Regulatory agency Archives — LIRNEasia


One of the key concepts we use when teaching about regulation is administrative expropriation. It is a form of expropriation that is distinguished from the more obvious expropriations by governments (nationalization) or warlords. It nibbles away at the ability to make the expected return on investment and beyond a certain point starts to eat into the invested capital itself. In my teaching I define it as follows: Administrative expropriation = being prevented from making a reasonable return on investment per expectation at point of investing, usually through a series of actions (not decisive when each taken alone), resulting in de facto expropriation of the investment Not necessarily telecom specific; can be through tax laws, customs authorities, etc. Any government can engage in admin expropriation, directly or through proxies The Sunday Leader lead story of 10 January 2010 provides an excellent example of administrative expropriation by a regulator, violating the provisions of the enabling law at the behest of a political authority or in an attempt to curry favor with a political authority.
Banded forbearance, a concept we have been working on since early 2007 which was further developed in our interactions with the Communications Authority of the Maldives, has just been published as a refereed journal article by the International Journal of Regulation and Governance. A previous version of this article was selected for presentation at the CPRsouth 3 conference in Beijing in December 2008. The abstract is given below: Fast growing telecom markets, especially in the developing world, are attracting new types of users, especially those at the Bottom of the Pyramid (BOP). Innovative pricing is needed to respond to this increasingly heterogeneous demand. However, many regulators still claim to regulate prices using methods from the monopoly era, despite lacking capacity to effectively regulate proliferating tariff plans.