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On 27 March 2007, Ofcom released a statement setting mobile voice call termination charge controls for the next four years. These new charge controls replace charge controls set to expire 31 March 2007. The previous charge controls had been set for 1 September 2005 to 31 March 2006, but then had been extended for additional year. The previous charge controls had been subject to a lengthy, contentious appeal and a revision that eliminated separate control across rather different types of competitors (fixed-mobile termination vs. mobile-mobile termination). In conjunction with issuing the new charge controls, Ofcom began considering revising those controls in view of the impact of indirect routing for mobile number portability on the effective termination charge.

Inter-carrier compensation issues are quite difficult for regulators. Ofcom's recent call termination statement comes about two years after Ofcom initiated formal consideration of new charge controls through publication of a document entitled Wholesale mobile voice call termination -- a preliminary consultation (7 June 2005). Following that preliminary consultation were two other consultations, Wholesale mobile voice call termination -- market review (30 March 2006), and Mobile call termination -- proposals for consultation (13 September 2006).

Economic formalisms seem to constrain Ofcom's ability to do sensible policy analysis. European Commission recommendations urge national regulatory authorities to define, "in accordance with the principles of competition law," a relevant "market" for regulatory action to be "voice call termination on individual mobile networks" (see Framework Directive 2002/21/EC, Article 15). Ofcom carefully considered Significant Market Power (SMP), Countervailing Buyer Power (CBP), a "two-sided market" (that's not meant to be a duplicative description; it's an organization of transactions currently attracting attention in leading economic and business analysis), and a variety of other concerns of the type typically raised in competition cases. In line with EC recommendations, Ofcom then concluded:

There are separate markets for the provision of wholesale mobile voice call termination in the UK to other Communications Providers by each of Vodafone, O2, Orange, T-Mobile and H3G. (paragraph 1.10)

Ofcom deserves respect and appreciation for collecting considerable data and examining in detail the structure of mobile voice services and businesses. However, defining as "markets" individual companies' mobile voice call termination services is conceptually absurd. Such "markets" are by definition "monopolized" by the company with respect to which they are defined.

Competition law should not be allowed to obtain a dominant position in communications policy analysis. A well-established, highly competitive symbolic market for legal and regulatory claims exists within the framework of competition law. That market spurs economic growth for lawyers, economists, regulatory affairs departments, technical consultants, etc. For more inclusive economic development, communication regulators should consider interconnection rules in relation to broad economic development goals.

Having communication service providers earn a large share of their revenue from basic voice communication is likely to impede growth in broadly capable networks and innovative communication services. Ofcom's charge controls set mobile voice call termination rates about 5 pence per minute through 2011. Consider those charges with respect to some real-world communications development goals. Vermont, for example, is pursuing the goal of having for everyone, everywhere state-wide symmetric mobile data service of at least 3 Mb by 2010, and at least 20 Mb by 2013. Such development could easily support zero-price mobile call termination charges. On the other hand, if zero-price mobile termination charges would cause a major loss in revenue to mobile service providers, such charges are much less likely to occur. Through both regulatory lobbying and large expenditures on marketing and promoting, communications service providers can sustain prices with little relation to economic and technical aspects of reality.

Requiring communication providers who offer voice communication to accept voice communication from others at no charge to those others would help to deflate revenue from basic voice communication. One technical description of this sort of interconnection regime is "bill and keep". Discussion of bill-and-keep has tended to focus on inter-carrrier compensation (pie splitting or money-routing) rather than on more important issues of industry structure. Regulation of mobile voice call termination rates has much broader implications for communication service users than pass-through of termination rate reductions or the particular circumstances of mobile voice calls. Regulation that supports per minute pricing of voice communication through the year 2011 does little to foster important communications possibilities that are already clearly visible.

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Government printing jobs have contributed significantly to the development of the printing industry. In North America from 1640 to 1790, printed government documents probably accounted for about 30% of printed documents considered to have enduring significance. In the U.S. at the end of the twentieth century, the number of titles that the Government Printing Office issued was equal to about a quarter of the total number of new books and new editions that other printers published. Other countries have probably had an even higher share of government publications. Government printing contracts are typically highly sought for the stable and predictable demand they provide. In addition, government documents have had a distinctive role in the evolution of copyright.[1]

Like print communication about government proceedings, video communication about government proceedings is intimately related to the functioning of democracy. In a letter to U.S. House of Representatives Speaker Nancy Pelosi, Carl Malamud stated:

Based on 25 years of experience in the field of computer networking and a 2-year investigation of this specific issue, I have absolutely no doubt that it is technically and financially feasible for the U.S. Congress to provide a permanent broadcast-quality video record of proceedings and hearings for download on the Internet. Technically speaking, this is a “no-brainer.” This is simply a matter of will.

Adopting a goal that by the end of the 110th Congress, the U.S. House of Representatives will offer broadcast-quality video of the floor and all hearings for download on the Internet is a reachable goal and one that will set a standard for transparency and openness. Your leadership in embracing this goal would set an example for all branches of the federal government, indeed for all governments here and abroad. If a hearing is to be considered truly public, the public has to be able to see it, both now and forever. I encourage you to adopt this standard as a goal for the 110th Congress.

The Government Printing Office (letter) and C-SPAN (press release) (after some controversy) have recognized the democratic importance of making video of government proceedings more widely available. E-government initiatives have tended to focus on information provision and electronic transactions. Video is not necessary for either. Video, however, is a powerful mode for attracting attention and creating a sense of personal relationship between government representatives and citizens. Thus politicians are typically keen to gain access to television, and political campaign fund-raising in the U.S. primarily serves to provide money for buying television time.

Expanding government video production can foster more capable and less costly video distribution networks. As Malamud explained in a Google Tech Talk, his proposal would make about 50 hours per day of original Congressional video available to the public. That large video source could serve as a testbed for the development of annotation technologies and might help to move along multicast capabilities for the Internet. Moreover, when potential state and local government video sources are added to federal sources, government video could amount to a significant share of video on the Internet. Government video might become as significant in the development of video communication as government printing has been in the development of print communication.

Related News: The U.S. General Services Administration (GSA) recently established a new communications contract for voice, IP, wireless, satellite and IP-centric services for the federal government. The GSA estimates that the over-all federal contract, called Networx, has a value of $20 billion across ten years.

Note:

[1] The North American Imprints Program (NAIP) provides a database of items that were printed from 1640 to 1790 and preserved in American libraries. In a categorization of these items, the largest five categories, with percent of total records, are: government printing (30%), sermons (13%), almanacs (8%), poetry (5%), and juvenile/schoolbooks (5%). These statistics exclude records for booksellers' advertisements, subscribers' lists, playbills, and sections of books (analytic records). Printing statistics based on page counts, or page area, produce different values, but that government printing was significant for the printing industry is clear. See Amory, Hugh (2000), "Appendix One: A Note on Statistics," in Hugh Amory and David D. Hall, eds., The Colonial Book in the Atlantic World (New York: Cambridge University Press). For the late twentieth century statistic, see Galbi, Douglas (2001), "E-Government: Developing State Communications in a Free Media Environment" p. 2. In the U.S., federal government documents are in the public domain (no persons holds copyright to them). Moreover, a case concerning U.S. federal court reports settled the statutory basis of copyright. See Wheaton v. Peters (1834).

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About the year 2001, 40% of persons in the world lived in countries where there was less than one fixed-line telephone per hundred persons. Good radio regulation can help to foster rapid development of communication capabilities for many persons around the world.

Björn Wellenius and Isabel Neto of the World Bank recently posted a paper, The Radio Spectrum: Opportunities and Challenges for the Developing World. I hope this important topic gets more attention in development economics.

Update: Check out this very impressive website and book on Wireless Networking in the Developing World.

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