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6. Enhancing sector efficiency

The debate continues in the telecommunications industry over the necessary level of regulatory intervention. Some argue for the abolition of industry-specific regulators and the transfer of regulatory functions to competition authorities and the judicial system. This overlooks the growing importance of independent regulation as a means for achieving effective competition in communication services. But regulation per se is no panacea. The success or failure of national administrations in stimulating market development is strongly linked to the institutional arrangements that underlie a regulatory agency’s operation and the powers with which they are invested. The main regulatory challenges they now face relate to issues such as interconnection, universal service and tariff rebalancing.

To bring home some of the many benefits that efficient interconnection holds for the local market and the national economy, regulatory agencies around the world have adopted approaches that either emphasize regulatory intervention or keep the regulator at arms length from commercial negotiations between operators. In the Americas region countries have relied more on approaches that give the regulator leverage to move the negotiation forward to reach timely and equitable agreements. Interconnection principles of most countries in the Americas are also in line with, or quite close to, those proposed by the Reference Paper attached to the World Trade Organization’s Basic Telecommunications Agreement.

As competition spreads across market segments and technological convergence blurs service boundaries, the availability of alternative infrastructures becomes an essential precondition for the ability to provide low cost information and communication services to end users. The demand for additional transmission capacity at lower rates is calling into question the extent to which the telecommunications interconnection paradigm should be applied to other types of networks.

The main challenges regulators now face relate to issues such as intercon-nection, universal service and tariff rebalancing

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Updated : 2007-08-28