Regulation of complex adaptive digital systems: optimizing competition and consumer welfare outcomes in Nigeria's converging telecommunications market

Onuoha, Raymond

Regulation of complex adaptive digital systems: optimizing competition and consumer welfare outcomes in Nigeria's converging telecommunications market

Thesis / Dissertation

2023

Abstract

The thesis explores how emerging digital ecosystems would benefit from new regulatory approaches that differ from the traditional models applied in the telecommunications sector. The historical model is typically based on an analysis of static efficiency, which does not appropriately acknowledge the often complementary nature of the evolving digital ecosystem and its dynamic efficiencies. Informed by the increasing complexities of the converging telecommunications ecosystem, the corroboration of this core proposition required the examination of not just the technical but also the socio-economic and institutional elements of advanced communication systems. Findings from existing academic literature on pro-competition regulatory challenges of digital markets focus more on mature competitive markets in the Global North. There is a paucity of empirical studies on the predominantly pre-paid mobile markets of the South — where competition laws and institutional arrangements that facilitate market competition are still nascent. More so, extant studies of telecommunications market regulation were mostly supply-side focused, not taking into full consideration demand-side elements, especially the social and public value of the converged telecommunications ecosystem. In addition, most of the studies focused on quantitative methodologies largely based on econometric analysis. To fill a gap in the research literature, the thesis explores these issues within the context of a developing country, Nigeria. The research responds to the dearth of critical policy enquiry within the domain of applied social policy research that relies on qualitative interrogation to examine the interrelated ecosystem elements and arrive at answers to questions that generally cannot be understood through quantitative methods. Although there is a rich vein of literature regarding telecommunications market regulation, explaining network competition principles and the institutional conditions under which they thrive, instances of such research in a developing country context are few and far between. The thesis bridges these gaps by applying a systemic approach based on complexity theory and institutional analyses drawing on the institutional analysis and development (IAD) framework to answer regulatory questions of competition policy under conditions of constraint, such as in emerging markets. By developing a conceptual framework drawing on these two approaches, the effects of demand-side access and willingness to pay are assessed via an in-depth qualitative analysis to examine the resulting dynamic impact on social welfare. The thesis provides a case study of Nigeria to examine these issues in a developing country context. The research questions examine the complexities of regulating dynamic markets to achieve often competing objectives of competition, investment, innovation, and consumer welfare. The author deployed the conceptual framework to analyze the evidence for the case rather than for purposes of theoretical contestation or theory building. Therefore, the thesis methodology leans towards an inductive research paradigm within the episteme of interpretive constructivism. The author adopted a qualitative methodology for the study based on the nature of the research questions and the conceptual framework. However, empirical insights were generated by the author from a combination of methods. The research process comprised a country-specific causeeffect analysis of the regulatory challenges of OTT-MNO competition in the context of Nigeria's converging telecommunications industry and its imperatives for both innovation and investment policy outcomes. Incorporating in the methodology a process tracing mechanism allowed for the elucidation of critical junctures in the structural evolution of the country's telecommunications market and the path-dependent outcomes for alternative policy options. Consequently, the author undertook an initial step in mapping the converging Nigerian telecommunications ecosystem, which detailed its complex interrelationships in relation to ecosystem stakeholders and institutions, regulatory governance mechanisms, and outcomes to complement the qualitative analysis. The ecosystem mapping was then used to identify critical opportunity pathways for regulatory evolution both in the 3 short and long terms for effectively addressing the competition dynamics related to OTTs and MNOs within the converging Nigerian telecommunications market. The thesis contributes to the existing body of knowledge on regulating complex adaptive systems by exploring competition and consumer welfare optimization in Nigeria's converging telecommunications market. It does so by building on the literature on socio-technical systems' governance and policy design within adaptive external environments, deploying key concepts from complex adaptive systems theory. In extending and problematizing the domain discourse, a key regulatory challenge that crystallizes in assessing the converging Nigerian market is an appropriate regulatory structure that optimizes investment and innovation incentives on both sides of the market — infrastructure development and next-generation services provisioning. In addressing this regulatory challenge under conditions of institutional and resource constraint, the thesis considers the preconditions, necessary and sufficient institutional arrangements for effective competition regulation within Nigeria's converging telecommunications sector to maximize dynamic efficiency and social welfare. This contribution provides an evidence base in support of claims of the value of the converged telecommunications ecosystem for developing countries. It evaluates how ecosystem stakeholders can find an optimal balance along multiple emerging telecommunications policy trade-offs and their implications for competition policy and regulatory options

Keywords

Public Governance

Reference:

Collections

PhD / Doctoral

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