Who Pays for Universal Service? : When Telephone Subsidies Become Transparent

This text aims to show that subsidised residential telephone access has little effect on telephone subscriptions in America while it has harmful consequences on the overall value of services.

The authors argue that the universal sevice subsidy will have to change as a result of the 1996 Telecommunications Act: subsidies should be paid from intrastate taxes on telecom services and paid directly to carriers or subscribers.