Wither Convergence: Legal, Regulatory and Trade Opportunism in Telecommunications
42 Pages Posted: 31 May 2002
Technological and marketplace convergence in Information, Communications and Entertainment ("ICE") has contributed to the merger of conduit and content. Yet laws, regulations and trade policies assume a separation between the delivery of content and the creation of the content. For example, the traditional common carrier model assumed that the transporter of traffic had nothing to do with the generation of the content carried. In the trade policy arena, limitations of the market access for content, such as movies, might apply even as such trade policies would prohibit such market access restrictions for telecommunications services.
This paper will examine the consequences of convergence with particular attention to the impact on semantic, telecommunications and trade classifications resulting when content and conduit blend together as occurs with Internet services. For example, Internet-mediated "streaming" of visual and audio content has characteristics akin to broadcasting, but also qualifies for a largely unregulated status in view of the fact that the service involves packet switched, value-added data communications. Other innovations, like Internet telephony, possibly fit into more than one classification. Other technological applications erode preexisting rules and policies like the international accounting rate division of long distance toll revenues.
The marketplace attractiveness of some new services results, in part, from trade and regulatory classifications that can accord arbitrage opportunities by blocking market access, or by avoiding costly regulatory burdens. The paper concludes with suggestions on how legislators, regulators and trade policy makers might curb regulatory opportunism by abandoning the strategy of classifying carriers and services based on static technological or market share assumptions.
Keywords: regulatory asymmetry, arbitrage, Internet telephony, international accounting rates, regulatory opportunism
JEL Classification: L96, F14, G38, K23, L51
Suggested Citation: Suggested Citation