Testing theories of regulatory behavior

Many decisions by regulators have been analyzed over the last two decades in an effort to test regulatory behavioral theories. As a result, the interest group theory of behavior has gained a considerable following and the public interest theory has been largely dismissed. However, many of these tests are inadequate; with the regulatory decisions analyzed, both the interest group and public interest theories lead to the same predictions. To properly distinguish between these theories, a set of necessary conditions that a regulatory decision must satisfy is developed. Based on these conditions and the extant empirical literature, public interest concerns of regulators cannot be dismissed, and a more general theory of regulatory behavior is suggested.     

Electricity Market Monitoring and the Economics of Regulation

Restructuring of wholesale electricity markets in the U.S. has brought new institutions known as Regional Transmission Organizations (RTO) and Market Monitoring Institutions (MMI) that oversee competition in the energy markets that they operate. Both regulators and external observers have viewed MMIs as impartial observers intended to police these exchanges against the exercise of market power. The economics of regulation generally questions (but does not always reject) public interest interpretations on grounds that interest groups use politics and regulatory procedure to shape institutions to their advantage. MMIs in fact originated as a strategic move by California’s large utilities in connection with that state’s restructuring, intended to advantage them against competitors. The responses of MMIs to the economically efficient practice of “virtual bidding” in RTOs differed with the relative strengths of different interests in the governance of those organizations. As policy, the Federal Energy Regulatory Commission should re-examine its endorsement of MMIs and consider centralizing their functions.     

Regulation and investment behaviour in the telecommunications sector: policies and patterns in US and Europe

This paper reports the results of the quantitative analysis of international experience of the relationship between infrastructure investment in the deployment of capacity that can carry large volumes of voice and data traffic and regulatory policy changes in the telecommunications sectors. It looks at the relationship between infrastructure investment for these infrastructure assets and the access pricing régimes for local exchange carriers in the United States and Europe. It then looks at the relationship between various aspects of regulatory and institutional policy changes in Europe and how they affect access prices.The paper finds that a lower access price promotes greater deployment of digital technology among US incumbent local exchange carriers (ILECs). Based on this finding, it suggests that it is in the ILECs interest to have access to their networks encouraged.The European data for interconnection are recent and far reaching conclusions are not feasible, but the findings, however, suggest that competition has worked by facilitating new entry through decreasing interconnection prices, although path dependencies, of existing and traditional concepts, in the mindsets of operators as well as regulators, may account for these findings.     

The long overhang of bad decisions in agro-industrial development: Sugar and tomato paste in Ghana

In theory, learning from past mistakes should result in adapted and improved development policy. However policy learning can be difficult to achieve, and the link between learning and policy change is neither direct nor immediate. In this study we look at learning in agro-industrial policy in Ghana, by tracing the interest in sugar production and tomato processing over six decades. Specifically we ask why four failed factories established in the early 1960s have continued to play central roles in both policy and public discourse. Using policy documents, academic material, and the popular press, we show that Ghana’s policy focus on sugar production and tomato processing has endured, despite the fact that the factories were misconceived, poorly sited, ill-equipped and poorly managed. Indeed, the political ideas that underpinned the establishment of these factories in the early days of independence can be seen in the current One District, One Factory policy. We suggest that it is their symbolic and political value, not their economic value, which keeps the discussion around these factories alive. Even when shut down, they are a physical manifestation of historic commitments by the state, and as such they guarantee the attention of politicians, and hold out hope of a next re-launch. Unfortunately as long as the factories continue to be incorporated into each new generation of agro-industrial policy, it is difficult for any alternatives to gain traction. This analysis highlights the very long overhang of bad decisions, particularly when they are associated with physical infrastructure. Learning from past mistakes will only happen if the short-term political cost of turning policy learning into policy action can be overcome.     

A study on the deployment of high-speed broadband networks in NUTS3 regions within the framework of digital agenda for Europe

This paper investigates the high-speed broadband situation in the EU and its prospects. It uses a deployment model to estimate the investment required to meet the Digital Agenda for Europe (DAE) broadband targets set by the European Commission in its Europe 2020 strategy at different stages: as of 2016, after expected operators’ deployment, after public subsidies and leveraged investment, and as expected in 2020. The model uses data at the NUTS3 level, which is the most granular level that has data available on the status of broadband deployment, to arrive at a coherent and comparable framework. From the different perspectives on the investment to meet DAE targets, the paper concludes on the need for an appropriate combination of incumbent and alternative operators investments, public subsidies and leveraged investments, and new investments, both public and private and non-existing as of 2016, examining their feasibility and the impact of different regulatory, technical, and policy strategies.     

The involvement of utilities in the development of broadband infrastructure: A comparison of EU case studies

Energy companies and other utility providers have been often involved in the provision of telecommunications services. Nevertheless, their contribution to broadband development has varied significantly over time. In the late 1990s, both local and national utilities in the European Union (EU) engaged in the provision of broadband networks, but only few of them managed to establish themselves as major broadband providers. More recently, new projects involving national utilities have been announced in several EU countries, opening new scenarios for utilities’ contribution to Next Generation Access (NGA) development. This paper identifies and explores the factors affecting the entry and the success of utilities in the EU broadband market, through the comparison of four case studies from four EU countries (Germany, Italy, Sweden and the UK). The evolution of utility involvement in the EU broadband markets is assessed against the interaction of market, technology and policy factors, focusing on the impact of policy and regulatory measures. As a result, this paper provides fruitful insights into the relevance and effectiveness of public interventions in broadband markets. Across the four case studies, public support and public ownership emerged as the main drivers for the involvement of utilities in EU broadband markets, with regulatory measures and economies of scope exerting a limited and decreasing influence. However, the contribution of utilities has varied significantly across the cases studied, reflecting the different approaches taken at national and local level to support broadband development, in spite of the common regulatory framework.     

The Economic Implications of House Price Capitalization: A Synthesis

In this article, I synthesize an emerging literature that explores the conditions under which public and private investments and intergovernmental transfers are capitalized into local house prices and the broader economic implications of such capitalization. The main insights are: (1) house price capitalization is more pronounced in locations with strict regulatory and geographical supply constraints; (2) capitalization can induce the provision of durable local public goods and club goods; and (3) capitalization effects—which are habitually ignored by policy‐makers—have important adverse consequences for a wide range of policies such as intergovernmental aid and the mortgage interest deduction.     

THE IMPACT OF ACADEMIC PATENTING ON THE RATE,QUALITY AND DIRECTION OF (PUBLIC) RESEARCH OUTPUT*

We examine the influence of faculty patenting on the rate, quality, and content of public research outputs in a panel dataset of 3,862 academic life scientists. Using inverse probability of treatment weights (IPTW) to account for self‐selection into patenting, we find that patenting has a positive effect on the rate of publications and a weak positive effect on the quality of these publications. We also find that patenters may be shifting their research focus to questions of commercial interest. We conclude that the often voiced concern that patenting in academe has a nefarious effect on public research output is misplaced.     

Trade and food policy: Case studies from three Pacific Island countries

There is growing interest in the use of trade policy to create a healthier food supply. Eighty percent of chronic disease deaths occur in low and middle income countries, and a responsive food policy is an absolute necessity. In this paper we analysed three trade-related food policy initiatives to reduce the supply of fatty meat in the Pacific, in order to help public health workers understand how to effect policy change in sectors beyond the health portfolio. We found that policy uptake and implementation were easier with advocacy, tailoring the policy to the political context, the selection of policy tools that align with Government priorities (e.g. trade commitments) – ideally tools that are already used by trade policy makers in other contexts – and a broad justification for the policy initiative. Barriers to policy success included a focus only on health concerns (not taking into account policy issues of other sectors), limited engagement from other sectors in proposing and developing these cross-sectoral policies, and lack of a clear enforcement mechanism.     

Models for the social accountability of computing

This article examines the social dilemmas of computer use and strategies for ensuring the accountability of computing to the public. Improving the social accountability of computing means finding ways to organize groups that develop, manufacture, sell or use computer-based systems, and their markets, so that the broader public is well served. Six public policy strategies for social accountability of computing are commonly proposed: competitive market arrangements; administrative authority; professional control; regulatory commisions to administer legislative acts; judicial enforcement and review of legislative acts; and citizen action. Inspection shows that each model has problems in either its practical effectiveness or its appropriateness for computing.     

New Product Team Decision Making: Regulatory Focus Effects on Number,Type, and Timing Decisions*

Company executives rely on new product development teams to carry out their directives and make decisions according to management's goals. However, team members bring their own motivational perspectives to strategic decisions. This research examines how individual and leadership motivations influence a dyadic team's new product decisions. Specifically, this article investigates how matching vs. mismatched motivations between team members affect new product number, type, and timing decisions. In addition, this study asks how effective leadership‐provided motivations are in guiding teams' new product decisions. A set of hypotheses is developed using regulatory focus theory, which identifies basic motivational differences in individuals (i.e., promotion vs. prevention focus) and their effects on decision making. The hypotheses examine the effects of regulatory focus match vs. mismatch within teams on the likelihood to introduce new products, the timing of new product introductions, and the types of new products introduced. To test the hypotheses, a controlled, yet realistic product management simulation is employed. A total of 124 undergraduate seniors (83 women and 41 men) at a large public university enrolled in a marketing management capstone course participated in this study for partial course credit. Utilizing two‐person teams engaged in a business simulation ensured an appropriate level of controlled complexity in the decision making task, while allowing the phenomena of interest to be isolated and tested. Results show that when dyads share the same motivational approach (regulatory focus match), leadership‐prescribed goal pursuit strategies are largely ineffective. Only dyads that do not share the same motivational approach to decision making (regulatory focus mismatch) make new product decisions consistent with leadership‐prescribed goal pursuit strategies. For regulatory focus match dyads, the results demonstrate that a promotion focus (when compared to a prevention focus) leads to greater numbers of new products introduced, faster new product introductions, and more novel new product introductions. For new product managers, these results carry important implications. Which new product opportunities to invest in and which to forgo is presumably determined by the strategic direction given to teams by top management. Results suggest that when team members share the same motivational approach, this not only influences new product decisions, but also diminishes or eliminates the influence top management can exert on new product decisions. Such “isolation” from leadership influences does not have to be detrimental. For example, companies that seek to insulate new product development teams from influences from the top, such as is the case in many new venture incubations, would be well served to staff those teams ensuring a promotion focus match.     

Spectrum auctions in India: lessons from experience

Spectrum auctions have been used with significant success in many developed countries. From a regulatory and policy perspective, spectrum auctions ensure the efficient use of spectrum by allocating it to those entities that value it most, while also generating revenues for governments. But auctions may lead to unexpected outcomes due to unanticipated problems with their design leading to unexpected bidder behavior such as collusion and over-bidding. The key challenge before regulatory agencies is to design auctions in such a way as to meet the objective of fostering competition while at the same time ensuring that bidders can effectively use the spectrum for their business. While India was one of the early adopters of spectrum auctions, its success in service provision has been low. This paper critically examines issues in auction design that contributed to this delay and reviews the key elements in the design process namely a coherent regulatory framework, choice of service areas, flexibility for service area consolidation, standards and their role, convergence, managing public service regulation and managing defaults. The paper compares the handling of these elements in auctions in the United States (US), United Kingdom (UK) and Australia with the objective of drawing lessons for Indian policy makers.     

Convergence between telecommunications and other media: How should regulation adapt?

The paper examines the regulatory issues raised by technological convergence between telecommunications and other media. Market uncertainty for broadband services has gone hand in hand with both uncertainty over how to supply those services and a regulatory framework that will facilitate growth in the sector, ensure a competitive market and provide the necessary protections for consumers and the public. Development of the information market should be determined primarily by market forces. Intervention may be justified but a clear distinction needs to be drawn between regulation in the public interest and regulation to protect against market failure.     

Restructuring the U.S. Electric Power Sector: A Review of Recent Studies

The restructuring of the U.S. electric power industry has been described as “one of the largest single industrial reorganizations in the history of the world.” As with deregulation and reform of other industries, electricity restructuring was intended to produce cost efficiencies and price benefits to consumers. Whether it has achieved its stated objective is the focus of a number of recent studies that are examined in this review. The studies differ in numerous important ways – most importantly, in their methodologies and their conclusions. The focus of this review is on the strengths and limitations of their specific methodologies and, hence, on the confidence one might place in their conclusions. The article begins by setting out the basic methodological approaches employed in public policy evaluation. It then illustrates these points with examples from methodologies employed in several studies of electricity restructuring, concluding that several methodological deficiencies call into question the study results. In particular, despite much advocacy, there is little reliable and convincing evidence that consumers are better off as a result of the restructuring of the U.S. electric power industry.     

Leveraging the EU regulatory framework to improve a layered policy model for US telecommunications markets

What is the best way to overhaul the current telecommunications legislative framework in the United States? This is an ongoing debate among telecom policy analysts and many others affected by the legacy of regulatory compromises that govern US telecommunications (and related information and media) industry sectors. This paper compares a Layered Model for US telecommunications policy with the regulatory framework adopted by the European Union. Both approaches focus on service characteristics rather than underlying technological traits.¹ It becomes clear that the Layered Model could be adopted to move away from sector-specific regulation, and could successfully use conventional market analysis criteria.     

Friending the taxman: On the use of social networking services for government eID in Europe

The provision of identities online continues to be a fiercely debated topic in policy circles, with proposals emerging for public sector organizations to leverage pre-existing social networking services for their own identity management purposes. Within the broader context of private sector organizations springing up as identity providers, this article explores — from a socio-legal perspective — the merits and drawbacks of using social networking services for government eID in Europe. It then reviews the present and future European policy environment concerning official use of social networking credentials. We focus specifically on legislative measures currently being proposed in the EU to facilitate the Identification, Authentication and Signature policy, within the scope of the ongoing Electronic Signatures Directive revision process and the launch of the proposed Electronic Trust Services Regulation.     

Forming a 5G strategy for developing countries: A note for policy makers

This paper aims to provide policy makers in low income and middle income countries with a pragmatic review of the critical issues in formulating effective strategies and planning to embrace the next generation of mobile cellular technology. In a context of industry lobbying of governments to promote 5G, the paper attempts to bring clarity to just what are the critical issues, specifically for an industrial policy to deal with this novel but complex technology. Planning for 5G is a series of complicated choices as there are issues at the levels of creating ecosystems to support it, unproven business models, with claims for applications which may not be financially viable, yet, plus confusion over choices of radio spectrum, and selection of equipment suppliers, even potential issues over public health, as well as the real level of industrial and consumer demand beyond the hype. The emphasis here is on the importance of making balanced strategic choices, by identifying the basic issues, in a ‘realpolitik’ fashion - including why embrace 5G at all. The paper develops its insights from lessons learnt in the introduction of the previous mobile generation, LTE, also from policy studies on small cells and on designing auctions for 5G networks, as well as various 5G-focused publications from governments, regulatory authorities, mobile industry associations and global suppliers over the past six years (2015–2020). It examines whether to regulate 5G deployment with a heavy or light-touch regime, also whether to focus on more than the traditional indicators, such as penetration and coverage, or on “transformational outcomes” (as the promotional literature terms them) for the private and public sectors.     

Copyright issues for home videotaping

The consumers' home use of videocassette recorders to record TV programmes or motion pictures has concerned copyright owners, who fear that their economic interest will be jeopardized. The 1976 US Copyright Act is silent on the issue of private, non-commercial home videotaping. The US Supreme Court, in the Betamax case, has ruled that private, non-commercial home videotaping is not a copyright infringement. However, neither the law nor the ruling has actually resolved the fundamental copyright problem associated with home videotaping. This article proposes a number of public and private policy options for reaching an optimal solution.     

From the outside in: Consumer anti-choice and policy implications in the mobile gaming market

Significant growth in mobile media consumption has prompted a call to better understand the socio-cultural and policy dimensions of consumer choices. Contrary to industry and technology led analysis, this study argues that to guide consumer choice and innovation via regulatory policies requires an understanding of both ex-ante as well as in ex-post consumption conditions. This study examines mobile phone gaming to uncover how consumer anti-choice shapes decision-making as a framework for closely interrogating the ways in which policy concerns impact on consumers’ behavior. Through eleven focus groups (n=62), the study empirically identifies voluntary, intentional, and positive consumer anti-choice behaviors all of which impact policy initiatives when consumers, both gamers and non-gamers, self-regulate their behaviors. Findings point to four types of policy implication: regulating the self-regulated, understanding anti-choice, boundary-setting and including the self-excluded.