Publication Type

Journal Article

Version

publishedVersion

Publication Date

4-2006

Abstract

The mobile penetration rate in Taiwan has climbed from 6.86 to 112.15. Mobile phone accounts per 100 capita in the first 6 years of market competition, during this time the state-owned incumbent Chunghua Telecom has been dethroned by a new entrant, Taiwan Cellular Corp. This paper addresses the cause of Taiwan's unprecedented mobile growth, and provides policy solutions for countries that strive to improve their telecommunications sectors in a short time scale. The authors highlight the fundamental role of asymmetric regulation, rather than pure liberalization, in the creation of the deregulated telecommunications industry in Taiwan. The asymmetric regulation in Taiwan is manifested in a twofold framework: the dominant carrier vs. competitors, and the fixed-line carrier vs. mobile companies. Econometric analysis concludes that dualistic asymmetric regulation leads to higher growth for mobile competitors and raises the total mobile penetration rate. However, the authors warn against the paradoxical consequences of dualistic asymmetric regulation. The regulatory benefits which mobile entrants received evolved into rents when they successfully lobbied to end the follow-me call service, the pricing scheme of which contradicts the asymmetric revenue-sharing constraint. The paper calls for a sunset clause for dualistic asymmetric regulation in order to take full advantage of its strengths, while at the same time preventing rent seeking by the firms, which benefit. (c) 2006 Published by Elsevier Ltd.

Keywords

regulatory asymmetry;revenue-sharing constraint;contractarian approach;regulatory costs;rent seeking

Discipline

Communications Law | Communication Technology and New Media

Research Areas

Innovation, Technology and the Law

Publication

Telecommunications Policy

Volume

30

Issue

3-4

First Page

171

Last Page

182

ISSN

0308-5961

Identifier

10.1016/j.telpol.2005.06.016

Publisher

Elsevier

Additional URL

https://doi.org/10.1016/j.telpol.2005.06.016

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