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Samarajiva and Shields (1990, p. 229) argues that decisions about resource allocation in telecommunications are value-laden, where the 'interests of the potential beneficiaries may be articulated through their representatives in government or may be represented in the policy arena by third parties such as aid organizations or consultants'. Indeed, when policy makers and regulators around the world look at telecommunication regulation, they have in their mind certain judgments of what is good and bad for those who are in the parlance of our field 'traditionally underserved'. In this review chapter, we discuss some of the regulatory and policy implications of the findings of the work in this book. Specifically, we elaborate on the task of the regulator with relation to what users—the potential beneficiaries of regulation—want.

Learning about what users do with communications technologies ensures that regulation does not stray too far from the social activities it seeks to direct. Users are the most unpredictable group of technologists. Indeed, there is a small but influential body of research in the social study of technology that looks at users as the determinants of technology success (for example, Cowan 1990). In his work on the social history of the telephone, Fischer (1992, p. 21) employs a 'user heuristic' to 'discern how the average user reacted to and employed the technology'. von Hippel (2001) has suggested that user communities innovate and develop new products and techniques independent of involvement by traditional producers. In colloquial wisdom this concept finds expression in the adage that 'the customer is king'.

The question for us is how does the use of technology relate to its regulation? We contend that this is a central question when thinking about policy and regulation. Indeed, this is an especially important question when we think about connecting the next billion—the consolidated goal of many universal service or telecommunications development policies around the world.

THE PUBLIC INTEREST

Most regulators and policy makers seek to act in the public interest. The 'public interest' itself is a nebulous concept, with many contending that it acts only as a mask for actions taken in the private or self-interest (Horwitz, 1989, pp. 22–23; Levine and Forrence, 1990). Noting these discussions, we will use this as the starting point for our brief examination of regulation, supposing that the public interest means giving users of communications technologies what they want, without impinging on the rights of other users.¹

According to this definition, regulators and policy makers will have to know what users want. However, as Fischer (1992) and this volume show, it is difficult to predict what communication technologies will ultimately be used for. Hence, the users' wants will not find expression until the time that they can actually use and experiment with technology. This is where the regulator's job becomes difficult—it is not practical, from the standpoint of ensuring credible commitment or minimizing regulatory risk, to wait until a technology has diffused sufficiently for people to know how they want to use it.

In order to balance the public interest by giving users what they want, with the need to ensure a stable and predictable regulatory environment, it is essential that regulators learn from experience and create, more than specific rules, the right regulatory environment within which technologies can diffuse, and where innovation—whether by users or producers—can flourish.

WHICH USERS?

A concern with the definition of the public interest is to define exactly which users we look at (or not) when we make policy. In the context of development, it is also important to include, as this book has, non-owners (Chapter 2) to understand how they can be brought into the fold of the 'haves' of the information age. In this determination, we segment users into two groups: one is those who can influence directly the development of telecom infrastructures and services. The second is those who cannot—what we call the underserved, marginalized, or outsiders. In this, it is important to understand that the second group can influence telecom development, but not directly.

The first group includes business users, who have had tremendous influence in the development of infrastructure and services (Schiller, 2000). Another part of this group is high-end users—both high-revenue and 'high-tech'. As Castells (2000, p. 72) pointed out in his epic study, networks connect valuable places. Thus, users 'at the top of the pyramid' will find service following them. The second group includes users who the first few chapters in this volume identify as those at the 'bottom of the pyramid'. In some cases, these users follow services—going to community or shared telephone or Internet connections, while in other cases, these users do not need or find a use for Information and Communication Technology (ICT) services. Within this broad segmentation, there are further segments of users—and in fact, there are an infinite number of characteristics and needs. Yet, it is possible for regulators and policy makers to look at data like that provided in this volume and make decisions, even if value-laden, about where they need to invest time and effort. Regulators in developing nations need to invest significant time and effort on the second group of users.

REGULATING USERS THROUGH TECHNOLOGY REGULATION

A regulator has to deal with both supply- and demand-side issues. On the supply-side, telecom regulators are involved in three fundamental types of issues: interconnection, resource allocation, and revenue management. On the demand-side, however, the task of the regulator is typically indirect, especially since there is no way to order users to do something. However, as Chapters 8 and 9 argue, there are market efficiency and access gaps that regulators typically seek to overcome. The regulator can, through control on the supply of ICTs, ensure that telecom services reach the underserved (universal service), that they are affordable (subsidies), or have some minimum standard (quality of service and interconnection).

To return to our earlier question, it is now important to consider how regulation and use of technology connect. Let us consider the case of supply-side regulatory control of revenue management, and the specific regulation on the calling party pays (CPP) and receiving party pays (RPP) regimes. Chapter 2 discussed how an RPP regime results in people avoiding incoming calls. Going back to the earlier days of the telephone, in 1881, the National Capitol Telephone Company complained to AT&T that flat rate pricing of calls had 'led to the transmission of large numbers of communications of the most trivial manner' (Fischer, 1988, p. 48). Today, as Chapter 1 finds, these trivial social conversations are the 'second most important use of telephones'. Our point here is simple: the regulation of technology constrains and conditions its use. However, the lesson from this is very powerful and often overlooked—that regulators can effectively change the fortunes of technologies, and we need to be careful in our actions.

Another popular and instructive example is the success of Wi-Fi. As Bar and Galperin (2004, p. 53) point out, the success of Wi-Fi is partly due to of the lack of regulatory overhead, especially in that the technology used unlicensed spectrum. Neto, Best and Gillett (2005, pp. 73–90) surveyed license-exempt spectrum in Africa and found that 'the significant diversity in regulations across the continent inhibits economies of scale and may discourage large entrants. Furthermore, the lack of clarity and enforcement discourages innovation and small entrepreneurs.' We, thus, cannot expect African wireless entrepreneurs to spring up as community wireless projects and entrepreneurs have mushroomed in the USA, UK, and elsewhere (Neto, Best and Gillett, 2005, pp. 73–90). The absence of regulation of spectrum, which is a resource allocation choice (Raja and Bar, 2003), has directly resulted in users' innovations relating to Wi-Fi technology in ways not initially planned (Sandvig, 2004). These and other examples illustrate how understanding use can ensure that regulators make better policy.

REGULATION FOR THE NEXT BILLION

In an earlier section we noted that regulators are often interested in users who are 'traditionally underserved'. Here, we will tie the different threads developed in this review chapter to arrive at some conclusions that will be useful for regulators to keep in mind when making or suggesting policy, or making rules for the ICT industry.

A key take-away for us from the social study of technology is that users matter—not just as users, but also as producers and innovators. They often will take a technology that was supposed to do one thing and turn it into something completely unexpected. If the public interest involves giving consumers what they want, regulation and policy should allow such innovation and production, and accommodate it in the development of technology. Of course, users are often unable to change the technical system of an ICT infrastructure. A recent exception is the diffusion of Wi-Fi community networks. Yet, the majority of user innovations might involve changes in use and not structure, like making a business technology such as the telephone into a social communication tool.

Innovation often challenges regulatory structures. From the innovation of the radio-to-phone, Carterfone, ultimately leading to the break-up of Ma Bell (Brock, 2003), to Skype in the Internet age, and Wi-Fi in a liberalized spectrum management environment, new technology has not only brought benefits to users, but has led to paradigm shifts in regulation and law. In a recent statement, the Hong Kong telecom regulator (OFTA) wrote that the regulator was not in favor or against convergence, but wanted to create the right conditions for market forces to play out and allow the smooth introduction of convergence as and when the market demanded it (Au, 2006). Such forward-looking action by regulators can ensure that innovation is not perceived as a problem or a 'disruptor' as much as an expression of both producer and consumer desires.

With respect to regulation for the next billion, this volume has significant findings that throw light on how users and non-users who form part of the next billion use ICTs. First, shared access is an important means of access. Communities are able to support ICT services better than lower income individuals and form a more attractive collective revenue source for service providers. The success of the public call office and village public telephone programs in India, recorded in Chapter 1, indicates that these modes of access are valuable in bridging the 'access gap'.

Innovation is getting more attention from policy makers around the world. Given the use of converged IP technology to provide a range of services, and with end-to-end networks now in place, users and technologists are able to develop and quickly deploy new and interesting technologies to better serve their needs and requirements. Such decentralization of innovation is apparent in the moves made in many countries towards spectrum-as-commons regimes, the debates on open network access, and the increased use of open source software to control and use media. These developments alter greatly the mechanisms of control of technology. Regulators need to recognize that technology is now open to decentralized innovation—often leading to benefits for users. Innovation will come through in a competitive and incentive-structured environment, where innovators will benefit, monetarily or otherwise, from their creativity.

A regulatory environment that allows entrepreneurship, flexibility, and competitive behavior will bring to all users—within and without ICT networks—the best possible services that serve their needs, and hence the public interest, the best.

NOTE

¹ This is an approximate Pareto-optimal definition—the public interest will be maximized when the sum of all users' utilities is maximized without harming other users' utilities.

REFERENCES

Au, M.H. (2006). On 'Fixed-Mobile Convergence' Again. Retrieved October 14, 2007, from http://www.ofta.gov.hk/en/dg_article/au_articles/20061112.pdf

Bar, F. and Galperin, H. (2004). Building the Wireless Internet Infrastructure: From Cordless Ethernet Archipelagos to Wireless Grids. Communications & Strategies, 54(2), p. 53.

Brock, G.W. (2003). The Second Information Revolution. Cambridge, MA: Harvard University Press

Castells, M. (2000). End of Millennium. Oxford: Blackwell Publishing.

Cowan, R.S. (1990). The Consumption Junction: A Proposal for Research Strategies in the Sociology of Technology. In W.E. Bijker, T.P. Hughes and T. Pinch (Eds), The Social Construction of Technological Systems (pp. 261–280). Boston: MIT Press.

Fischer, C.S. (1988). 'Touch Someone': The Telephone Industry Discovers Sociability. Technology and Culture, 29(1), p. 48.

Fischer, C.S. (1992). America Calling: A Social History of the Telephone to 1940 (p. 21). Berkeley CA: University of California Press.

Horwitz, R.B. (1989). The irony of regulatory reform: The deregulation of American telecommunications (pp. 22–23). Oxford: Oxford University Press.

Levine, M.E. and Forrence, J.L. (1990). Regulatory capture, public interest, and the public agenda: Toward a synthesis. Journal of Law, Economics, & Organization, 6(2), pp. 167–198.

Neto, I., Best, M.L. and Gillett, S.E. (2005). License-Exempt Wireless Policy: Results of an African Survey. Information Technologies and International Development, 2(3), pp. 73–90.

Raja, S. and Bar, F. (2003). Transition paths in a spectrum commons regime. Paper presented at Telecommunications Policy Research Conference, September 20, 2003, Arlington, Virginia.

Samarajiva, R. and Shields, P. (1990). Value issues in telecommunications resource allocation in the Third World. In S. Lundstendt (Ed.), Telecommunications, Values, and the Public Interest (pp. 227–253). Norwood NJ: Ablex.

Sandvig, C. (2004). An Initial Assessment of Cooperative Action in WiFi Networking. Telecommunications Policy, 28(7/8), pp. 579–602.

Schiller, D. (2000). Digital Capitalism: Networking the Global Market System. Boston: MIT Press.

von Hippel, E. (2001). Innovation by user communities: Learning from open-source software. MIT Sloan Management Review, 42(4), pp. 82–86.

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