Net Costs of USP’s Service Provision: Challenges for the Coming Decade

The chapter explores the evolving challenges faced by universal service providers (USPs) in calculating net costs, particularly in the context of declining markets and regulatory changes. It delves into the theoretical framework and practical issues surrounding the calculation of net costs, emphasizing the need for dynamic regulatory measures. The authors present empirical evidence from Switzerland, highlighting the importance of regularly updating counterfactual scenarios to reflect market realities. The long-run analysis reveals that some counterfactuals may become relevant in the future but are not profitable today, underscoring the need for ongoing adjustments. The chapter concludes by stressing the importance of dynamic regulatory measures to ensure accurate net cost calculations, providing valuable insights for policymakers, regulators, and USPs.