The primary theme of this report is the study and estimation of universal services of telephone carriers. Telephone services spread throughout Japan by the telecommunication policy after World War II. Now telephone has become indispensable for present day life. In this regard, to provide equal telecommunication services, “universal services” have been promoted by a law that obliges telephone carriers to complete basic infrastructures throughout the nation. As a result, telephone services with uniform charges have spread throughout Japan. Development of telecommunication technology has drastically changed the communication tools from fixed-line phones to cellular phones. Moreover, due to a wide range of access platforms including internet services and broadband, the telephone policies both for providing new services and for attaining optimum distribution of resources need to be re-considered. In this paper, we analyze basic economic theory and practices including the basic concept of universal services. This study also shows that technological advances in telephone functions require an amendment to the present universal services and enforcement of adequate public policies. The major findings are summarized as follows. First, landlines spread all over Japan after World War II when the government incorporated the rules of universal service systems. Now everybody can equally and uniformly access the services. Second, theoretically universal services are necessary to increase the external effects of networking and to diminish the digital divide. Third, our empirical examination showed a great difference in the maintenance costs of equipment per capita and this difference is mainly due to differences in population density. This means that without the promotion of universal services, the services can not be provided in high cost areas. In this regard, newcomers such as cellular phones can never provide their services to uncommercial regions. JFL classification: L51, L96