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Rational Regulatory Policy for the Digital Economy: Theory and EU Policy Options


  • Paul J.J. Welfens

    () (Europäisches Institut für Internationale Wirtschaftsbeziehunge (EIIW))


Telecommunications is a key element of the ICT sector which has been shaped by strong innovation dynamics since the 1990s. Market dynamics in OECD telecommunications markets are analyzed. We present new ideas about efficient regulation, emphasizing the need to adopt a broader international perspective. Analytical innovations also include the discussion of an adequately-modified Hitch-Sweezy oligopoly model. Moreover, we suggest differentiated two-part tariffs as an ideal welfare-maximizing approach in both wholesale and end-product markets. From a theoretical point-of-view, the need to avoid regulatory uncertainty is also emphasized. Theoretical progress is contrasted with regulations in the EU and the US. The EU offers a broad range of different regulatory approaches where the link between framework regulation and national regulation is rather complex. The internationalization of telecommunications requires a broader cooperation among regulators in the OECD.

Suggested Citation

  • Paul J.J. Welfens, 2006. "Rational Regulatory Policy for the Digital Economy: Theory and EU Policy Options," EIIW Discussion paper disbei146, Universitätsbibliothek Wuppertal, University Library.
  • Handle: RePEc:bwu:eiiwdp:disbei146

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    References listed on IDEAS

    1. Bart van Ark & Marcin Piatkowski, 2004. "Productivity, innovation and ICT in Old and New Europe," International Economics and Economic Policy, Springer, vol. 1(2), pages 215-246, January.
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    Cited by:

    1. Paul J.J. Welfens, 2006. "Digitale Innovationen, Neue Märkte und Telekomregulierung," EIIW Discussion paper disbei142, Universitätsbibliothek Wuppertal, University Library.
    2. Tony Irawan, 2013. "ICT and Economic Development:Conclusion from IO Analysis for Selected ASEAN Member States," EIIW Discussion paper disbei192, Universitätsbibliothek Wuppertal, University Library.
    3. Tony Irawan, 2014. "ICT and economic development: comparing ASEAN member states," International Economics and Economic Policy, Springer, vol. 11(1), pages 97-114, February.

    More about this item


    Competition; Telecommunications; EU Integration; FCC; Regulation;

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications
    • F15 - International Economics - - Trade - - - Economic Integration
    • L98 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Government Policy
    • K23 - Law and Economics - - Regulation and Business Law - - - Regulated Industries and Administrative Law


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