Lesson from South Korea: Telecom dereg works

The lesson from South Korea's success in broadband: full deregulation works. So argues Tom Hazlett in WSJ.com who goes on to say that the US's strategy of easing into deregulation was worse than just going cold turkey would have been. Excerpt:

In the mid-1990s, Korean policy-makers set out to inject competition into local telephone service. They enacted rules allowing rivals to challenge the erstwhile state monopoly, Korea Telecom. Yet, by mid-2004, KT still accounted for 95% of local phone lines.

A failure? On the contrary, Korea's policy has proved a smashing success. Because, as an additional lure to attract phone entrants, the government ended regulation of advanced telecom applications. The result: While competitors largely avoided (regulated) voice services, they invested billions to create new (unregulated) high-speed Internet networks. The broadband technologies unleashed by telecom rivals forced KT to modernize its network, which now serves just half of the high-speed market.