Interconnecting the Network of Networks

Originally published in 2002 in The Business Economist, volume 33, issue 2. The original publication day is unrecorded.

Eli M Noam, MIT Press, 2001, 318 pages, £34.50

From The Business Economist, volume 33, issue 2 (2002).

The ‘networks’ referred to in Professor Noam’s book are those which carry voice and data and which are being linked together to create a single integrated grid. The linking of these individual networks, allowing the transfer of information from the users of one supplier to the users of another supplier, their interconnection, is the focus of this study. Regulation of this interconnection, he argues, has been governments’ principal policy lever to secure first monopoly, later a limited form of competition, and of increasing importance more recently, aims such as universal access. In the future, the author concludes, new competition particularly from system integrators will largely obviate the need for government intervention.

As Director of the Columbia University Institute for Tele-Information, a research centre which focuses on the strategy, management, and policy issues in telecommunications, computing and electronic mass media, Professor Noam brings great erudition to the analysis of the issues outlined in this book. He begins with an account of how early telecommunications companies came to be regarded as natural monopolies, and then traces the evolution of the industry’s structure as policy objectives changed and as technical and institutional innovation led to emergence of the digital economy.

Chapter 7, ‘Interconnection and Technology’, provides a lucid description of how these disparate parts are welded into something approaching a single network as well as exploring issues such as number portability.

Elsewhere such issues as pricing of interconnection and access, and legal issues surrounding the flow of content are addressed.

Noam’s final chapter includes provoking conjectures on the future of competition in the communications environment, and suggests that the regulator’s role will be greatly diminished until he is left with a handful of residual functions.

This book is essential reading for analysts both in academia and the business world as well as policy makers. A word of warning – with its closely argued text and its sparsity of diagrams, this book is not for the faint-hearted. For braver souls persistence will be well rewarded.

Keith Telford IBM United Kingdom

Archived source: 2002-08-30 website capture.