The principles of good regulatory decision-making are universal: (a) transparency; (b) objectivity; (c) professionalism; (d) efficiency; and (e) independence.1
Although all of these principles are necessary for successful regulation, transparency is particularly critical, as it provides accountability and legitimacy to regulatory decisions. In the context of telecommunications regulation, transparency refers to the openness of the process of exercising regulatory power, which, in turn, ensures the fairness, accountability and credibility of the results.2
Box 7-4 below provides a summary of the benefits of transparent regulation.
Box 7-4: Benefits of Transparent Regulation
1. Efficiency and Effectiveness – Open processes enhance consensus and create confidence in the regulator. Increased public participation promotes diverse ideas in decision-making and increases support for rules and policies, making implementation easier. In addition, transparency can lead to greater efficiency by ensuring that duplication of functions is avoided.
2. Certainty and Reliability – Regulatory credibility and legitimacy builds stability, essential for attracting investment. This is particularly important in newly liberalized markets, where potential entrants need to trust that their investments are protected from arbitrary action and that further commercial development will not be thwarted by sudden changes to “the rules of the game.”
3. Accountability and Independence – Openness promotes accountability and legitimacy, reinforcing regulatory independence and reducing political and industry interference. Stakeholders will have confidence that their views will be heard, without bias, by the regulator. Where regulatory actions are exposed to public view, regulators are more likely to engage in careful and reflective decision-making.
4. Continuity – A stable set of rules governing transparency will transcend political changes and outlast political appointments, ensuring a continuous regulatory record regardless of who is in charge of the regulatory agency or which political party is in office.
Source: ITU – Trends in Telecommunication Reform 2002, Chapter 6.
A common way to foster openness in the regulatory process is to engage in public consultation before making decisions, thereby ensuring the participation of the general public, industry and others in the outcome of the decisions. Holding public consultations are not required in all countries, but most regulators have adopted some form of consultation process (Figure 7-B), e.g., before adopting policies, creating regulations or issuing licences.3 See, for example, the consultation procedures for Hong Kong (SAR), St. Vincent and the Grenadines, and the United Kingdom (in the online practice notes), which are illustrative of the public consultation procedures adopted by regulators in many countries.
Figure 7-B: Percentage of Regulators Worldwide that Mandate Public Consultation
Source: ITU World Telecommunications Regulatory Database 2005.4
In some cases, public consultations are not undertaken due to lack of resources or other immediate constraints that make it difficult to hold them. In Botswana, for example, when the Telecommunications Regulations were promulgated in 1997, the regulator did not include public consultations because it did not have sufficient staff resources to conduct consultations and it had a tight timetable. In subsequent years, however, the regulator added extra staff and developed more expertise, so that in 2000, the Botswana Telecommunications Authority (BTA) prepared its first consultation document on telecommunications services pricing.5
Other countries mandate public consultations in certain occasions. In Bahrain, the Telecommunications Law requires that, except in emergency cases, the Telecommunications Regulatory Authority (TRA) must provide interested parties the opportunity to present their opinions within a reasonable period on measures having a material effect on the telecommunications market. Procedurally, the TRA issues a bylaw regarding such consultations ensuring that the public is informed from a single information source of the ongoing consultations, excluding confidential information.6 The EU Framework Directive mandates national regulatory authorities of member states to publish their consultation procedures and the subsequent results when they intend to take measures in accordance with the Directive or other directives that have significant impact on the relevant market. This is intended to ensure that interested parties are given the opportunity to comment on the draft measure within a reasonable period.7
Where the requirements for holding public consultations are mandatory, the legislation typically specifies the particular instances when public consultations are compulsory and must be held by the regulator. For example, in Portugal, the Electronic Communications Law specifies that the regulator, the Autoridade Nacional de Comunicações (ICP-ANACOM), has discretion to determine matters that are subject to formal written public consultations, except for the following:8
- Change in the conditions, rights and procedures applicable to the exercise of the activity;
- Limitations on the rights to use frequency;
- Allocation of rights to use numbers that are exceptionally valuable through competitive or comparative selection procedures;
- Definition of quality of service parameters;
- Release from the obligation to offer additional resources;
- Definition of portability regulations;
- Definition of the relevant markets for products and services, determination of a relevant market as being effectively competitive or not, identification of companies with significant market power in the relevant markets, and the imposition, maintenance, change or elimination of obligations by companies with or without significant market power;
- Definition of carrier selection and pre-selection regulations;
- Definition of obligation pertaining to the universal service providers applicable to the offer of public telephones;
- Definition of the terms and conditions of the service offers specifically for people with disabilities;
- Definition of the performance objectives applicable to universal service obligations.
Although public consultation procedures can vary from country to country, minimum procedural safeguards are generally instituted to make sure that there is maximum participation in the decision-making process, such as: issuing public notice of consultations; allowing for a proper comment and reply comment period; and publishing the consultation results and final decisions.
1 Telecommunications Regulation Handbook, InfoDev, Module I, Section 1.3 (2000).
2 International Telecommunication Union, Trends in Telecommunication Reform 2002: Effective Regulation, Chapter 6, (2002).
3 Id., at Section 6.1. “It is worth noting that many regulatory authorities are not bound by explicit statutory requirements to follow transparent procedures. Even so, many agencies are engaging in public consultation voluntarily.”
4 ITU survey on Public Participation. In the Americas, out of the 31 countries surveyed, 27 countries responded, resulting in a response rate of 87 per cent. In the Arab States, 13 responses were received out of 19 countries surveyed, resulting in a response rate of 68.4 per cent. 28 countries were surveyed in the Asia Pacific region, and 20 countries responded, resulting in a response rate of 71.4 per cent. In Europe, 45 countries were surveyed, and 38 responded, resulting in a response rate of 84.4 per cent. In Africa, 41 countries were surveyed, but only 27 countries responded, resulting in a response rate of 65.8 per cent.
5 ITU Effective Regulation Case Study: Botswana (2001).
6 Bahrain Telecommunications Law, Legislative Decree No. 48 (2002), Art. 3(f).
7 Council Directive 2002/21/EC on a common regulatory framework for electronic communications networks and services (Framework Directive), Art. 6, 7 March 2002. The exceptions to the public consultation requirement include: (a) exceptional circumstances where there is an urgent need to act, (b) dispute resolution between undertakings, and (c) resolution of cross-border disputes.
8 ICP-ANACOM Consultation Procedures, adopted pursuant to the Electronic Communications Law no. 5/2004 available at http://www.anacom.pt/template12.jsp?categoryId=95282.