WORKSHOP ON COMMUNICATIONS REGULATION …pubdocs.worldbank.org/en/391271437690468481/03...WORKSHOP ON COMMUNICATIONS REGULATION IN SOMALIA World Bank Group Offices, Nairobi June 2015

WORKSHOP ON COMMUNICATIONS

REGULATION IN SOMALIA World Bank Group Offices, Nairobi

June 2015

Presenter: Dr. Monica Kerretts-Makau

Policy & Regulatory Consultant WBG

POLICY AND REGULATION

• Policy and regulatory issues are interrelated

• The intensity and purpose of regulation are determined by the adopted sector policy

• The objective is to have an evolving efficient ICT sector to leverage socio-economic development

• Most countries find competition an enabling facility to attract investment and develop the services and sector

• In developed countries where there is a long history of market economy and well-established competition laws there is less need for regulation

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RATIONALE FOR REGULATION

• WTO GATS FRAMEWORK

• Cooperation is enabled in a competitive environment to ensure that a level playing field exists between unequal entities in the marketplace;

• All equipment suppliers are treated equally where the market is dominated by a single buyer with strong pre-existing relationships with suppliers;

• All new entrants and investors in the telecommunications service sector are treated equally by the dominant competitor, who will be a supplier of inputs (e.g., interconnection) to the businesses of the new entrants; and

• All customers have a “voice” and their complaints and interests receive an adequate response.

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ROLES OF REGULATOR

• Implementing the authorization framework that provides opportunities for new companies and investors to establish ICT businesses. Simple authorization procedures tend to maximize new entry (case example of the ULF framework)

• Regulating competition (including tariffs) involving the effective

enforcement of fair and equitable competitive market principles, restraining the power of dominant suppliers and leveling the playing field for new entrants (case example of the competition policy by product/service)

• Interconnecting networks and facilities. Normally transparent rules

are established for interconnecting all types of traditional and new communications networks and associated cost-based (case example of Kenya’s and South Africa’s interconnection issues)

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ROLES OF REGULATOR

• Implementing universal service/access mechanisms to ensure the widespread (and affordable) diffusion of ICT ( Case example: Challenges in African countries and options used)

• Facilitate new entrants and new technologies, which is particularly

relevant to new broadband wireless opportunities such as Wi-Fi and wimax or application service providers (example of growth of application providers in the region)

• Establishing sufficient safeguards to ensure that consumers, particularly children, are protected against bad business practices, cyber crimes and violations of data privacy

• Minimizing the burden and costs of regulation and contract enforcement

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REGULATION OPTIONS

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Developed countries Developing countries

Ex ante regulation

Light-touch regulation for, Strong competition •Detailed regulations •Strong law enforcement mechanisms •Law-observing stakeholders

More heavy-touch regulation needed Weak competition Infant regulatory system Operators uncomfortable with laws

Ex post regulation

Strong system exists •Clear detailed competition laws •A long history of free market operation Strong judicial system •Strong law enforcement mechanisms

Stronger system needed Competition laws needed if not there Competition laws enforcement normally weak Stronger justice system needed Stronger law-enforcement mechanisms needed

REGULATORY INDEPENDENCE/CO-DEPENDNCE

• Providing the regulator with a distinct statutory authority, free of ministerial control;

• Prescribing well-defined professional criteria for appointments;

• Involving both the executive and the legislative branches of government in the appointment process;

• Appointing regulators (the Director General or Board/Commission members) for a fixed period and prohibiting their removal (subject to formal review), except for clearly defined due cause;

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FORMS OF ENHANCING INDEPENDENCE

• Where a collegiate (Board/Commission) structure has been chosen, staggering the terms of members so that they can be replaced only gradually by each successive government;

• Providing the agency with a reliable and adequate source of funding. Optimally, charges for specific services or levies on the sector can be used to fund the regulator to insulate it from political interference through the budget process;

• Exempting the regulator from civil service salary limits to attract and retain the best qualified staff and to ensure adequate good governance incentives; and

• Prohibiting the executive from overturning the agency’s decisions, except through carefully designed channels such as new legislation or appeals to the courts based on existing law.

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TRANSPARENCY, ACCOUNTABILITY AND PREDICTABILITY

• Clear division of responsibilities between the ICT regulator, ministries and other regulatory agencies, such as the competition authority etc

• Mandating that the regulator publishes its reasoned decisions

• Publishing the statutes of the regulator that clearly specify the duties, responsibilities, rights and obligations of the regulator, as well as differentiating between primary and secondary regulatory goals where there are multiple goals;

• Ensuring that the decisions of the regulator are subject to review by the courts or some other non-political entity although some “threshold” should be established to deter frivolous challenges that simply delay the implementation of decisions;.

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REGULATION

• Proactive and responsive

• Regulation should be guided by a need for clear and predictable framework

• Regulation needs to meet a range of public interest objectives whilst recognising the need to promote investment particularly in new services

• Regulation should facilitate full participation by citizens in the information society

• Regulation should be limited to what is strictly necessary to achieve clearly identifiable goals

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LICENSING AS A FORM OF REGULATION

• License New Players to promote Competition, Stimulate Investment & Innovation and overall Growth of the Sector

• Protect Consumers by Promoting Choice through Provision of

a Variety of Services and Players in a competitive marketplace • Provide for a framework for fostering the Rights and

Obligations for all players • Promote Quality through the development and enforcement

of standards for both equipment, Networks and services

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• The provision of facilities and services in the telecom sector requires a license:

LICENSING

Notes License Type country

Technology and service neutral licensing regime

Unified access service(UAS) License/ Unified License

Most Used – Kenya, Uganda, Southern Africa, Global etc

Technology and service neutral licensing regime based on activities

Network facilities License Network services License Application services License Content service License

Tanzania

Service based licensing regime

Fixed services Mobile services

Sudan

SPECTRUM ALLOCATION

• The Radio Regulations adopted by the ITU member states lays the basis for the use of the radio frequency spectrum (Frequency Allocation Table)

• A country will prepare its National Frequency Allocation Table where specific frequencies are allocated for use by specific services possibly under specific conditions

• These allocations may be on either exclusive, shared, primary or secondary basis

RECOMMENDATIONS

• Competition is already established in Somali telecom sector

• Consider unified licensing

• Allow a reasonable percentage of shares to Somali nationals in each licensee

• Introduce public sharing in the licensees where does not already exist and increase to a reasonable percentage

• Use revenue sharing for license renewal fees

RECOMMENDATIONS

• Apply effective methods for managing the frequency spectrum

• Apply LRIC methodology for calculating termination rates and consider the need for mandating asymmetrical rates

• Consider licensing two or more marine cables landing stations, not only one

• Consider mandating passive infrastructure (masts, ducts,…) sharing

• Arrange for management of the USF

• Prepare the necessary regulations

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THANK YOU

• IC4D 2012: Maximizing Mobile report (www.worldbank.org/ict/IC4D2012)

• ICT Regulation Toolkit (www.ICTregulationtoolkit.org)

• eTransform Africa Report (www.etransformAfrica.org)

• Broadband Strategies Toolkit (www.broadbandtoolkit.org)

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