Telecommunication Reforms, Access Regulation, and Internet Adoption in Latin America
The authors review the stylized facts on regulatory reform in telecommunications and its effects on telecommunications development and Internet penetration in Latin America. Relying on data from the International Telecommunication Union, the Inform...
| Main Authors: | , , |
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, D.C.
2013
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2002/03/1733736/telecommunication-reforms-access-regulation-internet-adoption-latin-america http://hdl.handle.net/10986/14320 |
| Summary: | The authors review the stylized facts on
regulatory reform in telecommunications and its effects on
telecommunications development and Internet penetration in
Latin America. Relying on data from the International
Telecommunication Union, the Information for Development
Program (InfoDev), and the World Bank for 1990-99, the
authors then test econometrically the determinants of the
differences in Internet penetration rates across Latin
America. The results show that effective implementation of
the reform agenda in telecommunications regulation could
accelerate adoption of the Internet in Latin America-even
though it is only part of the solution (income levels,
income distribution, and access to primary infrastructure
are the main determinants of growth in Internet connections
and use). Regulation will work by cutting costs. Cost
cutting will require that regulators in the region take a
much closer look at the design of interconnection rules and
at the tradeoffs that emerge from the complex issues
involved. It will also require a commitment to developing
analytical instruments, such as cost models, to sort out
many of the problems. Appropriate cost models will generate
benchmarks that are much more consistent with the local
issues and with the local cost of capital than international
benchmarks will ever be for countries in unstable
macroeconomic situations. Cost cutting will require an
equally strong commitment to imposing regulatory accounting
systems that reduce the information asymmetrics that
incumbents use to reduce the risks of entry. All these
changes will ultimately require a stronger commitment by
competition agencies, since in many countries a failure to
negotiate interconnection agreements will raise competition
issues just as often as it will raise regulatory questions. |
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