Telecommunications industry regulation is set to become more necessary than ever as a means of economic regulation, according to an economics and telecoms academic. Eli Noam, professor of economics and finance and director of Columbia Institute/Tele-Information at Columbia Business School, opened the first panel of PTC ’08 yesterday, saying that as communications infrastructure becomes more central to national economies, government regulation will find a global resurgence.

“Ten years ago, twenty years ago, when we thought about the future of telecoms regulation, we thought there will be competition and there will be more competition and in the end, regulation will become unnecessary. Regulation will fade away, will disappear, and where it does exist it will be pretty similar across countries,” said Noam. But he said that the macroeconomics of new technologies, such as fibre networks, have brought the industry even higher economies of scale and a whole new set of issues. “Market power will continue to exist, and therefore so will regulation,” he said, describing the industry as “more important than ever.”

Noam claims that modern economies are so reliant on telecommunications infrastructure that it is impossible for governments to abandon regulation to market forces. “It used to be just voice and maybe some data, but now it is the infrastructure for the entire communications of the information society and the information economy,” he said.

“Every society wants to control its economy. In the industrial society it was over the means of production. In the information society it is over the means of information communication,” said Noam.

He claims that as the lines between broadcasting and telecoms legislation are blurred, it will be increasingly necessary to regulate telecoms. He describes current internet television laws “unenforceable” and “unworkable,” with different models being applied internationally, all of which have no effect. “It brings us back by a process of elimination to telecommunications regulation,” Noam said.

“Telecommunications, far from disappearing, is more important than ever as the central way of societies to get control of information flows,” he said.

by Luke Coleman

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