3561. Technological Change in the Telecommunications Industry
- Author:
- Judith Mariscal
- Publication Date:
- 01-1999
- Content Type:
- Working Paper
- Institution:
- Centro de Investigación y Docencia Económicas
- Abstract:
- This document examines technological change in the telecommunications industry at the international level, from the perspective which sustains that this change as the driving force behind policy reform, based on the public interest theory of regulation, argues that the emergence and diffusion of new technologies has transformed the market structure in this sector ad as a consequence the nature of government policy. The dramatic technological innovation that this industry experienced transformed the once stable role of the state in telecommunications. Until recent years telecommunications policy amounted to a rather narrow one, that of determining fair rates of basic service provided by a regulated telephone monopoly. The resulting increases in productivity of these new technologies has led to a high segmentation of this industry; to a proliferation in the number and kinds of firms providing telecommunications services which in turn transformed the role of government in this industry. This document will provide an understanding of the traditional technologies available in telecommunications and explore the mergence of new technologies. The most significant result of innovation has been declining costs along with an increased capacity of equipment unites and reliability. Because of this rapid technological change, new firms have entered the market bringing differentiated and new products and services. The objective is to identify how technological innovation decreased costs and allowed the entry of new competitors. The policy consequences were to erode the natural monopoly standing of this industry, to make it more contestable and with this to transform its traditional regulatory structure. The first section of this document will examine the prevailing literature on regulation as sustained by the public interest theory of regulation. The following sections will describe the conventional technology employed in telecommunications, the technological innovations that have occurred as well as how these technologies have transformed this industry at a worldwide level.
- Topic:
- International Relations, Development, Industrial Policy, and Science and Technology