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НазваRegulation in telecommunications industries: Why, What and How to Regulate? (реферат)
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Graduate School of International Corporate Strategy, Hitotsubashi

University

 

Asian Tax and Public Policy Program

 

Economic Analysis of Regulation and Public Enterprise

 

REGULATION IN

 

TELECOMMUNICATIONS INDUSTRIES:

 

Why, What and How to Regulate?

 

Bakhodir Mardonov IM0313

 

February 20, 2001

 

Recent empirical studies have showed that national indicators

correspond closely to the degree of competition in telecommunications

markets. Greater competition has generated greater innovation,

investment and spin-offs for the economy as a whole. However, many

governments have found that competition in telecommunications can bear

good results only if appropriate regulatory institutions are functioning

effectively. Consideration of advantages and disadvantages of specific

regulatory policies raises questions on why regulate, what to regulate

and how to regulate.

 

Why Regulate Telecommunications?

 

There are different approaches trying to answer this question, but

basically they are split into two views: whether government should

regulate actively or intervene only in case of “market failure”.

 

Public policy goals: Even though the ultimate goals are the same, the

relative priority given to different goals may vary. For example, in

developing countries with a limited access to telecommunications

services, the policy goal to make them universally accessible is

especially important. While, in developed countries, the priority goals

may be to raise the efficiency of telecommunications and maintain a

basic telephone service.

 

Market failure: General goals such as “universal accessibility” cannot

be enough to justify regulatory intervention when the prevailing view

relies on market forces to promote efficiency and innovations. In this

case, the strongest justification takes the form of “market failures”

and the regulator may intervene in order to facilitate competitive

entry, combat abuse of market power and redistribute benefit.

 

Actually, the nature of the problems addressed depends on the structure

of the telecom services industry, the general economic, political and

social situation and the prevailing set of fundamental

telecommunications policies, particularly those concerning the roles of

monopoly and competition. Accordingly, we may consider three groups of

countries: (i) full monopoly, (ii) partial monopoly and (ii) full market

system.

 

As some countries have moved from one of these groups into another, the

major problems to be solved by regulators have changed. For example, as

Mexico introduced competition in cellular services and privatised its

former state telephone monopoly, Telmex, it has faced controversial

issues concerning the interconnection of different carriers' networks.

In the United States, the evolution of the telecommunication industry

since the 1950s illustrates a gradual transition from the first group

via second to the last one: if in the beginning, the regulatory policy

concern was to assure the universal availability of telecommunications

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