal service with people's total telecommunications budget. It is also very important to look beyond costs alone to the benefit. If people save lots of money by telecommuting, then they can and will pay more for the InfoTelâ„¢ service.
Finally, subsidies should not automatically go to so-called "high-cost" areas; rather, subsidies should be available to people who cannot afford rates that, we hope, are determined competitively. It is no longer the case, as it probably was in 1934 when the previous Communications Act was enacted, that people in rural areas are likely to be low income. Nor will it necessarily be true that rural areas will be especially expensive to serve; if competition develops wireless technologies that provide the appropriate levels of service, rural areas will not need to be demarcated for special rate treatment. If competition emerges (a serious question for low-density and low-income areas), the subsidies might best go to individuals who can then use their "telecom stamps" to act in the marketplace for telecom services along with all other individuals. Income tax subsidies and rebates on monthly bills are ways to achieve this goal.
Multiple access methods. Includes voice activated, remote control, keyboard, and so on.
Curb cuts for people in wheel chairs turned out to be useful for cyclists and people pushing baby strollers. The same is true here: multiple access methods ("electronic curb cuts") developed to assist people with disabilities can assist us all. Universal design allows people to access their telecommunications system in emergencies or under a variety of circumstances.
Features enhancing public benefits (content)
Resolution. Adequate picture and color to allow doctor-patient interactions.
Because medical uses are so demanding, resolution should be sufficient to meet all other needs as well, but the precise level or quality of service should be hammered out by the technical community along with users.
Minimum levels of information. What should be included in universal service?*
The histories of public education and of public libraries spring from ideas of universal service. They recognize that people need a certain level of information to succeed as citizens and to participate in the economy, and the public benefit is great enough that it should be provided for free.
Likely candidates for inclusion to universal service are those services that bring widespread benefit to society, so that it is in each person's interest to ensure that everyone else has them. These are many of the same services that are least likely to be provided by an unregulated marketplace, namely, health, including preventive information, diagnostic information, and direct contact with health professionals, and education, including homework assistance, job training, and specialized teaching. Every aspect of these essential services cannot be included in universal service, but we must come to some agreement about which ones must be available to all.
Some have also argued that certain kinds of political and governmental information should be available as part of basic service, so that citizens can monitor and contact their governments. Many people imagine political debates on the network-what Dewey called the "conversation of democracy." It is here, of course, that I imagine the greatest use by public interest groups-providing people with fuller discussions and contending views on local issues such as cleaning up a Superfund site.
Conclusion
Expanded universal service will have two components: receiving and sending information. I see openness as the greatest threat to universal service-the ability of everyone to create and make public information of various kinds. The threat arises from several factors: the lack of obvious profit to be made, the likelihood that with "openness" small business and minority opinions will be empowered, and the increasing likelihood of a near-monopoly as telephone, cable, and newspaper companies merge. The market lacks incentive for aspects of receiving information as well, especially public service information-who will see that these services are created and distributed?
Because competition is unlikely to create the full measure of universal service, the role for government regulation is important. Mandatory standards for interoperability-search format, color, resolution, and speed, protections for privacy and provisions for network reliability, and assurance that all subscribers to the network can send as well as receive information are all areas where government intervention is needed to ensure the kind of universal service we need for a healthy economy and a growing public interest sector in the 21st century.
What public policies can achieve an expanded universal service where the public interest sector will flourish?
First, we need regulations to apply to all providers of similar services, regardless of the technology used or the name of the company. To regulate companies because they used to provide telephone service and to not regulate companies because they used to provide cable service ignores the primary feature of today's converging technologies. Second, all carriers of commercial information services must be common carriers. Without this protection, companies could discriminate through rates or censorship against unpopular messages, including those provided by public interest groups. Third, we need to adopt a long-range goal that calls for expanded universal service. This goal may not be reached for a decade or longer, but setting a goal offers a measure for the effectiveness of deregulatory measures likely to be adopted soon. The goal I propose, following the cadence of the 1934 Communications Act preamble, is this:
To make available, so far as possible, to all the people of the United States, regardless of location or disability, a switched, broadband telecommunications network capable of enabling users to originate and receive affordable and accessible high-quality voice, data, graphics, and video telecommunications services.
Fourth, we need to establish a monitoring strategy-a schedule for reviewing the extent to which we are moving towards this goal, with special reference to the needs of the poor, rural dwellers, and the public interest sector. If we find that satisfactory progress is not being made, we need to consider new regulatory approaches.
Fifth, we need to encourage government at all levels to begin planning the delivery of their services over the new network. Not only will delivering services electronically lower the cost of government, the availability of these services will stimulate demand from people who might not care about video-on-demand or other high-tech entertainment services. In addition, the guaranteed demand for network services by the federal government, which by itself is the nation's largest telecommunications user and information generator, could stimulate investment in the network-particularly investment in switching, without which government could not deliver health, environmental, and a whole range of other services to constituents. Finally, government's decision to move in the direction of delivering services electronically will help nonprofits to develop their services in the same way, building upon government services or acting to develop these services for the government as they often do now.
In putting forth these principles, my point is to show that the need for public action is inherent in the goal of universal service, no matter how it's defined, is the need for public action. Any policy that intends to reach every person-and any policy that increases societal benefits by including more people under its umbrella-is by nature public and governmental. The additional benefits of having every person connected to the network regardless of location, income, or disability are so great that they dwarf any costs of public oversight. But these benefits will not be attained if one technology or one industry is regulated while others are not. The benefits will accrue only if all providers are regulated equally and if all groups and individuals, no matter what their messages, are given equal access to the network. Universal service requires universal servers.
Notes
Susan G. Hadden is Professor at the LBJ School of Public Affairs, University of Texas at Austin.
1. I have starred (*) features that I think require government oversight or intervention. Government has tried to work on standards for interoperability and will probably continue to do so. Why won't interoperability appear without government? Think of IBM's earlier strategy-if they can get you hooked on their operating system, you will have to keep buying it and buying compatible software. Interoperability has some features of a public good as well-vendors cannot capture in their rates all the benefits of compatibility that will flow through the economy.
Switching is the essential difference between the 500-channel and the "public interest" models of universal service outlined above. Will it require public oversight to ensure switching as well?
