The design of legal instruments used to regulate the telecommunications sector may vary depending on the legal tradition of a country. Generally, however, the legal framework follows a hierarchy beginning with primary legislation, such as laws and decrees from which secondary legislation such as regulations, resolutions and guidelines follow (see Figure 3-B). This legislation, in turn, provides the legal basis for the regulator or the relevant ministry to issue authorization instruments such as licences, concessions, and permits to operators. This legal hierarchy provides certainty and predictability to consumers and other stakeholders because it specifies the rights and obligations (i.e., the rules of the game) that apply to the sector. Such hierarchy provides assurances to stakeholders that secondary legislation (e.g., rules, decrees and instructions) cannot be used by the government to nullify certain rights and obligations set forth in primary legislation. This stable environment, in turn, encourages investment and increases consumer confidence in the sector.
Figure 3-B: Hierarchy of Regulatory Frameworks
Primary Legislation
The primary legislation for the sector should consist of the framework that will be used to regulate the sector. To the extent possible, this should be issued through a legal instrument not susceptible to easy revocation by a government authority in order to ensure stability and predictability. It should lay out the basic elements and framework, such as the establishment of the regulator, the powers and responsibilities of the regulator, the role of the minister responsible for communications (if applicable), enforcement powers and ability to sanction. While the primary legislation should address fundamental regulatory issues such as universal service and interconnection, the details of such issues are better addressed through secondary legislation. When looking at primary legislation in both civil and common law traditions, many of the same elements are included, as noted in Table 3-2.
In countries with civil law traditions, however, subject areas covered by the principle of legal reserve (i.e., subject matters that have been constitutionally reserved to regulation by an instrument with the hierarchy of a law) also may need to be included within the text of primary legislation. Such subject areas typically encompass direct limitation of individual rights (e.g., the right to free enterprise and property, or freedom of speech) as well as the regulation of prohibited conduct and applicable sanctions. Moreover, in civil law jurisdictions it is often the case that in order to regulate certain matters through secondary legislation, they must be referred to in the primary legislation. Further, the extent of specificity contained in the primary legislation from civil law jurisdictions is mixed. In certain countries, such as Bulgaria,[1] the primary legislation is quite comprehensive, including extensive details regarding the licensing framework, universal service, interconnection, consumer interests, fees, and sanctions; whereas, in countries such as Algeria,[2] the primary legislation address similar issues, but the provisions are much less detailed.
Secondary Legislation
The more detailed elements of regulatory issues may be addressed best in secondary legislation, which can be amended and modified more easily to complement the pace of technological development without the intervention of the legislature. Typical regulatory issues addressed through secondary legislation include interconnection, competitive safeguards, numbering, universal service, and tariffs.
Secondary legislation may take different forms (e.g., regulations, instructions, decrees, guidelines) and depending on the jurisdictions there may be a hierarchy with regard to the secondary legislation. For example, in Spain, regulations may only be issued by the minister, as the regulator only has authority to issue “instructions.” This challenges the independence of a regulator to establish its own policy because the ministry can always issue a regulation that modifies an “instruction” issued by the regulator.
Authorization Instruments
A variety of “authorization” instruments are used by governments to grant an entity the right to undertake certain activities in the telecommunications sector (e.g., provide telecommunications services, operate networks, and use spectrum). These instruments include concessions, franchises, delegations, licences, permits, and other forms of authorizations.[3] Typically, the general authorization framework is set forth in the primary legislation and further expanded upon and described in specific detail in secondary legislation.
Administrative acts and administrative contracts
In civil law jurisdictions, the “authorization” instrument often is either a unilateral administrative act or a bilateral administrative contract. A bilateral administrative contract when used as an “authorization” instrument generally is a concession, franchise, delegation or other type of agreement. However, not all contracts entered into with public entities are administrative contracts. In comparison to licences, concessions, franchises and delegations are more often in the form of an administrative contract than a unilateral administrative act. Typically, an administrative contract requires the consent of the parties to be amended. Thus, some investors find concessions (as well as franchises and delegations) to be a more attractive vehicle than a licence.
Usually, a telecommunications licence is a unilateral administrative act, rather than an administrative contract. Although different views exist as to whether an administrative act can be unilaterally amended or revoked, it is considered a more flexible instrument than an administrative contract.
In certain jurisdictions, such as Jordan, the “licensing” instrument consists of a licence and an administrative contract (i.e., licensing agreement). Jordan’s Telecommunications Law provides that “the licence shall be issued by virtue of a resolution by the Board, provided that a contract of an administrative nature is drawn including the following terms and conditions in addition to any other conditions stipulated in this law, or the regulations issued pursuant thereto, or any exceptions determined by the Board: (…).”[4]
Shift away from concessions
While moving towards liberalization, some countries permitted the delivery of telecommunications services through the unilateral issuance of licences or concession contracts between the relevant government authority and the private party authorized to provide a particular service. As countries implement regulatory reforms, however, they are typically shifting away from concessions and moving to licences, permits, notifications and registrations which tend to be more straightforward and uniform. Moreover, in many countries, licensing instruments are much more streamlined, with the terms and conditions associated with the licence generally addressed in secondary legislation rather than the licence. From a regulator’s standpoint, this is a less cumbersome process because changes do not have to be introduced to each licence that has been issued, rather changes can be introduced by amending, or issuing new secondary legislation.
ENDNOTES
[1] Telecommunications Law of Bulgaria, Prom. SG. 88/7 Oct 2003, amend. SG. 19/1 Mar 2005, available at http://www.crc.bg/v1/eng/index.htm.
[2] Loi N° 2000-03 du 05 joumada el oula 1421 correspondant au 05 août 2000: ixant les règles générales relatives à la Poste et aux Télécommunications, available at http://www.arpt.dz/lois.htm.
[3] Georges P. Racine, Fasken Martineau DuMoulin LLP (London), A Review Of Key Issues Related To The Re-Licensing Of Telecom Networks And Services In Developing Countries, One-Day Course on Re-Licensing (GICTD – World Bank), 30 March 2005, Washington, D.C.
[4] Telecommunications Law of 1995, Telecommunications Law No. 13 and its amendments, available at http://www.trc.gov.jo/index.php?option=com_content&task=view&id=3&Itemid=164&lang=english.