Telecommunications Regulation and the Global Digital Divide

Abstract

The liberal-market model for telecommunications regulation is designed to promote access to voice telecommunications and is unlikely to improve internet access. As such, the liberal-market regulatory model will not enable countries to bridge the digital divide. The application of this model in least developed countries is widening the global digital divide by increasing the inequality of access to the information society in those countries compared with developed countries. The paper quantifies the scope and extent of the global digital divide by way of comparison of access to the internet in member states of the OECD and those states defined by the United Nations to be least developed countries (LDCs). The paper contrasts the statist Posts Telegraphs and Telecommunications regulatory regime with the neoliberal, market-based, privatisation approach for which the International Financial Institutions and the World Trade Organization act as agent of dissemination. The paper examines the dissemination of neoliberal policy frameworks from the wealthy North to the poorer South and sets out the limitations of these frameworks. There is a review of the role of the community of consultants created by the operation of the international financial institutions and their actions as agents. The paper shows that the regulatory policies disseminated improve access to voice telephony services but access to the internet (and the information society) has not increased nearly so significantly in LDCs. The particular kinds of solution imposed by international financial institutions reinforce some of the inequalities that they are intended to reduce. The paper advances some policy alternatives which are designed to remedy some of these problems.

Keywords: digital divide, regulation, development

JEL Classification: E61