Interoperability Provision in NGC: the case of Italian DTV

Purpose – The deployment of next generation communications (NGC) progresses unevenly, frequently suffering from insufficient interoperability. Interoperability remains a fundamental driver for NGC diffusion, but existing theories remain vague on how to ensure its provision. Since interoperability features increasing returns and public good regimes, its market provision may be hampered. At the same time, public efforts might be ineffective when colliding with private operators’ incentives. Sometimes, the policy instruments used might even distort technological diffusion and competition in a way incompatible with a market-neutral approach. This paper aims to investigate these issues. Design/methodology/approach – This paper first reviews the literature on the economics of standardisation, the provision of private and public goods and the regulation of NGC. Then, it illustrates the EU policy on interactive television. Finally, it presents a research case study, analysing the recent implementation of this policy in Italy. Findings – Coherently with the hypothesis of the literature, the case study confirms that the public-private interplay for interoperability is complex, and that the public and subsidised provision of an open standard might be captured by private interests. Research limitations/implications – The case study is representative of the dilemmas affecting future policy-making in NGC. More case studies will corroborate the above findings, better clarifying the available options to ensure a virtuous public private interplay. Practical implications – Policy should be carefully framed in a way to impose market-neutral implementations. Further, open standards – although valuable – are not a panacea and can be useless when systemically tied to other proprietary intellectual property rights (IPRs). Originality/value – This is a first case study in a new field of policy assessment. The evidence provided is valuable for scholars, practitioners and policy-makers dealing with NGC. Paper type Case study