Regulation: Case on Next Generation Broadband - Essay Example

Regulation: Case on Next Generation Broadband Technological advancement in the telecommunication industry led to the invention of the broadband technology. The technology sets to influence acquisition of telecommunication services. In the event of the technology roll out, players in the sector must iron out issues, which influence provision of the technology. Analysts observed that the introduction of new generation broadband had far reaching effects on the existing technology and need for exit criteria was eminent (Ofcom, 2008:10). The aim of instituting regulation is to protect interest of players in a given field. For instance, the roll out of the new generation broadband would influence internet service delivery and telecommunication services. The need to create fair play in the sector constitutes the discussion in this paper. Telecommunication sector contributes to the economic growth through various aspects such as creating jobs, enhancing communication, which influence the consumption of other products in the market. Providers in the telecommunication industry are keen about the role they play in the economy. Market without regulation would promote exploitation of parties concerned (Borrus, 2003:69). Providers in the telecommunication industry offer service to players at some fees regulated by existing policies. However, new generation broadband technology is a new application in the market, which requires policies that would protect various interests. The key players in the sector are the consumer, the provider and intermediary players. For instance, determination of prices in the market depends on regulations. Analysts in the sector realised that rolling out broadband technology in the market would lead to international coverage (Pietrunti, 2008:12). Broadband service consumers have demonstrated different needs depending on service type. For instance, television service providers and internet clients would consume different quantity of the product (Hardy, 2008:123). Urban and rural areas are set to acquire the services yet this would at different speeds. Analysts have observed that new generation broadband would change the pre existing aspects in the market (Hardy, 2008:65). For instance, the broadband technology contrasts the existing technology because it would channel copper loops to cabinets in the streets as well as ending up in various homes. The issue about regulation comes in when factors influencing modality of delivery crops. First, the opportunity has a set a ground for new players in the telecommunication sector to venture into business. The entrant behaviour into the market might cause unfair competition (Jordana, 2002:10). The idea is to create a ground for handling the existing players in the market and the new players. The next item is to address issues that affect consumers of these products. For instance, how would telecommunication companies relate to each other, what level of innovation would be acceptable and terms related to consumers. Market condition is a factor that influences price setting, product quality and target consumers (Jordana, 2002:13). New generation broadband market condition would influence timing in terms of new build development. The idea behind the market conditions is to balance factors influencing market economy in relation to the product in question. In most cases, product introduction would influence economic structures. Competition is inevitable in the telecommunication industry because several providers have similar products that intend to introduce in the market. The situation in the market would call for regulation because consumers would want to obtain quality products, which they would trust with their money (Mueller, M. 2010:132). For instance, when the cost of the broadband is set high, it should demonstrate to the consumers that it could deliver the quality professed by the provider. At the same time, the ground for competition must accommodate all the willing providers. Instances of product duplication are common when regulation is missing. The situation would be worse for the providers especially when the industry promote duplicated products (Pietrunti, 2008:14). Two players will face the effect of duplication. First, the consumer will not acquire the quality product he or she intended to buy in the market. Second, the input of the service provider will earn little income in the market because the duplicating firm will be enjoying patent right that does not belong to him (Hardy, 2008:111). Creating a framework of regulating service provision will influence the product quality and create a good ground of competition. Competition is essential in any market because it reduces monopolistic ideals, which may fail to offer quality products in the market (Pietrunti, 2008:9). For instance, when two or more firms compete to offer telecommunication services in the market, consumers are likely to face the following outcomes. First, quality provided would be good to attract the consumers secondly consumers are likely to face the challenge of crossing from one service provider to the next service provider, third consumers will have a wide variety of products to choose. The technicality involved in the competition is how providers will allow the consumers to cross over from one provider to the other (Borrus, 2003:56). For instance, when consumer A, want to communicate with consumer B, modalities that dictate their communication must be effective. Consumer A belongs to a different service provider thus communication between the two consumers would be difficult with regulation, which will protect the interest of the consumers and the interest of the providing companies. The above case would call for regulations, which influence the cost that consumers will pay for crossing from one service provider to the other. The service providers must agree on the modality that would allow crossing of the line by consumers. Factors involved are cost charged, technology application, and satisfaction of the consumers. Some providers may wish to protect selfish interest over other providers (Baldwin, et al. 2010:124). For instance, crossing from one provider to the other has been a contentious issue because a provider may decide to restrict crossing. When such incidence occurs consumers will suffer at the expense of the providers. Moreover, the condition will not be promoting competition. Service providers will always look for ways of winning clients onto their camp. It is not surprising to say that some service providers will use unscrupulous methods to win consumers (Mueller, 2010:124). Protection and institution of proper regulation must address factors, which influence the interest of the consumers, service providers and economy of the nation. Flexibility of the intended regulation is essential especially in the telecommunication industry where new developments are rampant. The fibre sets into a market that has providers that offer similar services. The opportunity in the market would be small for the new provider at the start but it is likely to grow because consumers will be willing to adapt a new technology (Ofcom, 2008:12). This feature calls for provisions, which addresses the current trends and the future trends. For instance, rolling of the fibre optics would begin in the urban areas, regulating the service provider to offer these services at the urban set up would influence the growth of the organisation in an event where the provider has acquired clients in rural areas. The intended regulations must address opportunities that service providers are likely to have and create a modality, which will favour the entry into unexploited markets (Borrus, 2003:66). For instance, deployment of the technology in the rural regions may require a lot of input in terms of capital required. The requirement would thus influence the operation of the company because it would have to pump in more cost to cater for its upgrading. Service type is a challenge that regulations must address. For instance, emergency services provided by the service providers cater for social welfare of the community. The organisation should have a ground for such provisions because regulations may dictate the modality of approaching such provisions. In essence, regulations should identify the category of products, which the providers intend to roll in the market (Hardy, 2008:121). Wholesale products and retail products serve various categories of consumers. Identification of interest based on the consumption power is one of the factors that regulation should address. Wholesale provision would address a need required in bulk while retail would address single need. It means that consumers of the product would belong to different categories. Pricing of their products has to vary in order to stump exploitations. New generation broadband has to involve other providers in its provisions. For instance, it has to involve power-generating companies, which will provide power for its operation. Incidents of power loss would lead to slow services to consumers. The situation has to balance the needs of the consumers and provisions that broadband company acquires from other providers (Baldwin, R. et al. 2010:87). The relationship has to ensure that the organisation will be providing its services without interrupting the interest of the consumers. The regulations must be able to address complains of consumers who feel the service provided has messed their business. Telecommunication policies in the past addressed penetration modalities thus influencing operation of the service providers (Jordana, 2002:125). Protection of the pre existing operators may infringe the introduction of the new operator (Ofcom, 2008:14). The idea is to elevate the pre existing regulations to accommodate changes in the sector. This would allow new providers to come in and do their businesses. Sometimes government might restrict operations in a particular venture because of the sensitivity it has to the economy or security of the nation (Mueller, 2010:130). However, policies influencing such operations must stipulate how to handle interest of independent providers in the industry. The government interest is to influence the public good and to balance between emerging issues. In conclusion, regulations provide framework used in conduction operations within a given environment. The idea behind instituting policies in the market is to promote competition and provision of quality services to the consumers. The concern of regulation is to enhance growth while addressing issues, which will influence initiation of infrastructure in the market. New generation broadband would influence the existing businesses because of its mode of application and its target for customers. Initiating a regulatory body would influence efficacy of service delivery as well as satisfaction of the consumers. Markets without regulation may promote the interest of a single provider, thus promoting susceptibility to consumer exploitation. Healthy competition entrenched through proper regulation enhance consumer satisfaction and provider satisfaction because of the level ground created for handling the business. Regulation in the industry would change the system employed in service delivery. Bibliography Baldwin, R. et al. 2010. The Oxford Handbook of Regulation, Oxford: Oxford UP Borrus, S. 2003. The Innovation Policy of the European Union, Cheltenham: Edward Elgar Publications Hardy, J. 2008. Western Media Systems, London: Routledge Jordana, J. (ed.) 2002. Governing Telecommunications and the New Information Society in Europe, Cheltenham: Edward Elgar Publications Mueller, M. 2010. Networks and States: the global politics of internet governance, Cambridge, Mass.: MIT Press Ofcom. 2008. Next Generation New Build. Available from http://stakeholders.ofcom.org.uk/binaries/consultations/newbuild/statement/new_build_statement.pdf [Accessed 12 April 2012] Pietrunti, M. 2008. Regulation and investment incentives for next generation broadband access networks. Available from http://www.itseurope.org/Pietrunti_Regulation_and_investment_incentives_for_next_generation_broadband_access.pdf [Accessed on 12 April 2012] Read More