REGULATION MISUNDERSTANDING: CONVERGENCE COMPLEXITY PROVIDING FAILURES IN TELECOMMUNICATION SERVICES COSTS

Abstract

This manuscript discusses a theoretical competitive scenario for telecommunications services, in particular voice over Internet protocol (VoIP), and finds that the economic benefits of the current technological convergence are based on three main factors: technological advances and updates; regulation failures related to technological complexity; and consumer inability to exploit the benefits of convergence. This study begins by giving the background to voice communication in the telecommunications sector and the misunderstanding of the competitive boundaries between technologies, service providers, and usage applications generated in an unregulated sector. Second, the kinds of regulation that organizes the development and pricing of integrated or bundled services are briefly discussed and presented. Third, theoretical analysis of the competitive environment is interpreted in terms of the three factors: technological advances, regulation failure, and consumer knowledge of convergence. Results derived from these factors are presented in the context of VoIP services. Finally, the work concludes by outlining the implications for regulatory reform and the impact on competitive behavior, and describes possibilities for the future management of the technology sector.