World Dialogue on Regulation

ICT Convergence Regulation or Multisector Utility regulation

The first phase of telecom reform in all countries involves the clear separation of the primary functions of network operation, policymaking and regulation. Incumbent operations are commercialized, often privatized, competition is introduced and network development objectives are established. Industry specific regulators are expected to drive the process of policy implementation, a far more difficult task than initially envisioned that has achieved only limited success so far.

Yet, even before this first phase of reform has been completed, technology and market developments are blurring industry boundaries and the effectiveness of industry specific telecom regulation. It has become evident that the objectives, scope, powers and priorities of regulation for 21^st century network economies must be reassessed in light of information/communication technology (ICT) and media convergence on the one hand, and the network development possibilities  of multi-sector utilities on the other.

If industry specific telecom regulation must be transformed so as to provide both a framework and a foundation for effective governance of network economies, what are the options to be considered by national governments and others who will influence the policy choices and the design of regulatory structures? One direction gives priority to ICT convergence issues. Regulation must focus on the ICT sector and the issues associated with converging technologies, electronic trading and other core next generation Internet services. Another direction gives priority to multi-sector utility developments, which unexpectedly have become a major part of the first stage of telecom reform in many countries. Most facilities-base network competition has involved – indeed required – major co-operation with other utility sectors, resulting in many joint ventures, mergers, and a significant trend toward multi-sector utilities. Would the establishment of coherent multi-sector utility regulation provide both more efficient and effective regulation across the different utilities, and stimulate investment in information infrastructure network development?

Each direction of reform suggests multiple options to be considered in the design of the next stage of information infrastructure regulation. Each option will offer potential benefits and costs that must be assessed in light of the traditions, institutions and telecom sector legacy in different countries. The two major directions suggested here need not to be exclusive, but they are unlikely to be pursued simultaneously in any country. Only one direction is driving, or likely to drive the process of regulatory reform in any particular country. To clarify the dialogue and sharpen the analysis, we have posed the Dialogue Theme as: The Next Step in Telecom Reform: ICT Convergence Regulation or Multi-Sector Utility Regulation?  

The dialogue will contribute to a better understanding of these important issues on which many countries will be making policy and regulatory decisions over the next few years. We encourage your contributions and welcome your views.