Introduction to ICT (Information and

Communication Technology) Policy and

Regulation

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 Outline
ICT Policy Regulation
Overview of ICT What is regulation?
ICT and Internet Policy Why regulate?
What can be regulated?

ICT Regulations Regulatory Frameworks

Regulator
What must be regulated? Types of regulators
Why, what and how? Regulatory organization structure
Drivers of change from monopoly to competition? Best practice for setting up a regulator
Implications of technology change? Characteristics of a good regulator
Principal objective of telecom regulation? Government’s responsibility
International frameworks
Types of telecom regulations?
Assessing a country’s regulatory framework

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 Overview of ICT Policy
• We thrive with Information

• Information is transmitted via different forms of

Communications

• Technology today has sped up the speed of

communication

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Forms of Technology

• Information Technology
The usage of computers to process data

-Computer hardware and peripherals

-Software
-Computer literacy

• Telecommunications Technology
-Telephone systems
-Radio and TV broadcasting

• Network Technology
- Internet
-Mobile telephone
- Cable, DSL, Satellite and other broadband connectivity

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Information Transmission
mode

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• Difference between circuit switching and packet
switching/circuit switching vs packet switching
• Circuit switching has resource reservation, while in
packet switching there is no resource reservation.
• In Packet switching, data is divided into small units
called packets. These packets can take a path which is
shared by other packet-switching nodes. ...
• In-Circuit switching the resources are reserved for a
call or circuit. If the call is idle then there will be no
utilization of circuit from any other call. ...
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 Telia
e r
opp
orc
c

Fibre optic or copper

International
opti
bandwidth e r
TDC Fib
(Transient
Fiber optic or copper Data
) Fib
Channel
e ro
pti
c or
co
pp
er

Telenor

National bandwidth
Last mile
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• International bandwidth
- International Bandwidth the maximum quantity of data transmission
(Rate) from a country to the rest of the world.
- It is measured either in megabits per second (mbps) or in gigabits per
second (gbps).

• National bandwidth/ backhaul

- Connectivity that links the core network (backbone) to the small networks
at the edges of the network or last mile. For broadband internet it is called
the middle mile. Data rates also measured in either Mbps or Gbps.

• Last mile
- The technologies and processes used to connect the end customer to a
communications network
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 ICT AND INTERNET POLICY
Policies are rules, principles, guidelines or frameworks that are
adopted or designed by an organization to achieve long term
goals. These are usually set out in a written format that is easily
accessible. Policies are formulated to direct and exert influence
on all the major decisions to be made within the organization
and keep all activities within a set of established boundaries

ICT (Information Communication Technology) policy

generally covers three main areas: telecommunications
(especially telephone communications), broadcasting
(radio and TV) and the internet. It may be national,
regional or international. Each level may have its own
decision-making bodies, sometimes making different and
even contradictory policies

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 What is Regulation?
Regulation is administrative legislation that constitutes or constrains
rights and allocates responsibilities. It can be distinguished from primary
legislation (by Parliament or elected legislative body) on the one hand
and judicial decisions on the other hand [1]

• Regulations can be seen as implementation

artefacts of policy statements. They make up
policy statements

1. Levi-Faur, David, Regulation and Regulatory Governance, Jerusalem Papers in Regulation and Governance, No.1, 20101

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 What is usually regulated

A good of public / A good, where the demand for a good or service is

national interest considered a common
necessity for the public at large, and the supply
conditions are such that the public may
telecoms water not be provided with reasonable service at
reasonable prices, the government may
transport regulate to ensure that the service is available to all

electricity

***The general need to regulate varies from country to country

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 Why Regulate?
Regulation mandated by a state attempts to:
1. Produce outcomes which might not
otherwise occur, (eg. Facilitate competition)
2. Produce or prevent outcomes in different
places to what might otherwise occur, (
constructive or destructive outcomes)
3. Produce or prevent outcomes in different
timescales than would otherwise occur
(market failures)
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 What can be regulated?
• controls on market entries
• prices
• wages
• Development approvals
• Pollution effects, employment for certain
people in certain industries
• Standards of production for certain goods
• The military forces and services
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 ICT/Telecoms Regulations

Traditionally it was a Now it regulation of both

regulation of monopolies, monopolies, duopolies and
(Telecoms ) competitive markets

Monopoly Competition
Economies of scale Organisational
Technical efficiency efficiency
Low interconnection Pressure on tariffs
costs Innovativeness
Public interest New service
objectives development

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 What must be regulated?
Monopoly Competition

Tariffs Scarce resources

Quality of service Interconnection
Universal service Transparency
obligation (Cross subsidisation)

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 Why What How

Monopoly Protect monopoly Tariffs Direct:

Technical Quality of service Ownership
Efficiency Universal service Informal guidance
Social and obligation
Industrial policy
Competition Effective Scarce resources Indirect:
competition Interconnection Legislation
Coherent Transparency Market incentives
Infrastructure (Cross
subsidisation)

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 Drivers of change in telecom policies from monopoly to competition

1st stage
1990
-Liberalization policy broke up
Economic Politics public monopolies into private
monopolies
-- Separation of Post from telecoms
- Establishing a separate regulator

2nd stage
Globalization has -Privatization of monopolies
led to New - Opening up markets
unbundled - New licensing framework
markets, new
.international
policy framework
3rd stage
- Exclusivity of incumbent ends
that has - Full competition begins
produced new - Regulation of competition
best practices

Technology

Fixed: PSTN (Using Analogue switches)--- ISDN (digitzation)---DSL---- ADSL---- future

broadband
Wireless- Radio transmission---GSM--- UMTS--- LTE– WiMAX---- future broadband

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 Policy trend

Market/ Policy Technology Services Application

Monopoly Analogue Voice telephony Voice calls
technologies
(circuit switching)
Monopoly, Packet switching Voice + Data service SMS, Voice calls, Fax
Duopolies and Digitization
(x.25, ISDN,
analogue mobile)
Competition; Digitization has led Voice + Data service Voice, MMS, SMS,
Liberalization to Broadband, + Multimedia VOIP, IPTV, DVBH,
Privatization Internet protocol services + lots more Streaming etc
Commercialization (GSM, UMTS, LTE,
Deregulation WiMAX, WiFi, DSL,
Corperatization ADSL, HSPA, etc)

Implications: new regulatory policies

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 Types of Telecom Regulation
• Public ownership
– A part of the public administration
– Public owned corporation
• Legislation
– Licensing
– Rights and obligations
– Competition laws
• Market incentives
– Taxes and subsidies
– Tradable permits
• Self Regulation

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 Regulatory Framework
• Government: Decide on the regulatory
framework, structure and implementation.
Creates the regulator.
• Regulator: Executes the regulation
• Market players: Network operators, equipment
manufacturers, content providers, content
aggregators, equipment retailers/suppliers, etc
• Public

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Implications of Technology Change
• Unbundling of the PSTN to several horizontal
and vertical disintegrations.
• More players, Network providers, content
providers, content aggregators, application
providers, equipment manufacturers,
equipment suppliers etc.
• Movement for diverged service platforms to a
converged service platforms.

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 Principal Objective of Telecom Regulation

Social/Political interest: Availability of service and continuity.

The service should be made available to everyone on reasonable terms,

sometimes whether or not it is profitable to do so.

Economic interest: Prevention of monopolistic behaviour to avoid failure, Promotion of

competition through incentive regulations , Use of scarce resources in an efficient way.

The services should satisfy the full range of consumer demand and be supplied
under conditions of optimal efficiency

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 Regulator
• Management of scare resources (spectrum, numbering, right of
way)
• Responds to the challenges made possible by new technologies that
will raise the need for a new regulation, eg privacy concerns etc.
• Manages the evolving markets made possible by convergence
• Tackles how to deal with disruptive technologies and how to protect
public interest when they discover that the market for the new
technology can't take off because of the impediments in former
regulations that prevent it. (eg voip and IPTV)
• It is advisable for the regulator to inform the public on the
limitations that comes with new technologies. This isn't very
practical

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 Types of Regulators
• Single sector regulator (Oversee only one sector, eg only
telecoms)
• Converged sector regulator (Oversee several inter-relating
sectors eg, Telecoms, broadcast, electronic payment)
• Multi sector regulator (Oversee sectors with common
economic and legal characteristics eg, telecoms, water,
energy, transportation. Under one umbrella)
• A competition authority (no regulator as such but apply
competition and anti trust rules). Antitrust laws are
regulations that encourage competition by limiting the
market power of any particular firm
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 Regulatory organization structure
• The collegial body: A board or commission composed of
multiple members. Here individuals are with different
expertise, more independent, but development of
regulation may be slower due to internal wrangling

• The single regulator: Often led by a chairperson or

president. single regulator has benefit of consistent
approach to regulation and decision making. They can
act quickly but can be influenced by external actors.
he/she may not be able to match the expertise of the
collegial body
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 Best practice for setting up a regulator
• Regulators must be independent to be seen as
transparent and accountable.
• Regulators should have the expertise to assess and make
sound judgements on both technical and industry
specific issues.
• Regulators must take into account various view points
and interests, including economic, social and political
objectives. there should be checks and balances.
• The institutional design, internal structure and
administration must be sufficiently flexible to allow the
regulator to respond to market realities.
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 Characteristic of a good regulator
• Accountability
• Transparency
• Predictability

Some areas to regulate competition

• Local services
• Domestic long distance service
• International long distance services
• Mobile
• Internet services
• Leased lines
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 Government’s responsibility
Must grant the regulator structural, financial and functionality
independence
• Structural: Free from political and industry capture to ensure
transparency and objectivity.
• Financial: Funding should be free from private and political
interests. The regulator should manage its funds and also have
multiple ways of sourcing for funds
• Functionality: The regulator should be independent in making and
enforcing authority, dispute resolution powers, clear rule involving
appointment , removal and mandate of regulatory authority,
incentives to promote professional expertise of staff, adequate
provisions to address ethical and conflict-of-interest-concerns.

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 International Frameworks
• Countries make global and regional commitments to
open the telecommunication market to foreign
investment
• They also make commitments to harmonize legislation
with that of other countries in similar geographic or
economic situations eg EU framework, WTO, NEPAD (New
Partnership for Africa Development)etc
The advantage of this could be the development of global or regional
regulatory best practices.
It can also grant the telecoms investor a level of certainty and
predictability of the regulatory regime in the country he or she wants to
be a part of.
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 Assessing a country’s Regulatory
Framework
• Greater economic growth
• Increased investment in the sector
• Lower prices
• Better quality of service
• Higher penetration and a more rapid
innovation in the sector

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 Summary
• Regulation is an important tool to ensure public interest in the
telecoms market
• Technology, Economics and politics are the driving force for new
regulations and the initial movement from monopoly to competition
markets
• Tariffs, interconnectivity, scarce resources, transparency, Quality of
service, Universal Access and Services are some of the areas
regulated in telecommunications
• Telecommunication is regulated to promote its social and economic
benefits to citizens of a country
• A regulator must be independent to function properly
• Countries do sign up with international regulatory frameworks to
enable them develop best practices
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