Europe and telecommunications regulations

This probably qualifies as "none of my damn business," since I am an American and thus not directly affected by many European regulations. On the other hand, American companies will be subject to such rules if they wish to operate in Europe, and besides, I didn't live five years on the continent because I disliked the place.

Whatever the case, European Commission regulators may soon mandate that European telecoms strictly sequester their data and voice communications divisions from each other. The idea is to reduce the advantage that large companies who offer bundled services have over those who can't offer such bundled services. Quoting BetaNews:

While they can offer low-cost Internet service to limited areas, they can't simultaneously offer landline or mobile phone service. So customers in many countries end up choosing bundled services just for the convenience, even if the Internet component ends up being slightly higher-priced.

I do wonder if regulators may be exaggerating the problem somewhat. While in Switzerland, I received my broadband Internet service from a regional cable company affiliated with the Lausanne city government (the underlying provider was Cablecom, I believe), my phone from Orange Communications, and my fixed-line phone access from Swisscom. In Ireland, I briefly used Eircom for my fixed-line phone service (before dispensing with fixed-line altogether), used Vodafone Ireland as my mobile provider, and had broadband cable access through the local Irish cable company (Chorus Communications is a former state-owned creature which has to be the worst cable company I have ever dealt with).

I wasn't atypical in such mixing and matching behavior. Furthermore, I see little reason why any of the communications channels (data, fixed-line, mobile) would be unable to compete with any of the others. Vodafone could offer all-you-could-eat wireless broadband service for use by PCs.  Chorus could easily offer VoIP service (which it didn't at the time, but certainly could), and Eircom had its DSL service. Bundled service categories, in other words, could easily compete with other bundled service categories.

Granted, it would be more difficult to combine fixed-line service options with wireless / mobile service options, as operating in both markets is rather expensive. That, however, is where alliances enter the picture. Before AT&T started its IPTV rollout, it offered television services by way of an alliance with DirectTV (an alliance that still exists today). Chorus could link-up with O2, if they so desired, to offer a quadruple-play bundle (fixed-line phone, broadband data, television, mobile service), and Cablecom in Switzerland could link up with Sunrise (an upstart mobile provider that may not exist anymore, but did when I lived there).

Companies can and do find ways to compete in bundled product categories. I think its better to let companies figure that out and allow synergies to occur naturally rather than have bureaucrats try to impose their vision of the proper outcome as outsiders. Unexpected consequences can result. Lack of bundled features may reduce the likelihood that new features will reach wide adoption (bundling, in other words, cultivates a larger market for the individual services offered). Similarly, If media convergence is truly driven by a push to offer more bundled features, then such convergence could be derailed by short-sighted attempts to engineer the market.

I am not arguing that regulations are unnecessary. I think it's necessary to regulate telecommunications companies to ensure, say, that customers aren't locked in using long-term contracts designed to make it difficult to choose alternatives (as an example, just as I think regulations designed to prevent my company from penalizing OEMs for offering non-Microsoft operating systems are important). Boost consumer freedom to make choices. Don't try to design the kind of choices the markets offer, however.

Companies want to make money, and will find ways to counter another company's quadruple-play offering.