2.4 What is the Role of Regulators?

Often there are sector-specific regulators, general regulators (such as competition authorities), and special agencies or ministries charged with specific tasks (such as spectrum management), that all share common duties. As noted by the UN Task Force on Financing ICT, this Toolkit and other sources, the most important duties of the regulator(s)[1] include:

• Implementing the authorization framework that provides opportunities for new companies and investors to establish ICT businesses. Simple authorization procedures tend to maximize new entry (see Module 3, Authorization of Telecommunication/ICT Services).
• 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 (see Module 2, Competition and Price Regulation).
• Interconnecting networks and facilities. Normally transparent rules are established for interconnecting all types of traditional and new communications networks and associated cost-based payments (see Module 2, Competition and Price Regulation).
• Implementing universal service/access mechanisms to ensure the widespread (and affordable) diffusion of ICT (see Module 4, Universal Access and Service).
• Managing the radio spectrum effectively to facilitate new entrants and new technologies, which is particularly relevant to new broadband wireless opportunities such as Wi-Fi and wimax (see Module 5, Radio Spectrum Management). 
• Establishing sufficient safeguards to ensure that consumers, particularly children, are protected against bad business practices, cyber crimes and violations of data privacy (see Module 6. Legal and Institutional Framework).   
• Minimizing the burden and costs of regulation and contract enforcement (see Module 7, New Technologies and Impacts on Regulation).

All of the above continue to evolve and to present new challenges in the context of market and technological developments, especially the growing availability of broadband and the increasing prevalence of convergence.  For example, many countries have adopted consumer protection regulations specifically designed for ICT customers, which are enforced by the ICT regulator and/or a designated consumer protection agency. The Australian Communications and Media Authority (ACMA) has instituted measures to protects consumers’ interests in the Internet Age by investigating complaints about online content and gambling services; encouraging the development of codes of practice for ISPs; and educating the public about Internet safety and privacy risks, particularly for children.[2]

To better adapt to the new converged landscape, governments have also been developing coherent national broadband strategies as a vital component of overall deployment and access to broadband services.  For instance, those OECD countries leading in broadband penetration rates have typically established national broadband policies. These countries include Korea (Rep.), Denmark, the Netherlands, Sweden, Finland, and the United Kingdom.[3] As a step towards improving its ranking for broadband penetration among OECD countries, the United States is currently developing a National Broadband Plan to be presented to the U.S. Congress in February 2010. Rather than engage in broad regulatory intervention, the government’s role in the provision of broadband should be based on sound economic principles limited to ensuring that markets function effectively and access is reasonably available to all.

The role of the regulator in broadcasting is similar to some of the functions of the ICT regulator such as allocating and managing the radio spectrum, licensing service providers and ensuring universal access. But broadcasting regulators have additional duties regarding the social and cultural impact of the sector. They are also charged with overseeing content and ensuring diversity, protecting minors, the right of reply, etc. Furthermore, if there is a Public Service Broadcaster (PSB), the regulator performs some form of oversight of it and private channels. 

The proliferation of broadband and the digitalization of content are bringing about a profound and rapid transformation of the media/content landscape, which may change regulatory functions. Russia, for instance, has issued several Internet Protocol Television (IPTV) licenses. It is quite common for a radio “chat show” to take a call from someone living overseas and listening to the program on the Internet. Both the Russian TV and the chat show channels are licensed but many service providers are not. The aggregate audience for the unlicensed self-produced and “long tail” content exceeds that of traditional broadcasters in some countries. For example, in July 2009 alone, YouTube’s audience exceeded 120 million people in the United States – or approximately one-third of U.S. population. The explosion in content provision is a huge challenge to content regulation (how does the regulator screen everything?), which is made even more difficult because a large proportion of the content may originate in other jurisdictions. As “mass markets” retreat, it will be necessary to reconsider the regulation of national broadcasting institutions and thereby the functions of the regulator.

Where PSBs, cable and satellite channels remain in a strong position, the regulator(s) will have a role to play in the application of competition policy, including merger control. This competition policy issue centers on the relationship between dominant/non-dominant access providers and dominant/non-dominant content providers.

In light of the recent global economic crisis, regulators can also play a key role in increasing confidence, reducing risk and encouraging investment in the ICT sector overall.  In particular, regulators are able to play a role in investment by 1) lending financial support through “stimulus packages” and public private partnerships and 2) lowering the costs of doing business by deferring license fees and taxes, as well as implementing rules that enhance efficiency. [4]

ENDNOTES

[1] ITU, World Summit on Information Society, The Report of the Task Force on Financial Mechanisms for ICT for Development at http://www.itu.int/wsis/tffm/final-report.pdf.  

[2] GSR 2009 Discussion Paper, Rosalind Stevens, Consumer Protection: Meeting the Expectations of the Connected at http://www.itu.int/ITU-D/treg/Events/Seminars/GSR/GSR09/doc/GSR09_Consumer-protection_Stevens.pdf.

[3] World Bank, Tim Kelly, Victor Mulas, Siddhartha Raja, Christine Zhen-Wei Qiang and Mark Williams, What Role Should Governments Play in Broadband Development? at OECD, http://www.oecd.org/dataoecd/40/47/43631862.pdf.

Related content

Module 6, Legal and Institutional Framework