The Formation Of Telecom Competition

This paper addresses the issue of how a competition mechanism has been introduced into the telecom industry. 1 first attempt to straighten up some relevant theories involved in the process of evolution from monopoly to competition in the said industry, in the hope that a picture of transformation of economic accounts about natural monopoly could be sketched out, and that the theoretical background lurking in the introduction of the competition mechanism could be better appreciated. Next, a retrospective analysis of the development of the telecom industry in the United States, which aims to show the inevitability of telecom competition, reveals the causes of its two monopolies in the history as well as the economical, technological and institutional factors that helped terminate the monopoly. Then, from the perspective of government, I discuss some approaches and measures that might help introduce an effective competition mechanism into the telecom industry, a regulated industry as it is. I come up with a method, by combining the contestable market theory with the market barrier theory, of constructing the structure of a competitive telecom market, which enables me to insightfully explore the issue of privatization of state monopolized telecom operators in the course of increasing marketization.Since the telecom industry is characterized by its economic technology, the competition among telecom operators, it can be argued, cannot be realized unless some regulation is implemented. That is to say, an effective regulation policy should be formulated to guarantee and improve the telecom competition. Whereas a regulation policy requires efficient regulatory governance, the latter is something that is more important and fundamental than the former. In fact, it is one of the major targets of the present study to investigate the kernel of regulatory governance and its practical implications.Lastly, by looking back to the changing market structure and examining the existing market structure and performance, I analyze the inevitable process of China's telecom industry from monopoly to competition and suggest some measures to solve the existing problems. In addition, I construct a model and, by employing some relevant theories in the new institution economics, evaluate the characteristics and weaknesses of the governance of China's telecom industry, pointing out that to...