The Institute for Information Policy (IIP) at the Pennsylvania State University recently released its 2001 update on the telecommunications industry, titled “The New Global Telecommunications Industry & Consumers.” While the report found competition in telecommunications to be growing, it also cited a need for regulations to change with technology to better serve consumers.
This paper is intended to serve two purposes: first, to provide a comprehensive overview of the nature of and factors behind the dramatic changes driving the telecommunications industry today, and how those changes may affect and benefit consumers; and second, to offer this overview in language that is relatively free of jargon.
The report’s primary findings on telecommunications competition are:
- A new regulatory approach needs to be established that is less focused on the underlying infrastructure of communications technology and more focused on ensuring a quality of service and equal access to the consumer.
- Telecommunications regulations today still are designed for traditional, voice-switched phone networks instead of the packet-switched data networks that have enabled technology advances to flourish.
- Regulations that hold on to the local/long-distance paradigm for packet-switched data networks where geographies are not relevant, have stymied the growth of integrated data networks with global and local reach, allowing only a few to compete and little incentive to innovate.
- Today, distance means nothing for Internet communications and has nearly lost its meaning in mobile communications.
- By 2011, the traditional distinctions between different media, such as telephone, broadcasting, and cable, will virtually disappear.
The new telecommunications industry creates new business imperatives for telecommunications companies. First, major players must achieve global scale in terms of customer base, network, and cost economies. Second, all companies need to collaborate successfully with other players. Third, companies must have excellent customer service. Fourth, companies must constantly innovate and get innovations to market quickly.
For more information, contact Penn State or the National Association of Regulatory Utility Commissioners.
