New regulator called upon to rethink its rules

15 Jan 2004

The UK’s new media and telecommunications watchdog Ofcom has been called upon to reconsider its general attitude and stance towards market regulation, to move from a short-term price cutting strategy to one which promotes the longer-term benefits to the economy afforded by technological innovation. The petition comes from UK operator Cable & Wireless, which commissioned a study from Spectrum Strategy and Indepen to assess the impact on the economy to be had from a different regulatory approach. CEO Francesco Caio said that its report concluded that short-term price reductions merely served to restrict capital investment and slow down the proliferation of new technologies, and instead urged Ofcom to allow operators greater freedom to generate returns from their new investments to encourage take-up and ongoing development. The report highlights that such an approach could boost productivity gains and generate a one-off dividend of GBP20 billion. Moreover, such a move could realise a total benefit of GBP430 billion over 25 years. Mr Caio added that ‘Fixed line telecoms is a critical driver of UK productivity and competitiveness. This report indicates business is missing out on the dividend from networking and telecoms’.

United Kingdom