Table 6-1: Model 1 – Single-Sector Regulator [6.1.1]

Advantages

Disadvantages

Staffing

• Staff is generally focused on telecommunications.
• Core of specialized professionals with strong set of engineering skills and knowledge of technical issues.

Internal Administration

• A single-sector regulatory authority can be more focused on the technical challenges of the telecommunications sector, including network and service development.

Staffing

• Staff is focused on telecommunications and not always able to adapt to the continuous changes in the broader communications sector.

Risk of Capture

• Staff often originates from the only source of telecommunications experience – the incumbent – and is often seen to be biased in favour of the incumbent and more subject to capture by such dominant forces.
• Staff can also be seconded from government, which in the case of government still being a majority owner of the incumbent can lead to conflicts of interest, especially if staff is seconded from line ministry or Ministry of Finance.
• Where the Law foresees reporting to the line ministry (e.g., Ministry of Communications), a greater risk of political capture exists.

Cost of Regulation

• One disadvantage of having a regulator focused on the telecommunications sector alone (or for any other single sector) is that too many regulators are created for different sectors, thus leading to a higher cost of regulation.

Overlap of Tasks and Responsibilities

• With too many regulators for the different sectors (e.g., telecommunications and broadcasting) overlap of responsibilities between agencies is possible.
• More uncertainty for investors because of inconsistent decisions in the various sectors (included in a multi-sector regulator) on regulatory issues common to other sectors (e.g., the application of price cap regulation or cost accounting rules across the utilities sectors) – if such decisions were more consistent across the various utilities sectors, it could set a precedent that is valuable to potential investors in those other sectors.

Institutional Rigidity

• By focusing too much on a one-time “snap-shot” of the sector to be regulated, the mandate of the regulator can quickly become obsolete and out of touch with market realities.