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The Economics of Selfregulation in Telecommunications under Sunset Legislation

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Andreas Freytag and Klaus Winkler, University of Jena, Germany ... The Economics of Self-regulation in Telecommunications under Sunset Legislation Klaus Winkler ... – PowerPoint PPT presentation

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Title: The Economics of Selfregulation in Telecommunications under Sunset Legislation


1
The Economics of Self-regulation in
Telecommunications under Sunset Legislation
  • Andreas Freytag and Klaus Winkler,
  • University of Jena, Germany
  • ITS Berlin, 06.09.04

2
Overview
  • Background and problem
  • Sunset Legislation
  • Self-regulation - an efficient approach combined
    with Sunset-Legislation?
  • Conclusions

3
Background and problem
  • Overregulation is seen as major obstacle for the
    development of markets
  • However, radical changes in regulatory regimes
    cause problems
  • A combination of different regulatory instruments
    could be an efficient solution for the market
  • The search is on for an efficient regulatory tool

4
Sunset Legislation (I)
  • The changing benefits of regulation over time
  • When is how much regulation necessary?
  • Problem of Capture
  • Ex ante clause could be helpful
  • What is Sunset Legislation?
  • Control mechanism for regulation
  • Finding the right indicators is difficult

5
Sunset Legislation (II)
  • Some experience with Sunset Legislation
  • No large measurable effects visible
  • At least expansion of regulatory regimes is
    hampered
  • Pros and cons of Sunset Legislation in
    telecommunications regulation
  • Pros Faster, chance for trials, could discipline
    the regulator, keeps incumbent from making use of
    market power, rationalizes the legislative
    process
  • Cons No indicator available, different rules for
    different market segments necessary, even more
    bureaucratic efforts

6
Sunset Legislation (III)
  • Normative conclusions basic requirements of
    sunset legislation in telecommunication
  • Contestability as the goal
  • Assessment of need for regulation and regulatory
    body should be made simultaneously
  • Find categories that describe the different
    speeds of deregulation of different segments
  • Members of sunset committee must be independent
    and
  • should also be public
  • Sunset Legislation needs support to be effective

7
Self-regulation an efficient approach
combined with Sunset-legislation? (I)
  • Dynamics of regulation different regulatory and
    de-regulatory regimes for different time phases
  • Self-regulation does not imply no regulatory
    backing
  • Different services might need different
    regulatory processes

8
Self-regulation an efficient approach combined
with Sunset-legislation? (II)
  • Cases The mobile network-operators, AKNN and
    Billing
  • In areas with no or less regulation
    self-regulatory regimes are common, such as in
    the mobile sector
  • Association agreements are common especially for
    technical issues
  • A combination of Sunset Legislation and
    Self-regulation is the new billing contract of
    Deutsche Telekom

9
Self-regulation an efficient approach combined
with Sunset-legislation? (III)
  • Conditions for successful Self-regulation under
    sunset legislation
  • Framework needs to be made transparent
  • Necessary to establish a common goal for all
    actors
  • Strategic incentives of the actors must be
    undermined (possibly by the regulator)
  • Sunset Legislation together with Self-regulation
    proves to be effective if certain, but realistic
    conditions are met

10
Conclusions
  • Self-regulation is not toothless if combined with
    Sunset Legislation
  • Different market phases need flexible tools
  • Actors are more likely to reveal what they can do
    for the market with Self-regulation
  • Especially in a fast market such as
    Telecommunications the possible gains of Sunset
    Legislation together with Self-regulation are
    worth the effort

11
The Economics of Self-regulation in
Telecommunications under Sunset Legislation
DISCUSSION
  • Andreas Freytag and Klaus Winkler,
  • University of Jena, Germany
  • ITS Berlin, 06.09.04
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