BY ROKU FUKUI
Roku Fukui is a SAIS alumnus who graduated in 2016 and currently works on technology issues at the World Bank.
Conventionally, phones only made calls. Today, with just a few clicks, most smartphones can search the web, pay bills, monitor your health, and call a cab. The implications of this multi-functionality demand new ways of thinking about future regulation and policies. In the past few decades, technology has dramatically advanced while disparate supporting systems and industries have evolved into single conglomerates, which now can perform a variety of tasks. Traditionally, these systems and industries provided distinct services like telecommunication, mobile networks, consumer electronics, and entertainment services. Now they have come to perform these various roles under a single design architecture. This trend is called ‘technological convergence.’ Distinct technological media such as voice, data, message and videos are now able to share resources and interact on a single platform.
Take Facebook, which started as an online platform to post personal information and interact with friends. Today, we not only post cat videos, we also message, call, exchange data, and use associated platforms like Instagram, which Facebook acquired in 2012, or WhatsApp, which was acquired in 2014. The subject of much controversy and debate, Facebook also operates as a content aggregator as it analyzes billions of data points to generate news and media on its personalized news feed. Facebook also attempts to perform the role of a traditional infrastructure provider, flying drones to provide internet to remote regions of the world.
As social and economic activities including business, trade, government, education, health, journalism and entertainment are increasingly conducted in digital spaces, technological convergence demands new policies for society to benefit from these changes while remaining protected. In many instances of convergence, companies are often not subject to specific licensing laws as they operate in nebulous digital spaces, where boundaries are opaque and constantly shifting. As digital companies serve customers regardless of geographic jurisdiction, taxes can often be avoided by establishing a fiscal presence in low-cost tax havens. Finally, there are few established data protection laws and personal privacy requirements by which companies must abide.
Ensuring competition, transparency, privacy and security has become a key element of the process of technological convergence. Regulators must now remain ahead of technological advances and facilitate the provision of different services over different platforms, ensuring technological neutrality, meaning the same regulatory principles apply regardless of technology. Their role is to monitor the entire markets for abuses of dominant positions, ensuring competition and compliance with regulatory frameworks. Often, a country’s legal framework does not contain the necessary legislation to support a digital environment, missing vital elements such as strong and stable intellectual property laws or adequate cyber security to prevent computer crime and ensure secure electronic transactions. New privacy and consumer protection rules must also be developed to secure sensitive personal data.
In the context of development, technological convergence can potentially be very dangerous when small groups of elites hold a significant amount of power. As technological convergence produces very different types of societies, there is a danger of the concentration of power in the hands of a few. In the example of transportation, with public taxis and bus drivers, each individual driver maintains a share of the transport market. Drivers can unionize and strike for better treatment and wages. In the future, if a single algorithm and self-driving vehicles dictate the transport market, conceivably controlled by a few corporations and a limited number of billionaires, the political and economic bargaining power of drivers is lost, though accidents and traffic jams would likely be limited. For developing countries, this loss of human liberty is a serious concern that more policymakers need to consider.
In developing countries around the world, general ICT services including telephone, cable and internet providers are trending towards convergence. Telecommunications and broadcasting services experienced merges in India, Brazil, Sri Lanka, Nigeria, Egypt, Ukraine, Argentina, and Chile, among others. In Egypt, Telecom Egypt, one of the five major network providers, upgraded its fixed-line network to a next-generation internet network through its internet service provider subsidiary, TE Data. Here, convergence promoted competition, lowered costs, allowed for Telecom Egypt to utilize varied business models, and broaden the range of services and technologies available for users. However, convergence could also lead to market consolidation, reducing competition, and limit entry barriers. Subscribers could be locked into a single provider, which is the case for Telecom Egypt and landlines. Smaller firms, especially those without their own broadband networks, could be pushed out of the market. Mergers could potentially lead to less competition, increased market dominance, and less diversity of media content, where the government could easily limit or prohibit use of social media or internet (which was the case during the 2011 revolution). If the telecom provider does not allow citizens to actively participate in content production, this could have potentially dangerous consequences in places like Egypt, where access to information and political volatility are closely interlinked.
Technological convergence is an inevitable process that replaces older technologies and disrupts markets. Responding to the advances in technology is vital for the healthy transition into the digital age.