Someone was kind enough to supply me with a hard-bound version of Ofcom’s recent publication, ‘Communications - The Next Decade‘, so I thought I would go through it over the next few weeks, offering my observations on certain chapters.So, where to start? Well, how about the Foreward? It was written by Viviane Reding. It’s basically one of her standard stump speeches, with a few references to the Ofcom publication thrown-in. She doesn’t surprise the reader with any new thinking. She does ask the question - ‘what does a good regulator look like?’, but never really answers her own question. I hate it when writers pose a question then never really answer it.

Reding also criticises old school regulation ‘that is based on specific technology.’ ‘In contrast’, she writes, ‘the principle of technological neutrality delivers coherent regulation of all the services provided over such networks whatever the communication network used for its delivery.’ Trust me: graduate students in public policy programmes all over Europe are uncritically being taught the benefits of this approach.

I’ve never been convinced by the argument of technological neutrality. It seems like a principle that no serious person questions — we all just assume it’s correct because how can neutrality be wrong? This raises at least two questions:

1. Does the European media and communications regulatory framework really embrace technological neutrality? Of course not. The same content can be delivered in a newspaper (or newspaper website) and on a broadcast television station and receive different regulatory treatment. Where there are meaningful technological differences, regulators make appropriate distinctions.

2. What’s really behind the notion of neutrality? In my opinion, neutrality occurs when the established players use their political power in select cases to (i) extend the burdens of regulation to new entrants or (ii) maintain or increase barriers to market entry through regulation. There’s nothing neutral about that outcome.

So, those clamouring for ‘neutral’ regulations are often telcos who want it applied to VoIP and broadcasters who want it applied to internet content. And it’s no surprise that they often appeal to the needs of the public (that they have been over-charging and under-serving) as justification! Needless to say these proponents of a ‘level playing field’ often find a sympathetic ear in consumer organisations and national regulators. But these types of regulations are not equal and do not permit the market to decide the winners and losers. They instead saddle new entrants - holding no market power - with confusing or onerous regulations. Instead of competing in the marketplace, proponents of technological neutrality are competing (and winning) before the regulator.

This theory of regulation advanced by George Stigler is, of course, contested, but it seems applicable in this case. Stigler famously wrote ‘as a rule, regulation is acquired by the industry and is designed and operated primarily for its benefit.’

So, perhaps oppponents of the AVMS Directive are asking the wrong question. Don’t ask who the AVMS Directive harms. Ask who it benefits …