Outlook: Dangers of overly vigilant regulation

Don Cruickshank seems determined to go out all guns blazing, doesn't he? This is his final month as Director General of Oftel and for a regulator who's already said there won't be any need to control telecom prices soon after the turn of the century, he's certainly packing it in. First he dispatched the mobile phone companies to the Monopolies and Mergers Commission. Now he's suggesting that Oftel is recreated as the Electronic Communications Commission, swallowing a large chunk of the Independent Television Commission's functions in the process.

There's obviously some logic in the proposal. The model is the Federal Communications Commission, which has long been responsible for economic regulation of both broadcasting and telecommunications in the US. As the lines between traditional broadcast TV, cable, new media and telecommunications become more and more blurred, the opportunity for and complexity of anti- competitive practice is bound to grow. The ITC, which was set up to regulate a limited number of publicly franchised TV monopolies, is plainly not appropriate to the task in the modern world and Mr Cruickshank is right to suggest its activities be confined to content and quality.

However, if it is logical to absorb large parts of the ITC into Oftel, would it not also be equally logical to absorb Oftel into the soon to be created Competition Authority. Mr Cruickshank's answer seems to be that electronic communications is too specialist a field, as well as too essential a utility, to be left to the wider competition authorities. He may be right, but there are dangers as well as advantages in having a busybody specialist regulator digging around in emerging industries and technologies. Overly vigilant regulation can sometimes be more harmful to advance than a dominant monopoly supplier.