|Choice and Fairness - a spectrum of possibilities|
|Written by David Brunnen|
|Monday, 28 March 2011 06:17|
Ofcom’s rapid-fire response to a recent CMA ‘opinion piece’ in Computer Weekly was deeply revealing. Never slow to defend the auction process for the round of upcoming spectrum licenses as ‘efficient market fairness’, Ofcom left us wondering - fair for whom, exactly? Well certainly not the UK’s business enterprises and citizens whom Ofcom is supposed to protect from the excesses of free market dynamics.
Just the merest hint of a suggestion that UK government policy might begin to head ever so slightly towards some higher purpose (like growth and innovation and competitiveness), rather than allowing mobile players have fun and games fuelling the fascination of market economists, seems to be a deeply upsetting thought for our communications regulator.
David Prosser writing last week in the Independent suggested that the energy regulator Ofgem had performed even worse than the FSA’s lightly-touched command of the Financial Services sector.
Of the leading energy companies he wrote “It is the sort of behaviour of which the banks would be proud. Just as mortgage lenders used to overcharge loyal customers in order to subsidise eye-catching introductory offers . . . . . so the mis-selling in the energy sector is still going on. One of the most striking of Ofgem's conclusions is that the energy industry's customers now have even less trust in the big six than they do in the banks. That's quite an achievement.”
David Prosser may bemoan the energy regulator’s failings but he has not yet turned his eye to the regulator whose recent report, repeating its now annual surprise, points out yet again that advertised broadband speeds bear very little relation to the service actually delivered.
In the Government’s budget ‘Plan for Growth’ the UK’s standing in the broadband stakes puts the country 13th in the world. Unfortunately the measure selected for this claim was advertised broadband speeds. But no one seems yet to have added up the mobile operators’ tax on British business – the source of most of their profits. The regulator seems far too busy being fair to the operators and not thinking through the bigger picture or re-casting the model to serve the higher national purpose.
So here we go again with another round of spectrum auctions – designed, apparently, for fairness and market efficiency. Never mind that asking mobile operators to compete for spectrum licences will diminish their ability to afford the infrastructure investment. Never mind that the bill for this efficient market Olympiad will eventually arrive on the doormats of British businesses. Never mind that duplication of basic Access utility infrastructures diminishes competition at the more-vital Services level.
What was even more remarkable this week was the energetic response from CMA’s regulatory college. Not all Ofcom consultations galvanise our members into action but the response was both fast and furious – particularly from those with large numbers of employees fully exposed to the free market machinations of the mobile men. In choosing to respond to the spectrum consultation the members are clearly keen to focus on a single key issue – mandating the introduction of national roaming – in a determined effort to make a major issue of regulatory reform.
Just as in fixed fibre access, four essential questions will apply when judging the contribution of the regulator in supporting government policy. The four basic questions are:
Will these proposals enable an affordable infrastructure for innovation?
Will these proposals contribute to an infrastructure for enterprise?
Will these proposals accelerate economic growth?
Will these proposals enhance community development?
This has very little to do with finessing fairness between market players. It's about responding to higher national purposes and fairness to UK enterprises and society - a responsibility that the Communications Act 2003 placed squarely on the shoulders of Ofcom.
The editorial was written for the Communications Management Association (CMA) whose members spend in aggregate over £13bn per annum on networked services and products.
Readers of this editorial also viewed ‘Fitness for Purpose’- a commentary on the underlying motivations and ‘national purposes’ for FTTx investment.
|Last Updated on Monday, 28 March 2011 10:48|