The tail wagging the dog

Citation

Blackman, C. (2003), "The tail wagging the dog", info, Vol. 5 No. 1. https://doi.org/10.1108/info.2003.27205aaa.001

The tail wagging the dog

The tail wagging the dog

In this issue we publish an article arising form the World Dialogue for Regulation on Network Economics (WDR) by Anders Henten et al. on "next generation telecom regulation". The article examines the arguments in favour of and against telecom/IT/media convergence regulation, on the one hand, and multi-sector utility regulation, on the other. WDR took this as its theme for 2002 and held an expert forum on the topic in September 2002[1].

The main argument in favour of "convergence regulation" is that it is common sense to regulate firms operating across previously distinct horizontal and vertical boundaries in a consistent way and that this can be done most cost-effectively by a converged regulator. If markets are converging, so the argument goes, it is sensible to apply the same provisions across communication and media areas. Largely on the basis of this we have seen a few converged regulators established – in India, Malaysia, Singapore and the UK.

The danger, however, is that, in attempting to unify in one organization completely different regulatory approaches, the whole thing may end up as a nightmarish bureaucratic disaster. Either that or the organization will be dominated by the broadcasting issues of the day (or, more likely, the television programmes of the night before). The idea of a converged regulator does, of course, assume that markets are converging. Perhaps we should not draw too much from the experience over the past couple of years – it is tempting right now to think that convergence was just a passing fad of the last century but, more likely, we just do not know yet what convergence will mean.

So, what about the other alternative on offer – multi-sector utility regulation? One argument here is that common use of rights of way by different infrastructure sectors such as ICTs, energy, water and sewage means that there is a strong case for multi-sector regulation. But that is not a strong argument, and it would be turning back the clock in the industrialized countries to once again treat the telecoms sector like monopoly utilities. In the developing countries, there is an argument that, because skilled people are in short supply, then a multi-sector regulator would be helpful – now there is a case of letting the tail wag the dog if ever I saw one.

Of course, as Henten et al. point out, it is not a case of either converged or multi-sector regulation – you could have both! Or, alternatively, you could have neither, because it does not seem to me that either of these options really addresses the next generation but simply attempts to use the models of the past. Despite the recent faltering, technology is developing rapidly and so are the demands of consumers. Certainly we will have to continue to deal with questions of competition policy, rights of way, and intellectual property, for instance, but the overriding concern has to be to foster competition and choice. How can we best achieve that?

Colin Blackman

Note

1. 1.

   Further information and discussion papers are available at: www.regulateonline.org/ The WDR theme for 2003 is simulating investment in network development.