.mobi will thwart the VoIP revolution
The telecommunications industry is on the verge of a revolution driven by the growing use of the Internet technology for voice telephony.
By circumventing the traditional cost structure and barriers to entry, VoIP telephony is drastically changing the competitive landscape in the telecommunications industry by allowing new cost efficient competitors to successfully challenge incumbents. This structural change in the industry is bringing it closer to a 'contestable market' status.
A 'contestable market', in modern economic theory, is considered to be the ultimate benchmark for efficient competition and offers properties that are highly desirable from a social welfare and public policy point of view (see: Baumol, American Economic Review 1982).
In this respect, the granting of a telecommunications TLD by ICANN should be encouraged because it will accelerate the widespread adoption of VoIP telephony by consumers which in turn will improve the competitive structure of the telecommunications industry. In short, a virtuous cycle! Regrettably, the Mobi JV proposal, far from embracing this coming VoIP revolution, is a disguised attempt by certain incumbents (Microsoft, Nokia and Vodafone) to preserve their dominant market positions by taking control of an ICANN approved TLD which will be the 'nerve center' through which VoIP providers will need to 'transit' in order to access mobile devices or users. Can these incumbents be relied upon to administer this 'nerve center' in a fair way? The contestable market theory provides a straightforward answer:
In a perfectly 'contestable market', the firms that emerge in the long run are those which produce the industry's output at the lowest possible cost, which, when applied to the telecommunications industry, would mean that VoIP providers, because of their lower cost structure, will slowly but surely either supplant the incumbent operators or oblige them to become more cost efficient. Under these circumstances, the founders of Mobi JV have no interest in overseeing their own demise and therefore will probably not administer the 'nerve center' or the .mobi sTLD in a fair way!
By granting the .mobi sTLD to incumbents which have a proven track record of predatory and monopolistic behaviour, ICANN will likely reduce competition and innovation in the industry. Is ICANN prepared to take this gamble?
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