Regulatory Tug of War

I found a post titled “Here’s how the telecom industry plans to defang their regulators” very interesting. In real world economics equilibrium is rarely stable. It is generally dynamic. So it would seem is the empowerment/dis-empowerment of a telecommunications regulator. 

In India, the Communications & IT Minister has criticized the Deptt. of Telecommunication’s tendency to impose heavy penalties regardless of the nature of default by operators and has suggested that these powers be removed from bureaucrats and be given to TRAI. The TRAI is often at loggerheads with the Competition Regulator CCI, on jurisdiction. However, TRAI has recently come to the rescue of a  beleaguered telecom industry with its recommended reduction in reserve prices for spectrum. See “Regulate in Haste, Repent at leisure” under the label Telecom Regulation.

It would seem from the above mentioned post that USA’s telecom giants want to remove/reduce FCC’s powers to regulate issues relating to privacy, competition and net neutrality. While there motives are obviously their commercial interests, all these issues have an important bearing on consumer welfare which should be the primary concern of the sector regulator. Ex ante competition issues too would normally lie in its realm.