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STRI for Telecommunications

STRI for Telecommunications. OECD Services Experts Meeting, Paris, 3 July 2009. Overview. Regulations included in the index Classification of the regulations Methodology The indices Robustness Relevance Conclusions. Description of the sector. Telecommunications in the STRI includes:

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STRI for Telecommunications

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  1. STRI for Telecommunications OECD Services Experts Meeting, Paris, 3 July 2009

  2. Overview • Regulations included in the index • Classification of the regulations • Methodology • The indices • Robustness • Relevance • Conclusions

  3. Description of the sector • Telecommunications in the STRI includes: • Fixed line telecommunications services • Mobile services • Internet • Telecommunications is a dynamic sector characterised by rapid technological changes • Market imperfections play an important role

  4. Telecommunications and trade restrictions • Market imperfections: • Network externalities • Essential facilities • Switching costs Regulations can be trade enhancing; lack of regulation can be trade restrictive • Selection criteria for including regulations in the STRI: • Mentioned in the GATS and/or RTAs; • Expert judgement.

  5. Restrictions included in the STRI

  6. Classification of restrictions

  7. Methodology - scoring 87% of the measures are binary Scores are binary 0 indicates no restrictions; 1 indicates a restriction and lack of regulation when regulation is required Regulation is required when markets are uncompetitive Interaction term between regulation and market structure

  8. Methodology - weighting • Starting point: the 6 categories of regulation • Each category (j) is weighted according to expert judgement : • Equal weights are used under each heading (and sum to 1 within each category) • Each weight is carried over from one classification to the next:

  9. Methodology: aggregation

  10. Design of the STRI Equal weights within categories Expert judgment Categories of measures are ranked from the most to the least trade restrictive

  11. STRI scores OECD average

  12. STRI by GATS

  13. STRI by mode

  14. Robustness Rank correlation equal weights 0.89 Rank correlation PCA weights 0.83 Robust to all weighting schemes Even regulatory profiles – results do not depend on weighting schemes

  15. Relevance – STRI performance in gravity regressions

  16. Conclusions • The STRI for telecommunications is very robust to different weighting schemes • The STRI for telecommunications is strongly and negatively correlated to FDI and FATS in the sector • More restrictive countries have relatively more restrictions on market access and national treatment • The least restrictive countries’ remaining restrictions are mainly in the form of non-discriminatory domestic regulation

  17. OECD Trade and Agriculture www.oecd.org/trade/stri Contacts Hildegunn.Nordas@oecd.org Molly.Lesher@oecd.org Alexandros.Ragoussis@oecd.org

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