Classroom Companion: Business

Digital Regulation
Contents
22.1 
 Introduction – 336
22.2 
 Mobile Network
Regulations – 337
22.2.1 
 Fair Competition – 337
22.2.2 
 Denial of Interconnection – 338
22.2.3 
 Excessive Pricing – 338
22.2.4 
 Cross-Subsidizing – 338
22.2.5 
 Price Discrimination – 339
22.2.6 
 Lock-In of Customers – 339
22.2.7 
 Non-Price Discrimination – 339
22.3 
 Internet Regulations – 340
22.4 
 Lessig’s Four Modalities – 342
22.5 
 Conclusions – 343
 References – 345
22

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336
22
 
n Learning Objectives
After completing this chapter, you should be able to:
5
Explain why and how mobile communication is regulated.
5
Discuss the complexity of regulating the Internet not only because of its inherent 
complexity but also because there is an ongoing conflict between opponents and 
proponents of net neutrality and the need to regulate the network.
5
Discuss why legislation is not the only way to regulate the market but that the 
market itself, the technology, and the public also contribute to such regulation.
22.1
 Introduction
Since the early 1980s, competition has gradually been introduced in the telecom-
munications market, first in the UK in 1982 for regulating the market for cellular 
mobile communications. In the rest of Europe, mobile communications were 
opened for competition in 1992. In 1998, all telecommunications in Europe were 
de-monopolized and opened for general competition. This development and the 
extensive use of the Internet have generated a demand for regulating the telecom-
munications market to make it a level playing field.
Market regulation for ICT can be defined as follows. (Note that this definition 
is not essentially different from the regulation of other markets.)
Definition
Regulation of the ICT market is the intervention of governmental, legal, social, 
economic, or technological authorities, by rules or procedures, to restrict the free-
dom of operations for market participants (in particular, mobile operators, Internet 
service providers, and application service providers) and to target the evolution of 
the market.
There are several motives for regulation:
5
To avoid market failure such as formation of monopolies
5
To foster fair competition
5
To secure that the users have correct and adequate information about the 
market
5
To ensure affordable access to the ICT infrastructure, thereby satisfying collec-
tive needs of the public
5
To protect individuals against unethical business conduct and abuse of per-
sonal data
5
To promote professional and ethical conduct of market participants
5
To stimulate peer-based service innovation and development of new technolo-
gies
The regulations apply to fixed and mobile network operators, user access providers, 
Internet service providers, application service provides, and content providers. This