Regulation Misunderstanding: Convergence Complexity Providing Failures in Telecommunication Services Costs

Emilio Jose Montero Arruda Filho

Resumo


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.

Palavras-chave


Competition; Emerging markets; Regulation; Strategy; Technology convergence; Consumer behavior

Texto completo:

PDF (English)

Referências


Blumberg, S. J., Luke, J. V., & Cynamon, M. L. (2006). Telephone coverage and health survey estimates: Evaluating the need for concern about wireless substitution. American Journal of Public Health, May, 96(5), 926.

Brunekreeft, G. & Gross, W. (2000). Prices for long-distance voice telephony in Germany. Telecommunications Policy, 24, 929–945.

Buskirk, B., Schmidt, S. M. P., & Ralph, D. L. (2007). Patterns in high-tech firms’ growth strategies by seeking mass mainstream customer adaptations. The Business Review, 8(1), 34.

Carpenter, P. & Lapuerta, C. (1999). A critique of light-handed regulation: The case of British Gas, February 1999. Northwestern Journal of International Law & Business, 19(3), 479.

Cicekli, E. (2011). Antecedents of normative integration in multinational companies: A conceptual model. International Journal of Management. 28(4), 177–183.

Chen, J.-L., Chen, M.-C., & Chian, Yi-Ru (2007). QoS management in heterogeneous home networks. Computer Networks, 51, 3368–3379.

Cherry, S. (2005). The VoIP backlash. IEEE Spectrum, 42(10), 61–63.

Cherry, B. A. (2007). The telecommunications economy and regulation as co-evolving complex adaptive systems: Implications for federalism. Federal Communications Law Journal, 59(2), 369.

Chou, Y. & Liu, K.-C. (2006). Paradoxical impact of asymmetric regulation in Taiwan’s telecommunications industry: Restriction and rent seeking. Telecommunications Policy, 30, 171–182.

Cohen, T., Mattila, O., & Southwood, R. (2005). VoIP and regulation. Global Symposium for Regulators (GSR), Hammamet, Tunisia, November 14–15, 2005. http://www.itu.int/osg/spu/newslog/VoIP+And+Regulation.aspx, International Telecommunications Union (ITU).

Cox, L. A. Jr., Kuehner, W. E., Parrish, S. H., & Qiu, Y. (1993). Optimal expansion of fiber-optic telecommunications networks in metropolitan areas. Interfaces, 23(2), 35–48.

Crandall, R. W. (1997). Are telecommunications facilities 'infrastructure?' If they are, so what? Regional Science and Urban Economics, 27, 161–179.

Davies, G., Hardt, M., & Kelly, F. (2004). Come the revolution: Network dimensioning, service costing and pricing in a packet switched environment. Telecommunications Policy, 28, 391–412.

De Boer, D. B. & Evans, L. (1996). The economic efficiency of telecommunications in a deregulated market: The case of New Zealand. Economic Record, 72, 216–239.

Fennel, J. W. Jr. & Gobioff, B. D. (1983). A satellite communications controller. IBM Systems Journal, 22(1–2), 80.

Fenton, C., Nigeon, B., Willis B., & Harris, J. (2000). Wireless access. BT Technology Journal, Jul 2000, 18(3), 74.

Gill, T. (2008). Convergent products: What functionalities add more value to the base? Journal of Marketing, 72(2), 46–62.

Green, W. (1999). Unlocking the potential of outsourcing. Telecommunications, 33(8), 77.

Habib, A. & Chuang, J. (2007). Improving application QoS with residential multihoming. Computer Networks, 51, 3323–3337.

Hameria, A. P. & Paatela, A. (2005). Supply network dynamics as a source of new business. Int. J. Production Economics, 98, 41–55.

Han, J. K., Chung, S. W., & Sohn, Y. S. (2009). Technology convergence: When do consumers prefer converged products to dedicated products? Journal of Marketing, 73(4), 97–108.

Hobday, M., Davies, A., & Prencipe, A. (2005). Systems integration: A core capability of the modern corporation. Industrial and Corporate Change, 14(6), 1109–1143.

Jussawalla, M. (1999). The impact of ICT convergence on development in the Asian region. Telecommunications Policy, 23, 217–234.

Kim, B. W. & Seol, S. H. (2007). Economic analysis of the introduction of the MVNO system and its major implications for optimal policy decisions in Korea. Telecommunications Policy, 31, 290–304.

Korzeniowski, P. (2001). VoIP – Still only a drop in the bucket. Business Communications Review, 31(2), 78.

Lee, G. K. (2007). The significance of network resources in the race to enter emerging product markets: The convergence of telephony communications and computer networking, 1989–2001. Strategic Management Journal, 28(1), 17.

Lewis, T. R. & Sappington, D. E. M. (1989). Regulatory option and price-cap regulation. The Rand Journal of Economics, 20(3), 405.

Liu, F., Chou, W., Guo, W., & Wong, W. E. (2005). An approach to integrating SIP in converged multimodal / multimedia communication services. Telecommunication Systems, 28(3), 387–405.

Maeda, T., Amar, A.D., Gibson, A. (2006). Impact of wireless telecommunications standards and regulation on the evolution of wireless technologies and services over Internet protocol. Telecommunications Policy 30, 587–604.

Mansell, R. (1997). Strategies for maintaining market power in the face of rapidly changing technologies. Journal of Economic Issues, 31(4), 969.

Martikainen, O. E. (2006). Complementarities creating substitutes – Possible paths towards 3G, WLAN/WiMAX and ad hoc networks. The Journal of Policy, Regulation and Strategy for Telecommunications, Information and Media, 8(4), 21–32.

Nunes, P., Wilson, D., & Kambil, A. (2000). The all-in-one market. Harvard Business Review, 78(3), 19–21.

Pathak, J. (2005). Risk management, internal controls and organizational vulnerabilities. Managerial Auditing Journal, 20(6), 569.

Peha, J., & Tewari, S. (1998). The results of competition between integrated-services telecommunications carriers. Information Economics and Policy, 10, 127–155.

Reynolds, R. J. B. & Rix, A. W. (2001). Quality VoIP: An engineering challenge. BT Technology Journal, 19(2), 23.

Sanmateu, A., Paint, F., Morand, L., Tessier, S., Fouquart, P., Sollund, A., & Bustos, E. (2002). Seamless mobility across IP networks using mobile IP. Computer Networks, 40, 181–190.

Santos, J., Gomes, D., Sargento, S., Aguiar, R. L., Baker, N., Zafar, M., & Ikram, A. (2008). Multicast / broadcast network convergence in the next generation mobile networks. Computer Networks, 52, 228–247.

Sappington, D. E. M. (2005). Regulating service quality: A survey. Journal of Regulatory Economics, 27(2), 123–154.

Shelanski, H. A. (2007). Adjusting regulation to competition: Toward a new model for US telecommunications policy. Yale Journal on Regulation, 24(1), 55.

Shin, D. H. (2005). Technology convergence and regulatory challenge: A case from Korean digital media broadcasting. The Journal of Policy, Regulation and Strategy for Telecommunications, 7(3), 47.

Trebing, H. M. (2004). Assessing deregulation: The clash between promise and reality. Journal of Economic Issues, 38(1), 1.

Van de Klundert, J., Kuipers, J., Spieksma, F. C. R., & Winkels, M. (2005). Selecting telecommunication carriers to obtain volume discounts. Interfaces, 35(2), 124.

Xavier, P. & Ypsilanti, D. (2007). Universal service in an IP-enabled NGN environment. The Journal of Policy, Regulation and Strategy for Telecommunications, Information and Media, 9(1), 15–31.

Yung-Ching, H. & Tsui-Hsu, T. (2006). The impact of dynamic capabilities with market orientation and resource-based approaches on NPD project performance. Journal of American Academy of Business, 8(1), 215.

Zhou, H. (2003). Integration and access regulations in telecommunications. Information Economics and Policy, 15, 317–326.




DOI: http://dx.doi.org/10.4301/S1807-17752017000100006