Transcript No Slide Title - Internet Policy course

Internet Policy
Day 3 - Workshop Session No. 5
The impact of telecomms regulation
Prepared for CTO by Link Centre, Witwatersrand
University, South Africa
Sessions Summary
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Day 1
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Interconnection, IXPs and voice over IP
Governance and domain names
Session 5
Session 6
The impact of telecommunications regulation
Internet specific policy issues
Day 4
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Session 3
Session 4
Day 3
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History and technical background
Market structure
Day 2
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Session 1
Session 2
Session 7
Session 8
Content on the Internet
E-commerce issues
Day 5
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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
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Telecomms regulation
– Why regulate?
– Policy, law and regulation
– Best practices
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Impact of telecomms regulation on the Internet
Regulatory issues
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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?
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Resource allocation
– Frequency spectrum
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Public utility
– High costs to set-up infrastructure required protection
and some guarantee of a return on the investment
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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?
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Efficiency
– Monopolies are not efficient, no incentive to improve
service levels or lower costs
– Lack of proper cost allocation and accounting
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Globalisation
– Rapid increase in global trade and the flow of money
– External pressures on countries
– Multi-nationals playing an expand role
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Aside: Who does the longest term planning?
CTO / DFID Internet Policy workshop, Jamaica, 22-26 April 2002
Policy, law and regulation
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Policy
– Set by government
– Sector specific needs
– National objectives
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Law
– Usually a result of certain policies
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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
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Transparency
– Policies and procedures accessible to all and simple to use
– Public hearings and the provision of reasons for decisions
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Fairness
– Impartial, equitable, lawful, unbiased and just
– Fairness produces trust, credibility and legitimacy
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Accountability
– To government, courts, industry and consumers
– Regulatory decisions should be accorded full recognition
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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
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Charging models
– Local calls flat rate or time based?
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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
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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
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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
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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
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Example: regulating prices.
– Structural: Directly affect the market structure
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Example: blocking a merger of two network operators
CTO / DFID Internet Policy workshop, Jamaica, 22-26 April 2002
Competition
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Advantages of incumbents
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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
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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
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Quality of service regulation
– Price vs. quality
Consumer complaints and dispute resolution
 Standards setting
 Informed choice: educating the consume
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– 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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CTO / DFID Internet Policy workshop, Jamaica, 22-26 April 2002