Why are regulations still hindering connectivity?

This is a guest blog post by Tom Dailey, chief international legal, policy and regulatory officer at Verizon

The regulatory and policy landscape is a really important topic for all businesses given the ubiquity of connectivity in today’s digital economy and society. One major challenge facing stakeholders is that technological development has outpaced regulation, even more so in recent years. Many countries are still bound by regulations developed decades ago, which don’t take into account innovations like the 5G-enabled Internet of Things (IoT), artificial intelligence, virtual reality and advanced robotics that are now powering the Fourth Industrial Revolution.

Enabled by connectivity, the Fourth Industrial Revolution is fundamentally changing how we live and work. This connectivity is both wireless – such as high speed and low latency cellular (and soon to be 5G) connectivity, built on deep fibre; and wireline, with intelligent, virtual and software-defined networks (SDN) that offer secure, high performance, and adaptable capacity that can flex to support changing business needs.

Countless use cases for these emerging and new technologies are yet to be invented, but the connectivity-driven revolution is focused on innovation. It has tremendous potential when it comes to a positive social impact on the big issues of sustainability, public safety, healthcare and education. Yet, current regulations are obstacles in the way of potential progress.

Battling against regulations

In many cases, enterprise service providers are bound by the same regulatory framework that protects consumers. Lots of businesses might question why this is a problem. The fact is, services that cater to enterprise customers are worlds apart from those offered to consumers. Rarely do enterprise customers use off the shelf packages. Instead they choose a provider on a competitive tender basis, and then opt to negotiate specific terms and packages under a service level agreement for a tailored contract. Yet the same rules apply.

Today, regulation varies dramatically across the globe, with no consistent policy approaches. These current, patchwork regulations make it difficult for enterprise service providers to confidently operate across borders. While, work is being done at an EU level regulation is still complex and multi-layered. Regulator frameworks are essential to ensure legal certainty and clarity for all stakeholders in the future.

New technologies are often forced to operate in a regulatory regime that was developed decades ago and now no longer makes sense for the current landscape. An example of this is SDN. A virtualised network is no longer about the telephone line or point-to-point connectivity. It’s about changing information and ideas into bits and bytes, and using software to create an environment in which those can be shared. Problems occur when SDN then sits on top of the underlying network, as this becomes complicated from a regulatory perspective Should SDN be classified as a telecommunications service, or as an information service?

Policy-makers should now look to promote innovation when developing new legislation. A 21st century digital economy, driven by state-of-the-art networks, can only exist with a 21st century regulatory agenda. This is, however, by no means an easy task, as it needs to protect consumers, encourage investment and harmonisation, while avoiding the patchwork of regulation and uncertainty that stifles many investments and innovations today. But it will be worth it, as the payback will be cycles of innovation that generate significant opportunities and economic growth.

Overcoming regulatory hurdles

How can we achieve this growth and innovation? Firstly, regulators need to consider the unique characteristics of enterprise services, and should look to eliminate outdated regulations in this space. In most cases, light-touch (or even no-touch) regulation is vital for new technologies like 5G and SDN to flourish.

Simplification of regulation is critical and could be very positive for the use of these new technologies. In this case, simplification would mean deregulation where appropriate, rather than incrementally building on historic—and often outdated—sector-specific laws and regulations. This new approach would rely more heavily on existing horizontal competition and consumer protection rules. By making these changes it would markedly benefit the industry by providing: greater regulatory certainty and predictability; regulatory outcomes that minimise compliance costs and inefficiencies; a more prosperous environment in which innovation thrives; and a boost to economic competitiveness.

The technology-led disruption and innovation will transform communications around the world, and open up business and collaboration opportunities that we can’t yet imagine. Network connectivity is key to supporting this revolution and delivering the new services it will enable. But the right regulatory and public policy environment is critical for driving continued investment in this innovation across the board. There is no question that we need to move quickly, and think differently, to realise the power of the Fourth Industrial Revolution.

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