Technological convergence in the telecommunications and broadcasting markets is hastened by the growth of broadband networks, since the higher speeds and larger capacities of broadband create new opportunities for operators to offer an array of services, including voice, data, and video. For example, two of the largest broadband network operators in the world, Comcast and Time Warner, began as cable television (TV) operators, but now derive substantial revenues from Internet and voice services, as well as from pay TV, particularly through their “triple-play” packages (Raja 2010). Broadband also supports the expansion of markets and competition as well as helping to reduce prices, improve the efficiency of service provision, and increase the variety of offerings for subscribers. To facilitate the supply of emerging wireline and mobile broadband networks, an enabling licensing framework is necessary.
Convergence and the distributed nature of networks and communications have unleashed a disruptive force across traditionally segregated industries that demands new, flexible, enabling responses (Benkler 2006). Traditional, service-specific regulatory frameworks have typically required separate licenses for wireline, wireless, and broadcasting networks as well as for different types of services. In many instances, operators have been prohibited from offering services outside their traditional, rigidly defined industry—even though new digital broadband technologies make this easily possible. For example, Internet Protocol television (IPTV) was restricted in the Republic of Korea until the IPTV Business Act of 2008 permitted telecommunications operators to offer television programs in real time over their broadband networks. Within a year of enabling this converged technology and licensing three IPTV operators, Korea had more than 1 million IPTV subscribers.
As this and similar cases demonstrate, distinctions between types of network infrastructure are becoming increasingly impractical in a converged environment. Thus policy makers and regulators in both the developed and developing worlds are enacting reforms to transform legacy regulatory regimes so that they can effectively address converged networks and services. These efforts generally have two key elements: (1) the introduction of the principles of technology and service neutrality and (2) the establishment of greater flexibility in key aspects of licensing and authorization frameworks, particularly the authorization of a wide range of networks and services under a single license. At the same time, there is expected to be greater reliance on broad competition law and regulation, as the historic restrictions contained in licenses and authorizations are progressively reduced.