Universal service provision in western China

by Wu, Feng.

iii Universal telecommunications services provision is an important factor in reducing regional disparities in China and ensuring sustainable economic development, social equity, and national stability. This study, by drawing on the universal service concept and institutionalism policy research, analyzes the disparity in telecommunications services access between the western and the eastern regions of China. Based on the analysis, the study attempts to provide a framework to motivate and assist further explorations of universal service provision in China and in other regions with similar features. The objective of this study is three-fold: (1) to demonstrate the widening disparity in telecommunications services access between the eastern coastal and the western inland regions of China; (2) to examine the historical, geographic, and policy reasons for the disparity; and (3) to offer solutions, policy recommendations, and a conceptual framework for universal service provision in western China and in regions with similar features. To accomplish the objective, this dissertation conducted a case study of telecommunications development in China. The findings suggest that despite the rapid development of overall telecommunications capability in China, a widening gap in telecommunications services access exists between the western and the eastern regions of the country. The study also suggests that the gap is a reflection of not only geographical and historical reasons, but more importantly, strategic considerations and national polices. In recent years, a more fundamental problem confronting universal service provision in China has been the incompatibility between the need to provide services to disadvantaged regions, and the requirement arising from China’s entry into the World Trade Organization to transform to a full-fledged market-based economy characterized by competitive neutrality. The contradiction between a planned economy in a socialist system and commercial viability in a competitive quasi-capitalist free market economy is both the background and the cause of the difficulty and disagreement in universal service provision in western China. iv Based upon its analysis, this study attempts to propose solutions and policy recommendations. The study suggests that emphases should be given to establishing a universal service mechanism, ensuring interconnection, promoting alternative technologies, segmenting the market, and improving the policy-making process and regulatory conduct. This study also suggests that the current approach to universal service provision continues to be bound by the limitations of a past regulatory era. When new elements emerge and change the industry’s underlying facts, the dominant and classical model becomes increasingly inadequate. Thus this study presents a new universal service model that emphasizes heterogeneity and flexibility, and is likely to be more suited to the new telecommunications environment in China and in other regions with similar features.