Innovation and regulation in telecommunications industry: A comparative institutional economic

The paper provides an input-output model of telecommunications industrial system that connects the producers of contents (who originate information and communication) to the final consumers (who receive them). Accordingly, the telecommunications industry is jointly constituted by three functional Clusters (intermediaries) which exploit four kinds of tangible and intangible resources related to innovation and R&D. This approach allows a comparative institutional economic analysis of the impact of alternative regulatory designs of integration and separation (driven by functional separation schemes, privatisation of public monopolies, regulated access by new competitors, the break-down of industrial alliances, and so forth) on levels of (and incentives to) innovation and R&D by functional intermediaries, and on the overall performance for the final users (both producers and consumers of information and communication contents), thus providing recommendations for industrial and accounting regulations concerned with telecommunications industry. This framework of analysis is generic and may be further applied to other network industries concerned with innovation and R&D processes.