[governance] reality check on economics

[Lee W McKnight]

Just one more link re China's regulatory actions permitting the Google-Motorola Mobility merger to conclude:

http://www.rethink-wireless.com/2012/05/21/android-remain-free-open-years-china.htm

Main condition is  Google cannot restrict access to the Android OS for the next 5 years.

So returning to the original consumer/user focus of this thread; the regulatory approval process for M&A activities including of major multinational enterprises impacting the Internet seems to work more or less well. With China the notable newcomer joining the default gauntlet of US and EU regulators which those firms must pass by to conclude major deals. (Other national regulators matter too, of course, but from a power politics point of view, not so much.)

However, to Guru's, Parminder's, Jeremy's and Louis' concerns for consumers/users and their democratic rights, we can't point to similarly effective opportunities for their direct intervention at global level, nor equally effective coordination of national regulators.

Except perhaps...in areas of Internet governance where existing global MSH mechanisms, namely ICANN, are the market-makers and regulators.  Eg, for gTLDs.

Lee


________________________________
From: governance-request at lists.igcaucus.org [governance-request at lists.igcaucus.org] on behalf of parminder [parminder at itforchange.net]
Sent: Monday, May 21, 2012 7:06 AM
To: governance at lists.igcaucus.org
Subject: Re: [governance] reality check on economics



On Monday 21 May 2012 01:41 AM, Milton L Mueller wrote:

SNIP.... Let's say there is a cartel or monopoly of some kind over telecom equipment production for the international market in an Indian state. That monopoly - if indeed it has monopoly power - is likely to be politically popular and politically protected locally. (Need I remind you of the controversy over allowing multinational retailers into India's cartelized local scene?) That is, the monopoly profits that are being made can easily be directed to local politicians, may create higher than market wages for the local workers and higher local tax revenues.

If the consumers of these services, who pay too much, are diffused all over the world, and the suppliers/beneficiaries of market power are concentrated locally, then yes, it is unlikely that local political and regulatory institutions will respond properly.


Yes, Milton, very good analysis. This is exactly the situation. The monopolies are almost all based in the US, and consumers are spread worldwide. And since the local politicians, and also economy, benefits from these monopolies, they would not take the necessary action. It has to be taken somewhere else.


So, we need global institutions.


Yes, very true. Exactly the right conclusion from your right analysis. thanks. So now I hope we can take it that you agree that we need some kind of global regulatory system for the global Internet industry.. :)  parminder

We do have institutions for global regulation of business now. One of them is called the World Trade Organization, which tries to prevent national governments from discriminating against foreign entrants. But somehow, I get the feeling that the WTO is not too popular among the economic populists calling for global regulation of Internet businesses. But, maybe I am wrong, perhaps Parminder has discovered (belatedly) the virtues of neoliberal economic policies and is seeking to expand these benefits to the Internet domain.




The question i have then, beyond the regional/local problem of


countries etc that allow such local capture, is there a global way to
help with this.  I think there may be, and thus it is worth discussing.
Except for a very few companies, and these rather incompletely, most
companies do not make social ethics a high priority and thus will take
market power whenever they can, by whatever means they can get it.
Unfortunately, it is only regulatory frameworks that stop most companies
from this sort of behavior.  So what can be done at a global level to
keep local/regional monopolies from happening.


avri



Avri,

I think you have begun a useful thread of thought - the need for global
regulation of business. This is an extension of the national regulation
of business, to a global space as the Internet, and much required. The
lack of global regulation has led to so many abuses of market power and
political power.

My question for you is - in the processes of framing national
regulation, would you have the concerned companies "on an equal footing"
as with the other stakeholders, wherein a verizon or google can veto any
definition of net neutrality other than theirs. Or is it that each
stakeholder group has an important yet distinct role  - and that of
business is certainly to forward arguments for their practices and
provide any expertise... but business given their very nature/need to
maximise their shareholder wealth cannot be expected to protect public
interest or 'make social ethics their priority' as you put it. What is
the implication of this for defining the nature of MSH?

You must be familiar with the ALEC lobbying efforts in USA, and the
impact on US regulation in the past few years. How can we ensure
regulation/policy making to be based on negotiation of perceptions of
public interest? What would be the implications of allowing powerful
corporates 'equal place' at the policy table? How would it work?

regards
Guru




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