Economic and institutional implications of network convergence Dr. - PowerPoint PPT Presentation

Economic and institutional implications of network convergence Dr. Zsuzsanna KOSA, Budapest University of Technology and Economics Faculty of Informatics: kosa@tmit.bme.hu Faculty of Economics: kosa.zsuzsa@itm.bme.h u 5-7/10/2004 Vilnius, ITU-D Seminar on CEE 1 Lithuania, EU Telecommunications Markets

Convergence model: 3 dimensions • Convergence is a s n technology based regulation d market restructuring development process s n market • Regulation reacts to d technology and market n s features and changes d technology • The ICT sector T I M extends sectors 5-7/10/2004 Vilnius, ITU-D Seminar on CEE 2 Lithuania, EU Telecommunications Markets

Dependency from networks • Networked industries extend and influence the economy • Reliability and security of these networks become essential • Dependency asks for regulation 5-7/10/2004 Vilnius, ITU-D Seminar on CEE 3 Lithuania, EU Telecommunications Markets

Oligopol structure leads to asymmetry • There are few providers and capital concentration • There are differences in market power and information asymmetry • Asymmetry asks for regulation 5-7/10/2004 Vilnius, ITU-D Seminar on CEE 4 Lithuania, EU Telecommunications Markets

Stakeholder structure & convergence Stakeholder groups: Convergence aspects: � Customers � Growing supply � Providers � Restructuring markets � Suppliers � Rearrange supply chain � Investors � Growing risk � Workers � Less staff needed � Redistributors � More regulation needed � General public � Interested in involvment 5-7/10/2004 Vilnius, ITU-D Seminar on CEE 5 Lithuania, EU Telecommunications Markets

Historical regulation approaches • Sector specific regulation for telecom • Self-regulation for informatics, • Technical regulation for scared resources for media • Content providing as other media 5-7/10/2004 Vilnius, ITU-D Seminar on CEE 6 Lithuania, EU Telecommunications Markets

Co-regulation approach Distributed duties among: • Sector-specific Regulator • General Market Regulatory Authorities • Industrial self regulators • Civil Society 5-7/10/2004 Vilnius, ITU-D Seminar on CEE 7 Lithuania, EU Telecommunications Markets

Co-regulation for convergence Stakeholders: Regulation: • Sector-specific- and • Legislative framework, general- market direct regulatory regulatory institutions: empowerment is needed, (Governmental Authorities) co-opetition for duties • Industrial self co- • Fight for more self- regulators (Industrial regulation, they ask for associations) funding, risk of dominants • Civil associations, • Weak on the market, but consumer groups, workers public is sensitive on them groups, public 5-7/10/2004 Vilnius, ITU-D Seminar on CEE 8 Lithuania, EU Telecommunications Markets

Globalization of networked industries & regulation Networked industries Regulation tends to be become Global: Global too: • Operators, consumers • ITU as a global regulator from the whole World seeks for consensus • Network density grows, • WTO & UN-WSYS tries to networks extend enhance the development • Internationalisation • EU has intensive internal extends market regulation The relevance of the industrial co-regulation • US is a benchmark for EU increases 5-7/10/2004 Vilnius, ITU-D Seminar on CEE 9 Lithuania, EU Telecommunications Markets

Institutional framework scenarios: “Let it be” • Let the spontaneous convergence process to act. Handle only the emerging market failures • Happy incumbents • Rather happy customer and regulator • Unhappy newcomers workers and social groups 5-7/10/2004 Vilnius, ITU-D Seminar on CEE 10 Lithuania, EU Telecommunications Markets

Institutional framework scenarios: “Look it after” • Extend the existing regulatory institutions towards information and media technologies • Happy customers, newcomers and investors • Rather happy regulators • Unhappy incumbents 5-7/10/2004 Vilnius, ITU-D Seminar on CEE 11 Lithuania, EU Telecommunications Markets

Institutional framework scenarios “Merging” • Merge sector-specific regulation with regulation of content • On stop shopping for consumers • Merges political issues with technical ones • Risky scenario in CEEC 5-7/10/2004 Vilnius, ITU-D Seminar on CEE 12 Lithuania, EU Telecommunications Markets

Institutional framework scenarios “Federalisation” • Public utility regulatory institutes in each EU member states, • Extended sector- specific regulator at EU administration • Not matured scenario in Europe yet 5-7/10/2004 Vilnius, ITU-D Seminar on CEE 13 Lithuania, EU Telecommunications Markets

Focuspoint options of sector-specific regulation � Extend the competency � Co-regulate in aliance of sector specific with Competition regulator Authority � Regulate based on � Co-regulate with communication with industrial bodies civil society 5-7/10/2004 Vilnius, ITU-D Seminar on CEE 14 Lithuania, EU Telecommunications Markets