Protections from Competition: Usually Bad

Can someone give me a slightly sane justification for making Voice over IP (VoIP) illegal? This story out of Bangladesh is very interesting:

VOIP has remained illegal in Bangladesh in an attempt by the government to protect the state-owned telephone company, the Bangladesh Telegraph and Telephone Board.

But it simply hasn’t worked. Earlier this year it was estimated that VOIP calls accounted for up to 80% of the total telephone traffic from abroad.

According to the BBC, “the country’s new military-backed government has been waging war on what it sees as the too-long tolerated illegality and corruption of the past.” How about instead of forcing everyone to use the state-owned telephone provider, Bangladesh just makes VoIP legal and forces providers to pay their share of taxes?

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