Triple play: How do we secure future benefits?

Recent technological developments make it possible to provide all telecommunications services (TV, telephony and internet) via the TV cable and fixed telephony network. Moreover, a new infrastructure based on optical fibre (to the home) is emerging in some places, which may in the future replace both existing networks. Making use of the available economic literature, the paper analyzes some of the consequences of the emergence of one electronic communications market. It focuses on two policy issues: the consequences of convergence of technologies and competition between networks for regulation in the short and medium runs, and the role of public investment in the rollout of optical fibre. It concludes that the present state of regulation may have some undesirable effects in the face of convergence and that public investment in a new general purpose infrastructure may have important advantages.     

EC competition law and the convergence of the telecommunications and broadcasting sectors

This article surveys how convergence is dealt with in the main areas of EC competition law. First, under Article 90 EC Treaty, the Commission has not yet reached a solution to the problems of TOs holding exclusive rights over cable TV networks or providing broadcasting services over their telecommunications networks. Secondly, while the Commission has largely upheld certain policy lines in individual decisions, it has reached markedly different outcomes in the broadcasting and telecommunications sectors. The Commission has not been able successfully to integrate non-economic factors in its competition law analysis. Third, State aid problems are likely to arise in relation with production subsidies and compulsory broadcasting fees. In the end, competition law must still evolve to deal with convergence, but in doing so it is likely to pre-empt regulatory options.     

Can the US transition to digital TV be fixed? Some lessons from two European Union cases

This paper compares the regulatory incentives created by government policies aimed at promoting the transition to digital TV in the US, France, and the UK. It argues that US policies have aggravated coordination problems and even created incentives for terrestrial broadcasters to retard the transition in order to receive compensations from wireless telecommunications providers for vacating frequencies before the statutory deadline. The institutional analysis framework is applied to explain the observed policy variations across countries as well as the factors retarding the transition in the American case. The conclusion suggests possible remedies to accelerate the transition to digital TV in the US based on the British experience.     

The impact of technological convergence on firms' product portfolio strategy: an information-based imitation approach

Technological convergence in the electronics industry has enabled disparate new functionalities to be added to existing basic products. Although the main drivers of technological convergence have been examined by the technological change literature, the impact of technological convergence on firms' product portfolio strategies remains a largely unexplored issue. Drawing on the technological change and information-based imitation literatures, we develop hypotheses on how the introduction in the market of technologies from other product categories affects the way firms modify their product portfolio vis-à-vis the market leader. Data on nearly 300 imitation strategies at the product portfolio level, which cover over 3,500 handset models introduced by 55 mobile phone vendors from 1994 to 2010, show that the relationship between the level of technological convergence in a product category and the firms' level of imitation of the market leader product portfolio strategy is U-shaped. Data also show that the firm's prior experience plays an important role in moderating this curvilinear relationship.     

Cashlessness in India: Vision,policy and practices

Over the past few years, an increasing convergence can be observed between international and Indian initiatives towards cashlessness, often involving a broad range of actors and influences. Despite this convergence, it is also clear that the conceptualization and implementation, or goals and outcomes of cashlessness can vary considerably, which indicates the need for a closer look at the Indian case. In this introductory note to the special issue on cashlessness in India, we outline the variety of institutions, stakeholders (regulatory, financial and technological actors), technologies and policies involved. As we have observed, digital payments and financial inclusion are two significant planks of cashlessness in India. Perhaps as a result, digital payments have been intentionally defined in a broad manner in India – ranging from anti-cash to less-cash and now contactless payments in the aftermath of Covid-19. Considering the variety of legal, economic, social and technological concerns involved, this special issue adopts 2 complementary foci to study cashlessness in India: technological visions and the systems undergirding it, and practices of end users. The special issue includes four papers. The first paper argues that the Digital India programme may lead to the commercialization of bias. The second paper historicizes the Indian demonetization of 2016 and examines its stated and unstated goals. The next paper provides a conceptual model on technology adoption in the context of digital payments. The final paper argues that users strategically switch between multiple payments media based on the context in which the transaction is taking place.     

Standard–setting processes: evidence from two case studies

In many hi–tech sectors one of the most important dimensions of competition is standardisation. This is particularly true in modular markets (i.e. markets characterised by the existence of modular architectures) and in network markets (i.e. markets where users would like to buy products compatible with those bought by others). Different processes may lead to the standard–setting. Sometimes there are fierce standardisation wars whereas in other cases competitors are able to agree on a common standard before the introduction of the technology on the market. In this paper we endeavour to provide an interpretative framework of the standardisation process and validate such a framework through an in–depth analysis of two case studies in a typical network market (the multimedia sector): the case of the Modem 56k and the case of the Information Appliances–Enhanced TV.
The two case studies offer some evidence of the standardisation process and of the growing importance of super–partes organisations (Standard Development Organisations) in the mediation process between different interests and technologies to impose a common standard on the market.     

IS MULTIMEDIA CONVERGENCE TO BE WELCOMED?*

This paper considers the consumer implications of the process of convergence across multimedia and telecoms markets. Convergence starts when one firm begins to sell products in hitherto separate horizontal markets competing against rivals active in just one or another of the markets. Convergence creates a strategic link between the markets which alters the price levels, creates the possibility of bundle prices, and creates winners and losers in the population. Partial convergence (e.g., a merged provider of telephony and internet services vs. independent sellers of telephony or internet broadband) lowers prices in the less competitive sector, raises them in the more competitive sector and raises the total prices paid by consumers active in both sectors as compared to the counter‐factual of no convergence. Full convergence (e.g., multiple firms offering TV and internet bundles) leads to deep discounts for bundle purchases but no reductions in stand alone prices paid by consumers in only one of the converging sectors. The bundle on bundle competition is so fierce that profits for all converging firms are reduced compared to the counter‐factual of partial convergence.     

Convergence and regulation of multi-screen television: The Singapore experience

This article addresses complicated convergent and regulatory issues arising from cross-platform audiovisual services and analyzes Singapore's multi-screen television experience. A “platform neutrality” multi-screen TV regulatory scheme is proposed to concentrate on content classification in order to respond to the fast-changing audiovisual industry and competition. Under the scheme, different content and license regulations are applied to four types of TV-like services which are categorized by “socio-cultural impact” (i.e., broadcasting and mass market vs. VOD and niche market)” and “content production/aggregation model” (i.e., gatekeeping vs. participatory mechanism). In addition, competition, content regulation, and digital copyright are identified as key issues involved in the fast-growing cross-platform audiovisual media industry. Finally, this study analyzes market development, regulatory issues, and national plans for multi-screen TV services in Singapore and examines them under the proposed regulatory scheme. Market and policy recommendations are discussed.     

The Danish tax on saturated fat – Short run effects on consumption,substitution patterns and consumer prices of fats

Denmark introduced a tax on saturated fat in food products with effect from October 2011. The objective of this paper is to make an effect assessment of this tax for some of the product categories most significantly affected by the new tax, namely fats such as butter, butter-blends, margarine and oils. This assessment is done by conducting an econometric analysis on weekly food purchase data from a large household panel dataset (GfK Panel Services Denmark), spanning the period from January 2008 until July 2012.The econometric analysis suggest that the introduction of the tax on saturated fat in food products has had some effects on the market for the considered products, in that the level of consumption of fats dropped by 10–15%. Furthermore, the analysis points at shifts in demand from high price supermarkets towards low-price discount stores – at least for some types of oils and fats, a shift that seems to have been utilised by discount chains to raise the prices of butter and margarine by more than the pure tax increase. Due to the relatively short data period with the tax being active, interpretation of these findings from a long-run perspective should be done with considerable care. It is thus recommended to repeat – and broaden – the analysis at a later stage, when data are available for a longer period after the introduction of the fat tax.     

The impact of convergence on regulatory policy in Europe

In December 1997, the European Commission published a Green Paper on the regulatory implications of the convergence of telecommunications, media and information technology sectors. The article starts with a look at the consultation process, and goes on to discuss some of the substantive issues raised. Without repeating material already evident in the Green Paper itself, it attempts to clarify the difference between Community and national approaches to regulation. Some ideas on the basis for national regulation are then explored, as are notions of the balance between the application of competition rules and sector-specific regulation in a converged environment.     

TV white spaces exploitation through a bicameral geo-location database

The exploitation of TV white spaces can meet the increasing demand for spectrum resources and create opportunities for deploying a variety of wireless services in a flexible manner. However, uncertainties from technologies, business models and regulatory policies hinder the take-off of TV white spaces exploitation. This paper proposes a bicameral (or two-chambered) geo-location database, which allows/supports both free and paid access to the TV white spaces: i.e., one chamber supports free access through opportunistic or geo-location database access; and the other chamber supports paid usage through secondary spectrum trading. Consequently, four technological scenarios for the acquisition of TV white spaces emerge, namely: sensing only, joint sensing and geo-location database access, geo-location database access only, and broker based secondary spectrum trading. An analysis of these scenarios is performed based on a theoretical framework for emerging technology evaluation while considering technological, business models and regulatory dimensions. The analyses show that free and paid access to TV white space complement each other; and that despite considerable infrastructure costs, the bicameral geo-location database is positioned to create viable TV white spaces exploitation value chains; hence have the most optimal technological, business and regulatory prospects.     

Information resources : A nation's stake in telecommunications

The major trend affecting worldwide economic development is the growing level of information-intensive activities throughout all sectors of increasingly global markets. This paper analyses the crucial role of telecommunications in a nation's productive processes. It examines the salient market force of services in virtually all sectors of national economies, describes how VANs enhance the quality and utility of basic communications channels, and analyses future network growth as a country's economy and society become increasingly computerized. The author discusses the importance of competition and recommends that restrictive regulatory regimes should respond to dynamic technological change.     

Convergence between telecommunications and other media: How should regulation adapt?

The paper examines the regulatory issues raised by technological convergence between telecommunications and other media. Market uncertainty for broadband services has gone hand in hand with both uncertainty over how to supply those services and a regulatory framework that will facilitate growth in the sector, ensure a competitive market and provide the necessary protections for consumers and the public. Development of the information market should be determined primarily by market forces. Intervention may be justified but a clear distinction needs to be drawn between regulation in the public interest and regulation to protect against market failure.     

Genetically modified crops as real options: Identifying regional and country-specific differences

This paper employs real options methodology for evaluating profitability of genetically modified (GM) crops in volatile market and regulatory environments. Observed instances of market entry, or product introduction, are viewed as outcomes of profit maximizing decisions based on comparison of market entry costs, expected future returns, and the value of managerial flexibility. The process is estimated using simulated maximum likelihood. The estimates suggest that, in the developing countries, the downward volatility of the returns is higher resulting in lower adoption rates, whereas the environment in the top four industrialized GMO adopting countries appears to be costlier but much more optimistic. Commercial success of GM soybean and maize in Argentina, Brazil, and the U.S. is explained mostly by a combination of high upward return volatility and moderate entry costs. The findings may contribute to the general understanding, measurement, and possibilities of controlling the rate of technical advance in biotechnology.     

Collective action for market chain innovation in the Andes

The Papa Andina network employs collective action in two novel approaches for fostering market chain innovation. The participatory market chain approach (PMCA) and stakeholder platforms engage small potato producers together with market agents and agricultural service providers in group activities to identify common interests, share market knowledge and develop new business opportunities. These forms of collective action have generated commercial, technological and institutional innovations, and created new market niches for Andean native potatoes grown by poor farmers in remote highland areas. These innovations have benefited small farmers as well as other market chain actors. This paper describes Papa Andina’s experiences with collective action for market chain innovation. It then discusses the implications of these experiences for the understanding of collective action and the policy implications for research and development organizations.     

Leveraging the EU regulatory framework to improve a layered policy model for US telecommunications markets

What is the best way to overhaul the current telecommunications legislative framework in the United States? This is an ongoing debate among telecom policy analysts and many others affected by the legacy of regulatory compromises that govern US telecommunications (and related information and media) industry sectors. This paper compares a Layered Model for US telecommunications policy with the regulatory framework adopted by the European Union. Both approaches focus on service characteristics rather than underlying technological traits.¹ It becomes clear that the Layered Model could be adopted to move away from sector-specific regulation, and could successfully use conventional market analysis criteria.     

Unravelling the internal and external drivers of digital servitization: A dynamic capabilities and contingency perspective on firm strategy

Despite the increased interest in using digital technologies for servitization purposes, little is known about what drives firms towards a digital servitization strategy. Using a dynamic capabilities lens, we look into the relationships between two organizational mechanisms – exploitation and exploration – and firms' orientation towards digitization, servitization and digital servitization. On top, we examine the influence of two environmental contingencies – technological turbulence and competitive intensity – as potential influencers of these relationships. We collected and analyzed data of 139 Belgian firms through hierarchical regressions. Exploitation and exploration are positively associated with digital servitization, but exploration trumps the effect of exploitation when firms do both. Technological turbulence is positively associated with digitization regardless of the firm's level of exploration or exploitation, and competitive intensity only relates positively with servitization when firms emphasize exploration. Theoretically, we contribute to the literature by unravelling the relationship between firms' dynamic capabilities and their environment. In order to fully understand firms' strategic transition towards digital servitization, both should be considered. As managerial implications, we suggest that firms pay close attention to adapting their strategy to fit an increasingly changing environment.     

Emerging issues in white space regulation

The secondary use of vacant television channels (TV white spaces) and the reallocation of the digital dividend to provide wireless broadband services are in the final stages of implementation in some countries. Originally seen as a once in a generation opportunity to better allocate UHF spectrum, further digital dividends are now underway as regulators and industry strive to meet exponential increases in demand for mobile data services. Concurrent developments suggest that TV white spaces may be rapidly exploited by global networks with billions of supported devices. The potential for sub-optimal outcomes is identified if the prospect of further digital dividends is not taken into account as technical and regulatory arrangements are put in place to allow productive use of TV white spaces. The importance of considering the potential interaction between further digital dividends and the use of TV white spaces is discussed and technical and regulatory approaches to support optimal outcomes are identified.     

It Won't Fit! For Innovative Products,Sometimes That's for the Best

The degree of overlap (i.e., fit) between product development organizations' resources and the product development projects pursued has powerful performance implications. Drawing on organizational learning theory and the resource‐based view, this research conceptualizes and empirically tests the interrelationships between the levels of fit, innovativeness, speed to market, and financial new product performance. After reviewing the research literature relevant to resource fit and new product performance, the level of innovativeness is posited to be an important moderating and mediating factor, which is validated by analysis of data gathered from 279 product developing firms. Technological fit has a negative direct effect on both technological and market innovativeness, while the use of existing marketing resources (i.e., a high degree of marketing fit) positively impacts technological innovativeness. This suggests, consistent with findings from market orientation research, that a deep, long‐held customer understanding can promote technological innovativeness. The moderating hypotheses proposed are also well supported: First, a high degree of marketing fit has a more positive impact on performance for market innovative products (e.g., products which address a new target market or use a nontraditional channel for the firm). Drawing on a deep customer understanding is more critical to performance for market innovative products. Conversely, the benefits of marketing fit are limited where market innovativeness is lacking. Interestingly, the counterpart moderating role of technological innovativeness on technological fit's performance effect is not significant; the level of technological innovativeness does not significantly impact the performance impact of technological fit. There are also significant moderating effects across dimensions. Our results show that the financial benefit of using existing marketing resources is lessened for technologically innovative products. Technological innovations necessitate drastic adaptation of marketing resources (i.e., channel and brand); firms drawing only on existing marketing resources for a technologically innovative new product will incur reduced profit. Similarly, the positive implications of using existing technological resources are limited for products which are highly market innovative. Generally, resource fit is seen to have an (oft‐overlooked) dark side in product development, though several of our findings suggest that marketing resources are more flexible than are technological resources.     

The role of ICT in Korea’s economic growth: Productivity changes across industries since the 1990s

This paper investigates the hypothesis that technological convergence has been a major driving force for the recent productivity increase in Korea. Based on the dynamic panel data of Korean industries, the direct impact of information and communication technology (ICT) on labor productivity is assessed through growth accounting, and the indirect network effect of ICT on industrial total factor productivity (TFP) is estimated. The results confirm the essential role of broadband networks for successful convergence. The policy implications for the regulatory change are drawn from the empirical analysis.