Mexico's international telecommunications policy: Origins,the WTO dispute,and future challenges

Mexico is by far Latin America's largest trader and the country with the most free trade agreements. Notwithstanding the success of its trade policy, the liberalization of its telecommunications sector was limited and generated a dispute at the WTO. This article offers an overview of Mexico's trade policy, with special emphasis on its policy regarding trade in telecommunications services and the 2002–2004 Mexico–United States dispute over telecommunications at the WTO. The dispute is the first one over trade in telecommunications services at the WTO and has generated interest among many developed and developing countries.     

Conflicting national policies: The creation of the euro and the rebalancing of telecommunications prices

Government departments have diverse interests, and on certain occasions, the need to achieve a priority objective in one department may lead to the adoption of inefficient policies in other areas, with long-lasting consequences. In this paper, we analyze the rebalancing of the telecommunications tariffs that took place in the European Union before and after the liberalization of the market in 1998. We show that the objective of satisfying the Maastricht inflation condition to allow participation in the European Monetary Union from 1999 led some national governments to block the rebalancing of telecommunications tariffs. Specifically, we demonstrate that in the years immediately before the liberalization of the telecommunications market, those countries that faced greater difficulty achieving the inflation objectives of the Maastricht Treaty reduced, rather than increased, the prices of local telephone calls and line rental. Furthermore, these countries did not intensify efforts to rebalance their tariffs after the creation of the euro. Our paper also shows that in this period the countries that diverged most from the inflation condition invested less in their telecommunications infrastructure.     

The Canada-US Free Trade Agreement and the telecommunications industry

The Canada-US Free Trade Agreement, which came into effect on 1 January 1989, could well prove to be a breakthrough in the liberalization of trade between the two countries. This paper highlights the provisions of the FTA that indirectly or directly affect the telecommunications industry, assesses their possible impact and evaluates their probable importance to different participants in the industry. The authors make many predictions as to the effects of this agreement in terms of both telecommunications equipment and services and foresee greater competition and larger markets.     

Different paths to universal access: The impact of policy and regulation on broadband diffusion in the developed and developing worlds

The authors examine the broadband digital divide by analyzing the impact of policy and regulation on broadband Internet diffusion. Their multiple regression analysis shows factors that determine broadband diffusion in technologically developed countries do not necessarily have the same impact in less developed countries. They show that in technologically developed countries, there is greater broadband diffusion in countries that make a higher financial investment in information and communication technologies (ICTs), have effective governing practices at the national level, have higher levels of education, and are more urban. In technologically developing nations, a competitive telecommunications sector and higher investment in ICTs lead to greater broadband diffusion, with investment having an even larger impact in the developing world than in the developed world. In addition, stronger democratic political institutions, higher levels of national income and lower levels of income inequality increase diffusion, but the presence of a national telecommunications regulatory authority has a negative impact. These results suggest that the path to widespread availability and use of broadband requires different strategies depending on a nation's level of technological development.     

Financing and other issues in telecommunications development

Implementation of telecommunications infrastructure throughout developing countries is a prerequisite to national development. The fundamental question, argues Dr Parker, is how can developing countries pay for the capital investment in the necessary telecommunications equipment. The need is to encourage an institutional structure that can stimulate innovative, lower-cost appropriate rural telecommunications technologies without imposing excessive risks on the national telecommunications monopoly. With sucessful models to follow, it will be easier to achieve consensus between developing country borrowers, international lenders and telecommunications manufacturers.     

Trade patterns,industry structure and industrial policy in telecommunications

This article examines three major changes which have been occuring in the telecommunications market: liberalization, leading to increased competition in services and equipment, the internationalization of the equipment market, and a rapidly changing industrial structure. The interrelationship among the three trends is analyzed, and the authors hypothesize that it is the technological determinants which are driving the changing structure of the industry and its trade patterns and regulatory environment. The instruments of industrial policy are discussed, with examples from several countries. The European Community's policy in telecommunications is explained in some detail.     

Fueling investments - The effect of the Agreement on Basic Telecommunications

As international agreements come under fire from current politics, it becomes ever more important to investigate the effect of such agreements. The telecommunication sector is of special interest due to its growing importance in the digital age. International law came into play in 1998 when the Agreement on Basic Telecommunications (BTA) entered into force. It demanded far-reaching liberalization reforms and was signed and ratified by 66 countries. A difference-in-differences estimator is used to analyze if the treaty had an impact on investments in telecommunications. The analysis reveals that investments in telecommunications became significantly higher in signatory countries than in non-signatory countries after the treaty took effect.     

Telecommunications and investment decisions in the Philippines

This article is a rejoinder to the article written by R.J. Saunders published in the December 1983 issue of Telecommunications Policy on investment decisions in telecommunications. The author, in this brief paper, attemps to discuss the decision-making process in telecommunications investments described by Saunders and as it relates to the practical experience of the Philippines and other developing countries in a similar situation. Attention is given to how the national telephone programme in the Philippines is being developed. Efforts have been exerted to identify the similarities and basic differences of the Philippines to other developing countries.     

Inclusion or Dualization? The Political Economy of Employment Relations in Italian and Greek Telecommunications

Recent literature argues that trade unions in restructuring service industries have responded to the challenges of the post‐industrial era by accepting different forms of labour market dualization. This article examines two case studies from Italy and Greece, in which unions adopted divergent responses to intensified market pressures unleashed by the liberalization of national telecommunications markets. In the Italian case, collective bargaining was successfully centralized, resulting in the inclusion of traditional labour market ‘outsiders’. In contrast, bargaining centralization failed in Greek telecommunications, leading to intensified dualization. These different paths of institutional change are explained as resulting from differences in ideological cleavages among unions and distinct legacies in employers’ associations.     

Infrastructure investment and optimal access regulation in the different stages of telecommunications market liberalization

In this paper, we compare the optimal access regulation under three different market configurations that approximate the different stages of telecommunications market liberalization. We show that in the first stage of market liberalization the regulator has to balance between static efficiency and investment and that the optimal access price may be above marginal cost. In the second stage, two different outcomes are possible. If entrants tend to underinvest, the regulator balances between static efficiency and investment. If entrants tend to overinvest, the regulator sets the access price as low as possible in order to prevent or limit infrastructure duplication. Interestingly, we find that in the third stage of market liberalization the regulator may decide to promote infrastructure duplication and to set the access price above the price in the first stage of market liberalization, even if telecommunications network operators tend to overinvest in infrastructure duplication.     

An economic analysis of the impacts of trade liberalization on Asian dairy market

This paper develops an economic analysis of the impacts of further trade liberalization scenarios on Asian dairy markets, using a world dairy model incorporating both vertical and spatial characteristics of the world dairy sector. Japan and Korea’ producers will suffer much bigger losses from trade liberalization than other countries in the region; Japan and Korea’s producers get much more protection from trade distortions than from domestic subsidy. India is a potential competitive exporter if Asia is liberalized. China and India are potential competitive exporters under global free trade. South East Asia and other South Asian countries remain importers under free trade. Greater trade liberalization around the world increases exports for potential exporters and/or ease importing pressure for potential importers. The increasing order of competitiveness of Asian dairy economies sectors is found to be Japan, Korea, South East Asia, other South Asia, China and India. China and India consumers would lose from world trade liberalization, but the other countries’ consumer surplus will increase.     

Why is the international accounting rate system in terminal decline, and what might be the consequences?

This paper looks at the incentives and opportunities existing in the provision of international telephony and argues that the present accounting rate system is unsustainable. The paper also provides a framework within which current or proposed regulations governing trade in international telecommunications services can be analysed. The enormous profits available in this sector, together with developments in digital and fibre optic technology, are resulting in a breakdown of the Implicit cartel arrangements which have largely prevented operators from on-selling services (a type of arbitrage). However, liberalization by only part of the world will give rise to a potentially serious new problem—monopoly opportunism by operators in non-liberalized countries. The paper analyses this and other potential problems that can be expected to arise in the future.     

The impact of ICT convergence on development in the Asian region

Emerging economies in the Asia–Pacific region are experiencing dramatic and accelerating changes in patterns of ownership and investment in their telecommunications sectors, as well as in convergence. This paper will highlight the significant dependence of emerging economies of the region on convergence of ICT and how these technologies create new networks. Evidence will be cited from China, the Asian Dragons and the near NIEs like Malaysia and Indonesia, to show how they have created one of the largest markets in the world for telecoms equipment and services. The Southeast Asian countries with their open economies and export oriented investment technologies have proved that such policies have generated trade surpluses and long-term growth despite their current financial crises. They still plan to continue ascribing priority in their investment patterns to converging ICT.     

Subscriber financing of telecommunications investment

This article describes a system of subscriber financing of investment in the telecommunications industry, which has proved highly successful in Japan and Brazil. In those countries, new subscribers were required to buy bonds or shares as well as paying a telephone installation charge. The capital raised was used to fund construction and improvement of telecommunications facilities. The article examines the details of the financing plans in Japan and Brazil, and the results for the industry and for subscribers. Subscriber financing is recommended as a useful method of raising sufficient and assured capital to fund a carefully planned telecommunications system, especially in developing countries where national priorities for resources may be in other sectors.     

Assessing the WTO agreements on China's telecommunications regulatory reform and industrial liberalization

By drawing on new institutional economics, this paper contends that the “rules-of-law” specified by the World Trade Organization (WTO), as an exogenous institution for the member states, will theoretically influence its members’ domestic telecommunications regulatory institutions, but that the actual effects will be different and will depend on the institutional endowments of host countries and their institutional stances. Empirically, this paper examines the impact of China's prospective membership status in the WTO on its telecommunications regulatory reform and industrial liberalization and explores the institutional barriers preventing China from fully implementing the WTO Agreements in this sector.     

Take your partners: Public private interplay in Australian and New Zealand plans for next generation broadband

Within a few days of each other in early 2009, the national governments of Australia and New Zealand announced separate plans to invest heavily in advanced broadband networks. Taxpayers in each country will contribute at least half the estimated cost of fibre-to-the-premises networks reaching the overwhelming majority of households and businesses within 8–10 years. These complex and controversial forms of ‘public private interplay’ demonstrate three trends: a shift away from the liberalization and privatization policy consensus of the last two decades; shared convictions about the anticipated size of fast broadband’s economic and social benefits, and about the need for wholesale-only fixed line network operation to maximize those benefits; and the unlikely impact of the global financial and economic crisis in stimulating investment in particular infrastructures seen as critical to the national economies that emerge from it. This article discusses industry structures and regulation in Australia and New Zealand, their long history of public investment in telecommunications and the recent popularity of public private partnerships (PPPs) with Australian state governments. It outlines the ambitious broadband plans and surveys their prospects. Like so many other policy actions following the global economic crisis, these are distinctively national responses to internationally shared challenges.     

Economic growth and the development of telecommunications infrastructure in the G-20 countries: A panel-VAR approach

This paper examines the linkages between the development of telecommunications infrastructure (DTI), economic growth, and four key indicators of operation of a modern economy: gross capital formation, foreign direct investment inflows, urbanization rates, and trade openness. By studying the G-20 countries over the period 1991–2012 and employing a panel vector auto-regressive model for detecting Granger causality, we find a network of long-run causal connections between these variables, including bidirectional causality between DTI and economic growth.     

The political economy of the Korean telecommunications reform

South Korea proclaimed a gradual economic liberalization ever since the early 1980s. Regardless of her vow to do so, however, most of liberalization efforts turned out to be a sheer rhetoric. In sharp contrast, genuine market liberalization and regulatory reforms are being introduced in the telecommunication sector, which is unprecedented in the Korean economic history. Why and how could Korea pursue such a full scale market liberalization and regulatory reforms in the telecommunications sector? Though it is argued that a regulatory convergence in economic management is found in everywhere in the world, the particular speed, scope, and/or processes of a country’s telecommunication reform cannot be understood correctly without examining the structures and institutions of the Korean political economy and of the telecommunications industry. This paper examines the causes and consequences of the Korean telecommunication reform by analyzing the relevant institutional changes both in domestic and international, which largely affect the interaction among those involved in the process of market liberalization and regulatory reforms.     

制度差异风险与中国对外直接投资——双边投资协定与贸易依存度的调节效应研究

本文分别从理论与实证两个层面探讨了制度差异风险对中国OFDI 的影响。在理论层面通过模型构造论证了双边投资协定和双边贸易依存度对制度差异风险的调节效应：稀释效应与累积效应。在此基础上,选取2006-2015 年中国“一带一路”沿线41 个国家和地区样本,对理论假设进行了经验检验。研究表明：制度差异风险对中国OFDI 产生负面影响且具有门槛效应,中国更倾向于投资制度风险接近的国家;双边投资协定对中国OFDI 具有正向促进作用且对发展中国家作用更大,双边投资协定在一定程度上可以替代东道国的制度缺位,稀释制度差异风险对中国OFDI 的负面影响;双边贸易依存度有益于中国OFDI 且对发达国家作用更大,双边贸易依存度通过加强制度学习和经验积累,对制度差异风险具有反向调节作用。     

‘Mainline’ telecommunications infrastructure, levels of development and economic growth: Evidence from a panel of developing countries

This paper assesses the growth impact of telecommunications infrastructure investment in developing countries by subjecting country-specific data on mainline tele-density and per capita growth to a Granger causality test within a panel cointegration framework. The results suggest that growth effects vary widely across country groupings reflecting different levels of development. Mainline tele-density and per capita growth strongly reinforce each other for countries that are relatively less developed. The reinforcement effect is even stronger for emerging countries that can be identified by their higher than average growth rates. In contrast, there is, at best, weak evidence of bi-directional causal links between the two variables for countries that are relatively more developed. These differences in the mainline tele-density and per capita growth relationships suggest that investment in telecommunications infrastructure, with its potential to generate high growth return, may serve as the critical tool for driving the growth and development process forward in the less developed countries.