« Make time for this | Main | The Broadband Dividend »
Is Ofcom losing its way?
By jpenston | June 12, 2007 |
|
Any time politicians get involved in a debate, you know things must be bad. The Register today carries a detailed summary of Ofcomwatch’s interview with Chair of the Department of Trade & Industry’s select committee, Peter Luff MP. Vulture Central describe him as one of the most influential figures in telecoms, so hear ye…
But wait… Here is a politician who argues that Ofcom should look beyond the headlines created by the tabloid press and focus on strategic issues. Are you sure he’s a politician? He certainly doesn’t sound like one… Maybe he’s jealous of all the attention that Ofcom are getting?
“Should a regulator find out what people want? That’s the politicians’ job, isn’t it?”
In fact he seems very upset that the regulator has been dragged into tabloid politics (banning junk food ads or regulating roaming charges) and have neglected the technical side of their role (he is scathing of their input into the HDTV on free-to-air question).
This is so because Ofcom’s success or failure is judged on political issues, he states. “I hope I am wrong, but I get the sense that therefore as a result [strategic issues] inevitably attract a lower profile within the organisation.”
Luff clearly feels that Ofcom are micro-managing the market that the expense of the bigger strategic issues like understanding the role of telecoms on our international competitiveness and implementing effective separation such that there is an incentive to invest in future networks. Clearly, he’s not a huge fan of Openreach as it exists today and why should he be? No sooner is the division created than the Broadband Stakeholder Group suggests that £10bn of government money is needed to make this happen.
There are some interesting notes in what Luff says that are worth thinking about. He says that the National Grid is a “perfect parallel” for Openreach and that they are doing “a first-rate job”. There is more competition for the consumer’s Gas and Electricity bills than there is for broadband, where Openreach has a “comfortable relationship with its biggest customer, BT”.
He wants more competition for consumer broadband? Help! Or does he just want better competition for BT…? I could agree with the latter, not the former. I think we are in the mess we are now because of too much competition. The market was fragmented by past attempts to artificially create competition (Local Cable Franchises, NTS, CPS and IP Stream) and the cost of acquisitions to correct and consolidate such fragmentation.
“The telecommunications infrastructure is probably the most important one now. I would say it is more important than the roads.”
It is very hard to argue with that. In fact it’s hard to argue with Peter Luff, MP in much of what he says - he’s a politician, remember. I may joke about his reasons for doing so - jealousy at the attention that Ofcom gets - but whatever his reasons, he makes good points and he is picking up on a thread that is emerging whenever Ofcom’s performance is reviewed. What is its role? Does it represent government, industry or the people?
It appears that government is going to get ever more directly involved and that what the people want is going to be dictated by politicians too. Ofcom may benefit from simply being told what people want and be given responsibility for creating a market to deliver it.
My conclusion from Ofcomwatch’s interview may be that perhaps, Ofcom should simply be industry - dictating standards and a commercial framework that operators can then all work with on a level playing field. Instead of asking industry bodies like NGNuk to come to an agreement on the finer points of interconnect, let Ofcom dictate how this is going to be. It certainly seems from Peter Black’s last report that industry is struggling to dedicate the time and energy to such boring, detailed issues. Meanwhile, Ofcom with their £126.7m 2007/08 budget are tied up on “political issues”.
But what of consensus…? I’m not a huge fan if I’m honest. It strikes me that the very act of building consensus takes so much time and money that it kills innovation. Surely it would be better to get quick decisions, accepting that there will be decisions that occasionally go against you, but knowing that at least you have certainty. Nothing kills innovation like uncertainty.
Take this concept a little further and you have a merger between Ofcom and Openreach. Virgin may not like that very much, but sometimes you need to move on and leave stragglers behind.
Such an organisation could be built on utilitarian principles and act so as to maximise the benefit of technology to UK Plc. Boundaries and universal service obligations would be dictated by government and the aspirations of the people and would act to frame the pure principles of acting for the greater good.
Ok, so I’m being mischievous. I certainly haven’t thought through the implications of my slightly tongue-in-cheek conclusion to the role Ofcom should play. But there is the backdrop of an increasingly political environment in which policy will come increasingly from government. Because of the subjective nature of such policies, it probably makes sense to give those decisions to those who are accountable to the people via their need to be elected every 4 years or so.
Ofcom’s market research is great but worth £126.7m a year? Not for me. There must be better value for money for me as a tax payer. What is it? I’d love to hear your views in comments…
Copyright The IP Development Network - www.ipdev.net
Phone +44 1763 81 00 20
Email jpenston@ipdev.net