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 / Spring 2009 / Issue 54(originally published by Booz & Company)


Watching over the Web

As a substitute parent, provide the tools and resources needed to back up your education — for example, make high-quality content- and spam-filtering software easily available. Even more importantly, be as transparent and consistent as possible in your communications with consumers. Let them know exactly what your policies are, and make sure, if you promote a form of protection, that people at every level of the company understand it and can help consumers adopt it.

As a referee, be prepared to step away from your home ground when you can do so transparently. Contrary to some perceptions, consumers accept restrictions — but only when those restrictions are enforced with clear statements and a consistent, reliable framework. For example, if a consistent, high-quality user experience, without perceptible delays requires active traffic management, consumers will accept that, so long as it is fair and transparent.

And when you take on the policing role, recognize that you can­not act alone. For example, blocking (or reducing the speed of access to) some Internet sites can place a company at legal risk. Only if you are mandated by law to block certain Internet sites owing to content concerns will you be less vulnerable to accusations of infringement of copyright, civil liberties, freedom of speech, and Net neutrality.

The Internet industry as a whole, sooner or later, will have to demonstrate that it is serious about digital confidence by developing coherent solutions. Network operators and ISPs will need to work closely with each other, and with regulators around the world, to build collective confidence in the Internet. They will need to address all areas that clearly fall outside an individual service provider’s activity: for example, blacklisting illegal content, enforcing laws against spamming, and preventing large-scale DoS attacks.

The most effective solutions will have the commitment of all players, and they will proportion­ately allocate the cost of implementation and the resulting financial rewards. Regulators must allow in­dustry to develop such solutions and foster stakeholder co­operation and financial support programs while allowing competitive pressures to work, rather than applying regulation that may be counterproductive from a consumer point of view and may cause economic damage. For example, our analysis shows that a strict quality-of-service regulation banning most forms of traffic management could increase the capital expenditure requirements of network operators across Europe by up to $8 billion (€6 billion).

In the meantime, network operators are increasingly aware that they need to build and invest in their customers’ digital confidence to grow new advanced services. Their reputation, their competitive advantage, and the overall growth of the medium depend on it. Nothing, not even their technological edge, is as critical to their future success.

Reprint No. 09102

Author Profiles:

Thomas Künstner is a partner with Booz & Company’s communications, media, and technology practice. Based in Düsseldorf, he focuses on convergence markets and advises top management teams in the communications and media industry on strategic and organizational issues.

Manuel Kohnstamm is the managing director of public policy and communications for Liberty Global, a leading inter­national cable operator and provider of telephone and broadband services in Europe, the Americas, and Asia/Pacific. He is also a board member of Belgian cable operator Telenet NV and president of the industry group Cable Europe.

Stephan Luiten is the director of public policy for Liberty Global. He was formerly the director of Brussels-based E.U. public affairs consultancy European Strategy (now Grayling). He has also worked for the European Commission’s Directorate General Internal Market.

Also contributing to this article were Booz & Company Principals Michael Fischer and John Ward. This article was adapted from the 2008 Liberty Global report “Digital Confidence: Securing the Next Wave of Digital Growth,” by Thomas Künstner, Michael Fischer, John Ward, Martin Brunner, and Florian Pötscher.
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