Symmetric regulation for competitive telecommunications

Abstract

This paper argues that symmetric regulation should be adopted for the increasingly competitive telecommunications sector. This is required to provide market-based price signals which induce efficient investment and entry. All forms of asymmetric regulation contain an intrinsic bias toward some firms or technologies and run the risk of imposing large productive efficiency costs. We discuss various forms of potential anticompetitive behaviour and show how appropriate safeguards can be designed without resorting to asymmetric regulation. Price cap (access) reform and the design of mechanisms to fund universal service obligations are also discussed from the perspective of symmetric regulation.