The telecommunications industry is facing a mid-life crisis. The vision of the 1990s when it was to be at the centre of the information society, the builder of the Information SuperHighway and keeper of its toll booths did not work out quite like that. In the age of the Internet, interconnection is universal and substitute channels of access are ubiquitous. By-pass of telecoms gateways is an established fact at both technical and commercial levels. The industry is still struggling to come to terms with these new realities. A good example which illustrates this were the 3G auctions in Europe and in parts of Asia around 2000. Operators made one-way bets on creating business models based upon control of the spectrum, without regard to the fact that in an Internet world, markets are two-sided, that is network economies are created mutually by the vendors and consumers. For this reason the "closed garden" models failed. Regulators were also slow to wake up to these changes, even encouraging one-way bets through the use of an economic policy approach (auctions designed to maximize financial benefits) rather than an industrial policy approach (maximizing societal gains or economic benefits by encouraging the spread of broadband networking). There were ways to marry the two approaches. In Hong Kong the use of a royalty auction (the proposal came from this author) is one example. In other areas of broadband, examples would include equal access and local loop unbundling tied to sunset clauses. Lessons from the regulatory failures in other networked industries, notably the banking sector, point up the central importance of enforcing transparency in certain areas of operations, but telecoms remains unique insofar as the impact of the Internet is concerned.
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John Ure, Director, TRPC Pte Ltd, Singapore
- Tuesday, 05 May 2009
- 12.15 p.m. - 1.30 p.m.
Seminar Room 2-2
Level 2, Manasseh Meyer
Lee Kuan Yew School of Public Policy
469C Bukit Timah Road