regulatory affairs departments

A friend working for an incumbent telco in a country moving to a more competitive environment asked me for thoughts about the organization of regulatory affiars departments. Some thoughts:

The personality of senior management, by natural selection, tends to be competitive. Regulatory affairs departments tend to emphasize regulatory competition to get support from senior management. Regulatory affairs departments can easily form their own objectives that have little relationship to the company’s long-term profitability (in economic jargon, the principal-agent problem). Doing well in regulatory lobbying is not the same as doing well as a company. Winning regulatory battles is not the same as making money.

In countries in which many companies have participated in the telecommunications industry for a number of years, companies’ regulatory affairs departments typically interact extensively with various industry associations and lobbying groups. The organization of a company’s regulatory affairs department should be considered in relation to other extra-company regulatory affairs resources.

communication: three business visions

In Sense in Communications, I distinguished among three models of communication: information transfer, story-telling, and presence. These models of communication directly relate to business visions. Information transfer is central to Google’s mission: “to organize the world’s information and make it universally accessible and useful.” Story-telling is at the heart of the television and film entertainment business. Presence has been an implicit aspect of some successful telephone company promotions, e.g. “reach out and touch someone,” “the friends and family plan.” Communications companies lacking vision might benefit from thinking more about communication.

advertising and information

Back in 2001, I documented that the share of advertising spending in total economic output (GDP) and real advertising spending per person-hour of media use has been roughly constant since 1925. The development of new sensuous forms of media, such as radio and television, did not change the macroeconomics of advertising.

Google (GOOG) has acquired a market capitalization about $125 billion using text-based advertising. Google has created value in advertising not through media innovation but by making advertising much more information-intensive.

Perhaps such a change in advertising will make possible sustained growth in the share of advertising spending in GDP.

What's The Frequency, Kenneth?

I applaud important new research from MIT on the frequency attenuation properties of aluminum foil deflector beanie helmets (AFDBHs). This research concludes:

It requires no stretch of the imagination to conclude that the current helmet craze is likely to have been propagated by the Government, possibly with the involvement of the FCC. We hope this report will encourage the paranoid community to develop improved helmet designs to avoid falling prey to these shortcomings.

The research indicates that AFDBHs disturb radio frequency waves. Nonetheless, the FCC has never regulated the use of AFDBHs. Thus the FCC is probably not responsible for the rapid growth in the use of this radio device.