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General   Issues   in   Telecommunication   (   and   TV-cable)

    Contents
  1. How difficult is it improve Telephone/TV-cable network anyway?
  2. Factors that reduce competitiveness in cable/phone-wire business
  3. A basic requirement of the solutions
  4. Factors that reduce competitiveness wireless (mobile) communication
  5. Where is Government intervention may be needed and is NOT needed?
  6. Solutions

How difficult is it improve Telephone/TV-cable network anyway?

How difficult is to improve the status of telephony/TV-cable in India?

Using RLPP (i.e. Receipt/List printing procedure), improving telecom is EASIER than printing railway tickets and passengers’ lists.


Basic problem in TV-cable and phone-wire business

TV-cable and telephony require an entrenched network of wires running from some local center, such as telephone exchange or cable provider, to EVERY building in the area. The network in a way resembles network of water pipelines, gutters or roads, which would cover almost every house or every building.

This basic requirement creates a problem in TV-cable and telephony : by laws of physics, not economics, it is not possible for citizens to have dozens and dozens of companies providing cable and phone networks in a local area. At best, there can be only for 5-10 companies cable/phone wire companies. As technology improved, the number can increase. But compare this with restaurant business or grocery shop business, where it is possible to have 100s of restaurant and grocery shops even in a small area.

Due to this PHYSICAL constraints, the supply side in cable/phone wires lines is generally closed to new entrants, who also want to start their own companies providing cable/phone wires and electricity lines to residents in that area. This fact that market is NOT open to new entrants is the ROOT/ONLY cause of all the problems in these wire-network businesses, that are NOT seen in a free market areas like restuarants and grocery shops.

Once entry of new comers is blocked, the individual owners of incumbent cable/phone companies will always start forming nexuses amongst each other. And very soon, within months, the incumbents also manage to form nexuses with the regulators. And then the price fixing becomes norm rather than exception.

Now many intellectuals have opined that regulators are nexusless, and oligopoly owners wont form nexuses. I have ZERO faith in such idealistic arguments. I am more than convinced that nexus-formation is a rule rather than an exception.

So as far as I see, the ONE and ONLY ONE way to ensure efficiency is to keep supply side open to new entrants. Thats the ONLY way to "regulate" the behavior of the incumbents, NOT depend on individual regulators. In addition, we also need some NEXUSLESS procedures to regulate incumbents on a day-today basis.

Summarizing, the basic problems in cable/phone line business are
  1. there is room only for 5-10 cable/phone companies

  2. once this space is if filled, new entrants cannot come into the market of providing cable/phone wires to citizens

  3. incumbents and regulators form nexuses and raise the prices


A basic requirement of the solutions

Whatever techno-administrative solution to the basic problem is used, the solution MUST have easy means for citizens to allow new comers to come into the field of proving cable/telephone wires and start their business.

But if a room is full, by law of physics, it is impossible to get a new entrant unless an incumbent, preferably an incompetent one, is expelled. So, I would propose following lemma : it is necessary that citizens have an easy and cost-effective procedure to expel an incumbent who is incompetent.

In addition, for day-today supervision, we need supervisors or regulators who are NOT probe to nexuses.

In addition, there is techinical issue which makes telephone wire business difficult to new-comers --- if a customer changes phone company, his number MUST not change i.e. a customer MUST have ability to retain SAME number even if he changes phone company. If he does NOT have this ability, he will refrain from changing phone company, even if newcomer is cheaper and more efficient. This will make it difficult for newcomer to enter the market. Hence telephone numbers MUST be "portable" i.e. can be moved from company to company. This problem does NOT exist in case of cable companies.

So we need to create 5 items
  1. Easy and effective ADMINISTRATIVE procedures by which citizens can expel a the cable/phone wiring company, if it needs to be expelled.
  2. Easy and effective ADMINISTRATIVE procedures by which citizens can invite a cable/phone wiring company, they approve.
  3. Nexusless supervision
  4. Portable phone numbers : A customer MUST have zero cost ability to retain same phone number even if he changes companies.
  5. A technological setup by which cable/phone/electricity companies can be expelled and admitted at low cost and without causing much inconvenience to the users/citizens.

The first two requirements can be TRIVIALLY fulfilled by RLPP. The third one can be trivially met by Juries. The fourth is also trivial --- the techonology to support portable phone numbers has been there since 1990s, we ONLY we a law that would FORCE phone companies to make it avialable. The fifth one is tricky - if a cable/phone is expelled, wont it involve digging and re-digging of all wires? Not at all. This is classic lie that phone companies have been telling us, that expulsion of phone companies would be an expensive process. I will show that providing a technological setup to simply expulsion of phone/electricity company is as easy is firing a manager.


Basic problem in wireless (mobile phone) communication

Some of the problems are same --- when all the bandwidth is allocated, the supply side closes for new comers. And even if a newcomer comes, due to lack of portable numbers, even if he is cheaper/better, he may fail to attract enough numner of customers. This will further discourage a newcomer. But luckily, a major hurdle that blocks new-comer in wired-phones does NOT exist in wireless phones namely wires i.e. even a company is invited, it does NOT need to lay a whole network of wires.

EAS.04 ensures that bandwidth allocation is ALWAYS open to newcomers. So only thing we need to ensure maximal competition is portable phone numbers and a nexusless supervision.


Where is Government intervention may be needed and IS NOT needed?

Issuing and revoking the licenses for putting phone/cable lines is the one area in telecommunication business that needs Government intervention. Are there any other areas where regulators need to intervene, except enforcing contract between supplier and customer? Not as far as I see.

What about regulating quality of sound, quality of signals and price? These areas need ZERO intervention from Government. Why? If the administrative procedures to issue/revoke licenses induce ample competition between suppliers, there will be little need to regulate prices and quality.

What about compatibility? Once again, if the administrative procedures to issue/revoke license create competitiveness, the resulting competitiveness would NOT create any incompatibility problem that would hurt the end users. In fact, the bitter competitiveness would REDUCE the compatibility problem. If customers can easily change suppliers, the customers will throw away the incompatible players and soon there will be rock-solid compatibility. The players of industries, such as manufacturers of wires, connectors, switches etc. are capable of creating standards. The State may optionally play role to create standards and approve standards, but can leave the enforcement of the standards to private players and users via Juries of the civil courts.

In short, the right procedures to issue/renew/revoke license would be sufficient to maintain optimal quality, low price and compatibility.


Solutions

These are the general problems, and possible spead breakers in creating solutions, in wired phone, mobile phones and TV-cable business. To deal with these problems, I have proposed following administrative procedures :
  1. COMM.01 - RLPP/Jury over Telecom Regulators (this will ensure portable phone numbers)
  2. COMM.02 - Creating a Multi-Company Wire Network using multi-slot poles and multi-slot pipelines
  3. COMM.03 - RLPP over cable companies
  4. COMM.04 - RLPP over local phone exchange and local phone-wire companies
  5. COMM.05 - RLPP over companies laying wires to connect exchanges
  6. COMM.06 - RLPP over companies to lay Trunk Cables and Trunk Exchanges