Estimating the Cost of Universal Service Obligation: A Review of International Practices and Comparative Analysis

It is only natural, given that the competition environment and policy priorities in the telecommunications market vary from one country to another, that methods for assessing the cost of universal service obligations differ as well. In Korea, with the introduction of LRIC for assessing the universal service cost in 2004, the national telecommunications authority (MIC) is preparing for a substantial revision of the current cost assessment method, and discussions on details of changes to be introduced are in full swing. This paper will explore estimation methods for universal service costs adopted by countries around the world by dividing them into three large categories, and compare practices concerning two of the major issues surrounding the assessment of universal service obligation cost-universal service cost ceiling and intangible benefits-to provide directions for changes to be introduced to Korea´s own cost estimation model