Remarkably, protagonists of the ongoing debate over third-generation (3G) spectrum auctions assume operator licensing is an issue to be considered in isolation. It is deemed unnecessary to consider the exercise anything other than a bureaucratic and self-contained procedure.
Equally remarkable is users’ needs hardly ever come into the discussion. “Users” means the community as a whole-the people the telecom industry is meant to serve. The manner in which 3G and other broadband operators are chosen has wide ramifications, and auctions can only be judged in the light of what is trying to be achieved.
Assuming the purpose of licensing broadband operators is to help provide users with broadband services they need, the requirements clearly include content independent of access operator. Users must be able to obtain and distribute any legal content, irrespective of the access service they use. An operator that provides the immediate user connection must not act as a gatekeeper, determining what content customers can and cannot access.
With fixed-line service, we can call anyone worldwide who has a phone, and we generally assume that the same will be true for broadband. Wireless operators, on the other hand, are intending to compete on the basis of the content they provide. They intend to control content transmission according to their commercial interests.
The licensing process must mandate complete any-to-any interconnectivity-just as with fixed-line service. Operators must interconnect users and content providers without discrimination. Anything less is unacceptable.
Another requirement is technology-neutral licensing. 3G mobile is merely one of the means by which broadband services are to be delivered. Wireless technology will have to compete with other delivery methods, such as ADSL, cable, LMDS, satellite and others. To compete fairly, it must be regulated so it is not placed at a disadvantage compared with the alternatives.
For many, the operator of choice will provide access through a mobile device. The regulatory regime must make true freedom of choice a priority, for mobile and other users. 3G mobile spectrum auctions do just the opposite. Users do not want artificial distortions in what is offered, particularly regarding price, which result from a biased licensing regime.
Innovation is another requirement. One feature of the Internet revolution are the small and nimble companies that are now driving forces in the telecom industry. These companies provide new and innovative services that users want.
By contrast, companies representing the old order, typically ex-monopolies that never previously faced competition, have been left in the dust as a result of outdated business models and inward-looking cultures, despite the vast financial resources they accumulated over the years.
Now, through auctions, governments are reversing that market trend. Emphasis is being placed on the depth of a company’s pockets, irrespective of its ability to deliver the innovation that users require.
These three basic requirements-the ability of users to access any content, without operators acting as gatekeepers; an undistorted licensing procedure; and a regulatory regime that encourages innovation-should be our goals, and the licensing process should be such that these goals are attained.
When are we going to see a government make need, not greed, the starting point in its thinking?
Graham Mead is with the Hong Kong Telecom Users Group. He can be reached at mead@pacific.net.hk. The views expressed in this article are those of the author alone.
