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Publication on the Financing of Universal Service Obligations
The paper «What is an Unfair Burden? Compensating the Net Cost of Universal Service Provision» by Christian Jaag appeared in the Review of Network Economics. It discusses the net cost of universal service obligations and the potential burden they represent on the universal service provider. Specifically, it analyzes the situation in the postal sector after full liberalization.
The paper considers various interpretations of what an unfair burden might be and discusses the competitive impact of corresponding compensation scenarios by means of a stylized theoretical model with endogenous entry and coverage decisions.