Telecommunications and investment in the great supranational regulatory game

This paper has two ambitious goals. One is to explain how telecommunications policy has become part of an emerging supranational regulatory order and the impact of that on telecommunications policy. The second is to emphasize one very important link in the interdependent supranational regulatory system, the link between telecommunications and investment. It is argued that the traditional international regulatory regime based on monopoly and protection is slowly being integrated into an emerging supranational regulatory system which now emphasizes market access. Various strategies and organizations exist at the supranational level to promote the widespread acceptance of the market access model, and these are discussed. Direct foreign investment (DFI) in telecommunications is a key policy area where there are strong pressures for the relaxation of regulation in order to promote market access. It is suggested that, for less powerful states, the relaxation of DFI restrictions needs to be addressed cautiously. A strategy of staying out of multilateral negotiations on telecommunications as part of the post-Uruguay Round negotiations on services could be disadvantageous.