ITU SPU – 28 July 2003 – Richard Horton
Forward-looking Programme & Strategy
Innovation, Convergence and Regulation
29/07/2003
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ComReg Structure
3 Commissioners (Chairperson)
Senior Legal Advisor
Human Resources
Market Operations
Financial Control &
Regulatory Accounts
Market Framework
Public Affairs
Market
Development
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Recap 1: Technological & market conservatism
A challenge for innovators and regulators:
“Nothing is more difficult than to introduce a new
order. Because the innovator has for enemies all
those who have done well under the old conditions
and lukewarm defenders in those who may do well
under the new”
Nicolai Machiavelli, 1469 -1527 A.D.
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Recap 2
- Innovation – uncertainties
- Connection between innovation,
competition & regulation
- Evolution of Regulation and Markets
- Forward-looking Programme
- Future trends
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Technological innovation & regulation – where’s the
connection?
! Price, choice & quality objectives
! Market development => vibrant industry
! Highlight opportunities presented by technological
innovation
! Help overcome misplaced technological
conservatism
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Technological innovation & competition
Technological innovation – a source of healthy
competition
! New entrants compete – innovate to fill market
voids
! Established players innovate – to head off or
respond to competition from new entrants
! Technological innovation – threat of competition
ever present
! (Disruption – implications for investment &
standards)
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How significant is innovation in regulatory policy?
! New EU Regulatory Framework
! ComReg Strategy
! DCMNR Statement of Strategy – Section 4
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Innovation defined
! Means different things to different people
! Various types of innovation:
Product innovation
Process innovation
Technology fusion (part of ‘Convergence’)
Incremental
Radical (major breakthroughs)
! Range of innovation techniques:
In-house R&D; Contracted out R&D; Rely on suppliers;
Corporate venturing; M&A; Access publicly-funded
R&D; Innovation portfolios
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Anticipating market developments and issues
Three Irish examples:
! Wireless LANs and related technologies
! Free space optics
! Low altitude platform stations
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Convergence, innovation and market development
! Like innovation – means different things to different
people
! Very broad scope:
! Technology fusion (e.g. optoelectronics)
! Service convergence (e.g. “triple play”)
! Integrated supply chains
! M&A
! (Convergence of prices & costs?)
! (Cross-border convergence?)
! Features prominently in new EU Regulatory
Framework
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Some high profile examples
! Optoelectronics
! VoIP
! Next generation networks
! Ad hoc networks
Common theme? Digitalisation
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Convergence today?
Figure 1: The Major Dimensions of ICT Convergence (Melody, 1999)
Pre Convergence Sectors
Post Convergence Sectors
Applications
• Finance
Content
Content
Telecoms
• Travel
• Manufacturing
Computing
Applications
• Education
Computing
• Health
• etc.
Telecoms
Dimensions of Convergence:
• Technological
• Industrial-Supply
• Applications-Demand
• Policies – Sectoral
• Policies – Convergent
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Convergence tomorrow?
! Miniaturisation and multiplexing hits physical limits?
! Growth of nano- and bio-engineering?
! New era of analogue computing and
communications?
! Convergence between nano- and bio-engineering
and today’s ICT sector, built around ‘new analogue’?
i.e. ‘telecoms/computing/content’ =>
telecoms/computing/content/nano/bio-engineering
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‘End game’?
History of information and communications:
!
Paintings and writings – record ideas & events
!
Printing press – copy & disseminate literature
!
Gramophone – record music, relive concerts
!
Films – record & disseminate images and sound
!
Telephony – two-way communication
!
Sound radio & television – broadcast audio & video
!
Tape recorders, VCRs – copy & relive broadcasts
!
Camcorders – record & relive personal experiences
!
Internet – transmit and receive multimedia, live or recorded
!
Mobile phones & PDAs – ‘anytime’ voice & multimedia
!
??
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An underlying trend?
To witness, record, convey and relive experiences whether they be news events of wide interest, our personal
experiences, or pleasure and entertainment – with ever
increasing realism…however, wherever and whenever it
suits us.
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An end-game scenario
Technologies enabling real and fictional ‘virtual
reality’ content - live or recorded - to be
communicated ubiquitously between individuals,
small groups and large audiences
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R&D implications
! Sensing & recording technologies
! Data storage & processing
! Display technologies
! ‘All senses’ communication
! Miniaturisation (nano- & biotechnology)
! Communications infrastructure
! Energy consumption & storage
! Heat transfer (superconductivity?)
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Outlook for the ICT Sector
!
Struggling – but some ‘green shoots’
!
In line with familiar pattern of technology-based
upheavals - maturing
“As a technology begins to mature, a sense of realism sets in.
Inevitably, for some, cash runs out. Companies begin to fold,
only the strong survive, and naïve investors lose money in the
huge rationalization. Pessimism begins to pervade the
marketplace, and stock prices fall across the board. Eventually,
the market stabilizes.”
Sir John Templeton, in Foreword to “Engines that Move Markets”,
A. Nairn, Wiley, 2002.
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Question for policy makers and regulators
Should they intervene to try to avoid ‘price, choice, quality’
discontinuities, or allow the market to evolve to a more
sustainable equilibrium from which renewed growth can be
built?
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Conventional wisdom?
“For God’s sake go down to reception and get
rid of a lunatic who’s down there. He says
he’s got a machine for seeing by wireless!
Watch him – he may have a razor with him”
Editor of the Daily Express in response to a
visit by John Logie Baird, 1925
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Conventional wisdom? - 2
“Drill for oil? You mean drill in the ground and try to
find oil? You’re crazy”
Drillers whom Edwin L Drake tried to enlist to drill for oil,
1859
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Conventional wisdom? - 3
“Rail travel at high speed is not possible because the
passengers, unable to breathe, would die of
asphyxia”
Dr Dionysus Lardner, 1793 – 1859 AD
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Conventional wisdom
“In questions of science, the authority of a
thousand is not worth the humble
reasoning of a single individual”
Galileo Galilei, 1564 – 1642 AD
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Thank you
! Dr Richard Horton
! (+353) 1 804 9714
! richard.horton@comreg.ie
! www.comreg.ie
(for Briefing Notes and all other ComReg/ODTR publications)