Public intervention in the access to advanced telecommunication services: Assessing its theoretical economic basis

Abstract Any public intervention in the access to advanced telecommunications services should be based on one or more of the causes that justify State intervention in industry activities. More importantly, the opportunity and magnitude of the intervention should be directly related to the intensity with which such causes appear and, among these, to the one considered predominant. There are four “market failure” groups: inherent to the good (public goods, merit goods, externalities), referred to the market situation (failure of competition, incomplete markets, information failures), regarding the incidence in the economical development, and last, based on equity. We have analyzed the presence of these “justifying” causes in telecommunications on a general level, and particularly with regard to new infrastructures and services, and concluded that the greater part of these circumstances could justify public intervention. The assessment made of them provides a strict basis on which to construct every opinion this debate can generate.

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