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Friday, July 10, 2015

Telecoms Regulation and the mythical "Level Playing Field": A Flawed Analogy

Much of the recent discussion around telecom regulation, especially in the EU, but also the US, India and elsewhere, has been about the idea of a "level playing field". This is typically used in discussions about the role of telcos vs. the so-called "OTTs". The usual story is that telcos are subject to rules (eg on interoperability or emergency-call support) that Internet application providers are not.

There's just one glaring problem.

There is no "playing field". It cannot be "level", because it does not exist.

It's a flawed and misleading analogy, intended to set the frame of debate and discussion. It's a duplicitous move by (mostly) telecom industry lobbyists, to redefine the regulatory arguments in their terms.

Analogies are important. They can be hugely informative, or hugely misleading. They direct our thoughts, and can sometimes make an argument much easier to understand - but they can also distract and mis-direct our thinking.

I recently read a fantastic book by John Pollack called "Shortcut: How Analogies Reveal Connections, Spark Innovation, and Sell our Greatest Ideas". (I'm also now reading "I Never Metaphor I Didn't Like" by Dr. mardy Grothe).

So here, the analogy with a playing field contains a fundamental error - playing fields are where two teams meet, to play a common sport. You want a level playing-field so that one side isn't advantaged by the slope of the pitch.

But if the two teams are playing totally different sports, the flatness of the pitch is really not very important. 

If a polo team turns up against a rugby squad, or a cycling peloton vs. a swimming team or a lone golfer, the idea of a “playing field” is obviously ridiculous.

This is the case for much of the telecom vs. Internet discussion. SnapChat and Instagram are not playing the same sport as each other, or SMS. Skype doesn’t really map onto phone calls well either. Netflix isn’t playing the same game as the BBC. Google isn’t playing the same sport as anyone.

The levelness – or bumpiness – of the “playing field” is a useless analogy. It is becoming manipulatively used to try to push regulators towards the ideas of mandated interoperability, emergency-call support and so forth.

It’s basically the Football Premier League trying to convince the world’s sports authorities to forcce rugby, American Football, tennis, hockey and beach-volleyball to all use the same size & shaped ball as them. It’s Bernie Ecclestone trying to get F1 rules applied to rallying and Nascar.

A much better analogy would be to try to get telecom regulation to work along the lines of the Olympic ideals and principles – fair play, mutual respect, and a focus on outright excellence, but with appropriate checks and monitoring. Those ideals can apply to all sports, with each specific one having its own set of rules.

The fragmentation of voice, video and messaging into diverse applications, and especially their shift to being features embedded in other apps/websites, means that “voice” is not a singular sport. We already know that messaging isn’t homogeneous, because we’ve had diverse forms for many years.

Trying to assert a “level playing field” between telephony, Skype, Talko and 1000 new WebRTC-powered apps is a completely flawed use of analogy. We can define some common Olympic-style principles (eg around privacy), but the notion that a pre-defined standard approach should be some sort of “baseline” for other proprietary modes of communication is ridiculous.

To use an extreme example, consider a mobile karaoke app. It is clearly about "voice". But equally, it is clearly not a "phone call". Same for a medical diagnostic app using breathing patterns, or a push-to-talk collaboration function in an oilfield-maintence worker's system. Walkie-talkie systems for security guards, a co-browsing tool for grandparents and children to read a book together from a distance, or any number of other applications are NOT the same "sport" or using the same pitch/field/velodrome/pool as phone calls.

Is there some overlap in use-cases? Perhaps. But that's more a function of telephony being a one-size-fits-all tool. Does a Swiss-Army knife have functional equivalence to a sushi-chef's knife?

The myth of the "Level Playing Field" needs to be expunged from current EU thinking on the Digital Single Market, especially with regard to communications applications. There are some valid areas where "levelness" is important - security, for example - but the majority of  the telcos' inputs (eg on interoperability or the spurious "platform neutrality") are self-serving irrelevance.

Pick your analogies more accurately, and you get the right to lead opinion. Pick flawed analogies, and you deserve to be viewed with suspicion that you're trying to muddle the debate.

(A few other telecom analogies are awful too - "dumb pipe" is completely wrong, and "over the top" invokes images of dominance/power that are false too. "Delivery" and "Distribution" applied to data are nonsensical - there is no equivalence with physical goods being shipped. Even "neutral" is questionable).


Anonymous said...

All well n good, but you completely ignore the fact that these so called OTTs substitute the core telecom services thus eating in to their revenues. To quote your analogy, fan of Premier League is completely different than a fan of American Rugby or whatever!

Having said that, its Telcos fault not recognizing OTTs as threats early days (look whats happening at traditional taxi industry because of Uber!) and workout their pricing models accordingly - some markets have done it successfully and kind of immune to OTT penetration, its very market specific!

On the other hand - over regulating OTTs hinders innovation. That's where regulators should play the role which so far no regulators have done anything about it.

End customer is winning, that's all matters now!

Dean Bubley said...

No, in most cases they don't directly substitute or even intentionally compete.

For instance, Whatsapp is functionally different to SMS in many ways (eg "last seen online", blue ticks etc), and is optimised for group chat. iMessage is a more direct equivalent, although that too has been hugely enhanced since its first introduction and can now do many other tasks.

The problem is that the so-called "core telecom services" were old and near-obsolete, with virtually zero effort expended to improve them incrementally over the years. SMS and telephony have been sitting ducks, or dead men walking. (See? Analogies are powerful...)

Why should regulators protect laziness & complacency?

InfoStack said...

There are immutable and standard laws and objectives that all of these (should) abide by. To the extend software is different from hardware, or edge from core, or upper layers from lower layers, yes, there are differences. And how they are perceived from a supply and demand perspective, there are differences. (I would say that your article appears slanted more to a supply than demand perspective).

But how information flows from top to bottom (and vice versa) and left to right (and vice versa) in the "informational stack" ends up holding all actors to these same standards and objectives. Things like transport and access, things like addressing and controls, things like pricing and onboarding. At the end of the day all of these "different" players are all impacted by these issues in one way or another.

The playing field is leveled when the government regulators understand their role in mandating interconnection (at various horizontal layers and across vertical boundaries) and guiding/fostering market-driven settlements that recognize that universally inexpensive access should be a goal taking into account that value in networks is concentrated at the core and the top of the informational stack. The only reason we have edge monopolies (silos) is that we don't have mandated interconnection when it comes to unique rights of way (and frequencies). The reason that we have core monopolies is that the IP stack replacing the PSTN has no price signals and incentives.