In my posts on the issue of National Broadband Plan
and Broadband Networks
, I have consistently cautioned against creating publicly funded monopolies for OFC Networks and reminded readers about the regulatory issues involved in managing our legacy of wire line based incumbents. One of the reasons for avoiding the same is the nature of telecommunications where technology change is the rule.The advent of affordable and competitively provided mobile services debunked the notion of telecoms as natural monopolies, yet we risk repeating this faulty argument when it comes to high speed broadband.
In India, the Public Sector Incumbents BSNL and MTNL have been supported with billions of rupees to survive in a competitive environment. However, not even their dominance in wire line telephony has helped them compete with a nimble private sector. On the other hand, regulatory protection of legacy public investment in their wire line networks has had a negative effect on competition in that segment in the country. The result is very poor broadband penetration.
Today’s Times of India carries an article about a new laser developed by the California Institute of Technology that promises to greatly outdo the speed of existing OFC cables (that are based on older S-DBF lasers). This sort of disruption should be expected in telecommunications. There could be many more such developments even before the roll out of nation-wide OFC network projects which is underway in many counties (like India’s NOFN by BBNL) is even completed. What then will be the fate of the sunk (public) investment in these (then) obsolete megalithic OFC networks?