Abstract

The regulatory reform of electronic communications which is currently being developed in the EU envisages the rapid and complete transition of these markets from heavy-handed regulation to the mere application of competition policy. The aim of this paper is to discuss the crucial factors that affect the transition process and its outcome, depending on: the structural features of technologies and industries; firms' strategic behaviour; the regulator's goals in facing the equity vs. efficiency trade-off; the agents' bounded rationality in an uncertain environment. Thus, we first examine the observed evolutionary trends, with particular regard to Europe and Italy. Then, we analyse both the sustainability and the desirability of facility-based competition, discussing whether it can be sufficient to avoid (possibly also joint-) market dominance in the absence of regulation. Finally, we address the main issues related to the residual role of regulation in the mobile service sector, namely, the selection of a proper assignment mechanism for the available radio spectrum resources.