Wednesday, December 08, 2004

Telecoms Political Economy

Martin Geddes has an interesting blog called Telepocalypse, in which he analyses the telecoms industry.

In a posting called Special Favours (December 7th, 2004) he puts the following argument.
  1. Running a stupid network in a competitive market is inherently unprofitable.
  2. As soon as profit and prices are decided by means other than the open market, the only stand-in is politics: who you know, what you have, where you can influence.
  3. Hence the core competence of all telcos over time becomes lobbying.
What he is suggesting here is that the social forces (namely political games) can be stronger than the economic forces. The shape of technology (the stupid network in this case) may be largely determined by these social forces.

See also his posting Big Telco, Bad Telco (also December 7th, 2004) on the (social/political) relationship between BT and the UK telecoms regulator.

The role of the regulator is partly to sustain economic forces (competitiveness) and ethical forces (fairness, value for money) in the face of social/political games. And partly to sustain the overall viability of the ecosystem in the face of social/economic/technological change. Not an easy task.

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