Regulatory Theory Essay Example | Topics and Well Written Essays - 1750 words

Regulatory Theory - Essay Example Due to convergence of the information and communication technologies into a common delivery model, states were forced to undertake a review of existing legislations and create a new set of guide lines not only to attract private investments but also to meet techno sociological needs of the nation. The first waves of reforms were introduced in 1990s until then telecommunications services were provided by the government under monopoly regime. Private players were allowed to enter the sector when they brought with them the mobile telephony, VoIP, broadband internet and many other value added services. This necessitated the new regulatory frame work to allow the smooth working of these operators in the marketplace. ICT technology is evolving rapidly and the world has become a global village where voice communication and transfer of data takes place at a wink of eye. Analog technologies have got replaced with more efficient digital signals and data storage. ICT networks are now currently relying more on packet switching instead of analog based circuit switching. The shift in technologies has certain implications for regulators and network operators. It will be appropriate to identify how operators are affected with these technological changes. 1. Owing to change in technologies, Network operators have to overhaul existing setup and install new equipments. This necessitates a significant capital outlay for new infrastructure. 2. Development of the Internet and digitalization of the technology has given users a greater flexibility and control over networks to use the services they require; however, operators have less control over how consumers interact with networks and utilize the services in voice and data segments. 3. The governments of the countries allocate spectrum, and often specify how the portion of the spectrum is to be used. Operators are regulated in designing their tariffs, uses and services to their customers. These decisions affect the flexibility of s pectrum in providing ICT services. The historical allocations of spectrum limit the scope for service providers to offer new innovative wireless services. Mobile internet access requires more spectrum than previously made available to the operators. Competitive market is said to be efficient and self corrective when numerous player vie for a given cake. The advantage is that competition helps achieve optimum use of resources and indulges in self correcting as per the demand of the market. Rationale for an Effective Regulator Even in a Competitive Market An effective regulatory body is required to regulate the market players which checks unfair market practices, protects consumer interest and ensures optimum use of resources in national interests. This is in the same fashion as The Bank of England regulates some of the important monetary functions such as money supply, interest rate, repo and reverse repo rate, and private banks are free to formulate their own strategies and compete within the given guidelines as per the regulatory framework enacted by the central bank. Owing to the nature of ICT technology and a host of evolving new technologies, it becomes necessary to ensure fair allocation and the optimum use of spectrum in the larger interest of nation. This also requires having a regulatory body in place to chalk out various policies, procedures, and rules which creates a healthy and competitive environment ensuring the following: 1. Allocation and management of scarce resources in the national interest. 2. Oversees the smooth expansion of ICT networks and services. 3. Creates an