In the four years since the Maitland Commission made its initial report, many countries around the world have focused political and economic resources towards meeting the Commission's recommendations. Within the PINs, such efforts have manifested themselves in the various island countries' Five Year Development Plans and through the coordinated efforts of the regionally focused SPTDP. Examining telecommunication policy and development goals in relation to real and projected growth in telecommunications infrastructure within four Pacific Island countries and New Zealand, this paper analyses the feasibility of meeting the Maitland Commission's goals in the Pacific Islands Region.
The author argues that telecommunications efforts too often tend to stress distant connections. The local informative contacts are important, and should be given a chance in future systems. The argument presented to support this view includes the specific example of the TERESE project (Telecommunications and Rural Development in Sweden). This publically funded project uses narrowband communication, including computer conferencing, to stress economic and social identity in a region in the far north of Sweden. Details of continuing regional efforts are given.
Surprisingly, the Nordic countries are very clearly in the lead in the development of mobile telephones. Several explanations are possible - economic, technical, geographic or political - but none pinpoints what is unique about the Nordic countries. A combination of state legitimacy derived from the welfare state, service-oriented monopolies and some accidental historical reasons are proposed as an additional explanation. The story of mobile telephones in Finland is presented, together with a profile of users, based on an open question survey. This shows that the popularity of mobile telephones is based on two quite different reasons: perfect reachability (which implies that a call can be made from anywhere, and the receiver is always there, immobile from the point of view of the caller) and a perceived (although quite fallacious) immediate intimacy.
A general description of the major results of a survey of the perceptions of individuals in households with regard to 0055 numbers presently in existence is provided. Numerous factors are examined in an attempt to gain an overview of the 0055 market and establish hypotheses that could be subjected to statistical analysis. These factors include awareness, usage, bases for segmentation, perceptions of and problems with the service, present advertising, place of calling, relationship with the dial-it service, reasons for consumers not using 0055 and interest in an interactive service. Proof of the hypotheses would indicate that entry into the market for 0055 numbers appears to be warranted, as is entry into an interactive service. Cost to the user should be kept low and value for money emphasized. Media other then television can be used for advertising the service. A shopper typology may be useful.
This study provides a retrospective analysis exploring competition in the US telecommunication industry, a decade after passage of the highly deregulatory Telecommunications Act of 1996. Using history as a guide, it reviews recent merger activity facilitated by the Act, profiles the present state of concentration in cable and telephony and explores prospects for cross-media competition permitted by the Act. Study results suggest that industry concentration in these telecommunication industries has increased dramatically since the mid-1990s, with the top four firms controlling over 60% of the market in each industry. The stand-alone long distance industry has been virtually eliminated by the acquisitions of AT&T and MCI by Regional Bell Operating companies, whose extensive lobbying efforts and lawsuits, challenging service restrictions under the Act and their enforcement, play to RBOC advantages in scale and local loop control. Despite prospects for competition stemming from Internet and wireless alternatives, recent consolidation has been accompanied by hyper-inflationary rate increases in both industries. Recent developments, including AT&T's acquisition by former Baby Bell progeny SBC and its earlier sale of AT&T cable assets to Comcast, may thus signal a new era of competitive "detente" among telecommunication providers. Implications for cross-industry competition between cable and telephone industries for broadband, cable and voice services are explored.
Between 1894 and 1919 the U.S. telecommunications industry underwent a fundamental policy shift, from unprecedented private competition to regulated monopoly. This metamorphosis expressed not an evolving consensus, but a complex series of social conflicts over the structure and purpose of telecommunications. The most important outcome of these conflicts was to curtail grassroots political mobilizations to intervene in telecommunications policymaking.
The telephone is one of the most widely used technologies in the advanced industrial economies, typically achieving a household penetration rate in excess of 90%. Over the course of this century, the plain old telephone system (POTS) has become a critical techno-social infrastructure for all sorts of economic, social and personal interactions. The question arises as to what has driven the widespread diffusion of the telephone? How can we describe the adoption of telephony as a core element in economic and social affairs in modern societies? In particular, how can we account for the great disparities in the rate and pace of the diffusion patterns of POTS, taking account of different national and historical contexts? This paper critically interrogates influential universal models or `theory-led’ explanations of the diffusion of telephone systems, especially their capacity to account for the empirically observable national variations. The authors test these models with respect to the historical trajectory of telecommunications development in Ireland, drawing on unique time-series data related to the actual patterns of telephone adoption, use and utility. The authors also re-assess the extent to which existing diffusion models throw some light on aspects of observable diffusion processes and patterns. A key conclusion from the approach adopted here is that in themselves, abstract deductive models are at best unsatisfactory. Whilst a combination of such `universal’ factors derived from more deductive models may be useful in elucidating different parts of the story, they are not sufficiently nuanced or adequate to describe or frame the complex stories of different national historical experiences. With the Irish case study we have attempted to illustrate the value of a historical and empirically based understanding of the socio-economic, political or institutional factors which have served to shape the development of telecommunications services and policy in Ireland.
The AT&T Bell System invented cellular telephony and deployed the world's first prototype cellular system. Strangely, neither AT&T nor its spin-off Regional Bell Operating Companies capitalized on that technological lead, and cellular telephony in the US slipped behind that in other developed countries. This turnaround is explained as a combination of a competency trap that blinded the AT&T Bell System leadership to the importance of the wireless telephony market and the lead their cellular system offered, coupled with a failure of institutional agency required to organize and direct the emerging industry resulting from the death of the AT&T Bell System.
International telecommunications involve the transmission of economic, social, institutional and produced information, all of which have demand, flow, interaction and exchange aspects. International telecommunications is assumed to depend on other international movements, namely commoities, people and capital. The case of Israel is examined inlight of this assumption. Annual growth in Israeli international telecommunications is best explained by two-year lagged exports for 1975-87. Exports have also been found to be the leading variable for the 1980s, when annual examinations were performed for the most frequently called/calling countries every year. Most of Israel's international messages are exchanged with North America and Europe, with the USA leading. Separate trend analyses for nine leading countries did not produce decisive results in terms of the levels of explanation or the leading variables.
Data on US outgoing international telephone calls for 1961-1988 were analysed using stepwise regression analysis, so that data for all other two-way movements served as independent variables. This international movement model was found to explain annual growth for the period 1965-1979 only -- a period typified by growing demand and improved technology. In the 1980s several major technological and organizational changes occurred, to which movements and demands have not yet adjusted. Incoming tourism and foreign investments were the dominant movements explaining growth in calls. A regional analysis to most frequently called nations shows the Pacific Rim emerging in first rank. ISDN deployment may produce a return to a demand-dominated equilibrium.
Against a background of the increasing pressures resulting from the convergence of computer and telecommunications technologies, the author stresses the importance of the study of long-term trends and their implications. After discussing the main considerations in undertaking long-range studies, he reviews in detail the work of the Long Term Studies Working Group of the CEPT, focusing on the studies of the Evolution of Existing Services, the Demand for New Services, and the Evolution of Technology and Costs. He draws conclusions about policy issues facing telecommunications administrations, on study methods, and on the specific function of the Long Term Studies Working Group.
This paper explores the characteristics of Americans who lack home telephone service by drawing on FCC and Census data covering the period 1980-1993. It focuses on groups who have experienced lower than average telephone penetration per household - the elderly, the poor, women and children, blacks and Hispanics, and rural Americans. Income was found to be the single most influential factor in predicting the presence of a telephone in the home, although strong mitigating factors were also identified. Low penetration rates were found among women single heads of households. Low rates were also found among the two minorities studied in comparison with the white majority, even when controlled for income. Finally, the elderly, once thought to suffer from isolation, were found to enjoy higher than average telephone penetration rates. The paper concludes with a brief discussion of lingering questions and proposes considerations for policies that might lead to higher levels of participation.
The author considers a strategy for the study of visual communications in the 1980s. To establish a basis for this strategy, market research was carried out to ascertain major visual communications needs in leading business organizations. The systems found to have greatest potential were video conferencing, interactive information retrieval, facsimile, document processing, and office automation (integrating all four systems). In the light of these requirements, the author describes a study programme for the 1980s and shows which technologies should be developed.
The major law which provided for the privatization of Nippon Telegraph and Telephone (NTT) in 1984 is up for review by the Japanese government in April 1990. Given the continuing domination of Japan's telecommunications market by NTT, ultimate divestiture of the privatized NTT remains a likely outcome of the review. Against this backdrop, this study presents an analysis of the forces which have shaped Japan's privatization and liberalization policy throughout the period 1980-1989, and are likely to lead to additional reforms in Japan's telecommunications system in the course of the upcoming policy review.
The Korean government completed its privatization of Korea Telecom (KT) in May 2002. Privatization was undertaken at a gradual pace at first mainly because the Korean government did not want to hand over its managerial power to the privatized telecommunications service company, although it announced its plan in 1987. However, the inauguration of the World Trade Organization (WTO) system and the Korean economic crisis of 1997 forced the government to accelerate its full privatization plan. During this process, several main players such as the Korean government, transnational corporations, international organizations, and large domestic conglomerates played important roles. The full privatization of KT is the result of the political, social, and economic demands of these players.
This article investigates some of the areas for concern that are likely to be raised at the 1989 ITU Plenipotentiary, and evaluates the possibility of their resulting in any drastic change in the IFRB's structure or functions. After a brief history of the IFRB the author addresses the issues raised in an article of 1964 advocating the elimination of the IFRB, whose author, John Gayer, was a member of the IFRB.
This paper analyzes the relationship between governmental regulatory policies and competitive dynamics amongst private operators and the national monopolist, TP SA, in three network segments of the Polish telecommunications sector. Special attention is paid to the evolution of organizational strategies in a regulatory environment characterized by constant strategic indecision and reorientations of national policy makers. The paper finds that regulatory/competition coevolution has taken diverse forms in the three network subsegments, with asymmetric duopoly operating in the local fixed network, hidden competition at work in the long-distance fixed network, and oligopolistic technology-driven competition characterizing the high-growth cellular network. The conclusion reached is that Polish telecommunications to date has been stuck in a broad stage of pre-competitive market maneuverings by domestic and international capital, in preparation for privatization of the national operator and for full liberalization as part of EU integration.
The green paper on telecommunications was presented by the European Commission (EC) three years ago. Substantial funds have been made available for research and training and the European Telecommunications Standards Institute (ETSI) has been established. The ITU and CEPT are adapting their structures to accommodate the developments. In most countries the reorganization of the telecommunications sector is a top priority. The provision of telecommunications services has become an arena for competition, and development of a new set of rules for regulation is in progress. The next step is being taken in the framework of the Uruguay Round of GATT where liberalization of services on a world-wide basis is being considered.
Since the 1980s the growing importance of the corporate network has raised sensitive policy issues in telecommunications relating to privatization and national sovereignty. This paper explores these issues in relation to the corporate network and analyses the existing problems and those that will arise in the next decade. The authors examine the corporate network, its workings, its importance as a competitive strategy, especially in a global context, and explain how this causes policy tensions. The authors suggest that these tensions will not dissipate over time, but that they will continue to affect policy-making well into the 1990s.
The liberalisation of the telecommunication sector has dispossessed regulators from the use of cross-subsidisation in order to achieve the universality goal. In a liberalised context, special tariff schemes represent one possible policy tool in order to increase the penetration rate. This paper focuses on the UK fixed home telephone network and analyses LUS and InContact tariff schemes adopted by British Telecom (BT) in the 1990s. Both schemes turned out to yield unsatisfactory results. This paper, after reviewing past literature on telephone access demand, uses an econometric approach to test whether such schemes were properly targeted to suit the characteristics of "un-phoned" households. The empirical analysis points out that some important socio-economic factors, rather than simply low income, are the major drivers of non-connection. The failure to take into account these and other factors discussed in the paper, has significantly contributed to the poor results of the two special tariff schemes. In this context the UK experience provides a useful basis for discussion on the validity of policies aimed at promoting network good adoption via the introduction of special tariff schemes.
By 1992, the European Community expects to have removed all barriers to trade in Europe, and to have created a single, integrated internal market. This comment describes the economic rationale for 1992, and assesses the impact on telecommunications. Questions are raised about the threats which 1992 may pose, especially to the less wealthy economies, to new and small manufacturers, and to users of telecommunications.
The coming of the Single European Market in 1992 is intensifying competition among leading cities for investment, jobs and services. The deployment of information technology is central to the profound structural changes that are affecting Europe's cities as a result. In this Comment the author surveys the range of strategies being developed to boost the local economy and public service provision. Government action will be necessary, he warns, to offset the potential intensification of social and regional disadvantage.
The 1992 World Administrative Radio Conference discussed crucial issues regarding international spectrum allocation. In spite of the importance of the proceedings, little attention was paid to the conference by news media or trade press. This paper focuses on a survey of the 53 members of the US delegation to WARC-92. While most thought the delegation was effective in achieving most of its goals, they provided a number of recommendations to improve the efficiency of future US WARC delegations. The principal recommendation was that future delegations be selected earlier, especially the delegation leadership. In addition, the USA must be more active in seeking coalitions with other nations long before the conference itself actually begins. Many of the survey respondents mentioned the success of the European Community in the deliberations, primarily because 34 member nations supported any European-proposed initiatives.
This article examines EC policies intended to promote the coordinated introduction of an Integrated Services Digital Network (ISDN) in all member countries by 1993. ISDN was originally supposed to be a new telecommunications network that would eventually replace the old telephone network. It is argued that the EC's ISDN activities are trapped between the attempt to liberalize the so far closed and fragmented European telecommunications markets on the one hand and the aim of building up a strong, independent European telecommunications industry and a Europe-wide telecommunications network on the other. At the moment ISDN deployment is far behind schedule and will not fulfil the Commission's expectations.
In the 1990s, nations in the world from Singapore and Egypt to France and the United States poured billions of dollars into investments in information and telecommunication technologies. This article examines the effects of telecommunications investments from 1993 to 1998 using a model, which suggests that a delay in learning and adjustment is realized before the benefit and that it is (1) the transfer of information and knowledge and (2) the experience with telecommunications technology that contribute to economic performance of a nation. The research addresses the use of both traditional wireline and emerging wireless telecommunications and a nation's investments in telecommunications. The article concludes with a discussion of the results as well as the implications of the proposed learning model.
The 1996 Telecommunications Act provides mechanisms for all parties to pursue their interests. For instance, the Act incorporates two different and complementary approaches: (a) it authorizes all operators to operate in businesses from which they were previously excluded. (b) it incorporates some legal procedures and regulatory constraints, that provide parties with tools to defend their territories, excluding other operators. A striking example is the ‘competitive checklist’ for RBOCs to enter the interLATA long distance market.The undesired result of this approach is both the creation of enormous business opportunities for lawyers and a stalemate, because all parties have been quite successful in adopting defensive strategies to block others’ initiatives. This has happened to the detriment of offensive moves that, as everyone hoped, would have increased competition in all markets and, as a consequence, the availability of innovative high quality services for the public at low prices.Analysis of the US regulatory model in the telecommunications sector, and in particular the specific studies carried out in three States, have led to a series of conclusions that can provide guidelines on the type of issues and some possible solutions with regard to telecommunications liberalization, relationships between different levels of regulation (e.g. federal/State), operator’ strategic moves in response to regulation. The analysis of the US model, even though it is very much related to country-specific conditions, allows us to isolate some issues that other countries, and among them Italy, will be likely to face in the short term.
During 1996, the Office of Fair Trading investigated allegations of anti-competitive behaviour, by the major supplier of programming material in the UK wholesale programme market, BSkyB. At the heart of the review is the rate card that links the wholesale prices paid for premium BSkyB channels to the direct-to-home retail price. It was alleged that the nature of the linkage stified retail price competition and dissuaded cable operators from marketing services effectively. In this paper the authors explain the rate card and analyse the pro- and anti-competitive effects of the structure. The paper concludes that while the level of prices may not be anti-competitive, the structure certainly has behavioural consequences.
Three goals of the 1996 Telecommunications Act are competition, efficiency, and explicit mechanisms to further universal service. The new universal service policies violate these goals. I review the policies (support for highcost and rural areas, low-income subscribers, and educational and medical institutions, and the funding mechanism) and detect the influence of various interest groups and the regulators' desire to protect their policies from public scrutiny. The new policies will require $4–12 billion per year to fund and create inefficiency of $1.2–4.0 billion per year from revenue taxation. A more efficient tax scheme would increase total surplus.
This paper examines the hypothesis that ICT penetration has positive effects on economic growth. On theoretical grounds, this paper discusses three channels through which ICT penetration can affect growth: (i) fostering technology diffusion and innovation; (ii) enhancing the quality of decision-making by firms and households; and (iii) increasing demand and reducing production costs, which together raises the output level. This paper conducts three empirical exercises to provide a comprehensive documentation of the role of ICT as a source of growth in the 1996-2005 period. The first exercise shows that growth in 1996-2005 improved relative to the previous two decades and experienced a very significant structural change. The second exercise uses the traditional cross-country regression method to identify a strong association between ICT penetration and growth during 1996-2005, controlling for other potential growth drivers and country-fixed effects. The third exercise uses the system Generalized Method of Moment (GMM) for dynamic panel data analysis to tease out the causal link between ICT penetration and growth. This analysis also shows that, for the average country, the marginal effect of the penetration of internet users was larger than that of mobile phones, which in turn is larger than that of personal computers. The marginal effect of ICT penetration, however, lessens as the penetration increases. This paper points out several policy implications drawn from its analyses and findings.
The telecommunications industry is becoming increasingly internationalized. As a result international bodies such as the EU, ITU, OECD and WTO are taking an increasing interest in harmonizing regulatory principles so as to minimize regulatory asymmetries in regard to market access and operating conditions which can affect competitive and technological neutrality. This raises the question of the extent to which reforms to a country's regulatory regime should be in harmony with developments internationally. By way of a case study, this paper considers Australia's post-July 1997 regulatory regime for telecommunications In an international context.
This article summarizes and discusses the FCC orders for reforming universal service (FCC Order 97-157) and access charges (FCC Order 97-158) that were issued in May, 1997. Also included in the article is a summary and discussion of FCC Order 97-159 which makes some changes in price cap regulation. The article starts with a short tutorial on access charges. It then summarizes the FCC Orders and analyzes their financial impact. The article concludes with some personal observations on the course, thus far, of telecommunications reform in the United States.
This article discusses the significance of the 1997 sovereignty transfer for the development of telecommunications in the greater China region. The article argues that the verbally simple 'one country, two systems' formula papers over the complexities of what will actually be a long-term process of convergence or integration between the telecommunications regimes of Hong Kong and China. Although the results of that process are indeterminate, the article describes three basic models for structuring the relationship between Hong Kong and China. It goes on to identify some of the political and economic interests which create tendencies to select one or the other model, as well as the implications of each model for economic development.
On 30 June 1997, the People's Republic of China (PRC) officially reclaims the territory of Hong Kong from British sovereignty and administration. The impact that this will have upon Hong Kong remains unclear. Some point to China's guarantee to respect Hong Kong's capitalist system for a further 50 years, others speculate that Beijing will be unable to keep from tampering with the way in which Hong Kong is run. A third body of opinion believes that Hong Kong is too important to China's continued economic development for politics to interfere. In terms of telecommunications services in Hong Kong, parallel arguments have been presented. These positions take no account of China's telecommunications development objectives, nor do they take account of the administrative bargaining that already exists in the PRC and within which Hong Kong will be required to participate after 1997. Recognition of this bargaining framework will provide greater flexibility in telecommunications policy-making for Hong Kong administrators in the lead-up and passage through 1997.
The 1998 ITU Plenipotentiary Conference (PP-98 in ITU jargon) took place in Minneapolis from 12 October to 6 November. As well as electing a new team of officials to lead the organization and establishing a financial envelope for the next four years, PP-98 faced two main issues. The first was to conclude the work begun at the 1992 Geneva Additional Plenipotentiary Conference by amending the ITU Constitution to give greater rights and responsibilities to the ITU’s private sector members. The second was to adopt strategic policies and plans to guide the Union into the 21st century. After first situating the Minneapolis conference in the context of the ITU’s unique organizational structure, culture and working methods, the paper describes the main results of the Minneapolis conference with respect to these two issues. It highlights constitutional amendments made which open the ITU to greater participation by the private sector, as well as to give non-governmental actors a greater role in providing advice and making decisions on technical issues. The paper then outlines the five strategies adopted by the conference to guide the activities of the Union in the next four years. In conclusion, it attempts to assess the principal challenges facing the ITU in terms of policy and organizational development.
Variations in the supply and demand of telecommunications infrastructure in the United States are well documented. However, amidst waning concerns of a broadband digital divide, the geographic aspects of broadband availability continue to be intriguing. While some areas benefit from a robust selection of broadband providers, choices for consumers in other regions are often limited. The purpose of this paper is to explore the spatially unbalanced levels of broadband provision in the USA by providing an abbreviated longitudinal analysis of broadband regions and their development from 1999 to 2004. Broadband core and periphery regions are identified through the use of spatial statistical techniques and a geographic information system. A broadband competition index for ranking metropolitan and micropolitan areas is also introduced.
The E-Rate program was mandated by the 1996 Telecommunications Act to bridge the gap in telecommunications and internet access between rich and poor communities in the United States. Though the funding process embraces specific formulas to direct support at the most needy schools and school districts, a concern has been raised that the complex, multi-stage application process may prevent some school districts from availing themselves of E-Rate funds due to lack of technical expertise and administrative support. The objective of the paper is to assess the cumulative impact of these two contradictory effects. Changes in funding patterns over time are also examined. Data on all E-Rate projects where the recipient is a school district were collected for two years, 1999 and 2004, for the state of Pennsylvania. Results show that E-Rate funding was significantly positively correlated with the poverty rate and percentage of minority students fulfilling the policy intent, but school districts receiving more revenue per student also obtained higher E-Rate support. Location too was found to be a significant predictor of E-Rate funding. The policy implications of these findings are discussed in the conclusion.
Telecom 2000 explores the implications of the growing interaction between telecommunications and society. The author outlines the main findings concerning Australia's social and economic future, the possible directions of telecommunications, and the policies and strategies recommended to guide its development through the coming decades.
The United States is depleting its stock of telephone numbers for assignment to telecommunications carriers. If current trends continue the industry could run out of numbers as soon as 2015. There is little empirical examination of this problem in the economics literature. This analysis examines the distribution of telephone numbers across the United States and quantifies the effects of several key factors. The authors examine the effects that population density, competition for local telephone service, wireless telephone service provision and rate exchange area consolidation have on telephone number assignment.
Telecommunications plays a central role in fundamentally altering our relation to information and the manner in which we place value upon it. This article looks ahead to the state of telecommunications in the year 2000 and describes how technological advances are becoming obsolete with increasing speed. It discusses current technological advances which are nevertheless forming the backbone of planning ISDN, and comments on how ISDN is never likely to meet the objectives towards which it is directed unless basic planning assumptions are rethought in the light of the advances moving forward at unexpectedly rapid rates.
This paper develops a techno-economic model for evaluating mobile network evolution strategies and demonstrates its real-world applicability, using a Korean case study. A number of mobile network evolution strategies toward IMT-2000 are generated and evaluated with this model. The overall market performance is evaluated and its sensitivity to the key strategic variables such as technology choice, time to market and service coverage is analyzed. Given the regulatory condition that W-CDMA network should be deployed no later than 2004, it is found that direct evolution from cdma2000 1x to W-CDMA is more profitable than evolving via 1xEV-DO. Also, direct evolution from cdma2000 1x to 1xEV-DV appears to be a comparable choice, but with a higher supplier market risk. Finally, strategic implications of the empirical findings obtained in this study are discussed along with some further research issues.
The restructuring in the Chinese telecom sector in 2008 has prompted heated discussion among telecom analysts and experts. Past research tends to take an optimistic view that China has embarked on a liberalizing route, resulting in utopian projections that domestic competition and foreign liberalizing forces would lead to the emergence of a telecom market operated primarily under the principles of free market economics in the near term. This paper, instead, argues that current telecom restructuring was largely driven by domestic agendas. Drawing from the bargaining perspective, this paper finds that, while it is true that market mechanisms play a significant role in the telecom industry, the impact of competition and privatization on the telecom market ultimately depends on the political endowments of Chinese society.
In 1995, the Victorian State Government responded to the challenges presented by the emerging global information economy by developing the Victoria 21 policy. The policy offers valuable lessons regarding information industries development and information economy growth. Victoria 21 is an integrated and whole-of-government policy that is supported by highly developed political and organisational structures, providing insights on implementation strategies for countries preparing for the emerging global on-line economy.
The High-Level Committee (HLC) has made a series of carefully crafted, thoughtful proposals designed to help the ITU maintain its pre-eminent position in the field of telecommunications. In this article the author analyses the HLC's proposals in each of the major areas outlined in its mandate from the point of view of the rationale for change. Why is the change being discussed; who wants change; what sort of change is being proposed; and what will happen if change is not forthcoming?