Technological convergence: a regulatory approach

Abstract

This paper analyzes the phenomenon associated with the convergence of telecommunications and information technology and assesses its potential impact within the context of competition in, and the regulation of, the Brazilian telecommunications industry. The study draws parallels between the Brazilian regulatory framework, a successful model based on the statutory definition of telecommunications networks and services, and the new regulatory model adopted by the European Union in April 2002, which borrows the concepts of relevant market and market power from economic theory and the
competition law. The study shows the way in which both regulatory systems attempt to address the perceived technological convergence. Despite the adoption of different methodologies, the Brazilian regulatory system and the new European regulatory model are shown to achieve similar results. The reason for this is simple: both systems seek to deal with the same basic problems
— problems related to the presence of market power — and both have the same goals — to promote competition and universal access to services. In certain cases, however, the regulatory results achieved by the two systems are different. The study concludes that because the European system incorporates
definitions of fluid markets in the laws that govern the sector,
instead of the statutory definition of networks and services, it provides a broad and neutral approach, from a technological standpoint, with respect to the regulation of telecommunications services, thereby assuring that the challenge of technological convergence is addressed in a highly logical and effective manner. However, in spite of the apparent advantages of the new
European regulatory model, it has never been tested in practice. Without question, countless practical and operational difficulties and challenges will arise in the course of the model's implementation. In order to more effectively compare the two regulatory systems, therefore, we will need to see them in operation.