OII SDP 2007 (XXXIV): The End of Core: should disruptive innovation in telecom invoke discontinuous regulatory response?

Student research seminar: Chintan Viashnav

In a highly abstracted conceptualization, both the public switched telephone network (PSTN) and the Internet consist of two components: the end-devices and the network that connects them. Traditional telecommunications regulation has assumed the presence of a network core that could be engineered to fulfill regulatory goals as well as a vertically-integrated industry structure that could meet regulatory obligations. In my dissertation, I propose to take the case of Voice over Internet Protocol (VoIP), the technology that enables voice communications over the Internet, and argue that disruptive trends in technology are eroding the control in the core that was traditionally possessed by network designers and owners. This eroding control in the core has the potential to render the current VoIP regulation inadequate and unsustainable, requiring that future regulatory response be discontinuous from that of the past. This study uses a system dynamics model to study the dynamic complexity surrounding the current VoIP regulation and to understand policy options for preventing undesirable outcomes. The model consists of four sectors: the consumer adoption sector for modeling demand, the industry structure sector for modeling supply, the regulatory compliance sector for modeling the level of compliance, and the innovation sector for modeling innovation trends.

Current regulatory response to VoIP (goals)

  • Public Safety
  • Law Enforcement Capability
  • Equal opportunity
  • Economic Development
  • Competition

Of those five traditional aspects, just the two first are really developed. Disruptive trends such as VoIP erode assumed control in the core. With eroding control in the core meeting regulatory objetives will increasingly require regulatory responses discontinous from the past.

The functionality is dispersing to the end-deivde,k at the ownership of the Core (who’s in charge of guaranteeing the procedure of the communication) is fragmenting.

The End of Core can cause

  • Regulatory misalignment, and thus
  • Inefficiency in achieving regulatory compliance
  • Regulatory capture by new players
  • And may require discontinuing access-centric regulatory thinking… and understanding the value chain
  • Circum-innovation, and thus
  • arms race between proponents of compliance and non-compliance
  • And may require discontinuing command-and-control regulatory thinking… and understanding a collaborative model of regulation

System Dynamics Model: when a desired regulatory compliance takes place, circumvention actinos seem to wider the existing compliance gap. How to control the whole system?

More Info

SDP 2007 related posts (2007)

If you need to cite this article in a formal way (i.e. for bibliographical purposes) I dare suggest:

Peña-López, I. (2007) “OII SDP 2007 (XXXIV): The End of Core: should disruptive innovation in telecom invoke discontinuous regulatory response?” In ICTlogy, #46, July 2007. Barcelona: ICTlogy.
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About Me

    I am Ismael Peña-López.

    I am professor at the School of Law and Political Science of the Open University of Catalonia, and researcher at the Internet Interdisciplinary Institute and the eLearn Center of that university. During 2014 I am also the director of the Open Innovation project at Fundació Jaume Bofill.