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Regulatory Governance and the Implementation of Universal Service: A Comparative Study of the US and Japan
Unformatted Document Text:  Tracking Number: ICA-1-11804 Regulatory Governance and Universal Service 4 method or combination of methods, it is important to consider how the regulator assesses the degree of economic justification for requiring operators to provide universal service or participate in compensating the costs. In this context, this study tries to compare the implementation of universal service in the US and Japan focusing on the financing methods of universal service selected by each country’s regulator. The underlying assumption in this study is that political structure or system in which the regulator resides may largely affect the differences in the implementation of universal service in each country as the so-called “new institutionalism” perspective suggests. The US and Japan are chosen because the two countries have different political structure and have taken different paths in conducting the universal service policy and exposed different performance since the introduction of competition in the telecommunications marketplace although both are classified as industrialized countries. This paper presents a theoretical discussion of the new institutionalism approach for comparative policy analysis 2 ; reviews the definition, brief history, and methods of universal service; examines the implementation and current conditions of universal service in the two countries; and analyzes how political systems or institutions influence both countries’ ways of selecting a particular method of regulating universal service implementation. New Institutionalism: A Framework for Analysis In response to technological developments in the telecommunications sector and renewed appreciation for advantages of competition, nations are transforming in regulation of telecommunications services from monopoly toward competitive markets. Yet, there is much debate over the nature of policies most proper for establishing that transition. Much of this debate focuses on the incentives created by alternative regulatory policies, and their consequences for performance by telecommunications providers. However, for the incentives of telecommunications policies to produce their projected effects, they must be supported by “a more primary set of societal, legal, and governmental institutions” (Cherry & Wildman, 1999, p.608). Recently, a number of comparative policy studies have employed the new institutionalism perspective emphasizing the critical importance of a nation’s institutions that define the characteristics of regulation and policy-making procedures (e.g. Levy & Spiller, 1996; Vogel, 1996; Noll & Rosenbluth, 1995; Galperin, 2000 & 2002). Below I will describe this 2 For the rationale of applying the institutional perspective for comparative policy analysis, see Galperin (2000).

Authors: Park, Namkee.
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Tracking Number: ICA-1-11804 Regulatory Governance and Universal Service 4
method or combination of methods, it is important to consider how the regulator assesses the
degree of economic justification for requiring operators to provide universal service or participate
in compensating the costs.
In this context, this study tries to compare the implementation of universal service in the
US and Japan focusing on the financing methods of universal service selected by each country’s
regulator. The underlying assumption in this study is that political structure or system in which
the regulator resides may largely affect the differences in the implementation of universal service
in each country as the so-called “new institutionalism” perspective suggests. The US and Japan
are chosen because the two countries have different political structure and have taken different
paths in conducting the universal service policy and exposed different performance since the
introduction of competition in the telecommunications marketplace although both are classified
as industrialized countries.
This paper presents a theoretical discussion of the new institutionalism approach for
comparative policy analysis
2
; reviews the definition, brief history, and methods of universal
service; examines the implementation and current conditions of universal service in the two
countries; and analyzes how political systems or institutions influence both countries’ ways of
selecting a particular method of regulating universal service implementation.
New Institutionalism: A Framework for Analysis
In response to technological developments in the telecommunications sector and renewed
appreciation for advantages of competition, nations are transforming in regulation of
telecommunications services from monopoly toward competitive markets. Yet, there is much
debate over the nature of policies most proper for establishing that transition. Much of this
debate focuses on the incentives created by alternative regulatory policies, and their consequences
for performance by telecommunications providers. However, for the incentives of
telecommunications policies to produce their projected effects, they must be supported by “a
more primary set of societal, legal, and governmental institutions” (Cherry & Wildman, 1999,
p.608).
Recently, a number of comparative policy studies have employed the new
institutionalism perspective emphasizing the critical importance of a nation’s institutions that
define the characteristics of regulation and policy-making procedures (e.g. Levy & Spiller, 1996;
Vogel, 1996; Noll & Rosenbluth, 1995; Galperin, 2000 & 2002). Below I will describe this
2
For the rationale of applying the institutional perspective for comparative policy analysis, see Galperin
(2000).


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