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| WDR e-Brief No. 07 |
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| Tuesday, 28 May 2002 | |
In this e-Brief* Q&A: Do multisector agencies increase possibilities for political interference? * Dates changed for WDR Experts Forum * FCC Competition powers confirmed * IT Security Seminar report online * IT security links * Work underway on certification of regulatory professionals * eEurope Benchmarking report now available * Nigeria: “Transparent regulatory process . . . yields more for the industry” * Economics of Infrastructures and the Centre for Tele-Information to host conferences this week * Subscribing and unsubscribing ----------------------------- The WDR  No. 07, 28 May 2002 ----------------------------- Welcome to the seventh issue of the WDR e-Brief, a bi-weekly bulletin from the World Dialogue on Regulation for Network Economies (WDR). The WDR 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 the e-Brief to interested colleagues and let them know they can subscribe for free from the WDR website at http://www.regulateonline.org/. For more information on any of the items discussed here, go to the web addresses provided. -------------------- -------------------- Q&A: Do multisector agencies increase possibilities for political interference? 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 comes from Charles Roocroft who follows up on a question posed on regulatory independence and argues that the benefits of multisector regulatory agencies -- mainly insulation from political interference and cost-savings --may be difficult to achieve. The answer comes from Rohan Samarajiva, coordinator of the Multisector research team based at the Economics of Infrastructures at the Delft University of Technology. Question: It is argued that multisector regulation contributes to the independence and effectiveness of regulatory agencies. Doesn’t the fact that the multisector agency is responsible to multiple government ministries increase the possibilities of political interference? Doesn’t the cost-saving rationale underlying the creation of multisector agencies result in inadequate resources for regulatory activities, thereby reducing the effectiveness of regulatory agencies? Charles Roocroft Answer: The achievement of benefits in terms of greater independence and effectiveness depends on the actual design of the multisector regulatory agency and the fit between that design and the institutional environment of a particular country. Simply creating a multisector agency will not yield the desired outcomes. There can be no condition of complete independence. Independence must always be coupled with accountability. The difficulties that most regulatory agencies face arise from government ministries, in their roles as shareholders of service providers, seeking to exercise covert influence over the regulatory agency. Complete privatization can reduce this tendency, though of course the moment of privatization, at which the government has the greatest incentive to maximize privatization revenues, is one of the most dangerous for regulatory independence. Short of complete privatization, the design of multisector agencies has to recognize and address the potential of interference on the part of government that functions as the shareholder of the incumbent. It is vitally important that the regulatory agency not be accountable to that unit, be it the so-called “line” ministry or the finance ministry. Where the line ministry functions as the shareholder, the regulatory agency should be accountable to the finance ministry or the chief executive’s office. Where the finance ministry functions as shareholder, it may be necessary to report to the line ministry. This basic design principle should be applied to “convergence” or industry regulatory agencies as well as multisector agencies. The difference with multisector agencies is that there is no “natural” line ministry. The policy makers and legislators who create the agency will have to directly address the independence/accountability issue. It is true that the capture of economies of regulation is an important part of the rationale for multisector regulatory agencies. The effort to contain the costs of regulation is not an unreasonable one. Again, the efficient organization of a regulatory agency that may be made possible by giving it a multisector mandate must be distinguished from cost-cutting as an end in itself. The lumpy nature of regulatory tasks (such as periodic rate reviews) may allow for a more efficient use of staff resources in a multisector agency. This requires careful design, not only at the moment of creating the agency, but also on a continuing basis. If staff numbers can be kept low, the agency will have a better chance of paying adequate salaries to the staff, enabling the retention of skilled staff and the attraction of qualified personnel. It is misleading to equate staff size with effectiveness. Again, all forms of regulatory agency organization should address the question of efficiency. Multisector regulation, may, in certain circumstances, enhance the possibilities of achieving organizational efficiency. Rohan Samarajiva LIRNE.NET & Delft University of Technology Follow the dialogue post a question or make a comment at http://www.regulateonline.org/dialogue/ . -------------------- -------------------- Dates changed for WDR Expert Forum The WDR Expert Forum to critically assess the draft report on Convergence versus Multisector Regulation and related issues has been postponed until early September. The new dates will be announced shortly. -------------------- -------------------- FCC Competition Powers Confirmed The US Supreme Court has ruled on a controversial competition issue that has been in dispute since the passage of the Telecommunications Act of 1996, when the Federal Communications Commission (FCC) adopted a cost method called TELRIC (Total Element Long Run Incremental Cost) as its standerd for determining the prices that incumbent telcos can charge for interconnection to their networks by competitive service providers. The FCC's standard was challenged by Verizon and upheld by the Supreme Court, which ruled that prices should be related to cost, and the regulator could exercise its discretion in determining the specific cost standard. In a related decision, the Court ruled that US state regulatory decisions on interconnection can be appealed to federal courts, strengthening the capability of enforcing FCC standards at the state level. FT.com, the online service of the Financial Times is sponsoring a debate on the decision. Eli Noam started the discussion sating that the decisions are a “damaging extension” of regulatory powers. Bill Melody, in a contribution to appear at FT.com on Thursday, sees them as finally allowing the FCC to get on with implementing pro-competitive regulation. Read Noam's column at: http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&cid=1021990923460&p=1020498309075 Read Melody's comment at: http://www.regulateonline.org/news/melodyfcc.htm -------------------- -------------------- IT Security Seminar Outcome report, Denmark The members of the Independent Regulators Group (IRG) and representatives from other relevant organizations participated in a seminar on IT security in Copenhagen, Denmark on 4 April 2002. The aim of the seminar was to raise the awareness of IT security issues and discuss the role of national authorities in relation to improving IT security and user confidence in the Internet. Read the Outcome report of the seminar at: http://www.regulateonline.org/news/securityreport.htm Other links on the subject: A 19/04/02 WDR report on IT security for regulators http://www.regulateonline.org/news/security.htm ITU Meeting in Seoul May 20-22, 2002 Creating Trust in Critical Network Infrastructures http://www.itu.int/osg/spu/ni/security/index.html Telecommunication Working Group of the Asia-Pacific Economic Cooperation (APEC) will hold a two-day discussion on e-security in August 2002. The documentation for the meeting is online at http://www.apectel25.org.vn/documents_e_sercurity.cfm OECD Guidelines for the Security of Information Systems http://www.oecd.org/EN/document/0,,EN-document-43-nodirectorate-no-24-10249-13,FF.html Paper by Ewan Sutherland (INTUG), rapporteur for the IT-Security Seminar in Copenhagen http://www.intug.net/talks/ES_2002_04_copenhagen.html Information Assurance Advisory Council (IACC) - a UK forum on "secure and dependable information infrastructure" http://www.iacc.org.uk -------------------- -------------------- Work underway on certification of regulatory professionals The Private Sector Advisory Services Unit of the World Bank convened a workshop on the development of a certification program for regulatory professionals at Oxford, United Kingdom, in May 2002. WDR researcher Rohan Samarajiva was one of the invited participants. The Oxford Workshop addressed the question of establishing some measure indicating that regulatory professionals had achieved a degree of competence in the core areas of economic regulation. A report on the workshop is available at http://www.regulateonline.org/news/certification.htm -------------------- -------------------- eEurope Benchmarking report now available The eEurope Action Plan 2002 is a central element of the European Commission’s strategy of bringing Europe online as fast as possible and transforming it into a knowledge based economy. The recently issued eEurope Benchmarking report provides an overview of where Europe stands currently. The objective of the report is to give a first comprehensive overview of the benchmarking results, (ii) to compare policy progress with market developments, and (iii) to draw some conclusions for the final year of the eEurope Action Plan and to consider if further action is needed after 2002. The eEurope Benchmarking is available as a PDF document at: http://europa.eu.int/information_society/eeurope/news_library/new_documents/benchmarking/benchmarking_en.pdf -------------------- -------------------- Nigeria: “Transparent regulatory process . . . yields more for the industry” The Nigerian Communications Commission (NCC) recently auctioned Fixed Wireless Access (FWA) licenses with thirteen firms winning provisional licenses to operate in nine different regions of the country. At the end of the auction, one of the winners, Sa'ad Mohammed, representing Digital Science and Technology said that the process was transparent, although he added that the twenty-one working day deadline to pay for the licenses is too short. NCC Director General, Ernest Ndukwe, was pleased with the result and gave much of the credit to his own agency. “When you have a good and transparent regulatory process, it yields more for the industry. As you can see, people are comfortable with what has happened and even the winners and those who did not make it are fairly satisfied and they have been saying positive things about the process. It gives us a lot of joy and what will eventually justify the whole exercise is when these companies start rolling out in all these states.” From the WDR/Intelecon Regulatory News Service Read the full story at: http://www.regulateonline.org/intelecon/A-Nigeria-020517.htm -------------------- -------------------- Economics of Infrastructures and the Centre for Tele-Information to host conferences this week Regulation: Shaping Markets in Liberalized Infrastructure Industries for Better Performance is the title of the 5th annual conference of the Delft University of Technology's Economics of Infrastructures Section. Delft, The Netherlands, May 30-31, 2002. More information at http://www.ei.tbm.tudelft.nl/Seminars/Conference%2030-31%20Mei.htm The 7th International CTI Conference titled Internet & Mobility: Technologies and Implications for Work and Leisure will be held at the Technical University of Denmark on May 29. For further information see CTI's website ttp://www.cti.dtu.dk/activities/conference.view.php?id=16944 . ----------------------------- ----------------------------- Questions and support If you have questions about WDR, send them to This e-mail address is being protected from spam bots, you need JavaScript enabled to view it For technical matters, contact us at This e-mail address is being protected from spam bots, you need JavaScript enabled to view it or see the Frequently Asked Questions section in the Online Dialogue. http://www.regulateonline.org/dialogue/ ----------------------------- ----------------------------- Subscribing and unsubscribing The WDR e-Brief is a bi-weekly bulletin from the World Dialogue on Regulation for Network Economies - http://www.regulateonline.org. Subscribe from the site or by sending a message to This e-mail address is being protected from spam bots, you need JavaScript enabled to view it with the subject wdr e-brief list . To unsubscribe, send a message to This e-mail address is being protected from spam bots, you need JavaScript enabled to view it ----------------------------- ----------------------------- Bruce Girard - This e-mail address is being protected from spam bots, you need JavaScript enabled to view it - edits the e-Brief with assistance from Divakar Goswami. Archives: http://www.comunica.org/w-agora/index.php?bn=wdr_ebrief ----------------------------- ----------------------------- 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 necessarily reflect the views of LIRNE.NET, infoDev, the World Bank, the International Telecommunication Union or any other organisation associated with the World Dialogue on Regulation. ----------------------------- ----------------------------- World Dialogue on Regulation c/o LIRNE.NET Technical University of Denmark Center for Tele-Information, Building 371 2800 Kgs. Lyngby, DENMARK Email: This e-mail address is being protected from spam bots, you need JavaScript enabled to view it Phone: +45 4587 1577 - Fax: +45 4596 3171 http://www.regulateonline.org ----------------------------- |
