Information society : agenda for action in the UK : evidence received after 31 March 1996 / Select Committee on Science and Technology.
- Great Britain. Parliament. House of Lords. Science and Technology Committee.
- Date:
- 1996
Licence: Open Government Licence
Credit: Information society : agenda for action in the UK : evidence received after 31 March 1996 / Select Committee on Science and Technology. Source: Wellcome Collection.
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![ee 23 April 1996] [ Continued new services. Five, is to exploit its role as a user and bring the benefits directly into millions of peoples’ lives. Six, is to work harder to close the discrepancy between the apparent recognition of the commercial opportunities that convergence brings (witness that DTI Information Society Initiative) and the continued separate development of legislation and regulation (witness the Broadcasting Bill on digital terrestrial television which deals with new “data” services almost as an afterthought). And, seven, it must push for communications services liberalisation becoming a reality in the European Union in 1998 and applying to all players, not just telecommunications. Reciprocity in the opening and development of markets should be a key factor in international negotiations. And then there is the “R” word—regulation. BT’s vision of an appropriate regulatory framework for the future is one which creates confident, sustainable conditions for investment, within which regulation can progressively withdraw, and in which competition can flourish. Regulation should be clear and predictable, and the regulator should not have unnecessary or inappropriate discretionary powers, without complementary rights of appeal. None of us is infallible. What would be the essential characteristics of an appropriate regulatory regime? I would suggest, first, a light hand, with the emphasis on encouragement and commercial freedom rather than restrictions, and with safeguards rather than controls. Next, open customer access to the services and technologies of their choice with fair and reasonable terms for interconnection. There should also be a readiness and a capacity to face up to and deal with the implications of industry convergence; and, finally, we should see prices set competitively in a competitive market. Between them, Government and the regulator can create an environment in which companies are prepared to invest, where innovation is encouraged and where there are adequate returns for stakeholders. So, where are we now? As I have said before, we have come a long way. In the UK, the last 12 years have seen our industry transformed by liberalisation. The UK now has the most open telecommunications market in the world, with about 150 licensed competitors. Customers have access to a wide range of high-quality innovative services at affordable prices. But if this momentum is to be maintained, we need urgently to re-examine the way in which our industry is regulated. Many of you will be familiar with the broad terms of the debate bewteen BT and Oftel, but just to rehearse it very briefly. We believe that Oftel’s current proposals for price control regulation of BT do not adequately recognise the change in risk for future investment in our market and the resultant cost of capital. And this is, of course, an issue for the whole industry, not just for BT. The current signal to investors—both in the UK and overseas—is that markets elsewhere are likely to offer better returns for those wishing to invest in the Information Society. There is also unnecessary uncertainty for BT and other licensees arising from the Director General’s proposed sweeping powers on anti-competitive behaviour. We have to ask whether a single individual, the DG, ought to have the powers of prosecutor, judge, jury and executioner. Surely there must be some protection for operators against the regulator reaching the wrong conclusions. There must be some right of appeal rather than a presumption of regulatory infallibility that has hardly been borne out of past evidence. The UK is in imminent danger of creating disincentives to investment in the networks and services that will form the nervous system of the Information Society. We can only hope that the coming months of regulatory review will bring a sensible solution. Getting the most out of the Information Society will ultimately depend on getting the right relationships and getting the relationships right: between customers and suppliers and competitors; between the industry and Government; between the industry and the regulatory authorities; between the industry and shareholders; and between the users and the technology they use. But, the issue of timing is crucial. And the time is now. We are facing a once-in-a-lifetime opportunity. The next few years will determine whether the UK plays a major part in creating the Information Society and reaps its rewards, or settles back into being an information backwater. The UK has the technology, the skills and the companies to grasp that opportunity. I only hope that it can come up with a matching public policy and regulatory framework. Thank you. 29 April 1996](https://iiif.wellcomecollection.org/image/b32218631_0069.jp2/full/800%2C/0/default.jpg)
