Study On Who Decides Telecom Tariffs

Telecom industry is one of the basic sectors of our national economy. Obviously,it is pilot, permeable and strategic and involves national economy, socialdevelopment and all aspects of people’s lives. It plays a decisive role in everycountry’s economy and social development. With our government’simplementation of strategic target “using information to spur industrialization,promoting industrialization with information”, and determination of which itplays a basic role in the value chain of the national economy, telecom andpeople’s daily life link more closely. The standards of telecom tariff are directlylinked to the immediate interests of consumers. Given the strategic position of thetelecoms industry and its characteristics, coupled with lack of correspondingsupervision, meanwhile legal norms are not sound enough and the relevant legalsystems have not been established. Those result in a large number of problems inthe telecom industry, mainly in the quality of service and tariff standards oftelecom. Due to lack of effective supervision, some basic telecom authorities,companies and even local governments use telecom’s monopoly position to chargeadditional charges. Vicious price competition often happens among telecomcompanies. Such bad actions seriously damage our national interests andconsumers’ interests. How do we solve the problems in telecom tariff? The heart iswho are going to decide the telecom tariff and how to distinguish their respectiverights. At present, there are three models in telecom tariff decision: governmentpricing, government guidance pricing and market pricing. With the developmentof telecom, our government gradually gives telecom companies some rights ofautonomy pricing. But only price-caps of some telecom services are provided, andprocedures and price-floors are not specified. Penalties are also not provided forviolations. Meanwhile the pricing of telecom enterprises is only provided ingovernment departments’ documents, not in laws. So there is not sufficientdeterrent to telecom companies. We also find that consumers don’t play some rolesin pricing of the telecom tariff. Although our government sets to hold pricehearings on utility to listen to the views of different interest groups. But there areso many problems in price hearings of our country that consumers question theresults of the hearings. Reasonable solution to this problem will play a vital roleon the social and economic development. The main conclusions can be summarized as follows:The price hearings should be improved to let consumers have some sayings inthe pricing of telecom tariffs.Give telecom supervision bodies and social supervision bodies enough rights ofsupervising to ensure a fair and orderly competitive environment.The scoop of telecom companies’ deciding the telecom tariffs should berestricted in order to eliminate price chaos from the source.