The Governance of Network Industries
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The Governance of Network Industries

Institutions, Technology and Policy in Reregulated Infrastructures

Edited by Rolf W. Kunneke, John Groenewegen and Jean-François Auger

Infrastructures are subject to substantial readjustments of governance structures, often labeled as liberalization, privatization or re-regulation. This affects all traditional infrastructure sectors including communications, energy, transport and water. This study highlights and illustrates some of the major challenges for readjusting the governance of network industries from an economic, institutional, political and technological perspective. The three parts of the book address the institutional design of infrastructures, the role of technology in different sectors and actor behaviour.
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Chapter 6: Network Modernization in the Telecom Sector: The Case of Wi-Fi

Wolter Lemstra, Vic Hayes and Marianne van der Steen


Wolter Lemstra, Vic Hayes and Marianne van der Steen INTRODUCTION This chapter presents an account of the technological and economic development of Wi-Fi, from its genesis to the emergence of a global ecosystem. It provides detailed observations on the life cycle of Wi-Fi. What determined the emergence and success of Wi-Fi? What role does it play in the network modernization within the telecommunication sector? To answer these questions, we focus on three dynamic aspects: the evolution of Wi-Fi technology, the role of strategic management, and the coevolution of industry structure and the institutional environment. These aspects will shed light on several intriguing questions about Wi-Fi. Why did it start in a firm, NCR, operating outside the traditional telecom industry? How did the institutional changes in the United States (US) radio spectrum regulation support it in its early years? How did NCR, as a rule-breaker, forge the creation of an open standard? And how did supporting institutions of the global and regional economic system provide an incentive for further growth of Wi-Fi? Based on evolutionary economic theory, we assume that new technology develops along a relatively standard track from the time it is born to its maturity, and that the firm structure evolves with the technology. We take into account that technology coevolves with the development of institutions in response to changing economic conditions, incentives and pressures. Following the methodology suggested by Wilber and Harrison (1978), we develop themes and typology based on the case study. Our approach is to discuss...

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