The Competitive Order for the New Economy: Lessons from the Telecommunications Experience

The view that telecommunications represent the core infrastructure part of the new economy allows to argue that the correct understanding of the role of regulation in the highly concentrated landscape of the telecommunications markets is able to provide alternatives for regulatory policy of not only the telecommunications industry, but also of other areas of infocommunications and Internet-based business. While the ordered competition system, the regime where the state governs the field in accordance with its perception of how the market works and how the competition might be facilitated, has been widely accepted in different parts of the world and has found the immense support in the mainstream theories, the lessons of the telecommunications experience analyzed in the study suggest that the “competitive order” is able to provide better solutions for the actual needs of society. This dichotomy between the concepts of “competitive order” and “ordered competition” had become the core part of the research questions. The results of the research support the free market idea of the classical liberalism with minimal state participation in the economy and demonstrate that the market concentration is not a consequence of inherent characteristics of the field, but the outcome of regulatory efforts to cope with the problem of market failures. In order to revive the genuine market process, the government should change its approach in regulating economic activity, and formation of the genuine competitive order in vital spheres of the new economy could be a possible alternative to the regulatory capitalism. The study provides suggestions about prerequisites that are necessary for the formation of the competitive order and efficient work of market mechanisms in the new economy.