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Regulation in telecommunications industries: Why, What and How to Regulate?

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Gradua e School of I er a io al Corpora e S ra egy, Hi o subashi U iversi y Asia ax a d Public Policy ProgramEco omic A alysis of Regula io a d Public E erpriseREGULA IO I ELECOMMU ICA IO S I DUS RIES: Why, Wha a d How o Regula e? Bakhodir Mardo ov IM0313February 20, 2001 Rece empirical s udies have showed ha a io al i dica ors correspo d closely o he degree of compe i io i elecommu ica io s marke s. Grea er compe i io has ge era ed grea er i ova io , i ves me a d spi -offs for he eco omy as a whole. However, ma y gover me s have fou d ha compe i io i elecommu ica io s ca bear good resul s o ly if appropria e regula ory i s i u io s are fu c io i g effec ively. Co sidera io of adva ages a d disadva ages of specific regula ory policies raises ques io s o why regula e, wha o regula e a d how o regula e. Why Regula e elecommu ica io s? here are differe approaches ryi g o a swer his ques io , bu basically hey are spli i o wo views: whe her gover me should regula e ac ively or i erve e o ly i case of “marke failure”. Public policy goals: Eve hough he ul ima e goals are he same, he rela ive priori y give o differe goals may vary. For example, i developi g cou ries wi h a limi ed access o elecommu ica io s services, he policy goal o make hem u iversally accessible is especially impor a . While, i developed cou ries, he priori y goals may be o raise he efficie cy of elecommu ica io s a d mai ai a basic elepho e service. Marke failure: Ge eral goals such as “u iversal accessibili y” ca o be e ough o jus ify regula ory i erve io whe he prevaili g view relies o marke forces o promo e efficie cy a d i ova io s. I his case, he s ro ges jus ifica io akes he form of “marke failures” a d he regula or may i erve e i order o facili a e compe i ive e ry, comba abuse of marke power a d redis ribu e be efi . Ac ually, he a ure of he problems addressed depe ds o he s ruc ure of he elecom services i dus ry, he ge eral eco omic, poli ical a d social si ua io a d he prevaili g se of fu dame al elecommu ica io s policies, par icularly hose co cer i g he roles of mo opoly a d compe i io . Accordi gly, we may co sider hree groups of cou ries: (i) full mo opoly, (ii) par ial mo opoly a d (ii) full marke sys em. As some cou ries have moved from o e of hese groups i o a o her, he major problems o be solved by regula ors have cha ged. For example, as Mexico i roduced compe i io i cellular services a d priva ised i s former s a e elepho e mo opoly, elmex, i has faced co roversial issues co cer i g he i erco ec io of differe carriers' e works. I he U i ed S a es, he evolu io of he elecommu ica io i dus ry si ce he 1950s illus ra es a gradual ra si io from he firs group via seco d o he las o e: if i he begi i g, he regula ory policy co cer was o assure he u iversal availabili y of elecommu ica io s services wi h reaso able ra es, over he years, as compe i io has developed, regula ors become more co fide abou he provisio of differe elecommu ica io s services. hus, a gradual relaxa io a d wi hdrawal of some forms of regula io ( o ably co rols o he prici g of services o e d-users) has bee i roduced.

A he same ime, ew forms of regula io have arise from he eed o solve ew ki ds of problems, co cer i g for example, he erms of i erco ec io be wee differe carriers' e works, or co rol of he umberi g pla i a mul i-carrier e viro me . I spi e of varia io s of he regula or’s ma da e across each group of cou ries, some of his basic missio s ca be defi ed as followi g: Promo io of “u iversal service” arge i g low-i come households, users i remo e geographical areas, or disabled perso s. For example, i Arge i a, his was do e hrough se i g goals for he expa sio of P O e works; i he U i ed Ki gdom a d U.S., hrough imposi g “lifeli e” ariffs for low-i come users. Pro ec io of user i eres s. Cha ge i he i dus ry s ruc ure. he desired cha ge is usually owards a more compe i ive i dus ry s ruc ure, bu his missio ca be far from &quo ;deregula io &quo ;. For example, i Japa , he Mi is ry of Pos s a d elecommu ica io s caused o mai ai high charges be wee okyo, Osaka a d some o her major loca io s for he i i ial period of compe i ive e ry, o help ew e ra s gai a foo hold. Moveme owards a “ o discrimi a io policy” or “level playi g field”. However, i his case, he co cer o he eed o discrimi a e i favor of ew e ra s has o be addressed (missio 3). Supervisio of he domi a P O i case of limi ed or abse compe i io . his ca be do e, for example, hrough applyi g price-cap regula io like i Mexico. S imula io of i ova io s. I ma y cou ries, he regula or is see o a icipa e oppor u i ies for i ova io s a d crea i g a favourable e viro me for heir imely exploi a io . For example, i he U i ed Ki gdom he pio eeri g ac io of OF EL i gra i g lice ses for he Perso al Commu ica io s e work (PC ) a d elepoi (C 2); i Fra ce, curre ac ivi y by DRG o PC lice si g; i he U.S., policy of gra i g &quo ;pio eer's prefere ce&quo ; i he lice si g of radio freque cies o compa ies pio eeri g ew service co cep s a d ech ologies. Ma ageme of commo resources effec ively. S imula io of i ves me s i he public e work. e work i erco ec io . Ope e ry requires i erco ec io . I is impor a o crea e favourable e viro me for i erco ec io of ew e work opera ors a d o her providers of elecom services. However, he more i ova ive he services of he ew e ra , he ougher he problem may become for he domi a carrier. his subjec requires co siderable s udy a d a alysis, si ce i lies a he hear of he challe ge of fi di g eco omically efficie mea s of facili a i g e ry a d promo i g compe i io . I prac ice, he regula or’s ma da e represe s a mix ure of hese differe co cep s. o o ly does he &quo ;mix&quo ; vary from cou ry o cou ry, i also evolves over ime. For example, i Ca ada, elecom regula io has radi io ally followed he missio of supervisi g he domi a P O. More rece ly, he missio of cha gi g he i dus ry s ruc ure has emerged as a major hrus of Ca adia elecom regula io policies. A cellular duopoly was es ablished a d a seco d lo g-dis a ce carrier, ow k ow as U i el, was gra ed opera i g a d i erco ec io righ s o he local elepho e compa ies' e works.

his co se was i i ially give o ly for leased-li e a d packe -swi ched service, a d o for swi ched elepho y, bu U i el is ow lice sed o provide a full ra ge of lo g-dis a ce services, i cludi g voice services. Wha o regula e? he provisio a d use of elecommu ica io s services may be regula ed i he followi g ways: lice si g carriers; es ablishi g a d supervisi g ech ical a d opera io al s a dards a d prac ices for e work opera io s by carriers; overseei g he quali y of service provided by carriers; regula i g he prici g of elecom services, ei her by co rolli g elecom opera ors' ra es ( ariffs) i de ail or by applyi g some more ge eral form of co rol such as a price-cap; se i g he erms (admi is ra ive, fi a cial a d ech ical) for he i erco ec io of differe carriers' e works, i cludi g he &quo ;access&quo ; prici g charged by o e carrier o a o her, where here are mul iple carriers a d o e carrier eeds o i erco ec wi h a o her's e work; co rolli g ype approval of cus omer premises equipme (CPE) a d i s a achme o he public e work; co rolli g he umberi g pla a d rela ed ma ers. he decisio o &quo ;wha o regula e&quo ; has subs a ially varied i various cou ries si ce i depe ds o wha ou comes are o be achieved. For example, i “full mo opoly group” cou ries (e.g. Spai , I aly a d he majori y of developi g cou ries), he regula or's goals will imply ha : supervisio of he mo opoly P O's ech ical s a dards a d prac ices may be u ecessary; price regula io will be ecessary a d impor a ; lice si g ew carriers a d regula io of e work i erco ec io is o releva . A he o her ex reme, i a highly compe i ive group cou ries (e.g. U.S. lo g-dis a ce elepho e service), he regula or’s goals will imply: regula ory co rol of some ech ical a d opera io al ma ers is esse ial si ce effec ive compe i io requires ex e sive i erco ec io of differe carriers' e works; price regula io may become u ecessary, a leas i some segme s of he i dus ry; lice si g fu c io may be u ecessary or mi imal; rules co cer i g he i erco ec io of differe carriers' e works are of cri ical impor a ce. Bu wha if a gover me chooses o o regula e a all? Experie ce sugges s ha his decisio is oo illusory: i he u regula ed or self-regula ed mo opoly, someo e mus de ermi e whe her or o he mo opoly is ac i g i he public i eres , a d i erve e if i is o . hese co sidera io s, amo g o hers, have led he cou ries of he Europea Commu i y o collec ively e ac EC legisla io requiri g he es ablishme i each cou ry of a explici regula ory process for elecommu ica io s a d a regula ory body o impleme ha process which is separa e from opera io al P O orga isa io s, eve i hose cou ries where a io al legisla ors have chose o mai ai a mo opoly of basic fixed voice services. How o regula e? Regula or wi h a defi ed missio ca fulfil i usi g widely differi g regula ory approaches. Ac ually, here are basically wo ki ds of choices ha mus be made o defi e regula ory approaches: How far he regula or will exercise co rol, a d how far he regula or will ac &quo ;by excep io .&quo ; o wha ex e will cer ai ma ers (e.g

The Future of Intellectuals and the Rise of the New Class. (New York: Continuum Books, 1979.) [456] Habermas, J¬rgen. Knowledge and Human Interests. (Boston: Beacon Press, 1968.) [457] Hansen, Robert H. The Why, What and How of Decision Support. (New York: AMA Management Briefing, 1984.) [458] Hoffman, Lily M. The Politics of Knowledge. (Albany: State University of New York Press, 1989.) [459] Keren, Michael. Ben Gurion and the Intellectuals. (Dekalb, III.: Northern Illinois University Press, 1983.) [460] Kindaichi, Haruhiko. The Japanese Language. (Rutland, Vt.: Charles E. Tuttle, 1978.) [461] Konrad, George. Antipolitics. (New York: Harcourt Brace Jovanovich, 1984.) [462] Konrad, George, and Ivan Szelenyi. The Intellectuals on the Road to Class Power. (New York: Harcourt Brace Jovanovich, 1976.) [463] Kraemer, Kenneth L., et al. Datawars. (New York: Columbia University Press, 1987.) [464] Lakatos, Imre, and Alan Musgrave, eds. Criticism and the Growth of Knowledge. (London: Cambridge University Press, 1979.) [465] Lamberton, D. M., ed

1. Leadership in Hospitality Industry

2. "Career in hotel industry"

3. Sports in Great Britain, the USA and Russia

4. How to be happy in your family life

5. How to negotiate effectively

6. How to write exam essay
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7. How to use dictionary
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8. Drug abuse: Tendencies and ways to overcome it
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9. How to make your child gifted?

10. Ecological problems in big cities, particular in Moscow. How can a contradiction between the technological progress and ecology be solved from my point of view?

11. Pogroms in Azerbaijan and Armenia of 1988-89 As Historical Echo of the 1915 Armenian Genocide (Погромы в Азербайджане и Армении 1988-89 как историческое эхо 1915 Армянского Геноцида)

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14. Holidays and traditions in english-speaking countries

15. The Cinema World. Moden film festivals and film industry and stars

16. Continuity and change in Stravinskiy`s ballets. Стравинский и его балеты

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17. The Cinema World. Moden film festivals and film industry and stars

18. Continuity and change in Stravinskiy`s ballets. Стравинский и его балеты

19. Aral Sea - What Was and What Is

20. Апокатастасис и "Благое молчание" в эсхатологии св. Максима исповедника (Apokatastasis and «Honorable silence» in the eschatology of st. Maximus the confessor)

21. Poland and Hungary are in Transition

22. Why was the United States unsuccessful in Vietnam?
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24. Presents in Russia and America
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25. What is better watching sports or participating in sports?

26. What will be there in my new flat

27. KOREA People and History in Harmony

28. Internet helps in development of education and democracy

29. The Comparative Analysis Of The History Of The Computer Science And The Computer Engineering In The USA And Ukraine

30. Holidays in Russia, Britain and the USA

31. Customs and traditions in GB

32. Of the Polish political parties and organizations in Vilnius (1919 - 1922 gg.)

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37. The Participation of American and British Youth in Political Life of Their Countries.

38. What strategy are most effective in the conditions of globalization
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39. Literature in Ukraine: Mykhaylo Kotsiubynsky and Oles Honchar
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41. Globalization and Hospitality Industry

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43. The effect of light intensity on the amount of chlorophyll in “Cicer arietinum”

44. Спецподразделения Армии Израиля: "Голани" (Special forces in Army of Israel Golani)

45. Countries and cities

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51. Going public and the dividend policy of the company

52. Personnel selection and choice

53. Why do we learn English language?

54. American Federalism in 1990s
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55. Education in Moscow school
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56. Essay on the article "Tobacco and Tolerance: Blowing smoke" (о вреде курения)

57. How "DNA" testing works Анализ "ДНК" как проверяющие работы)

58. Knowledge, Innovation and Development

59. Monopolistic competition and economic efficiency (Монополистическая конкуренция и экономическая)

60. Rome and the Roman Empire

61. Slang, youth subcultures and rock music

62. Substance abuse: Alcohol Consumption and alcohol dependence among the youth (Социологическое исследование проблемы алкоголизма среди студентов)

63. The Irish and Australia

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67. Traditional Meals in Mexico

68. The School Education in Great Britain (Школьное образование в Великобритании)

69. Особенности ведения бизнеса в Китае (The peculiarities of marketing strategy development in China)

70. Music and Ballet
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71. Punks and Punk Rock
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72. Telecommunications
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73. British monarchy and its influence upon governmental institutions

74. Countries and cities

75. Raskolnikov and Svidrigailov: on the brink of suicide. Ф.М. Достоевский, Преступление и наказание

76. What is computer virus

77. The history of Old English and its development

78. Types of tests used in English Language Teaching Bachelor Paper

79. Indirect speech acts in modern English discourse. - Косвенные речевые акты в современном английском дискурсе

80. Русские заимствования в английском языке (Russian borrowings in English language)

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81. Modern talking and C.C.Catch

82. The United Kingdom of Great Britain and Northern Ireland

83. Education in the Middle Ages

84. Корпоративный имидж (Advertising and public relations)

85. Humane approches to toxicological evaluations of industrial chemicals

86. Financial Institutions in Turkey
Financial Institutions in Turkey
87. Спецподразделения Армии Израиля: "Голани" (Special forces in Army of Israel Golani)
88. British painting in the 17-18th centuries (Британская живопись 17-18 вв.)

89. Navruz - A Celebration of Life. Public holidays in Uzbekistan

90. Lexicology. Word structure in Modern English

91. Mozart: Symphony #40 in G Minor, K.550 Моцарт: Симфония №40 в си-минор, К. 550

92. Modern talking and C.C.Catch

93. British monarchy and its influence upon governmental institutions

94. “The Role of Smallpox Vaccination in Mortality Decline in the Great Britain through Eradicating the Disease between XVIII-XX centuries – Facts or a Political Arithmetick?”

95. Education in the Middle Ages

96. Militant Islam’s Expansion in the Southern Philippines

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97. What is Anorexiz Nervosa

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99. Russians and Mixed Martial Arts


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