Eli Noam: Market failure in the media sector

I came across Eli Noam's article in the Financial Times while visiting Kevin Werbach's blog. I haven't seen or heard about Eli Noam in a long while since I interned at his institute, the Columbia Institute for Tele-Information, during graduate school. Anyway, Kevin's comments follow and read Noam's article if you're interested in information technology, telecom, and their related policy issues:

The fundamental business challenge of our times
Eli Noam of Columbia Business School has an important Financial Times column pointing out the fundamental business challenge facing the tech sector: commoditization.

"The market failure of the entire information sector is one of the fundamental trends of our time, with far-reaching long-term effects, and it is happening right in front of our eyes."

Eli is by nature a cynic, so what he has to say is often not pleasant. But he has the unfortunate habit of being right much of the time, and ahead of the curve virtually all the time. I've disagreed with some of his conclusions, but I'm with him on the core insight: there is a basic structural disconnect in the economics of information industries, with painful consequences. We saw it first in telecom, where VOIP is now bringing the issue to a boil, but it's broader than that.