BIT by BIT
First published 1996 by M.E. Sharpe
Published 2015 by Routledge
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Copyright 1996 Taylor & Francis. All rights reserved.
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Library of Congress Cataloging-in-Publication Data
Gaster, Robin.
Bit by bit : building a transatlantic partnership for the information age /
Robin Gaster, Erik R. Olbeter, Amy Bolster,
Clyde V. Prestowitz, Jr.
p. cm.
North Atlantic Research, Inc./Economic Strategy Institute.
Includes bibliographical references and index.
ISBN 1-56324-916-2 (alk. paper)
1. TelecommunicationUnited States.
2. Telecommunication policyUnited States.
3. TelecommunicationEurope.
4. Telecommunication policyEurope.
5. TelecommunicationInternational cooperation.
6. Competition, International.
I. Olbeter, Erik R., 1971 .
II. Bolster, Amy, 1969 .
III. Title.
HE7775.G37 1996
384.0973dc20
96-8177
CIP
ISBN 13: 9781563249167 (hbk)
Chapter One: Overview
Chapter Two: The U.S. and European Communications Markets
Chapter Three: Regulatory Regimes in Europe and the United States
Chapter Four: Liberalization and Deregulation in Europe and the United States
Chapter Five: Creating a Competitive Telecommunications Market
Chapter Six: Forums and Efforts to Liberalize E.U. and U.S. Telecom Markets
Chapter Seven: Technical Standards: The Key to the Global Economy
Chapter Eight: Intellectual Property Rights, Privacy, and Security Issues
Chapter Ten: Government Programs for Research and Development
Chapter Eleven: Liberalize with Care: Lessons from the British Experience
Chapter Twelve: Painful Progress: German Telecommunications Reform
The authors wish to thank the Economic Strategy Institute and the Commission of the European Union for providing financial support for this project. In addition, we would like to thank Debra Scruby, Huge Clifton, David Peyton, and Catherine McFarland for their contributions to this project.
As the information age descends upon us ever more rapidly, it is inevitable that the transformations required will generate uncertainty and conflict, especially in an industry marked for nearly a century by certainty and the slow, stately march of technical progress. Specifically, conflict is caused by the two revolutionary changes taking place in telecommunications and related industries: digitalization and globalization. These two drivers have forced together industries which have hitherto been separate, as well as firms which, until now, have operated in walled-off, national environments. The result is much-intensified competition in the digital marketplace, among many interests within and beyond the traditional telecommunications industry.
There are also increasingly important, international dimensions to developments in the telecommunications sector. Leaving aside notions of a global information infrastructure, globalization of the industry is proceeding faster than experts and regulators can follow. The key players are increasingly global in scope, large multinational corporations with interests in many countries. The technology is certainly becoming international, and regional or global technical standards are increasingly the norm. Even within the telephony sector itself, international revenues are an increasing share of the total market. Perhaps most striking of all, content itself appears to be internationalizing, to the obvious benefit of some major corporations and players who are overwhelmingly American or British, and sometimes to the dismay of non-English speaking countries.
The rapid changes now under way hold out extraordinary, and unprecedented, opportunities. New narrowband technologies have already created the remarkable phenomenon of the Internet, still growing at more than seven percent per month. Emerging broadband technologies promise to turn existing communication networks into what could indeed be a high-speed, high-bandwidth infrastructure capable of delivering numerous services, including interactive video on demand.
Aside from the commercial potential, these opportunities can also be used to address pressing social and economic needs in areas spanning education, health care, and government services, as well as to foster a wide array of private-sector markets. In Europe and in the United States, political leaders have leaped to embrace these possibilities.
The convergence and globalization of information-based industries require governments to reevaluate traditional policy structures and paradigms governing trade, foreign direct investment, antitrust law, intellectual privacy rights, and international policy coordination. Information-based industries are now inherently international, not only in response to the internationalization of business, but also, more important, for reasons of economies of scope and scale. No one company can supply the worlds telecommunications needs, nor can the firms of one country-even the United States-provide the capital or expertise necessary for market competition in every aspect of these burgeoning industries. The growth and development of these industries make international transactions, mergers, investments, joint ventures, and partnerships increasingly important to the establishment of a world-class, competitive telecommunications industry.
Despite clear, mutual interests in finding positive solutions to shared problems and effective resolutions to conflicts between the United States and Europe, relations across the Atlantic have been both disappointing and institutionally disjointed. There has been progress in many of these areas, but it has, objectively, been slow progress, made slower by the burdens of suspicion held so tightly on both sides of the Atlantic. Progress has come painfully, issue by issue, without any sense that a shared mission or approach is developing.
This report addresses some of the complex changes occurring in information-based industries, the policies impeding and promoting this metamorphosis, and the international issues arising from this process. After reviewing the basic dimensions of the U.S. and European marketplaces in reviews some recent developments in the complex but crucial area of technical standards, focusing on the illuminating case of standards for digital, cellular telephony.
