Utility

Author: Luã Fergus and Laila Lorenzon

According to McGregor Jr. et al. (1982)¹, the term ‘utility’ refers to any service provided to people, either directly (by public sector institutions) or indirectly (by public or private companies). The term is associated with a social consensus, usually expressed in the legislation, that certain services must be available to everyone, regardless of income, physical ability, and other individual characteristics. Even when public utilities are neither provided nor funded by the public sector – for social-political reasons – they are, in general, subject to regulation because of the relevance of the service for the public wellbeing or interest. When done in the public interest and motivations, public policies can also provide public services (Anderfuhren-Biget et al., 2014)².

A public utility can sometimes have the characteristics of a public good (being non-rival and non-excludable). Still, most are services that can (according to current social norms) be sub-supplied by the market. In most cases, public utilities are services that do not involve the manufacture of goods. They can be provided by local or national monopolies, especially natural monopolies.

Utilities can be associated with fundamental human rights. In most countries, the term ‘public utilities’ often includes electricity, waste management, public transportation, health care, among many others. Regarding the Internet-related debates, most of them focus on whether broadband is a public utility, something that emerged from discussions on the regulation of net neutrality. Those who argue that broadband is a public utility understand that it is an essential service for the lives of citizens and, therefore, deserves to be subject to stricter regulation. Under this classification, net neutrality rules, for example, could be enforced more effectively (Mosendz, 2014)³. On the other hand, some find it problematic to classify broadband as a public utility since it is a service with a competitive market, and stronger regulations could damage innovation and create a barrier to entry (Downes, 2016)⁴.

There is also a debate about the possibility of seeing platforms as public utilities, considering their infrastructural implications on the informational flow of communications (Rahman, 2018)⁵. Rieder and Hoffmann (2020)⁶, for example, suggest that platform regulation should consider a broader concept of ‘public interest’ as a normative reference for evaluating the behavior of digital platforms and, therefore, its regulation. On the other hand, there are authors pointing the dilemma of social protection and innovation/competition with such regulation (e.g., Thierer, 2012)⁷. 

References

1. McGregor Jr, E. B., Campbell, A. K., Macy Jr, J. W., Cleveland, H. (1982). Symposium: The public service as institution. Public Administration Review, 42(4), 304.
2. Anderfuhren-Biget, S., Varone, F., Giauque, D. (2014). Policy Environment and Public Service Motivation. London. Public Administration. 92(4): 807-825.
3. Mosendz, Polly (2014). Is Broadband Internet a Public Utility? The Atlantic. Available at: https://www.theatlantic.com/technology/archive/2014/05/is-broadband-internet-a-public-utility/362093/.
4. Downes, Larry (2016). Why treating the Internet as a public utility is bad for consumers? Washington Post. Available at: https://www.washingtonpost.com/news/innovations/wp/2016/07/07/why-treating-the-internet-as-a-public-utility-is-bad-for-consumers/.
5. Rahman, K. S. (2018). Regulating informational infrastructure: Internet platforms as the new public utilities. Georgetown Law and Technology Review, 2, 2.
6. Rieder, B., Hofmann, J. (2020). Towards platform observability. Internet Policy Review, 9(4), 1-28.
7. Thierer, A. (2012). The perils of classifying social media platforms as public utilities. CommLaw Conspectus.