Tapping user-driven innovation: A new rationale for universal service

The current transformation of communication policies, as governments turn t o the marketplace as the driver of network evolution, requires a redefiniti on of universal service. The debate so far has focused primarily on the ela boration of new funding mechanisms and the definition of which services sho uld be covered, We argue that a more fundamental, third area demands attent ion: the articulation of a new rationale for universal service itself, With out articulating a clear justification for universal service, designing its scope and funding mechanisms is problematic at best, Past justifications r ested on welfare (make telephony affordable to all) and network externaliti es (increase the network's value by widening its reach), Increasingly, thes e need to be complemented by a new rationale based on the innovative potent ial of universal service. This article explores how universal service can f uel innovation-driven economic growth.