Friday, April 6, 2012


It was reported by Daily Times that the Benin branch of Ecobank was penalized for unauthorized use of frequencies of megahertz (Mhz) band but the Nigerian Communication Commission (NCC) noticed that Ecobank is not the only bank engaging in this illegal practice. Every other bank does it.

Even bad good business is costly for everyone.

Everyone suffers when nobody wants to do the right thing. That is why the cost of using cyberspace would increase by this activity. The banks know this as much as you and I. Because the benefits of this practice far outweighs any cost, which the simple eye cannot even see by the way, then no one would complain.

It has been argued several times that we all need the services of the Government. When you realize that its activities serve to sanitize the markets and enables competition and entrepreneurship to flourish, that is when you will be willing to cooperate with Government policies.

Although sometimes Government does the wrong things; like every mortal does. Government is run by mortals like you and I.

As for private firms, they are in the business of maximizing profits. Social costs and benefits or morality are their tools when it would help them make more money. So isEcobank, and every other bank. If she is penalized by the NCC for unauthorized use of frequencies in cyberspace, she would not count the social costs she has imposed on others which called for this penalty but, what would she lose if she stops doing this?

If what Ecobank stands to gain is above the penalty, then I bet you, she will continue to invade cyberspace at Benin branch unauthorized.

How much penalty is enough for this case?

That is why NCC knows she has to calculate how much penalty is enough to stop this practice. If she can, it would a loss to engage in revokes 47 licenses.That is the problem of every regulator, not only that of NCC. They do not have enough information to act to make defaulters face the true costs of their actions. Even if it is in the best interest of everyone for NCC to know this, nobody is prepared to risk its company secrets to allow some regulator go through its books without being watched.

So where the penalty can never be enough, all the banks will continue this practice. NCC should be content with public warnings and occasional penalties and fines.

The end result of all this, where it pays to be bad, is that we suffer for things we would have avoided, like Ecobank’s neighbor finding that sometimes her frequencies are jammed or clogged. It might lose him money, trust, or customer loyalty, but since no one can calculate how much, it is up to anyone’s guess.

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