The International Handbook of Telecommunications Economics, Volume III
Edited by Gary Madden
Chapter 12: The OECD and the internationalization of telecommunications
Dimitri Ypsilanti INTRODUCTION Since the mid-1990s there has been a signiﬁcant restructuring of the telecommunications landscape with the abolition of monopoly market structures in Organization for Economic Cooperation and Development (OECD) countries and the introduction of competition. An integral part of this change has to do with the increase in international cooperation and coordination of telecommunications from a policy perspective. As a result of this process policies, to a large extent, have been converging. These changes in policy frameworks are linked to the gradual liberalization of telecommunications markets, which culminated with the World Trade Organization (WTO) agreement on basic telecommunication services in 1998. The concept of the telecommunication service industry as a public utility with natural monopoly characteristics, best oﬀered through a monopoly service structure, was an unquestioned premise before the early 1980s. Linked to this belief was the argument that universal service requirements for the provision of telecommunication services and competition were incompatible. Concrete evidence that competition could provide economic beneﬁts began to emerge from the United States (US) as a result of the rapid development of long-distance competition following the break-up of AT&T into seven Bell Regional Operating Companies as a result of the Modiﬁcation of Final Judgment in 1984. In Europe, the privatization of British Telecom in the United Kingdom (UK) and the beginning of the duopoly during the same period also provided evidence that competition was feasible in the sector and compatible with maintaining universal service. These developments took place during...
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