Telcos still blowing steam in the digital world

12 Jan 2016

Last year, I wrote in this space how trendy it is for analysts and journalists to look into their crystal balls and tell you what to expect in the coming year. For me, it makes more sense to look back on the past year and see what failed or otherwise made no sense, in the faint hope that we can jettison the silly stuff and remedy the situation for next year.

My opinion on this has changed little since last year’s column. Sadly, the same is true for the telecoms world. It’s like an old steam engine - it just keeps going along on its merry way, needing a little fuel and water to keep going. There are no high-speed trains here - those seem to be the bastion of the digital players of the internet world.

Just like the steam buffs who believed (wrongly) that the era of steam would never end, the telco world is only now realizing that times are changing and they have to change with it. But that change is still agonizingly slow in coming, hampered by the belief that no customers should be disrupted by change and legacy systems should be maintained just in case something goes wrong.

See Also

Telecom Asia December 2015 / January 2016


By contrast, the high-speed digital players just go for it. If it doesn’t work they turn it off and try something new; and their customers not only accept it, they even expect it.

This situation isn’t likely to change until the New Boys buy out the Old Boys. Which might happen one day, but not for a long time. And the reason is quite simple: the New Boys would have to adhere to telecoms regulations. Who in their right mind would do that voluntarily? Those regulations came from the steam age, and are still in force. The response of regulators - if only to maintain their positions of grandeur - is to introduce even more regulation.

But their time may soon be up also.

Steampunk’d regulators

I’d hate to mention net neutrality yet again, but in this column last year I spent many paragraphs lambasting the FCC in the USA for playing politics with something that has worked fine for a long time without its meddling. Under the guise of providing equal internet access to all, it tried to impose a set of rules to guarantee that freedom. Somehow, rules and freedom don’t go well in the same sentence and the US courts agreed. In early December they tore strips off the net neutrality case, and the dust won’t settle for some time yet.

Sadly, the rest of the “free” world (mainly the short-sighted and toothless European Commission) followed suit and started imposing their own rules for net freedom, based on their American cousins. Talk about the blind leading the blind!

But what happens if the FCC is forced to rescind its rules and the most powerful internet state in the world falls back to the status quo - a regulation - free internet? What will then happen to the others, apart from ending up with egg on their faces?

Well, it may highlight once and for all that the telecoms industry has grown up and doesn’t need to be policed constantly. The beauty of the free market approach is that the customers decide what they like and don’t like, and they vote with their feet and wallets. If any operator tries to be clever, the word will spread like wildfire over social media and their customers will fly to the next available roost.

Regulation may have been needed during deregulation (an oxymoron if there ever was one) to protect new startups from the evil PTTs. But now that there are multiple players in almost every world market, why not scrap outdated steam-age regulations and let them get on with some good scrapping?

The courts can decide if anybody is being naughty, much like they do now. The regulators can be pensioned off and every country can save millions that can better be spent on farm subsidies, fireworks displays and flood controls, seemingly brought on by climate change.

And if they still don’t want to play ball, the governments should roll out their own national broadband networks and make everybody use those, just like they do with the railways. That way customers will have the choice of steam or high-speed electric trains - and we will see who wins then.

This article first published in Telecom Asia Dec 2015/Jan 2016 edition

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