3.2

General Authorizations and Open Entry Policies

Many different approaches have been applied to authorizing ICT services around the world. However, there is an increasing convergence of approaches as the experience of liberalizing the ICT sector is shared among regulators and policy-makers. This experience is also producing generally accepted ‘best practices’, which are increasingly being adopted as countries continue efforts to reform their ICT sectors.

Both general authorization and open entry regimes have gained acceptance in developed economies as ‘best practices’ for permitting the provision of a wide range of ICT services. This section will review practices and procedures that have been adopted in these regimes.

General authorization regimes also exist in some developing and transitional economies, although individual authorization frameworks are far more common. Where general authorization regimes do exist, they have been adapted to meet the particular conditions in these countries (e.g., low levels of competition). This section will also review practices and procedures in general authorization regimes that have been adopted in developing and transitional economies.

3.2.1 Introduction

The first section of this module described the difference between individual authorization approaches, general authorizations (or class licences as they are sometimes called) and open entry regimes. There is a clear trend in developed economies away from issuing detailed individual authorizations and towards issuing general authorizations that apply a consistent approach towards all service providers that provide the same class of service. Some developed countries have gone a step further and adopted open entry regimes, where service providers are not required to obtain any form of authorization to provide services, though they may be required to register with the regulator.

The trend towards the adoption of general authorization regimes and open entry policies has accelerated with the adoption of the EU’s Authorization Directive. In developed economies, widespread adoption of market liberalization policies and an increased recognition of industry convergence are also accelerating the trend toward the use of general authorizations and in some cases, the elimination of all authorization requirements or other restrictions on market entry.

However, many developed countries issue individual authorizations for some services or facilities, such as those that use scarce resources like radio spectrum or numbering resources, and issue general authorizations for other types of services. As markets become more competitive and as regulators seek to streamline and to lighten regulatory intervention in the ICT sector, it is likely that more regulators in developed countries will begin to rely primarily, or even exclusively, on general authorizations and open entry. General authorization regimes are generally considered the best practice today in most markets where some form of authorization regime is still deemed necessary. Where competition is sufficiently robust to protect consumer interests and where any necessary regulation of service providers can effectively be achieved through general, sector-wide rules and policies, open entry is considered the best practice in most developed countries.

Individual authorization regimes remain common in most developing and transitional economies. Since there are often low levels of competition in these countries and because the regulatory regimes are often still maturing, issuing individual authorizations remains a prudent approach to licensing in developing and transitional economies. Nevertheless, some developing and transitional economies have also adopted general authorization regimes for some services. For example, Malaysia, Botswana, Uganda, and Jordan have all adopted general authorization regimes for some services.

Where general authorization regimes have been adopted in developing and transitional economies, the practices and procedures used in these regimes have been adapted to respond to their national particular competitive and regulatory conditions. See section 2.3 for more information. A link to this section is set out below.

RELATED INFORMATION

Authorization TrendsTypes of Authorization RegimesAdvantages of General AuthorizationsServices Often Subject to General Authorizations or Open EntryIssuing General AuthorizationsITU Trends Report: Licensing in an Era of Convergence

3.2.2 Advantages of General Authorizations and Open Entry Policies

Regulators have increasingly adopted the practice of using general authorizations or establishing an open entry authorization regime for a number of good reasons. Most important, general authorizations and open entry regimes:

    • eliminate individual differences in the treatment of service providers and create a level playing field;
    • are more consistent with technological neutrality principles;
    • are more consistent with open market entry policies;
    • simplify the regulatory process;
    • reduce regulatory and administrative costs;
    • provide the regulator with greater flexibility to introduce changes to the licensing regime since the regulator does not need to negotiate the amendments of individual authorizations; and
    • facilitate the introduction of industry-wide regulatory changes to reflect changing technologies and sector conditions (i.e. no need to amend individual authorizations).

3.2.2.1 Services Often Subject to General Authorizations or Open Entry Policies

The following types of services, among others, are frequently subject to general authorization or open entry policies in many developed countries around the world and in some developing and transitional economies. (In more liberalized jurisdictions, such as in the EU, most other types of services, such as electronic communications, are also subject to general authorizations):

    • Internet Service Provider (ISP) services;
    • other value-added services, including information content services, intelligent digital network features (e.g. voice-mail, call-forwarding, call-waiting, audio-conferencing, etc.);
    • Internet content and transmission services, including e-mail;
    • Cyber/Internet cafés;
    • resale-based services, such as calling card services, call-back services, pay phone and public call office services and, sometimes resale-based IP voice services;
    • fax services;
    • private networks, including private virtual networks and private facilities-based networks (except for radio spectrum authorizations, which are usually granted on an individual basis, except for shared bands); and
    • customer terminal equipment, including VSAT terminals, PBXs, routers and all data processing equipment.

Some multi-service and unified authorizations are also subject to a general authorization regime. In Singapore, for example, the multi-service authorization regime includes service-based operator licences that are categorized as “class licences”. Moreover, the framework governing individual service-based operator licences and facilities-based operator licences has characteristics that are similar to general authorization regimes.

3.2.3 Issuing General Authorizations

This section provides further information on a subject introduced earlier in this module, namely issuing general authorizations.

While individual licences are granted to a single service provider at a time, general authorizations provide authority for a whole class of service providers to provide service or operate facilities. A general authorization normally prescribes any eligibility conditions and ongoing regulatory conditions for provision of the service.

For example, a general authorization might approve the operations of all VSAT service providers that meet certain conditions, such as: (1) registration with the regulator, (2) use of ITU-co-ordinated satellite service providers authorized in an ITU member country, (3) approval of earth station equipment under national spectrum regulations, and (4) compliance with any consumer protection or spectrum management regulations established by the regulator. Most general authorizations would contain more conditions; however, all would apply equally to all VSAT service providers. In this example, any entity that meets these four conditions would be entitled to start providing VSAT services, without the need to obtain a specific authorization or to go through any other authorization procedure.

With general authorizations, the regulator normally has no discretion to grant or withhold an authorization to a particular person. If a person meets the eligibility criteria for obtaining the general authorization and complies with the conditions of the general authorization, that person is automatically authorized.

A few countries have introduced variations on the theme of general authorizations. For example a general authorization may only permit a specified number of service providers of a specific class. These may be authorized on a first-come-first-served basis or using some other form of selection process. Nevertheless, all authorized service providers of the same class are subject to the same conditions, leaving intact one of the key principles of general authorizations. The Saudi Arabian Telecommunications Bylaw establishes several types of class authorizations, which include some of the features described above.

Another variation that is common in developing and transitional economies relates to the eligibility criteria for obtaining a general authorization. It is not uncommon for applicants in developing and transitional economies to be required to establish that they meet a wide range of eligibility criteria, including criteria related to financial viability, operational experience, and technical expertise. The licensing process for issuing general authorizations in such countries thus involves the submission of a detailed application and supporting materials and careful regulatory scrutiny. However, the licensing process is not competitive per se and all successful applicants of the same class are issued a standard authorization. Thus, while the licensing process may involve a more detailed evaluation of applicants and more onerous eligibility criteria, the process still bears the hallmarks of a general authorization regime. To see an example of this type of general authorization framework, review the materials on “Type A Class Licences” in the St. Lucian Procedures Manual for Licence Applications. A link to this document is set out below.

See also Box 3.1, which sets out the regulatory provisions governing the grant of Class Licences by the Pakistan Telecommunications Authority. Notably, although the Pakistan Telecommunications Authority (PTA) has more discretion to reject an application than many other regulators, there are clear criteria that the PTA must take into account when making its determination. Furthermore, applicants have the procedural right to be heard before the PTA rejects an application. The PTA also is required to provide detailed reasons for any refusal to grant an application. These provisions help to offset the risk of arbitrary or unfair licence application determinations.

Class Licensing and Registration Regulations 2007, Pakistan

Section 6 Grant of Licence – (1) The Authority may grant license or Registration Certificate to any applicant, who fulfills the open, transparent and non-discriminatory eligibility criteria given by the Authority from time to time.

2) The Authority shall consider all applications on merits and in determining whether or not to grant a licence or registration certificate, the Authority shall take into account the following factors, namely:

(a) financial and economic viability of the applicant;

(b) applicant’s experience in telecommunications and relevant past history;

(c) technical competence and experience of applicant’s management and key members of staff and local participation in the business; and

(d) nature of services proposed and the viability of the applicant’s business plan including its contribution to the development of the telecommunications sector.

(3) The Authority may reject an application; if it appears that the grant of the License or Registration Certificate shall threaten or potentially threaten national security.

Section 7 Procedure for grant of a License – (1) On receipt of an application for grant of License or Registration Certificate, the Authority shall examine the application and suitability of grant of Licence or Registration Certificate.

(2) The Authority shall not reject any application without giving a reasonable opportunity of being heard. In case the application is incomplete, the Authority may return the application without rejecting it or may require the applicant to make up the deficiency within given time.

(3) In case the Authority decides to reject the application, it shall give detailed reasons of rejection.

Box 3.1 Regulatory provisions governing the grant of Class Licences and Registrations by the Pakistan Regulatory Authority

Source: Class Licensing and Registration Regulations 2007, available on the website of the Pakistan Telecommunications Authority: http://www.pta.gov.pk/index.php?option=com_content&task=view&id=184&Itemid=347

The Canadian basic international telecommunications services (BITS) authorization regime represents yet another variation on the theme of general authorizations. Until 1999, telecommunications services were not subject to any authorization requirements in Canada, other than spectrum authorizations. When a new authorization regime was established for the provision of basic international telecommunications services, the Canadian regulator, the CRTC, adopted a general authorization model. The same standard conditions of authorization apply to all authorized service providers. However, instead of merely filing a registration to obtain an authorization, an application must be filed, and applications are processed individually. As long as an application contains the necessary information, the authorization will typically be granted within 30 days.

RELATED INFORMATION

The New EU Authorization Framework

Practice Notes

Reference Documents

3.2.3.1 Transitioning to General Authorization Regimes

This section outlines some considerations that are directly relevant to the implementation of a general authorization regime. Other sections of this module provide a broader discussion of the issues related to transitioning to a new authorization regime and the related matter of re-authorizing incumbents under a new licensing regime. Links to these sections are set out below.

Introduction of a general authorization regime can be complicated where existing individual authorizations authorize the same services as those covered by the general authorization. For example, general authorizations are frequently used to establish conditions for the provision of value added services. However, incumbent service providers may already be authorized to offer value added services under their individual authorizations.

To promote competitive neutrality, regulators should ensure that differences between general authorizations and individual authorization conditions do not significantly favour one competitor over another. A good solution is to indicate that individual authorizations do not authorize the offering of any service that can be offered under a general authorization. In this way, regulators can ensure that all providers of the services provided under the general authorization are subject to the same conditions.

In some cases, individual authorizations may have to be amended in order to harmonize the conditions under which existing services are offered with the terms of new general authorizations. This may be achieved with the full co-operation of existing licensees, particularly where the conditions of general authorizations are less onerous than those of existing individual licences.

Practice Notes

Reference Documents

3.2.3.2 Conditions of General Authorizations

There is no standard set of conditions for general authorisations or class licences. The conditions attached to general authorisations in different countries are products of the individual circumstances and regulatory framework in each country.

In Canada, the conditions for the basic international telecommunications services (BITS) class licence are relatively short and concise. The conditions include a requirement to keep information on file with the Canadian Radio-Television and Telecommunications Commission (CRTC) current; a prohibition on anti-competitive conduct; obligations relating to the contribution (universal service) regime; and a requirement to file any information required by the CRTC to be filed.

The conditions of general authorizations issued in EU Member States must comply with the terms of the EU Authorisation Directive. This Directive stipulates that general authorisations may only be subject to certain conditions listed in the Annex to the Directive. Box 1 outlines the permissible scope of conditions imposed on general authorizations.


Pursuant to the EU Authorisation, general authorizations issued by Member States may only be subject to the following conditions:

  • financial contributions to funding of the universal service;
  • interoperability of services and interconnection of networks;
  • accessibility and portability of numbers- portability means that users have the option to keep their telephone number when they change operators;
  • rules on privacy protection and, more specifically, the protection of minors;
  • the obligation to transmit certain television and radio programmes ("must carry");
  • environmental and town and country planning requirements;
  • the possible imposition of administrative charges on undertakings; and
  • restrictions concerning the broadcast of illegal content.

Box 3.2 Conditions permitted to be imposed on general authorizations pursuant to the EU Authorisation Directive

The conditions that have been imposed by the Irish regulator and by Ofcom, the UK regulator, on general authorizations are examples of how these requirements of the Authorisation Directive have been put into practice in an EU Member State.

In Singapore, the conditions of class licences are contained in the Telecommunications (Class Licences) Regulations. There are two sets of conditions. The first set is outlined in Part III of the Regulation and applies generally to all class licences issued in Singapore. The second set of conditions consists of the specific conditions that apply to each particular type of class licence. Class licences in Singapore are issued for specific services. There is a schedule to the Telecommunications (Class Licences) Regulations for each specific type of class licence. Each schedule contains the particular conditions that are applicable to the class licence described in that schedule. The general and specific conditions imposed on class licences are set out in the guidelines on Service-Based Operator Licensing published by Infocommunications Development Agency (IDA), the regulator in Singapore. A link to these guidelines is set out below.

The conditions of class licences in Malaysia can be found in the class licences issued by the Minister for Applications Services, Network Facilities, and Network Services. The conditions for each type of class licence are essentially the same.

Some general authorizations contain detailed terms and conditions. In countries where the regulatory framework is still maturing, it may be necessary to include fairly detailed terms and conditions in order to protect the public interest. In Jordan, for example, the provisions of the Public Telecommunications Class Licence cover a range of matters, including (but not limited to): eligibility; ownership and control; use of Jordanian resources; licence fees; universal service obligations; interconnection; emergency services; directory services; general service obligations and quality of service obligations; confidentiality of information; pricing; modification of Licence; and renewal and termination of Licence. Some of these terms and conditions are set out in the actual Licence, while others are included in the schedules to the Licence.

Practice Notes

Reference Documents

3.2.4 Open Entry Notification Procedures

The adoption of an open entry policy does not necessarily mean that ICT service providers are not required to file information with the regulator. In many countries, service providers are required to file some form of notification with the regulator prior to or shortly after commencing the provision of ICT services or network operations.

In some countries (e.g. Estonia, Ireland, and Sweden), regulators will provide confirmation of the receipt of notification, though in other cases (e.g. Germany), such confirmation is provided only upon request. In some countries (e.g., Canada), the regulator typically does not provide formal confirmation, however, service providers may check a list of registered entities that is posted on the regulator’s website to verify that they have been registered.

Service providers and operators usually have an ongoing duty to keep information filed with the regulator current and to notify the regulator upon terminating the provision of ICT services and network operations.

Filing a notification of the commencement of services and network operations is frequently tied to the enjoyment of certain rights established in the legislative framework governing the sector. For example, legislation or regulations may stipulate that a service provider obtains the right to negotiate interconnection and access arrangements once it has filed a notification of the commencement of services and network operations. Prior to filing such a notification, a service provider does not enjoy such rights. Tying the enjoyment of various rights such as the right to negotiate interconnection and access arrangements creates a positive incentive for service providers to comply with notification requirements.

Practice Notes

3.2.5 The EU Authorization Framework

The European Union has recently adopted a new regulatory framework for its ICT sector (renamed the ‘electronic communications sector’ in the framework documents). The new framework was adopted in 2002 and has been effective since July 2003.

The authorization procedures adopted by EU members must comply with the new regulatory framework, and particularly the provisions of two parts of the framework: the Authorisation Directive and the Framework Directive.

The Framework Directive contains general principles and guidelines that are applicable to ICT regulation as a whole. The Authorization Directive contains specific rules applicable to the authorization of ICT networks and services in the European Union.

Due to the speed of technological change and service innovation in the ICT sector, the European Commission has already initiated a review of its electronic communications regulatory framework. In November 2007, the Commission issued a number of proposals for reform. These proposals focus on four main areas: cultivating more competition, fostering better regulation, strengthening the internal market, and protecting consumers better. The proposals include consideration of how best to use the spectrum that will become available as a result of the introduction of digital television and the resultant “switch-off’ of analogue services (the digital dividend). The digital dividend is discussed in Module 5, Radio Spectrum Management.

Although the directives are binding only on European Union members, other countries have found the EU approach useful in developing their own approach to regulation of the ICT sector. In particular, countries that plan to join the European Union, or to harmonize their economic approach with that of the EU, have adopted many of the features of the new framework.

Practice Notes

Reference Documents

3.2.5.1 The EU Regulatory Framework

This section provides further information on a subject introduced earlier in this module, namely the European regulatory framework for ICT services or ‘electronic communications services’ as they are referred to in the framework documents.

Regulation of the ICT sector in Europe, including authorization, is subject to a set of directives and other legal instruments that together comprise the regulatory framework. These directives were adopted in 2002 and have been effective since July 2003.

The EU has enacted seven directives and related documents in connection with ICT regulation, including: the Framework Directive; the Access Directive; the Authorization Directive; the Universal Services Directive; the Privacy and Electronic Communications Directive; the Radio Spectrum Directive; and the Commission Competition Directive. These directives have a broad implication for regulation of the ICT sector, and they are discussed in greater detail in Module 2, Competition and Price Regulation, Module 4, Universal Access, and Module 5, Radio Spectrum Management. Links to these Modules are set out below. In this module, we will focus on the Authorization Directive and the Framework Directive, which are most relevant to authorization.

The electronic communications directives were developed in response to a dynamic and increasingly unpredictable market in which a growing number of competitors are participating. A key objective of the directives is to create a flexible regulatory framework that is capable of responding to new technologies, convergence, and an increasingly competitive market.

The fast pace of technological change and service innovation in the ICT sector has prompted the European Commission to undertake a review of the current regulatory framework. This review was deemed necessary in order to ensure that the regulatory framework continues to serve the best interests of consumers and the ICT industry. In November 2007, the Commission issued a number of proposals for reform. These proposals focus on four main areas: cultivating more competition, fostering better regulation, strengthening the internal market, and protecting consumers better.

The review of the current regulatory framework encompasses consideration of how to ensure that the ICT sector makes better use of radio spectrum. This dimension of the review includes an exploration of how best to use the spectrum that will become available as a result of the introduction of digital television and the resultant ‘switch-off’ of analogue services (the digital dividend). The Commission’s proposals in this regard advocate flexible and market-oriented management of the radio spectrum so that service providers have the freedom to use the spectrum to offer the services that have the highest value attached to them. The Commission’s support for a flexible and market-oriented approach to radio spectrum management is consistent with its commitment to neutrality in authorizations since this approach does not dictate the services for which radio frequency authorizations must be used.

Practice Notes

Reference Documents

3.2.5.2 EU Authorisation and Framework Directives: Authorization Requirements

This section provides further information on a subject introduced earlier in this module, namely the European regulatory framework for ICT services or ‘electronic communications services’ as they are referred to in the framework documents. This section focuses on one of the key framework documents, the Authorization Directive.

The EU’s Authorization Directive sets out the regulatory framework for issuing ICT authorizations in member states of the European Union. The Authorization Directive applies to authorizations for all electronic communications networks and services, regardless of whether the networks and services are provided to the public. The Directive does not apply to authorizations for the use of radio frequency, unless the use of the frequency involves the provision of an electronic communications network or service.

The Authorization Directive requires the replacement of individual authorizations with general authorizations. In general, electronic communications networks or services may only be subject to a general authorization requirement. As a result, an ICT service provider may be required to submit a notification that it is providing services, but it may not be required to obtain a decision or be dependent on any other administrative act by the national regulatory authority before commencing operations under the authorization.

The Authorization Directive also dictates certain rights and obligations of authorized service providers. For example, at a minimum, general authorizations must give undertakings the right to provide electronic communications networks and services and to negotiate interconnection with other providers in the EU. The Authorization Directive also specifies when a holder of a general authorization will be subject to universal service obligations, including the right to provide certain universal service functions.

The Authorization Directive sets out conditions that may be attached to general authorizations. It also specifies the types of measures that countries may take in order to verify and enforce compliance with these conditions. Subject to certain conditions, the Authorization Directive permits the imposition of administrative charges on undertakings providing a service or a network.

The requirements related to general authorizations do not apply to use of scarce resources such as radio frequency and numbering resources. The Authorization Directive sets out different requirements for authorization of these scarce resources.

The Authorization Directive has been developed to conform to the more general regulatory requirements of the EU Framework Directive. While the Framework Directive does not establish specific rules for the authorization process, several general provisions are relevant, including:

    • A requirement that national regulatory authorities exercise their powers (including the power to issue authorizations) impartially and transparently.
    • The adoption of a technology-neutral framework for regulation. Thus, technology-specific authorizations are not permitted.
    • The adoption of a broad framework for regulation. In light of evolving technologies and convergence, the Framework Directive and all other telecommunications directives apply to a broad range of networks and services, which are generally referred to as “electronic communications networks” and “electronic communications services”. These terms are given wide definitions.
    • The requirement that national regulatory authorities promote the development of an internal EU market by ensuring that there is no discrimination in the treatment of undertakings providing electronic communications networks and services.
    • The requirement that national regulatory authorities manage the allocation of radio frequency for electronic communications services. The Framework Directive specifies that radio frequency must be allocated and assigned on a basis that is objective, transparent, non-discriminatory, and proportional.

Practice Notes

Reference Documents

Next: 3.2.3 Issuing General Authorizations