Regulatory Economics and the Internet

Abstract

This paper aims to show that there are indeed points of contact between “conventional” telecommunications regulation and the Internet in its different aspects. In this connection it seeks to show the limits of regulation. Section 2 outlines some of the relevant trends in the market and the importance of the Internet. Section 3 then sets out the determinations issued to date by the Regulatory Authority for Telecommunications and Posts (RegTP) with a bearing on the Internet. Section 4 gives a schematic illustration of the impact of the Internet on the PSTN/ISDN. This is significant in that a large proportion of the services connecting to the Internet still use the narrowband telephone network today. More fundamental reflections are set out in section 5. These are concerned with making clear that the RegTP activities referred to in section 3 do not address regulation of the Internet as such. Attention is focused particularly on whether or not it is enough to limit regulation to wholesale products. In conclusion, the paper explores the implications of particular developments for future regulation.

Friedhelm Dommermuth is Head of Department Economic Aspects of Telecommunications Regulation at RegTP. Christoph Mertens is Assistant Head of Section in this Department. This paper reflects the views of the authors.