As usual, you raise very valid points below on this important public policy matter.
My view is that price controls are applicable -BUT – they are increasingly being overtaken by the realities of internet-driven technologies.
They are for example still very relevant and applicable in the case of fixed line & (GSM) interconnection rates (how much operators pay each other to terminate calls).
However, at a retail level, where internet based technologies are redefining distance & price, traditional price controls would be severely challenged.
Think of Airtel giving its subscribers free internet access to Facebook, while Safaricom does not.
Should the regulator intervene and stop Airtel from doing what ‘looks like’ undercutting the market, or should the regulator force Safaricom to also give free access to Facebook service since compared to Airtel ‘it looks’ like they are overcharging the market in that niche content segment? What is the greater public good in this case?
Fundamental to the decision the regulator would take, is the question of how much is the ‘right’ price to charge for accessing such content?
Using the cost+ tariff approach becomes murky because the costs related to delivering an internet driven service/product to a customer tends to be scattered across several different actors and does not neatly sit under one players domain. This property makes it harder for the regulator to appropriate cost of delivery, in order to effect the cost+tariff approach.
Even if regulator somehow managed to calculate the costs, the Operator may still opt NOT to charge the consumer and instead pass those costs to Advertisers – which is the classic business model for most of these content providers.
Since all teclom products are moving to the internet platform, my advice to the regulator is that they must begin to develop new regulatory tools for the emerging internet realities since the traditional regulatory tools are going to be increasingly inadequate.
I put my thoughts on the same on the Nation Blog and would be keen to hear yours or other listers views on the same.
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WALUBENGO: Can we regulate telecoms market without price
Using price controls to manage an increasingly internet-driven industry is no longer tenable.
On Friday, April 6, 2018, 9:27:58 PM GMT+3, John Kariuki via kictanet <