Internet PolicyDay 3 - Workshop Session No. 5
The impact of telecomms regulation
Prepared for CTO by Link Centre, Witwatersrand University, South Africa
CTO / DFID Internet Policy workshop, Jamaica, 22-26 April 2002
Sessions Summary
Day 1– Session 1 History and technical background– Session 2 Market structure
Day 2– Session 3 Interconnection, IXPs and voice over IP– Session 4 Governance and domain names
Day 3– Session 5 The impact of telecommunications regulation– Session 6 Internet specific policy issues
Day 4– Session 7 Content on the Internet – Session 8 E-commerce issues
Day 5– Session 9 Internet tools for regulators– Session 10 Conclusion, review and evaluation
CTO / DFID Internet Policy workshop, Jamaica, 22-26 April 2002
Topics of discussion Telecomms regulation
– Why regulate?– Policy, law and regulation– Best practices
Impact of telecomms regulation on the Internet Regulatory issues
– Universal access/service– Competition– Licensing– Interconnection and facilities leasing– Consumer protection– Price regulation
CTO / DFID Internet Policy workshop, Jamaica, 22-26 April 2002
Why regulate at all?
Resource allocation– Frequency spectrum
Public utility– High costs to set-up infrastructure required
protection and some guarantee of a return on the investment
Social objectives– Ensuring that prices are reasonable for all
sectors of the population
CTO / DFID Internet Policy workshop, Jamaica, 22-26 April 2002
Why regulate at all?
Efficiency– Monopolies are not efficient, no incentive to
improve service levels or lower costs– Lack of proper cost allocation and accounting
Globalisation– Rapid increase in global trade and the flow of
money– External pressures on countries– Multi-nationals playing an expand role
Aside: Who does the longest term planning?
CTO / DFID Internet Policy workshop, Jamaica, 22-26 April 2002
Policy, law and regulation
Policy– Set by government– Sector specific needs– National objectives
Law– Usually a result of certain policies
Regulation– Application of the law to the sector– Defining the relationship between market and
regulator
CTO / DFID Internet Policy workshop, Jamaica, 22-26 April 2002
Regulatory best practices
Transparency– Policies and procedures accessible to all and simple to use– Public hearings and the provision of reasons for decisions
Fairness– Impartial, equitable, lawful, unbiased and just– Fairness produces trust, credibility and legitimacy
Accountability– To government, courts, industry and consumers– Regulatory decisions should be accorded full recognition
Independence– Exercise of powers without interference or pressure– All stakeholders treated equally and with respect
CTO / DFID Internet Policy workshop, Jamaica, 22-26 April 2002
Impact of regulation on the Internet
Charging models– Local calls flat rate or time based?
Access technologies– Restrictions on international connections impact price
and quality of service– Huge impact on local loop; restrictions in access
technologies impact the roll-out of content delivery capability
Restrictions on voice– Slow down the natural integration of voice/data
services– Erodes country’s competitive skills based
CTO / DFID Internet Policy workshop, Jamaica, 22-26 April 2002
Universal Access / Service
Universal service means access to each household
Universal access means access within a reasonable distance
The goal of universal services is to bridge geographic disparities
Service must be affordable as well as available But the value of the service may actually be
higher! Changing definitions – from POTS to PANS
(Public Access Network Services)
CTO / DFID Internet Policy workshop, Jamaica, 22-26 April 2002
Competition
Competition increases efficiency and improves choice
Ideal world: totally open market means no need for regulation
Real world: imperfect competition, resources allocated unfairly or inefficiently
How governments intervene– Behavioural: Modify the behaviour of company
Example: regulating prices.
– Structural: Directly affect the market structure Example: blocking a merger of two network operators
CTO / DFID Internet Policy workshop, Jamaica, 22-26 April 2002
Competition
Advantages of incumbents– control essential facilities– economies of national networks– vertical integration– control over network standards and
development– cross subsidies
Accounting separation– to prevent unfair cross-subsidisation– to determine the real costs of interconnection
CTO / DFID Internet Policy workshop, Jamaica, 22-26 April 2002
Licensing
Three main approaches– No licensing at all– General authorisations– Government/regulator issues a
licence
Snap survey: Should ISPs be licensed?
CTO / DFID Internet Policy workshop, Jamaica, 22-26 April 2002
Interconnection and facilities leasing
Interconnection and facilities leasing– Enables communications – public interest, right
to communications, etc.– Enables competitive entry – fair competition
“Interconnection is key to the development of a competitive telecommunications arena…”.
Introduction to The European Interconnection Manual by Interconnect Communications
http://www.icc-uk.com/pubs71.html
CTO / DFID Internet Policy workshop, Jamaica, 22-26 April 2002
Consumer protection
Quality of service regulation– Price vs. quality
Consumer complaints and dispute resolution
Standards setting Informed choice: educating the
consume– Publishing comparable QoS indicators
CTO / DFID Internet Policy workshop, Jamaica, 22-26 April 2002
Summary
Why regulate? Initially to ensure service, now to ensure efficient services
Impact of telecoms regulation on the Internet
Universal service/access Competition Licensing Interconnection/facilities leasing Consumer protection
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