Tuesday, October 27, 2009

Politics and ICT Policy

This week's readings, chapters from Cowhey and Aronson's book Transforming Global Information and Communication Markets: The Political Economy of Innovation, offered a unique perspective on the roles of public policy and global market governance in the diffusion of ICTs, especially in developing countries. I appreciated the historical context ventured in the first chapter, "The Next Revolution in Global Information and Communication Markets." The authors state the essentiality of politics and policy in communications infrastructure--as we know from previous readings and discussion, national governments used to play a prominent part in that infrastructure. But thanks to the ascent of a more global, and more civil-based, society, communications infrastructure has been partially transferred to the private sector. However, governments do not want to be forgotten in this trend toward privatization and still have a hand in affecting ICT policy. As the authors state, "Some economists decry most government regulation, but the politicians' romance with intervention is (to borrow a phrase from Cole Porter) here to stay."

The authors provide some possible explanations for politicians' views on that intervention in Chapter 5, "The Political Economy of the Inflection Point." The main reason is that the United States has been, and will continue to be for the foreseeable future, "the pivot of this inflection point," and truly drives the agenda in the global ICT market. In 2000, when the Republicans captured the White House as well as both houses of Congress, they were well aware of this fact and of the rise of broadband services worldwide--and of the American lag in said broadband services. They took steps to pressure the FCC to adopt a leadership that would be more conservative (read: laissez-faire) on ICT economic intervention. Republicans argued that this policy plus others, such as scaling back regulation of the Bells' broadband networks, would promote market growth and investment. Of course, this hands-off approach also matched the GOP's national platform, as part of politicians' efforts to please their constituencies and attract revenue to the ICT market.

When the Democrats took control of Congress in the 2006 midterm elections, they pursued their own version of "the long-standing propensity in the US for policies favoring easier market entry." They just went about it in a different way, of course--one that matched their own national brand of more government regulation, in the form of net neutrality. According to the authors, net neutrality imposes price controls on broadband access and services and is "a government program to promote modularity." When AT&T sought to merge with BellSouth in 2006, the Democrats on the FCC made sure net neutrality figured into the negotiations in a big way: they made AT&T promise to maintain it by providing fixed-rate broadband service for 30 consecutive months after the merger. The authors express curiosity at what could happen after the 2008 elections; while ICT policy has not been a huge priority of the Obama administration so far, it will be interesting to see how net neutrality and FCC policy changes affect the landscape of broadband and other technology in the US. Whatever their policies, both sides of the political divide understand that in the world we live in, power on a global scale is to be found in the ICT market, and they all want a piece of the pie.

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