Telecommunications Workshop: Convergence or Competition?

In 1996, Guatemala pursued a sweeping reform program in radio spectrum policy. As a result, the country has emerged as one of the world’s most liberal environments for wireless telecommunications.

One of the most important elements of Guatemala’s spectrum reform was the creation and assignment of private property rights to use electromagnetic spectrum. Broadcasters, mobile phone carriers, and other spectrum users hold “títulos de usufructo de frecuencia” (or TUFs) that define airwave rights, allowing maximum flexibility for title holders.

As a result, in Guatemala, TUF holders may use the spectrum as they wish, within certain technical limits and consistent with international treaties. When there is a need for spectrum in the market – for example, to provide for mobile telephony or other services – TUF holders have an incentive to sell or lease their spectrum, in the event they do not serve the market themselves. These liberal rights to the spectrum thus encourage competition in a much different – and according to many economists, more efficient – way than that accomplished through traditional regulation. While a small number of countries have pursued similar liberalization programs (e.g., El Salvador, New Zealand and Australia), the precise property rights structure found in Guatemala is unique.

Given the rising importance of wireless technologies in the information economy and the barriers for innovative networks that accompany traditional regulatory structures, Guatemala’s experience may provide crucial evidence regarding the opportunities, and pitfalls, of market-based reforms. Surprisingly, few Guatemalan leaders or international telecommunications policy makers know much about these important reforms or their consequences in the marketplace.

To remedy this lack of knowledge, an International Telecommunications Workshop will be held in Guatemala, organized by one research center in the United States, the Manhattan Institute for Public Policy Research, and three research centers in Guatemala: the Centro de Investigaciones Económicas Nacionales (CIEN), the Centro de Estudios Económico-Sociales (CEES), and the Centro para el Análisis de las Deciones Públicas (CADEP).

A wide range of experts, including participants in the creation of spectrum property rights, regulators who have administered the system, service providers who have lived under its rules, and internationally recognized economists who have studied the marketplace results, will describe their experiences and address the key issues.

The national and international experts who have studied the Guatemalan case will address the following fundamental questions prompted by Guatemala’s policy experiment:

• Guatemala’s Telecommunications Act of 1996: How did the reform come about? What benefits have been realized—net of costs—for telecom users in Guatemala?

• Guatemala as a case study in ownership of the radio spectrum: What works, what doesn’t, and why? How do we get from a license to an ownership regime?

• What can we learn from the Guatemalan experience to improve wireless services and radio spectrum management?

The event will take place on June 9th and 10th on the campus of Francisco Marroquín University in Guatemala City, Guatemala. For more information about the workshop, see the conference website at www.cadep.ufm.edu/telecom/ or contact Lilian Yon at: telecom@ufm.edu.gt

Francisco Marroquín University