Venture Failure and the Timing of Telecommunications Reform
Chapter 5: Incumbent Telecommunications Operator Strategy and Internet Access
This study has already highlighted how growing home use of the internet and small business access had the potential to transform business in a wide range of industries. Through ubiquitous internet access, consumers and small ﬁrms could be integrated into electronic business networks, so-called business webs, connecting service ﬁrms, manufacturers and suppliers. In the previous chapter, diverse government activity to promote innovation and growth in data networking was discussed, from telecommunications liberalization, teletex, the promotion of research networks and ﬁnancing initiatives. Yet, as the example of the German research network DFN showed, it is insuﬃcient to study government intentions alone. Paradoxically, the direct role of government in the development of the nascent internet in Europe was far less signiﬁcant than in the United States. The backbone service of the US research network NSFNET, for example, was in 1995 handed over to private enterprises, speeding up the commercialization of the internet and promoting competition for data service provision. As discussed in the previous chapter, government action taken in Germany to encourage the growth of commercial data networking through the research network DFN was ineﬀective and misguided. The DFN, although founded by the responsible government ministry as a separate entity, resisted commercialization and veered towards the sphere of inﬂuence of the public telecommunications operator (PTO). Rapid commercialization of the DFN, which would have enabled competition to the PTO, would have been resisted. This chapter, which delves into internet uptake in Germany, is based on the premise that the...
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