Opening up more and more areas to competition should then be the touchstone upon which the new policy is based, and it is immaterial if the competition is between basic or cellular services, or between players hitherto classified as broadcasters, or ISPs, and telephony per se.

These artificial barriers must be dismantled, as the group on telecom has rightly recommended. The need for regulation arises from the fact that there exists a positive network externality, because existing users benefit when new subscribers join. In addition, there exists the social dimension of telecom, which must ensure that tele-density increases, not merely in urban areas, but also in the countryside.

The trouble arises,however, because of incumbent monopolies, existing because the sector was till very recently considered a natural monopoly. Regulation is necessary to ensure that rules of fair play between new entrants and the erstwhile monopoly are observed, in particular while ensuring interconnection rights, and on the "last mile" or the "local loop".

This makes it necessary to have rules which eliminate cross-subsidisation, and on the other hand prohibit cream-skimming of only the most lucrative businesses. Regulators must ensure that local lines will be resold and leased at competitive prices. Simple and swift mechanisms must be created that ensure compliance with statutory and regulatory standards, with stiff penalties for violations. And finally, it must be seen that the policy once enunciated is kept in place, and discretion is reduced. Regulatory uncertainty will only hamper investment.