They Aren't Exciting, But Regulators Matter

Carl Weinschenk

For most people, reading regulatory documents is about as much fun as jury duty or a root canal.

The reality is, however, that there are big bucks at stake. The future of convergence will be shaped to a higher degree than many people realize by decisions made by regulators at the local, state and federal levels. Indeed, convergence, which often involves combining applications and technologies that have evolved in different ways and have conflicting regulatory histories, runs the risk of particularly tough scrutiny.

Battles are raging on a number of levels. They just don't get much attention because of their tendency to make most people's eyes glaze over. For instance, the Missouri Public Service Commission and Comcast are battling over what approvals are needed to offer VoIP services. The state claims that Comcast is improperly offering local and long-distance services. Comcast says that the Federal Communications Commission (FCC) is still deciding how to regulate VoIP and, in essence, the situation is on hold for the time being.

The problem for Comcast and companies like it is that requirements that force it to satisfy different criteria in different places can cut much of the efficiency out of an organization that is conceived on a national level. This is true whether or not an individual rule makes sense.

Telco video is another good example. Decades ago, the cable industry won franchises on a community-by-community basis. The phone industry is pushing for statewide or even national franchises for its IPTV initiatives. If these lobbying efforts succeed, the carriers are much likelier to move aggressively into video. If they are required to replicate the forced march of the cable industry, they could deemphasize the application, at least to some extent.

There is a domino effect here. If the telcos don't exercise their buying clout, R&D, marketplace presence and other strengths in video delivery, the category will slow. The signs are that the phone companies are onboard, however. It should be noted that the FCC has decided to include IPTV in its next look at the video marketplace. (The title of the report, "The Annual Assessment of the Status of Competition in the Market for the Delivery of Video Programming," may lead us to cancel our weekend plans and buy a few logs for the fireplace when it is released.)

The bottom line is that investors, entrepreneurs and business development executives choose projects based on conditions as they are, not as they would like them to be. The attitude taken by the FCC or a state's public service commission has a huge impact on those conditions -- though the way the attitudes are expressed often are as dull as a 10-year-old butter knife.

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