Whither convergence: Legal, regulatory and trade opportunism in telecommunications

Technological and marketplace convergence supports the development of an integrated information communications and entertainment (ICE) marketplace. Yet, for various ICE market segments to function without trade barriers and competitive distortions, the legal, regulatory and trade policy regimes involved must adapt to changed circumstances. Of key importance is the need to assess whether to change basic definitions and assumptions that worked in a pre-convergent environment, but which provide opportunities for regulatory arbitrage, i.e. opportunities to tilt the competitive playing field to one's advantage by exploiting differences in classifications and qualifying for a status with less regulatory obligations and comparatively fewer market access opportunities for competitors. Many workable, semantic dichotomies break down in the convergent ICE environment, because technological innovations promote greater service flexibility and markets become more penetrable absent countervailing regulations and trade policies. For example, ventures operating in a digital environment can easily bridge pre-existing legal and regulatory distinctions between content creator and conduit. Similarly, many types of Internet venture use digitisation to eliminate pre-existing regulatory dichotomies between basic and value-added services and between different trade policies and market access commitments made for goods versus services. Convergence challenges many baseline assumptions legislators, regulators, jurists and trade policy-makers have made about ICE. Information services typically qualify for little, if any, regulatory oversight based on assumptions that they enhance and add value to regulated basic telecommunications.