The Public Policy Environment of the Privacy-Security Conundrum/Complement

Public policy constraints impact deployment of most technology underlying the convergence of digital technologies in telecommunications, e-commerce, and e-government. Networked computers increase the vulnerability of confidential data, transaction processing infrastructure and national security. Compliance regulation imposes complex constrains on data management by government, the private-sector and their personnel. Privacy and security are a balance between individual interests in secrecy/solitude and society’s interests in security, order, and efficiency. This chapter explores the key political, legal, and regulatory methods for resolving conflicts between privacy rights and security methods to encourage convergence success. The “Privacy-Security Conundrum” is framed, then set against the more cross-dependant relationships of a “Privacy-Security Complement.” Security law illustrates that the conundrum-complement dilemma serves to define convergence as constrained and induced by the legal and policy perspectives or privacy, intellectual property, technology transfer, electronic records management, torts, criminal law, fiduciary and contractual duties and professional ethics regulating privacy and security.

Issues in Internet Governance

“Internet Governance,” not to be confused with “e-government,” refers to the complex interaction of hardware (root-servers), software and public and private entities through which content is made available over the World Wide Web. The largely libertarian origins of Internet management, which helped it spread in a decentralized fashion, are under increasing pressure from various interest groups. The outcome of this tussle, and the future structure of Internet governance, will have significant geopolitical repercussions, especially in the context of the continuing tendency of digital convergence.

Mobile Payment Issues and Policy Implications

This chapter introduces three mobile payment plans that have been launched in Korea: mobile banking service, mobile prepaid electronic cash service and mobile phone bill service. Based on the recent experiences of the Korean economy, this chapter discusses the regulatory and monetary policy issues associated with mobile payments. Mobile payments are superior to existing means of payments because of their efficiency and convenience and mobile network operators (MNOs) are on the verge of turning into non-bank financial institutions in their nature. The government needs to facilitate the crossbreed between banks and MNOs to accelerate the development of efficient payment instruments rather than hindering innovation in banking industry.

Network Effects and the Evolution of Internet Auctions

Based on the weekly data of listings and Web site usage of eBay and Yahoo!Auctions, as well as fee schedules and available auction mechanisms, this chapter provides empirical support of the network effect in Internet auctions: A seller’s expected auction revenue increases with page views per listing on one hand and increased listings raise page views per listing on the other hand. The existence of the network effect between Web site usage and listings explains the first mover’s advantage and the dominance of eBay even with higher fees in the Internet auctions market. Our empirical findings also highlight unique features of Internet auctions, especially in the entry behavior of potential bidders into specific auctions, inviting more theoretical studies of the market microstructure of Internet auctions.

Open Systems in Digital Convergence

The greater the degree of digital convergence, the higher the potential for monopoly behavior. Open systems minimize the possibility of monopoly behavior. But what are open systems? This paper explores the different meanings and criteria suggested by the term open systems and the many ways openness is viewed. It specifically discusses open systems, open architectures, Open Source, open interfaces and open standards to better understand each. Identifying and agreeing upon what constitutes openness is an important step to avoid any disadvantages of digital convergence.

Digital Convergence and IP Divergence

This chapter proposes a legal, political, and social framework for a nation to formulate proper copyright policy and minimize the risk of potential IP trade conflicts in the digital age. It examines the challenges that the Internet and digital technology present to the traditional copyright legal system. It reviews and compares the copyright history in the U.S. and China, and explores major rationales behind copyright policies of these two countries as well as the main reasons why they were able to avert potential IP trade wars in recent years. By drawing on their experiences, the author argues that the interest of a country is only best served by tailoring its IP regimes to its particular economic and social circumstances. The author believes a nation’s copyright policy should always strike a sound balance of IP protection and social development, and makes some specific suggestions on how to achieve this in the digital age.

Broadband Technology

An important struggle for the control of the Internet is underway. It is fundamental in as much as it initiates control of the broadband network itself. It raises issues about what resources users will be able to reach, what content will be accessible, from whom and at what price and what functions application providers will be able to deliver. A core issue is control of transmission capacity. The chapter notes the struggles between carrier/content interests which desire to use Internet technologies for control of the global network and the global Internet. Implications for terrestrial networks, radio spectrum and satellite broadband are discussed. Finally the chapter concludes that access to broadband networks is a pre-condition for opening up opportunities for globalization and social integration and for making the power of the knowledge economy widespread. International organizations have a significant role to play in advancing this process.

Innovation Strategies in Digital Convergence

This chapter examines the innovation strategy of one of the major telecom companies—Nokia—in its efforts to develop a sustainable position in the emerging digital home market. The analysis of Nokia’s innovation strategy in the digital domain is based on Abernathy and Clark’s (1985) classification which differentiates between different types of innovations, depending on their impact on the firm’s competitive position. The case study finds that Nokia follows a niche creation strategy, relying on its existing technological competencies in areas such as handset design and open device architecture, while building new market competencies developed either in house, or through collaboration with industry partners. The chapter provides an in depth view into the strategic actions of a large firm which attempts to build a sustainable competitive advantage in an emerging market by taking advantage of the opportunities arising from the convergence of digital home technologies.

Modified Lease Auction

This paper proposes a system by means of which the utilization of radio spectrum may be improved from extreme inefficiency at present to equilibrium and efficiency in the future. It introduces a system which takes advantage of market mechanism with regard to spectrum assignment as distinct from spectrum allocation. It is composed of two parts. The first part proposes a system called “modified lease auction (MLA),” in which the government leases (rents) spectrum competitively to business and public users. To protect incumbents from excessive risk of losing spectrum rights, it proposes a number of ways including a provision of insurance. The second part considers the transition from the current system to MLA. It proposes a process in which the spectrum price be increased gradually from the current zero level to the target equilibrium level. Further, in order to reconcile to oppositions by incumbents to MLA, a scheme is proposed for compensating income to incumbents without hurting the incentive to save spectrum.

Is this the Global Village?

A long-held desire on the part of many concerned technologists and social scientists has been the creation of a system that would allow individuals in the remotest regions of the globe to have access to communications technologies. Today, Voice over Internet Protocol (VoIP) allows individuals in regions formerly restricted by economic, geographic or cultural reasons to communicate on a broader scale at a reasonable financial cost, through convergent systems and wireless means, for purposes defined by themselves. This analysis explains the core components of VoIP and how it facilitates communication, considers the social and cultural impact of VoIP on a global scale and examines whether we are entering a truly “global village” through greater use of VoIP technologies.