A mature industry faces a worrying round of hype.
The well-known cycle of technology hype, espoused by the Gartner Group, proposes a series of maturity phases for any new tech rollout. Starting with a “technology trigger,” hype builds quickly to reach the “peak of inflated expectations.” Then it trails off as reality sets in, until it reaches the “trough of disillusionment.” Later, hype rises again through the “slope of enlightenment,” eventually to reach a rational “plateau of productivity.”
We can argue about whether Gartner has got it right – or whether a linear series of phases should even be called a “cycle.” But never mind … it’s a useful framework for considering the industry’s direction and outlook, including economic prospects and regulatory trends.
Regulators aren’t immune to hype, but they tend to view transformative forces with a healthy dose of caution. After all, as we discuss in this issue’s Regulators’ Roundtable feature (see “Game Changers”), one of the key goals of a state utility commission is to maintain a semblance of certainty for utilities to invest in infrastructure. It’s implicit in the utility compact: in exchange for franchise rights and a healthy, regulated return on equity, utilities will build and operate the system. And the term “regulate” means to keep things from running amok.
Doing that, however, becomes especially difficult when market fundamentals begin to change.