Old fingers on very new buttons

Information and Communication Technologies - Telecom Reform
May 22, 1998

Egged on by futurologists and hyperbolists, the mass media would lead us to believe that the rapidly emerging possibilities created by new information technologies will bring us to a new and revolutionary world in which nothing will be familiar. The more sober reflections of social science suggest, however, that change is evolutionary. A central theme of Information and Communication Technologies, edited by William Dutton, is a critique of technological determinism. Empirically grounded social research suggests change is incremental, building on and shaped by existing cultural values and institutional arrangements. In a telling remark, Roger Silverstone comments in his essay on information and communication technologies in everyday life that the "hype itself both signals and attempts to mask a high-level anxiety in the industry, as major players invest massive resources in a technological competition in which there are going to be some very big winners and some cataclysmic losers".

Information and Communication Technologies features 22 papers, mostly in a critical vein, drawing on a variety of disciplinary approaches including sociology, geography, economics and politics and produced as part of the Economic and Social Research Council's ten-year research Programme on Information and Communications Technologies (Pict).

Telecom Reform is a different sort of book, collecting together papers that were originally presented as part of a week-long international training programme for prospective telecommunications regulators. Many of editor William H. Melody's contributors participated directly in the developments they describe as regulators or commercial actors, and consequently tend to lack evaluative distance. Whereas Melody's contributors resemble cheer-leaders for their side, those of Dutton are mostly disinterested commentators on the game. Linking the two books is Melody himself, who was the first director of the ESRC Pict research, and a number of academic authors who contribute to both books.

Dutton's book perhaps represents something of a coming of age for the social-science study of communications and information technology, and provides students with a good introduction to key themes in the scholarship. But the book goes beyond this, making the findings of a number of important research projects easily available to a wider general readership. Dutton's introduction recognises that key social-science questions in communications focus on the relationship between technological change and social and economic change. He helpfully suggests that there are four spheres in which such relations need exploration: production, utilisation, consumption and governance. The 22 chapters are thus divided into four corresponding parts. The social-science pedigree of these questions is traced back by Christopher Freeman (in a chapter on "The two-edged nature of technological change") to the concerns of 18th-century political economy about the impact of new technology on employment, contrasting James Steuart's interventionist approach with Adam Smith's espousal of the invisible hand of the market.

An approach to information and communications technology research that is at one with broader social-science concerns is exemplified in the chapter by Malcom Peltu, Donald Mackenzie, Stuart Shapiro and Dutton on policy disasters in which information technology was implicated. The incident involving the USS Vincennes warship in 1988 in which it shot down an Iranian passenger aircraft in the Gulf, the crew mistaking it for a hostile fighter plane, is attributed to a mixture of human error and a system designed for all-out combat rather than for selective picking out of hostile planes. The collapse of the London Ambulance Service's computer-aided dispatch system in 1992 is attributed not to failure of IT in the technical sense, but rather to a failure to take appropriate decisions on quality control, training and implementation more generally because of a "fear of failure" culture. Policy recommendations arising from the study of policy failures include attempting to overcome the "politics of blame", and respecting the limits to comprehension of both organisations and individuals. Though telling, the analysis and detail of these case studies is rather too brief to draw out fully the implications of policy failures involving the implementation of new technology.

One or two of the papers in Dutton's collection jar with the social science approach. In the section on consumption, Michael Gell and Peter Cochraine set out an instrumental vision of what technology can do for the future of higher education. This suggests that change in information and communications technologies will cause a "meltdown" in which those in higher education must unlearn all they know. The basis for such an argument is ungrounded normative assertion. The printing press did not finish off the lecture, nor the telephone or fax machine the postal services. As Nicholas Garnham notes in his chapter on the constraints of multimedia convergence, "The old forms survived and new media lived to some extent off the older media they were partially replacing, adding a further layer to the media mix." As most of the other chapters suggest, technology does not determine the shape of changes that technology itself may have a role in driving. A leitmotif of the book is well captured in Silverstone's chapter on the effect of technology on everyday life, where he says: "Social change is created by how we use the technology rather than by the technology itself - and that use is no simple matter."

Tension between the looser normative approach of technological change and grounded social-science research is also evident in the chapters on telecommunications regulation, which fall within the final section of the book on governance. Walter S. Baer's chapter on the costs of delaying infrastructure liberalisation in telecommunications makes assertions about the economic costs of failing to liberalise that are not adequately justified by the selective examples or explained in terms of causality. Robin Mansell's discussion of the need for innovation in regulation takes a more realistic and sanguine view and, contra Baer, rejects the idea that the United States model of telecommunications liberalisation and regulation is desirable or even possible in many other jurisdictions. I would go beyond Mansell's claim that regulation will be of continuing importance in "monitoring, guiding, and sometimes controlling the decisions by major players in the communications market" and suggest that regulation is an important constitutive element of the market, without which de jure liberalisation would leave dominant players free to assert their dominance (for example, by making interconnection difficult for new entrants, as has happened in New Zealand) and retain a substantial element of monopoly control. If one were to apply the analysis developed elsewhere in the book in relation to other topics, one would expect regulation to be shaped by local culture, institutional forms and implementation history.

Melody leads from the front in Telecom Reform, offering introductory chapters to most of the thematic sections of the book, and setting out a blueprint for governments and prospective telecommunications regulators engaging in reform. Thus, within Dutton's terms, most of Melody's book falls within the governance theme (though a number of chapters, such as those of Knud Erik Skouby and Morten Falch, focus on changes in the market and the consequences for competition and global alliances). The book, he suggests, offers "a comprehensive review and assessment of the telecom reform process", providing a foundation for "informed analysis and debate on the next steps in the unfolding drama in telecom reform and inform (sic) society development."

Though he and his contributors draw on examples of telecommunications reform in a number of jurisdictions, Melody is rightly cautious about the extent to which institutional models developed at a particular place and time can be simply transplanted into other places and times. For example, though he advocates the development of regulatory institutions independent of government ministers, and cites the example of the US Federal Communications Commission, he recognises that few jurisdictions have a government tradition in which such a degree of independence has been permitted. Nevertheless, there is a tendency in Melody's and some other chapters to over-generalise, in particular from US experience. For example, in Melody's second chapter on models of regulation he claims that a critical issue for regulatory policy is the conception of the "public utility principle", which, though "based primarily on economic and technological characteristics" will have a precise meaning "derived from law". Though the Americans have developed a juridical concept of a public utility, to draw the line between state intervention justified under the constitution and that which is not, such legalistic ways of thinking are alien to other jurisdictions, such as Britain, Australia and New Zealand, or configured in completely different ways and for different reasons, as with the French concept of Service Public or the Italian Servizio Pubblico.

Melody's book is immensely informative and thought provoking vis-a-vis the day-to-day experience of regulation, and the policy issues it raises. It would provide a good introduction to any reader wanting an advanced introduction to telecommunications regulation. But difficulties of under- and over-generalisation arise because, though the book is concerned with institutional design, little attempt is made to abstract effectively from the day-to-day experience of telecommunications regulation or use the insights of the theoretical literature on institutional design that has been developed from studies of different regulatory spheres in various jurisdictions and in a number of disciplines. Even Brian Levy and Pablo Spiller's important book, Regulation, Institutions and Commitment (1996), which is a comparative study of five telecommunications regimes within a new institutional economics perspective, is not referred to. Lacking such a theoretical underpinning it is difficult for Melody to escape the detail and offer a genuinely general blueprint.

The best attempt to escape the limitations of the rather homogeneous approach advocated by Melody is Aileen A. Pisciotta's chapter, which offers four different models of regulatory reform that abstract from experience in a wide range of jurisdictions. She concludes that "the best successes with telecom reform have been experienced by those countries that attend to regulatory reforms first". Ben A. Petrazzini reinforces this insight in his chapter on regulation in developing countries with a sensitivity to the diverse economic and political characteristics of the countries he discusses and an ability to recognise that the application of institutional design principles would result in different solutions in different places.

To offer this critique is not to suggest that Melody fails to identify the important issues. He highlights in early chapters a key question of the balance between sector-specific regulation and the use of general competition or anti-trust law. In arguing that it is now widely recognised that regulation will have a continuing role (and the unfortunate experience of New Zealand's reliance on general competition laws would support this conclusion) he downplays the extent to which the effective configuration of competition and regulatory rules will be shaped by local policy heritage. Melody's emphasis on interconnection as a central issue in opening telecommunications markets where an established, dominant operator continues to control much of the network is correct, and here the attention he pays to developing appropriate processes for inclusive decision making (which implicitly may differ in different jurisdictions) is to be welcomed.

International telecommunications policy-makers, whether in bilateral relations, the European Union, the International Telecommunications Union or in the World Trade Organisation, have long recognised that governments, regulators and telecommunications operators have choices about institutions and policies that will be exercised to some extent to fit local conditions. While the kind of international policy learning exemplified by Melody's study is of considerable interest and utility to students and policy makers, the blueprint approach to some extent masks the important positive and normative issues concerning when harmonisation is possible or desirable and when diverse regimes can be considered equivalent for trade purposes.

Colin Scott is lecturer in law, London School of Economics.

Information and Communication Technologies

Editor - William H. Dutton
ISBN - 0 19 877459 1 and 87749 6
Publisher - Oxford University Press
Price - £45.00 and £15.99
Pages - 464

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