The International Handbook of Telecommunications Economics, Volume III
Edited by Gary Madden
Chapter 1: Corporate and regulatory strategy for the new network century
Eli M. Noam THE CHALLENGE OF CHANGE For more than a century, domestic telecommunications operators have followed a classic model: a national monopoly, owned or controlled by the state, centrally managed and providing a common public network. By their very nature and tradition, these networks provided a small number of standardized and nation-wide services, carefully planned, methodically executed and universally distributed. Over the past two decades, ﬁrst in the United States (US) and subsequently in much of the developed world centrifugal forces have begun to unravel this system. The driving force behind the restructuring of telecommunication markets is the shift toward an information-based economy, which has resulted in the accelerated growth and reliability of telecommunication networks as the medium for the electronic transmission of information. Especially for large organizations, the price, control, security and reliability of telecommunication networks and services became matters requiring attention. In a series of controversial and painful steps monopoly began to give way to a network of networks. Technology is an enabler of much recent change. Projecting forward a decade or two, technology is not likely to be radically diﬀerent from that which currently exists, just cheaper, smaller, faster and more widely accessed. But these trends, exponential at present, suggest much change. The period of the 1980s and 1990s was characterized by a revolution in the technology of information data processing. Historically, transmission capacity was a scarce and therefore expensive resource, and its allocation was a matter of both political and regulatory interest. But transmission...
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