Caracas Chronicles

Mobile Number Portability (MNP) – the ability to change carriers without having to change your phone number – is becoming a hot topic of debate all over the world. In Latin America, several countries have already implemented this regulation, and many more are well on their way to doing so. This is particularly important for Venezuela given that 98% of the population has access to mobile phones, and there are now more mobile numbers that there are Venezuelans.

MNP is a crucial issue, one where it is likely to find a consensus. In spite of that, it is being completely overlooked by political forces and regulatory agencies beholden to the forces of obscurantism. Given that it is a measure that takes time to implement, Venezuela is on its way to becoming the last country to implement MNP.

I guess when you’re too busy figuring out how to have a reliable stock of toilet paper, other things fall by the wayside.

MNP is not a difficult concept. It allows you and me to own our number. It also helps the consumer by lowering the cost of switching carriers. What do you do when you get expensive crappy service? Well, you take your business somewhere else. But if you can’t take your number with you, you are almost “locked in” with your current provider.

Sneaky companies like to lock-you-in. It is not an odd practice. Printers are cheap because printer manufacturers know that they will profit on the cartridges. Same thing goes for razors, electronics, and even gas turbines. Economists have long studied this phenomenon, and legislation has adapted to prevent consumers from being locked in.

Here is where regulation can be great. Good regulation happens when it is justified by the public interest, usually leading to an overall increase in public welfare. MNP is great for you and for me because we get better, cheaper services. It is not great for lazy companies, because they have to work harder and compete. They are forced to innovate to make you and me happier. Some companies will dig that, most will not.

MNP has decreased the overall cost in mobile services by effectively reducing the cost of changing providers and leveraging competition. It is not a panacea and it requires a lot of previous thinking, study and active regulation. When done right, its effects are incredibly positive.

But why are we lagging?

Our problems begin with the regulator (Conatel) on two accounts. The first is its structure, and two, its obscurantism.

Its structure is more geared for media censorship than for actual regulation. In doing this, Conatel fails in that the overall increase in welfare is not on its agenda. The second, most tragic one, is its fundamental prejudice against markets, the denial that they exist and that they function with pretty well understood rules. This is a government that continues to blame plane crashes on gravity, for crying out loud.

A good friend of mine likes to say that is not that the Venezuelan government is large or small – it is simply misplaced (desubicado). It is not that it does a lot or a little – it is simply doing things that it ought not be doing. Instead of regulating markets so you and me are happier, and pushing industries to be better, the state is busy trying to make ice cream. The regulating agencies, in their obscurantism, doesn’t simply fail to empower the users, it chooses to leave us out and impede the provider’s proper development by ignoring good regulation fundamentals.

MNP is a good thing for all – consumers, the government, and ultimately, companies. It is time we start talking about it.