Regulatory Incongruity Will Increase; Multi-Purpose Networks are One Reason

The existing adage that regulation has a hard time keeping up with technology probably underestimates the challenge. Regulations have a hard time keeping up with end user behavior and new business models as well.

“How do you create a rule today that still is relevant and helpful in five years” is one natural question.

Five years might be too little time to trigger major changes in regulatory framework, though.

Fundamental matters, such as how best to use scarce communications spectrum, or how to apply a regulatory model, tends not to change that fast.

Though the matter is not on the public agenda, it has been obvious for some time that media delivery is changing. It is not just a switch from live performance to radio to broadcast television to wired network delivery to mobile delivery.

Each of those changes created whole new industries and new regulatory approaches. The perhaps-bigger challenge is that industry boundaries are dissolving.

Among the best examples is the incongruous fact that the cable TV industry operates under one regulatory regime that is substantially less rigorous than that applied to AT&T, Verizon and CenturyLink.

That, despite the fact that cable TV and telecom industry product offerings in the consumer and business market are fundamentally the same, if not identical.

More of those sorts of incongruities will arise. Consider TV white spaces, or the proposed 600 MHz auction proposed by the U.S. Federal Communications Commission whereby TV broadcasters can give up their broadcast licenses, allowing spectrum to be redeployed to mobile communications.

Why are regulators shifting spectrum from broadcast TV to mobile communications? Partly because more mobile spectrum is required.

The other incongruity, though, is that most people in the United States consume video entertainment using a fixed network delivery method, with an in-room untethered access, with a similar--if less clear pattern--in audio content consumption.

At some point, that will raise politically-charged new questions, such as whether it makes sense to allocate important spectrum for point-to-multipoint linear content distribution, as compared to other on-demand delivery methods, particularly using mobile networks.

The uncomfortable question will be whether the regulatory silo that separate “broadcasting” and “communications” must be reworked in some fundamental way. Given the size of each of those industries, the challenges will be difficult.

But difficult questions often cannot forever be avoided, as the boundaries between “industries” is becoming porous.

Three decades ago, researcher Nicholas Negroponte of the Media Lab at MIT suggested that broadband content devices received content “over the air” while narrowband devices received content using cables.

Negroponte argued that the reverse situation should prevail. A better use of available communication resources would be to deliver broadband content using cables and narrowband content using airwaves.

That came to be known as the "Negroponte Switch".

Updated for changes over three decades, the new issue is that linear content is being augmented by on-demand content, and devices increasingly are mobile or untethered, not fixed.

That might suggest the Negroponte Switch is outdated. Paradoxically, the issue of over the air delivery--in the Negroponte Switch sense--remains relevant.

Mobiles typically continue to use airwaves for video and other content delivery. But sometimes that access is shifted to the fixed network (cables to a location, then Wi-Fi for local device access).

The new wrinkle is on-demand video delivery (over the top streaming), sometimes accessed by people using the mobile network, sometimes using the fixed network.

At some point, the issue of symmetrical regulation is likely to seem more necessary. If, one day, mobile operators provide similar services or apps or content as “TV broadcasters,” what does that mean for the fundamental models of regulation?

It is another version of the challenges of “general purpose networks.” Cable TV and telco firms deliver the same services, but live under distinctly-different regulatory frameworks. Does that make sense?

Someday, it is likely similar questions could be asked about “TV broadcasting” and “mobile communications.”
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