Impacts of Universal Service Regulation for Broadband Internet Services

As more services are provided through Internet, the accessiblity to Internet is becoming an essential part of modern life. In this paper, we study the impact of universal service regulation for the Internet service using an analytical model between an Internet service provider and users. We compare the regulated and unregulated situation with respect to revenue and social welfare to understand the impact of regulation. We consider both unsatruated network and saturated network cases. We find that when network is not saturated, the universal service regulation is very beneficial to the society while the benefit is not as substantial under congestion scenario.