Stephen Temple

I have always been a passionate believer in common technical standards for our public telecommunications networks. I am not the first to press the cause of public standards. In 1215 the barons of England forced on the wicked King John a clause on standards in the Magna Carta – only in those days it was not proprietary technologies but proprietary weights and measures short changing the masses.

Public standards of national infrastructures are demonstrably in the consumer interest. In mobile radio they create economies of scale that puts mobile handset prices within reach of the largest number of people. They make the network services more competitive – as customers can switch service provider without having to change their mobile phones. It also makes the networks much more useful for consumers and business people alike, when they go abroad. It also creates the most ideal conditions for 3^rd party application developers in only having one set of development costs and the largest possible market. It is a win for nearly everybody and maximises the economic benefits.

It is therefore all the more surprising that, in the 1990′s governments and regulators right across Europe bought into the belief that networks standards should be left “to market forces”, “fragmentation” equalled “consumer choice” and its was somehow a regulatory virtue to embrace “technology neutrality”.

This has led to the emergence of a particular version of European capitalism being applied to the European mobile radio market that was a hybrid mix of non-intervention in technical standards but strong intervention in the market industrial structure.

What has driven this hybrid model is the belief that, somehow, market forces always delivered optimal outcomes and one can never have too much of a good thing in terms of network competition.

But in arguments I have had with regulators, other strong reasons for this conviction have emerged.

The most significant of these is risk aversion. Every regulator I have argued with speaks with conviction that the industry is better informed to choose network technologies. Hard on the heels of this comes the view that, as regulators, they are more likely to make the wrong choices. I have set on both sides of the fence at senior positions and frankly it is no easier to see the future sitting in the Civil Service or sitting in the Corporate Headquarters of a large enterprise. In fact I was probably better informed when I was in the DTI as I had the trust of all the competitors and they were telling me things that they were not telling each other.

But the biggest single difference I found between working in the government service and in the private sector was the attitude towards risk. There were very concrete reasons for this. In the private sector a company is ultimately judged by making a profit. Many things can go wrong but providing even more things are going right and a net profit is delivered – the market is usually forgiving of error. In the public sector every single error is picked up and is ammunition to be used by the media and opposition parties to attack the government and public officials. The government is being judged by its errors and the private sector is being judged by getting enough things right. It is therefore understandable that when an economic guru comes along with a vision that governments/regulators should not be taking responsibility for the technical standards of public networks but leave it to market forces – the message would come as a welcome relief and cherished as a virtue.

Once this belief in market forces had been established the approach becomes solidified as those adept in economics and price regulation tends to be recruited into top policy positions and engineers find themselves pushed to the fringes of policy development.

This lack of technical expertise then feeds a deep misunderstanding of the difference between “a technology” and a “technical standard”.

GSM is a technical standard but only of the essential interfaces and broad capabilities. This almost certainly will discriminate between broad technology solutions at the level of compatibility at the essential interfaces.

But at the same time a GSM network or mobile phone can then be implemented by a wide variety of different technologies at the level of implementation. This fact tends to erode away the differences between broad technical solutions with the passage of time as further iterations of the respective technologies tend to converge.

Even at this level of competition – there is even fiercer competition between the technology companies where a common technical standard has been imposed, as there is no proprietary technology “lock-in” barriers to hide behind.

My case is that Governments/Regulators should be promoting common technical standards for the essential interfaces and broad capabilities of national communications infrastructures. After all these technical standards define how good the network is that a country finishes up with for the next 15 years. Where market forces are getting out of hand and tearing away at these common technical standards there is a justified case for regulation to impose these common technical standards. A consequence of this is to take some responsibility to ensure fair conditions for private intellectual property rights caught up in those public technical standards.

Where governments/regulators can get relief from having to choose between technologies is to leave that choice to industry standards bodies – providing they deliver a clear and timely choice and resolve fair conditions for IPR. There is still space in this regulatory vision for “technology neutrality” and that is neutrality in how a technical standard is implemented.