(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.
Tags: Bank, digital, environment, networks, Ofcom, regulator
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