The concept of licensing ICT services is a relatively recent development in many countries. Historically, in most countries, state-owned incumbent service providers delivered telecommunications services on a monopoly basis. Telecommunications services were supplied by a branch of the public administration, in a similar manner to postal, road transportation and other government services. These administrations were often referred to as Post, Telephone and Telegraph Administrations (PTTs). The mandate of PTTs was sometimes spelled out in a law or a policy document. However, specific authorizations or licences were generally not considered necessary.
With the global wave of telecommunications liberalization that began in the mid-1980s, many government telecommunications services were privatized. At the same time, private sector companies were often authorized to provide new telecommunications services, such as cellular mobile and value added services. In both cases, that is, privatization of PTTs and authorization of new private sector entrants, separate authorizations (“individual licences”) were generally issued to the authorized entities. These authorizations set out the terms and conditions governing the provision of telecommunications services and dealing with other aspects of the operations of these private sector companies.
In recent years there has been a trend away from granting individual authorizations in developed economies. This trend is due to a number of factors, including the development of increased competition, the proliferation of service providers, the dynamic nature of telecommunications (or ICT, to use current terminology) technologies and markets, and the resulting deregulation and reform movements.
Instead of issuing individual licences, regulators in developed economies are increasingly issuing general authorizations, or “class licences”, that authorize the provision of all ICT services of the same type, regardless of who provides them. In some countries, authorization requirements for services and networks that do not use scarce resources such as radio spectrum or numbering resources are been removed entirely. Service providers or operators may be required to provide notification of the start and termination of services, however. They may also be subject to rules and regulations that are generally applicable to the ICT sector.
In many developing and transitional economies, the issuance of detailed individual licences remains common. Moreover, issuing detailed individual authorizations remains the norm for authorizing the use of radio spectrum where the demand for the use of a particular frequency band exceeds availability.
Today, three basic approaches are used to authorize ICT service providers:
- Individual licences;
- General authorizations (or "class authorizations"); and
- No authorization requirement (i.e., open entry).
There are a range of different practices and procedures associated with each of these approaches. This Module will examine all three approaches and will discuss the range of practices and procedures associated with each one.
A trend that has shaped the nature of authorizations in the ICT sector relates to the range of new services available to consumers. Consumers today enjoy access to a wide range of fixed and mobile services including voice, data, Internet services, and even IPTV. The emergence of “triple play” (voice, Internet access, and video) and “quadruple play” (voice, Internet access, and video services available over broadband mobile networks) service packages illustrates the breadth of new services available to consumers, as well as the erosion of traditional distinctions between carriage and content service providers.
Technological innovation, convergence in ICT services, and a concern to safeguard competitive neutrality have given rise to an important new trend in ICT licensing: the emergence of multi-service and neutral or “unified” authorization regimes. ICT authorizations have traditionally been issued for specific services delivered over a particular type of network, using a particular type of technological infrastructure. Regulators are increasingly moving towards service-neutral and technology-neutral forms of authorizations, however. These authorizations allow licensees to offer a range of services under the umbrella of a single authorization, using any type of communications infrastructure and technology capable of delivering the desired services. Multi-service and unified authorization regimes promote the efficient rollout of new services and technology and provide the flexibility necessary for the development of Next Generation Networks (NGNs).
In countries that have liberalized their ICT market and adopted a unified licensing approach, administrative procedures to enter the market have also been simplified and made more flexible. Unified and multi-service licensing regimes often feature general authorizations and do not require applicants to go through a competitive selection process in order to obtain an authorization. In many cases, applicants may obtain an authorization if they demonstrate that they meet certain criteria for licensing. These criteria frequently resemble criteria used in competitive selection processes (e.g., financial stability; viable business plan; and technical competence), however. Thus, the review of applications for unified and multi-service authorizations often involves close regulatory scrutiny, particularly in developing and transitional economies. Moreover, unified and multi-service authorizations sometimes include a detailed set of terms and conditions. Again, this is especially true in developing and transitional economies, where competition is still growing and where the regulatory regime may still be maturing.
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