A while back we reported that Ofcom CEO Ed Richards visited the U.S. Apparently, part of his trip included his testimony before a U.S. Congressional sub-committee on telecommunications matters. The link to Richards’ testimony is here. Here are some nuggets, along with my reaction:

On Ofcom’s structure:

“Whilst we cover similar territory to the Federal Communications Commission, there are some significant differences in the way we are structured. Most obviously, at the top of the organisation we do not have Commissioners affiliated to political parties. Instead we have a Board, modelled on that of a public company, consisting of a non-executive chairman, Lord Currie, appointed by the UK Government; a Chief Executive Officer – myself, appointed by the non-executive members of the board which includes the Chairman; and a mix of other executive and non-executive members, with the non-executives always in the majority. All are appointed on the basis of relevant business or policy expertise, rather than from a party ticket. This structure was a significant innovation in Britain and has generated a lot of interest throughout the world. We think it is working well.”

Certainly from my experience, politics plays a big role in what the FCC does. However, I think Richards understates the importance of politics in Ofcom’s regulatory environment. It’s a continuation of Stephen Carter’s claim that Ofcom is unashamedly technocratic. And how does a regulatory structure work well? Richards does not elaborate. It can work well from a daily perspective — business gets done without much delay or fuss. It can work well by serving democratic goals of accountability and transparency. It can work well by efficiently aggregating public desires on important issues. Or it can work well by simply producing better outcomes. Can one type of structure achieve all of these things? Maybe not.

On stimulating next generation access investment in facilities such as fibre optic cable:

“We have looked at going much further and introducing policies of regulatory forbearance. Some incumbents in Europe, though not BT, have called for ‘regulatory holidays’ for NGN investments – essentially the removal of all pro-competition rules. We do not agree that this is necessary to secure NGN investments, and we think the price of such a policy in a UK context would be extremely high. We would be sacrificing competition in return for an investment that BT can and will make in any event. Again, I return to the differences between our market conditions and yours. The forbearance policy here assumes widespread intermodal competition between cable, telco and wireless systems. This is not realistic in UK market circumstances.”

Richards is probably right: The weak position of UK cable is a matter for major concern. The lack of across-the-board inter-modal competition in the UK still requires regulation for network access (unbundling regimes) in the telecoms sector. However, instead of picking up the pace and investing new facilities, Virgin Media seem to want to engage in content and ownership fights with Sky. This is one area where Ofcom could have learned more from the US experience …