(This editorial is reproduced here in full – ahead of its formal release on http://www.groupe-intellex.com. Editor)
In the Today Programme lecture last night Sir Mervyn King, Governor of the Bank of England, said, “with the benefit of hindsight we should have shouted from the rooftops that a system had been built in which banks were too important to fail, that banks had grown too quickly and borrowed too much, and that so called ‘light-touch’ regulation hadn’t prevented any of this.”
So what, you may well ask, has this anything to do with Ofcom and their regulation of digital connectivity markets?
In a sense there are, in Mervyn’s ‘mea culpa’ moment, important clues for the whole of the regulatory industry – whether Energy, Water, Health, Financial Services, Education, Environment or Digital and the entire gamut of the UK’s arms length ‘independent’ supervisory bodies charged with the duty to protect citizen and consumer interests.
The Bank, apparently, didn’t grasp the scale of the looming financial crisis – and it still believes that there was ‘ no unsustainable boom’. Coming on a day when a Parliamentary Select Committee criticised a media baron for ‘willful blindness’, this expert opinion stands as a giant warning of the dangers of a silo mentality. The Punch and Judy show’s audience may holler ‘It’s behind you’ but the dedication to keeping the lid on things – or what big corporate interests call ‘a consistent and predictable regulatory environment’ – trumps all manner of disquietness.
Moreover, despite the semantics of Sir Mervyn’s ‘imbalances’, the Bank does not feel the need to take responsibility or say sorry for any failure. It seems they didn’t have the tools, the powers or the political clout to deal with anything even if it had seen the need. The best that his Bank could offer was in that ‘with the benefit of hindsight’ statement – and, let’s face it, is anyone in this regulatory industry recruited for their skill in shouting about anything?
Maybe this is where we can draw some sort of line between market regulation and political will-power. We give these regulatory bodies all manner of remits and, almost inevitably, they are captured by the big guns of those who by nature resist regulation. It is perhaps for the politicians to understand that they cannot absolve themselves from not giving their ‘arms length’ and enthusiastically light-touch regulators some clearer direction on national imperatives intelligently informed by the needs of citizens, communities and businesses.
So it is, with Ofcom, that the log-jam of spectrum licencing is standing in the way of better mobile services, that it doesn’t ‘shout from the roof-tops’ about the inadequacy of rural digital infrastructures, that it is perceived as being too close to those deemed ‘to big to fail’, that it confuses the needs of domestic consumers with those of enterprise and that it is not leading the way in reinforcing the message that dealing with the Digital Deficit is a vital pre-requisite for dealing with anything else.
In what other country would the need for smart electricity metering be interpreted as a need for another separate digital (wireless) infrastructure when any properly designed ‘fit for purpose’ connectivity utility could serve that purpose just as easily as the needs for personal health monitors and environmental controls. Or is that thought ‘out of bounds’?
In what other market are people expected to be content with a service (sold at a standard price) that is extremely variable in its performance – and often completely useless?
At least we can take comfort from Sir Mervyn King’s acceptance of the desirability of separating utility banking from the riskier investment banking. If only Ofcom could understand that digital connectivity utilities (mobile and fixed) properly separated from other ‘over the top’ competitive services would, in our increasingly digital world, better serve citizens, communities and enterprise and enable progress on a wide range of government policy objectives in all other sectors.
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This editorial was written for members of the UK’s Communications Management Association (CMA) – a part of the BCS, the chartered society for ICT professionals.
Groupe Intellex 
Spot on! Ofcom were saved from the bonfire of the quangos but I don’t know why. For too long they have protected the incumbent and not given government the true facts on how absolutely dire connectivity is for many people. I know a lot of the trouble can be put down to home wiring, but even after spending hundreds of pounds in the house next door the people still can’t get broadband despite 3 engineer visits too. They are still listed in all the stats and checkers as being able to get it, and this is the information government believes. A good regulator would have sorted all this. Also a good regulator would have got the 4g out and working, but when it does many will give up their rubbish landlines if it does work… so who are ofcom protecting? I don’t know much about the bankers, so I won’t comment on that, but I do know thousands of people in my little patch alone and many in every county are now rising up to demand a service, and this wouldn’t be happening if ofcoms published figures of ‘99.6%’ were really able to get broadband.
now would it?
Chris – thanks for your comment – a vindication I suppose of my decision (maybe 5 years too late) to open up Groupe Intellex writings for feedback, although I must say that I have sometimes celebrated the freedom from not engaging in the sort of nerdish nonsense that one often sees in the blogosphere.
Your comments prompted three thoughts.
Firstly I may have inadvertently misrepresented the link between Government and the regulator Ofcom. The latter technically reports to parliament (not the executive) and this ‘Prime Directive’ was, I think, enshrined in the Comms Act (2003?). Lots of countries manage these regulatory relationships in different ways – the more ‘centrally-directed’ examples in Asia spring to mind. The UK chose a more independent ‘hands off’ approach to constrain temptations to intervene and this has left us with a culture of market supremacy. You might say that to have a large number of small stakeholders (parliamentarians) is about as effective as small shareholders trying to vote on corporate renumeration but the reality is that without a well-informed ‘body politic’ the Executive may well be as frustrated as the citizens and business consumers whose interest are supposed to be paramount.
Secondly, my underlying (but perhaps not made explicit) point is that people are gradually realising that all this digital stuff adds up to a very basic part of the UK’s infrastructure. The quality of the access networks impact on the performance of all sectors of the economy and in the way we and our communities develop. Things get filed, categorised, departmentalised and in the process of creating any expert silo the bigger picture is often lost. That’s why I resort to talking about dealing with the Digital Deficit as a prerequisite for dealing the Economic, Environmental, educational, Energy . . . and pretty much all other deficits. This is something recognised in NextGen’s Connected Causes programme – and we do need to move on from a narrow focus of intense criticism on folks who are doing exactly what anyone would expect.
Finally, I do believe that we gain a lot from adding a touch of gentle humour to these debates. So I thank you for your reply yesterday – May the Fourth be with you!
May the fourth be with you too, and don’t forget your towel. I totally agree with your statement “Things get filed, categorised, departmentalised and in the process of creating any expert silo the bigger picture is often lost.” So how do we make them see the truth? or actually read the paperwork? I notice the same thing happening in the hospitals, they do all the obs, they tick the boxes, but nobody actually interprets the results. There are too many tickers these days.