* Q&A: Proactive regulators, policy and regulation
* WDR Discussion Paper: Telecom in Denmark: Investment, performance & regulation
* WDR 2003 Fora dates announced
* Technology Policy and Innovation Conference in Monterrey, Mexico
* WDR 2002 Report summary available in more languages
* WDR 2002 Report gets wide distribution
* Report: The Reality of E-commerce with Developing Countries
* Call for papers – Copyright and software patents: Open vs. proprietary paths
* Economics of Infrastructures 6th International Conference
* Subscribing and Unsubscribing
Welcome to the fourth issue of the WDR e-Brief for 2003. WDR e-Brief is an occasional electronic bulletin from the World Dialogue on Regulation for Network Economies WDR). The e-Brief keeps you informed of new documents and ongoing discussions on our website and features information and comment of interest to the regulatory community. Please forward it to interested colleagues and let them know they can subscribe for free from the WDR website at
http://www.regulateonline.org/. There are currently 1,218 subscribers.
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Q&A: Proactive regulators, policy and regulation
In each WDR e-Brief we feature a question or comment posted to the Online Dialogue at http://www.regulateonline.org/dialogue/ and ask our research teams to comment. The featured question in this e-Brief arises from the background paper for the 2003 Dialogue, Stimulating Investment in Network Development.
Question: Several contributors to the dialogue have questioned the expanded proactive role for telecom regulation suggested in the WDR 2003 Background Paper. They argue that it tends to blur the line distinguishing policy from regulation, and it assigns responsibilities to regulators that can better be performed by appropriate government departments.
The reply comes from William Melody, General Manager of WDR.
Answer: The line between policy and regulation in telecom, as in other sectors, is neither fixed nor clearly defined, and varies substantially across countries. In some countries the jurisdiction of the regulator is so narrowly circumscribed that the regulator is little more than an administrative arm of the Department/Ministry. In others, wide areas of discretion relating to such important matters as spectrum management, number allocation, licensing competitors and price regulation standards are delegated to the regulator. The differences are explained by many factors, including the experience, competence and trust that the regulator commands with the government. Clearly a proactive regulator cannot exceed its remit and policy direction. If it does, the policymakers or the courts will check it.
But regulators can use the discretion that has been delegated to them to implement their remits in innovative ways. Most have not done so for a variety of reasons. Yet the policy direction in nearly all countries is to facilitate network development so as to achieve universal coverage to the greatest extent possible. That surely includes taking innovative steps to stimulate investment in network development during a period of major recession in the industry. In the United States the Federal Communication Commission (FCC) has arranged special meetings with the investment banking community to attempt to assure them that the FCC is an investment friendly regulator. Groups of high level government representatives from developing countries, often including the regulator, have been touring the world’s financial capitals and visiting the largest telecom operators in order to stimulate interest in investing in the development of their networks. Potential investors immediately ask about regulatory risk and the potential demand for services. Proactive initiatives by regulators that address these issues do not blur the distinction between policy and regulation. Rather they add substance to the rhetoric of these investment promotion meetings. They change regulation from passive to proactive within the scope of the regulator’s remit, however that is defined.
The second concern questions whether telecom regulators are the best ones to implement the demand stimulation activities suggested in the background paper. At the present state of regulatory development, one would have to conclude that in some countries they are; but in most, they are not. Clearly the responsibilities should be assigned to the government agency most capable of implementing them. If regulation is working reasonably well, the telecom regulator should have a comparative advantage over other agencies, including the Ministerial departments.
The difficulty here is that weak and ineffective regulation arises, in the great majority of cases, because of a failure of policy at the Ministerial level more than regulation itself. If the regulator is held in straightjacket by the government, one can hardly blame the regulator. It is inadequate policy direction and ongoing political interference that explain most cases of regulatory failure. So it cannot automatically be concluded that, because of regulatory failure, the task can be performed better by another government agency. E.g., in South Africa both the telecom regulator and the Universal Service Agency are plagued by the same problems of political interference. Resolution of the failures of inadequate policy direction and the problem of ongoing political interference may be necessary before the demand stimulated activities suggested in the background paper can be performed at all.
The WDR Report 2002, Next Generation Regulation: ICT Convergence or Multisector Utility, examined the implications of ICT convergence for defining the scope and structure of telecom regulation. A number of countries already have broadened the remits of their telecom regulators, and in some cases created new sector regulatory authorities. Convergence has thrown up a set of new issues relating to network development for the next generation Internet (NGI) and the evolution of e-commerce and information societies. Some relate to the conditions of supply; others to the conditions of demand.
The Internet has developed to its current state in an environment of self-regulation addressed primarily to technical and administrative issues, through ICANN. But now the dominant issues are becoming primarily economic and political, prompting ICANN president Stuart Lynn to propose that government representatives be appointed to ICANN’s Board. In the US, some have even called for the creation of an Internet Commerce Commission. The WDR 2002 Report concluded that the case for integrating ICT issues as part of the remit of the telecom regulator is strong. This would suggest that it would be preferable to expand the FCC’s remit if necessary, to include Internet issues, rather than create a separate Internet commerce regulator.
Yet, there are issues of facilitating demand in next generation Internet services that may or may not fall within the activities of a telecom regulator, including privacy protection, security, digital signatures, conditions for e-contract enforcement and consumer protection for e-services. If the supply-side issues relating to Internet development are to be included under telecom regulation, the case for also including demand-side issues is strong. If they are included, a proactive regulator with responsibilities for network development should act on them.
These questions, and this answer, show how the boundaries of regulation are being challenged and reshaped by the interaction of technological change and market developments, in addition to the general recession in the sector. Continued research and dialogue will be needed to help clarify these issues further, and guide the policy and regulatory deliberations in all countries.
William Melody
June 2003
Download the background paper from http://regulateonline.org/2003/dp/dp0301.htm
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New WDR discussion paper
Telecoms in Denmark: Investment, performance and regulation
This year’s WDR theme on investment in telecommunications will feature a number of country and region case studies examining both developing and economically developed areas. The first case study examines various indicators on the development of telecommunications in Denmark in order to provide a broader picture of the situation of the Danish market. Often country case studies concentrate on diffusion and price information. This paper also includes information on investment, competition, innovation and financial performance of operators in Denmark.
Post your comments on the discussion paper to the WDR Dialogue under the theme Discussion Paper WDR 0302 at http://regulateonline.org/dialogue/ or email them to
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WDR 2003 Fora dates announced
WDR Expert Forum Meetings on this year’s Dialogue topic will be held in Koege, Denmark and Johannesburg, South Africa. Following a pattern established at last year’s highly successful Expert Forum in Skodsborg, Denmark, a similar programme is planned this year on 5 November in Koege, 40 km south of Copenhagen.
The LINK Centre, a LIRNE.NET partner, has made it possible to hold a second expert forum meeting focusing specifically on developing country issues. This is planned to take place in Johannesburg in early December. Further details will be posted on the WDR web site and the e-Brief as they become available.
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Technology Policy and Innovation Conference in Monterrey, Mexico
The Seventh International Conference on Technology Policy and Innovation was held in Monterrey, Mexico, 10-13 June under the theme, Connecting People, Ideas, and Resources Across Communities.
William Melody delivered a keynote address, From Telecom Policies to e- Economy. He emphasized that the pace of investment and development of the e-economy is being slowed by the inadequacies and lack of credibility of the policy/governance/regulatory structure. This ranges from industry-specific national telecom regulation, to informal and formal international organizations such as ICANN, WTO and WIPO. The e-economy requires a solid foundation of credible governance and regulation if e-markets are to become efficient drivers of the e-economy.
Melody’s powerpoint presentation can be downloaded in PDF format from
http://regulateonline.org/pdf/monterrey.pdf
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WDR 2002 Report summary available in Spanish and Lithuanian
With the addition of Spanish and Lithuanian, the summary of the 2002 WDR research report is now available in a total of five languages. The other languages are German, Greek and Italian. You can read and download the translations from http://regulateonline.org/2002/dp/dp0206exs.htm.
More languages are in preparation. If you or your organisation can provide a translation of the Executive Summary into other languages, please contact Merete Henriksen at
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All translations will be posted on the website and you will be given credit.
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WDR 2002 Report gets wide distribution
The WDR 2002 final research report has received wide distribution, both electronically and in print. Since it was posted on the regulateonline.org website at the end of January, it has been downloaded more than 1,500 times and printed and shared with hundreds of regulators, policy makers, private sector representatives and researchers. The print version of the report is also travelling the world, having been sent to the telecom regulators and communication ministries of all ITU member States.
If you have not yet seen the report, it is available for download or online consultation at http://www.regulateonline.org/2002/dp/dp0206.htm
Libraries and documentation centres wishing to have a printed copy should contact LIRNE.NET at the address at the end of this e-Brief or send an email to LIRNE coordinator Merete Henriksen at
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The Reality of E-commerce with Developing Countries
One of the reasons put forth for stimulating investment in telecom infrastructure in developing countries is that access to telecoms will enable developing country producer firms to gain more equitable access to global markets. A new report questions this assumption, finding that the main effect of business to business (B2B) e-commerce is not to open new markets but to enhance existing trade relationships and power relations. The report summarises research led jointly by the London School of Economics and the Institute of Development Studies and its conclusions convey clear messages for policy makers and practitioners.
Read the full story at: http://regulateonline.org/news/b2bdev.htm
The Executive summary of the report is at http://www.gapresearch.org/production/ExeSummary.pdf
and the full report can be downloaded from http://www.gapresearch.org/production/Report.pdf
Background papers and other results of the research are at http://www.gapresearch.org/production/ecommerce.html
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Call for papers – Copyright and software patents: Open vs. proprietary paths
On 4-5 December 2003, the 8th annual international conference of Denmark’s Center for Tele-Information, a WDR research partner, will focus on copyright and software patents.
The overall topic of the conference concerns open vs. proprietary development paths with respect to content and software production. In spite of the various specificities of the two fields, there is a common ground, and the conference seeks to explore both this common ground and the special features of the two areas.
A selection of the best papers for the conference will be published in the international journal Telematics and Informatics in spring 2004. For more information, read the full call for papers notice at http://regulateonline/news/cti2003.htm
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Economics of Infrastructures 6th International Conference evaluates market issues
Infrastructure Liberalisation - Speed up or step back?: Preparing for the next phase of telecom and energy reform was the theme of the 6th international conference of Delft University of Technology's Economics of Infrastructures group in cooperation with the Benelux Association of Energy Economists. Close to one hundred telecom and energy sector experts attended to evaluate market issues and assesses the implications for telecom and energy reform. Central to the conference Roundtable session was a discussion about whether liberalization process has run its course.
Full story at http://regulateonline.org/news/ei6.htm
The conference website is at:
http://www.ei.tbm.tudelft.nl/ei6conference/complete_ei6conference.htm
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Questions and support
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Subscribing and Unsubscribing
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Bruce Girard
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edits the e-Brief with assistance from Divakar Goswami.
Archives: http://www.comunica.org/w-agora/index.php?bn=wdr_ebrief
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The purpose of the World Dialogue on Regulation is to critically examine ideas and evidence. Unless otherwise indicated, the views expressed in content appearing on the WDR website, the Online Dialogue and the WDR e-Brief are the personal views of the individuals submitting them. Content does not necessarily reflect the views of LIRNE.NET, infoDev, the World Bank, the International Telecommunication Union, the International Development Research Centre or any other organisation associated with the World Dialogue on Regulation.
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World Dialogue on Regulation
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