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Opening networks through regulation

Arq Hector OsunaIssue:Global-ICT 2009
Article no.:4
Topic:Opening networks through regulation
Author:Héctor Osuna Jaime
Title:Chairman
Organisation:Federal Telecommunications Commission, Mexico
PDF size:208KB

About author

Héctor Osuna Jaime is currently the Chairman of the Comisión Federal de Telecomunicaciones (COFETEL), Mexico’s regulator for telecommunications. Héctor Osuna Jaime, an active promoter of Mexico’s social development, has had an extensive career in public service. He has served as a Congressional Representative of Baja California as Mayor of Tijuana, Baja California, and as a Federal Senator. In the Senate he chaired the Communications and Transportations Commission and was a member of the Parliamentary Commission for Telecommunications. Prior to beginning his career in public service Mr Jaime worked as an architect for several companies. Héctor Osuna Jaime graduated from Universidad Autónoma de Guadalajara as an Architect.

 

Article abstract

Regulators have played a pivotal role in the universalisation of telecommunications services and in reducing the digital divide. By liberalising the telecommunications sector within their countries, fostering free and fair competition on a level playing field and facilitating the adoption of new, lower-cost, converged technologies, regulators have encouraged the growth and usage of telecommunications. In many parts of the world, regulators have played a major role in the near universalisation of voice communications and the rapid growth of the Internet.

 

Full Article

It has been almost 20 years since most countries began to implement their liberalization strategy for the telecom sector. Privatizations of the incumbent carrier, accompanied by legal and regulatory frameworks were enacted to establish an open and competitive environment. The objectives were clear for all governments. We were looking for an increased coverage of services, better quality and a reduction of tariffs. The results have been quite good. Private telecom carriers and vendors have achieved a dynamic and profitable market, while governments have devoted their efforts to maintaining a level playing field, together with universal service provisions that have increased tele-density (telephone lines per 100 inhabitants), in such a way that more people now have access to telecommunications services. Nonetheless, the challenges are still big - in fact, they are even bigger, since ICTs are now not only an industrial sector, but the platform through which information is being created and shared, ready to be transformed into knowledge that can help countries to be more competitive. Missing links and the digital divide Today there is no doubt that the objectives should remain the same - increased coverage, more services, better quality and a reduction in tariffs and rates resulting from a competitive environment. Nevertheless, the market, the technology, the industry and the services have changed. In the late eighties, the main objective was to provide - at least - access to basic voice telephony services. Today that has changed and the goal is to give every person in the world broadband access to the information superhighway - the Internet. In the autumn of 1982, the Plenipotentiary Conference of the International Telecommunication Union (ITU) at Nairobi decided to set up an Independent Commission for World-Wide Telecommunications Development. As a result, in 1984 the ITU published a report (The Maitland report) which identified large disparities in the distribution of telephones around the world. The report stated that 75 per cent of the world’s telephones were located in the major industrialized nations including the United States, Japan and the major economies in Western Europe. The report recommended ways to address these huge inequalities in the provision of telecommunications services. This imbalance was then referred to as the ‘missing link’. Today, many of the original objectives of reaching a larger portion of the world population with basic telephone services have been achieved. Indeed, the original goal of ‘universal’ telephone access has, with mobile telephony, come quite close to being achieved in many parts of the world. In any case, the telecommunications sector has evolved in such a way that basic telephone services are no longer being pursued to achieve economic growth and development. In 2002, the telecommunications community of the world thought to organize the World Summit on the Information Society (WSIS, in two phases 2003 Geneva and 2005 Tunis), and there new concepts of disparity began to arise. Documents stated that putting information and communication at the service of the poor and reducing the gap that currently separates the ‘info-rich’ from the ‘info-poor’ were to be the priority goals. UN Secretary General Kofi Annan declared at the eve of WSIS that, “This global gathering will be a unique opportunity for all key players to develop a shared vision of ways to bridge the digital divide and create a truly global information society,” The concept of the digital divide began to emerge. The digital divide refers to the gap between people with effective access to ICTs and those with very limited or no access at all. It also includes the imbalances in resources and skills needed to participate effectively in the transformation of information into knowledge. The digital divide poses new challenges to the governments in the world. It calls for extensive coordination among agencies both at national and international levels. Telecommunications authorities may, alone, implement policies to increase access to infrastructure. However, when dealing with ICTs, the broadband access pipe is only the tip of the iceberg and providing the infrastructure, which is required to facilitate the flow of information is only a piece of the puzzle. The need remains to create the information and, more important, to make this information useful to everyone by transforming it into knowledge. ‘Natural monopolies’ and level playing fields How can ICT regulators contribute to bridge the digital divide? As the title of this article suggests, providing regulatory frameworks that encourage the growth of ‘open networks’ can contribute greatly to the efficient and universal flow of information. Regulators were especially instrumental in achieving a broader coverage of basic telephone services. Prior to liberalization, governments were the only stakeholders in deploying infrastructure. Least developed and developing countries had very low tele-density levels before they started to privatise their incumbent carriers and open the sector to private investment and competition. Independent regulators were created as part of the new legal and institutional frameworks. They provided legal certainty to private investment, as their decisions were made on technical grounds, the decision-making processes were transparent and regulators were made publically accountable for their acts. New market institutions were needed to break the sector’s paradigm of ‘natural monopolies’ and allow new entrants to participate in the deployment of new infrastructure. Regulators established fair rules for open interconnection between incumbent service providers and the new private competitors. This strategy not only proved effective in increasing access to telecom services, but also allowed governments in developing countries to devote resources to other priorities such as education, health and the alleviation of poverty. Nowadays, regulatory institutions have had many years of experience dealing with the opening of network access; they have improved their institutional design and are ready to help to eliminate the disparities between the info poor and the info rich. The WSIS also established regulatory principles for a converged world. Governments and regulators were asked through the WSIS to establish ‘an enabling regulatory environment’. Specifically, in the Global Symposium of Regulators (GSR) in 2003, governments identified some best practice guidelines for regulators. Among such guidelines, the GSR identified and proposed that it was essential that regulators exist, that they be established where they do not yet exist, and that their key role in implementing universal access policies and promoting competition be recognized and reinforced. Moreover, regulators should review universal access/service policies, regulations and practices periodically to adapt to the evolving nature of ICT services and the needs of end-users. Regulators were asked to conduct periodic public consultations to the extent possible with stakeholders to identify their needs and, accordingly, modify universal access policies, regulation and practices. Regulators have the duty to establish fair and transparent telecommunication regulatory frameworks that promotes universal access to ICTs. Regulators should also adopt technologically neutral licensing practices that enable service providers to use the most cost-effective technology to provide services for end-users, as well as adopting a framework of interconnection rates linked to costs and reducing regulatory burdens to lower the costs of providing services to end-users, among others. These are the challenges that regulatory agencies face in this era of convergence and universalisation. We are putting all of our energies and hard work into becoming enablers of open networks that serve the flow of information and knowledge to all.

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