What we need in 2013: Competition in digital industry

More competition in our digital industry, created through less regulation, is surely something to aspire to in 2013 and beyond

A silver lining for 2013?
Dominique Lazanski
On 31 December 2012 11:44

The end of an old year and the start of the new one brings many opportunities to reflect on what has happened and to plan or wish for what is to come over the next 12 months. I’ve been thinking a great deal about what I would most like to see in the New Year for digital and internet-related issues and for me the most obvious answer is more competition.

Competition drives companies to innovate while focusing on consumer and market-led demand. It drives prices down while driving quality up and creates opportunities for new companies to grow and some older ones to die. Competition should not be looked at as a panacea, but should be one factor among many in a growing and dynamic economy. I’ve put together a few ideas of areas in which I hope to see more competition in 2013.

Competition in Internet Access. The broadband rollout scheme in the UK known as BDUK is set to spend up to £1.5 billion rolling out superfast, fixed line Internet access to most of the country. In order to achieve this, BT will be awarded most, if not all of the contracts. This whole process was meant to be competitive, but sadly it is proving anything but. 

I have a broadband paper coming out later in January that will recommend some straightforward policy changes that will make fixed line broadband access more competitive and less costly to the taxpayer going forward. But for the meantime we are stuck with a large, taxpayer-funded broadband scheme that won’t even deliver fibre to most of the homes it is targeting.

One way to ensure that BT doesn’t extend its monopoly even further is to have competition in Internet access. The coming 4G spectrum auction and the talk of a 5G spectrum auction soon after will create an even more competitive mobile Internet access market. This, along with the decreasing cost of satellite Internet access as well as the rollout of local WiMax and WiFi, will provide more options to consumers all across the country, as the Telegraph noted recently, and allow for competition across all kinds of Internet access points, not just fixed line broadband.

Competition in the Creative Industries. The complexity of copyright in the digital era is difficult for most of us to comprehend. As Glyn Moody recently wrote, the change to copyright law in the UK in order to bring it up to date is complicated at its best and extremely difficult at its worst.

That said, I will not discuss the very fact that the Digital Economy Act has yet to be fully implemented nor any of the other assorted issues that have come up over the last five years. I will say this, however: if copyright holders could possibly release and license all products as soon as they are available (i.e. at point of broadcast or release date) a more competitive and income generating situation might come about. Why do my American friends, who now already know of Cousin Matthew’s untimely death, have to wait months in order to get legal copies of the last season of Downton Abbey? It makes no sense.

Spotify, Songkick, and other new digital music companies go a long way to provide more legal options to consumers, but we're still yet to see a music company that uses illegal download locations data to book new gigs. In any case, more competition among new and old start ups in 2013 for all kinds of creative content including ebooks, music, and film will not go amiss.

Competition in Regulation. I’ve recently returned from the WCIT where the UK and others refused to sign a newly negotiated treaty that would see greater regulation and oversight on the Internet from a UN based organization. Those that did sign the treaty will use it to justify authoritarian practices on an International stage already in place (see the related info graphic here).

While there is little hope for doing honest business in countries like Bahrain, as the UK contemplates leaving the EU, there should be some pause for thought. Taking the opportunity to create a regulatory regime that would compete with the likes of the EU and the US might further accelerate the technological growth that is already happening in the UK.

But the key isn’t just to make available a less burdensome system of regulation for business, but to provide regulatory certainty that would allow for start-ups and business to make longer-term decisions. Such consistency would spur on increased investment to tech start-ups from the private sector as well. Competition in regulation would have knock on effects and might just spur on long term economic growth.

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