Among the PiRRC contributions to the Pacific Broadband Forum just concluded in Nadi, Fiji, was a panel discussion on regulatory independence. In addition to the practicing regulators of Papua New Guinea, Samoa and Vanuatu, they invited some observers to participate. Preparing for the panel, I looked through some old slidesets and came up with this structure. Did not use the slidesets, but the structure was useful. What surprised me was how easily I switched from the role of disinterested scholar to former regulator.
For the longest time, I could not understand why there were no legal challenges to the regulator in Bangladesh. No one went to court, however arbitrary the decisions were. Looks like that has changed. Grameenphone has won a crucial legal battle with regulators BTRC as High Court has rejected claim for an extra Tk 236 crore in spectrum fees levied in 2008. A two-judge bench also said the BTRC was however right in asking for the spectrum and licence renewal fees without deducting value added tax.
We had the pleasure of engaging with an erudite politician at the inauguration of LIRNEasia’s principal capacity-building event, CPRsouth in Bangkok last week. Former Prime Minister Abhisit Vejjajiva, who used to teach economics at Thammasat U before he went into politics, had this to say, as reported in Bangladesh’s Daily Star, about innovation and the role of the state: “Creativity takes place very much in the private sector, so regulations must be friendly for them,” said Vejjajiva, in his keynote speech at the inaugural session of a two-day conference on Communication Policy Research south 6 (CPRsouth6) in Bangkok on Friday. Vejjajiva, now the leader of the opposition in the House of Representatives of Thailand, also emphasised independence of the regulatory body, but not without accountability. I found it quite a contrast to a long article in the New York Times about how the Chinese state is treating innovation by the private sector, ripping it off and bringing it under the control of the state: The usurping of private enterprise has become so evident that the Chinese have given it a nickname: guojin mintui. That roughly translates as “while the state advances, the privates retreat.
A little bit of history, about people waiting for 27 years to get a phone before liberalization and what leased lines cost in the bad old days before SEA-ME-WE 4, was recounted. But most of the attention was on the future, on how Bangladesh could give its people the benefits of broadband through good regulation. One speaker said that the root of all evil was illegal call termination. Knowing what I know about the Bangladesh industry, I could agree. The entire convoluted structure of Bangladesh telecom regulation is anchored on safeguarding the massive revenue thought to be generated for the government from incoming and outgoing international calls.
Since 2004, India has been behind Pakistan on a key indicator: mobile SIMs/100. Few in India wanted to talk about this. But we did. Now finally, India has pulled ahead, as it should. I discuss the reasons in a recent piece done for Pioneer.
The Telecom Policy and Regulatory Environment survey results have been carried in the Economic Times in India. India’s regulatory regime has been found to be the best for mobile phone tariffs but the 2G spectrum allocation controversy has pulled it down in a recent perception survey of seven nations conducted by telecom regulation and policy study firm Lirneasia. “In India, the regulator does not regulate most of the prices where as in other countries, we surveyed, there are regulatory interventions,” Payal Malik, senior research fellow of Lirneasia told PTI. India scored 3.9 for mobile phone tariffs on scale of 1 to 5.
According the LIRNEasia’s 2011 Telecom Regulatory Environment (TRE) survey, stakeholders in India, Pakistan and Indonesia have identified the telecom regulatory environments in their countries as improved since 2008, the last time the survey was carried out. In contrast, Bangladesh, Sri Lanka, the Philippines have seen the regulatory environments decline in effectiveness, while Thailandremains more-or-less the same. The TRE Survey asks senior level stakeholders to evaluate the effectiveness of the telecom regulatory environment in the fixed, mobile and broadband subsectors along a Lickert scale of 1 to 5 (1 being highly ineffective and 5 being highly effective, with the mid-point of 3 being considered average performance). Seven different dimensions of regulation (market entry, tariff regulation, interconnection, universal service, anti-competitive-practices, quality of service) are evaluated by the stakeholders. This year, 349 responded participated in the 7 countries.
The first supranational regulator was created in the Eastern Caribbean in the 1990s. It was a logical solution to the problem of micro states that lacked adequate capacity still wanting to do conventional regulation. But it sorely lacked teeth. Now we have a supra-national regulator with teeth. Well worth watching because national regulation is not working too well.
In most countries in the early stages of liberalization, I get asked about the profits operators make and how they should be monitored. I tend to say that the priority should be on monitoring investments (not committed, but actually made) and that it’s not a bad idea for the regulator to have some knowledge about profits. The reason I give priority to investment is because that is what drives performance. If investment declines, the regulator can expect problems. Profits are relevant for two reasons: first, if they are below the norm (more on this below), investments will most likely be affected negatively.
Bangladesh is considering the issuance of 3G frequencies (they should get the license renewal mess sorted; but that is another story). The question of establishing a single 3G network that multiple operators would jointly own and use has been floated by an important stakeholder, the CEO of Banglalink. This is a theoretically good, but practically bad, idea. So LIRNEasia explained why in Bangladesh’s premier English language daily, the Daily Star: The operation of multiple 3G networks, owned and operated by different limited-liability companies, may be sub-optimal if seen solely from resource optimisation or planning perspective. But it is actually the most efficacious for the ground conditions in Bangladesh.
For a long time, we were the voice in the wilderness. But now the regulator is on the job. If the promised results materialize, we can move on to something else: “Three months ago, most operators were provided services 70% less than the speed rate advertised in the package”, TRC Director General Anusha Palpita said. The speed-up move came after the TRC carried out an evaluation of the quality of service including speeds of fixed broadband services – ADSL and WiMAX. Mr.
Earlier this year the TRC appointed a special committee to develop broadband in Sri Lanka. Possibly based on its recommendations the TRC has issued new directives on broadband, placing emphasis on customer’s right to know, an approach we at LIRNEasia also promoted a few months prior to the constitution of the committee. The guidelines had been issued in August. We regret not giving them publicity at the time. With the intention of raising awareness among broadband subscribers, the Telecommunications Regulatory Commission has issued a set of guidelines for broadband service providers.
CHAKULA is a newsletter produced by the Association for Progressive Communications (APC). Named after the Swahili word for ‘food’, it aims to mobilise African civil society around ICT policy for sustainable development and social justice issues. The latest issue features an e-interview with LIRNEasia’s CEO Rohan Samarajiva, but it is not the only reason why we thought of highlighting the issue. The content is interesting and very readable. We publish two e-interviews from July 2010 issue here fully, as they are not available on public domain.
We were not optimistic about the telecom regulators actually doing something about lowering intra-SAARC phone prices more than one year after the SAARC heads of state said it should be done. The regulators show their independence when it comes to matters such as this. But the prices came down for LK-IN calls without any regulatory intervention. We continue to live in hope. South Asian telecommunications regulators have decided to ask phone companies in the region to reduce international call charges, an official said.
Developed countries are generally perceived to be the gardens of best practices. Most of these countries’ lawmakers and lawbreakers (Including the diplomats and consultants) frequently lecture us on how to do the right thing. But we hardly know about their dirty laundry. Mitchell Lazarus unfolds the regulatory dark side in the USA. The technical rules that deal with mature products are relatively general.
One of the greatest contributions that can be made to help people pull themselves out of poverty is to facilitate safe, secure, low-cost transactions. Mobile payments which are potentially accessible to almost the entire populations of emerging economies need to be encouraged in this regard. At the beginning of the year, the Central Bank of Sri Lanka indicated it will be making policies for mobile payments. Not having seen much activity on this front, we facilitated a contribution from Muhammed Aslam Hayat, a legal expert currently based in Bangladesh but with extensive regional experience. It was published in the Financial Times, 12 July 2009.