As networks migrate to digital technologies, broadcasting networks are able to carry a range of services including voice telephony. This has important consequences for sector regulators and competition policy. Co-ordination across regulatory areas (between broadcasting, data services, and telecommunications) will be important to avoid 'regulatory arbitrage' [1]. Mergers between entities in previously separate sectors may now raise competition concerns.
Many competitive conduct issues can be addressed by competition law. But, ex-ante regulation of conduct can be quicker and cheaper. Regulators have to avoid over-reach and be consistent and predictable. In emerging markets, forbearance is wise.
Much of a regulator’s work will focus on ensuring there is no anti-competitive conduct by the incumbent or dominant operator. But, the regulator must focus on protecting the process of competition which is not always the same as protecting new entrants. The integrity of competition can be compromised by possible new entrant practices such as “slamming” [2] and misleading advertising. Such practices should be stopped.
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[1] Sometimes arbitrage opportunities can be self-inflicted. The Australian incumbent in 1995 had to make tariffs generally available (this changed in 1997) so that pure resellers were able to access the 20-25 per cent discounts on long distance calls available to large business customers and offer residential customers better discounts than the 10 per cent they received from Telstra. Many new entrants too advantage of this arbitrage window until it was closed by Telstra price changes in 1996.
[2] “Slamming” occurs where a new entrant falsely claims a customer has chosen to switch provider.