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Vested interests can impede progress

20 January, 2016 - 15:30

Every nation enacts laws and policies regarding communication and information technology. The vested interests of telephone, cable TV, and media companies and government agencies influence this policy. Political considerations are often more important than technological considerations.

For example, repressive governments face a “dictator’s dilemma” in that free and open communication is important for the economy, but can undermine a regime, and, to some extent, all governments curb open communication. Many nations take steps to filter information coming in and out and restrict access to computers and the Internet. This may have to do with maintaining political control or with enforcing cultural norms, for example, against pornography. The Open Net Initiative monitors government Internet filtering, as shown in the following map.

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Figure 7.20 Government Internet filtering levels 
 

Incumbent telephone companies and telecommunication ministries may fear a loss of revenue. For example, telephone companies and ministries have traditionally received significant income for completing international calls, but calls between two Internet-connected computers are free, and international calls routed from the Internet to a standard telephone cost only a few cents a minute. Those who stand to lose from such improvements often lobby against new competition.

For example, in 1996, the United States passed a Telecommunication Act designed to increase competition. William Kennard, chairman of the United States Federal Communication from 1967-2001 was charged with implementing the act. Near the end of his term, he expressed his frustration that “all too often companies work to change the regulations, instead of working to change the market,” and spoke of “regulatory capitalism” in which “companies invest in lawyers, lobbyists and politicians, instead of plant, people and customer service” (Kennard, 2000). He went on to remark that regulation is “too often used as a shield, to protect the status quo from new competition - often in the form of smaller, hungrier competitors -- and too infrequently as a sword -- to cut a pathway for new competitors to compete by creating new networks and services.” 1

Incumbent wireless communication companies – radio and television stations and cellular operators – lobby to keep their licenses to broadcast at specified frequencies in a geographic area. These spectrum licenses are valuable assets for their owners, but the rapid growth of WiFi would not have occurred if it did not use license-free radio frequencies. The current licensing regime is based on old technology. Modern radios are able to switch transmission modes to avoid interference, but to take full advantage of those advances, we will have to overcome vested interests and open more license-free spectrum.

Internet resource

Bill Moyers’ Public Broadcasting System documentary The Net at Risk illustrates the conservative impact of organizations with vested interest in the United States.