Perspectives on political influences on changes in telecommunications and internet economy markets

Abstract

For the past thirty years, international consensus has supported telecommunications policies favoring the pursuit of economic efficiency and the distancing of governments from ownership and day-to-day industry governance. These principles serve to minimize the potential for conflicts of interest and corruption to influence industry outcomes. However, recently, a trend has emerged for governments to expand their sector influence more directly, via network ownership, extension of regulatory interests into all aspects of the digital economy, the politicization of matters such as payment for internet content and content censorship and at the extreme, prohibitions on the use of equipment and software originating from non-favored countries. This begs two questions. Is this populist politicization of telecommunications and internet economy matters a worldwide phenomenon, or is it confined to a handful of developed countries? And even though the rhetoric may flow at election-time, do these potentially-flawed populist policies flow through into problematic laws and actions, or are there other checks and balances that constrain these excesses and ensure that the long-standing economic and social objectives governing the industry for the past thirty years are preserved in national laws and regulations?

The international perspective appears to confirm both the persistence of regulation and its ability to expand into all areas of the digital economy, and a disconnection of regulation from the original intentions to promote more competitive markets. We review the current state of sectoral regulation and thinking, including a juxtaposition of the EU and US approaches, concluding with a proposed research agenda.