Information Technology and Telecommunications Law

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INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS LAW

"DO CONVERGED REGULATORY AUTHORITIES REPRESENT THE OPTIMAL WAY FORWARD FOR THE REGULATION OF THE COMMUNICATIONS SECTOR?"

"DO CONVERGED REGULATORY AUTHORITIES REPRESENT THE OPTIMAL WAY FORWARD FOR THE REGULATION OF THE COMMUNICATIONS SECTOR" DISCUSS Telecommunications Law:

TABLE OF CONTENTS

INTRODUCTION

PART I: CONVERGENCE OF THE COMMUNICATIONS SECTOR y

What is convergence?

y

The effects of convergence.

y

Regulatory issues in a converged communications sector.

PART II: CONVENTIONAL REGULATION y

What is regulation?

y

How should the communications sector be regulated?

PART III: CONVERGED REGULATORY AUTHORITIES AND THE REGULATION OF THE COMMUNICATIONS SECTOR y

Converged Regulatory Authorities.

y

The Office of Communications (OFCOM).

y

Advantages of Converged regulatory authorities.

y

Disadvantages of converged regulatory authorities.

PART IV: CONCLUSION

BIBLIOGRAPHY

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"DO CONVERGED REGULATORY AUTHORITIES REPRESENT THE OPTIMAL WAY FORWARD FOR THE REGULATION OF THE COMMUNICATIONS SECTOR" DISCUSS Telecommunications Law:

SUMMARY This essay answers the question "Do converged regulatory authorities represent the optimal way forward for the regulation of the communications sector" by depicting that converged regulatory authorities are indeed the best possible way forward for the regulation of the communications sector. Part I introduces you to the concept of convergence to ena ble you to understand why converged regulatory authorities are of the essence in the dynamic communications market. Part II embodies a description of the nature of the present-day regulation in the United Kingdom, in order to give you a clear comprehension of where regulation has been and how it is being forced (by the vertical and horizontal convergence of industries in the communications sector) to progress towards converged regulation as the most favourable way forward for regulation of the communications sector. Part III takes a look at the prerequisites for successful regulation under a converged framework with the spotlight on the Office of Communications (OFCOM) as an example of a converged regulatory authority. In its attempt to reaffirm the assertion that converged regulatory authorities are the optimal way forward for the regulation of the communications sector  this chapter of the essay takes a concise look at the advantages and disadvantages of converged regulatory authorities. Part IV concludes this essay by emphasising that converged regulatory authorities  represent the optimal way forward for the regulation of the communications sector. INTRODUCTION The continuous expansion of applications of information and communications technologies (ICT) has led to the transformation of local, national, regional and international economies throughout the world. This ICT revolution is in the process of creating another "paradigm shift" for the 21st century economies and societies. The liberalisation of the communications sector worldwide in general and in Europe in particular, has been followed closely by convergence resulting from changes in technology, changes in the market structure, and su bsequently changes in policy. Convergence has occurred in industries (e.g.) telecoms as it becomes more closely associated with the information technology and broadcasting industries. This has had profound effects on competition and the way the industry is regulated. Seeing that many telecoms services are being made available across computer  networks, and many broadcast services can be delivered over telecoms networks there are numerous fore sighted questions (e.g.) "Which regulatory structure is most ideal for  the dynamic converging market? Can sector specific regulation suffice? Must regulation follow the trend of the market by way of convergence?  A  re converged regulatory authorities the optimal way forward for the regulation of the communications sector? In

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"DO CONVERGED REGULATORY AUTHORITIES REPRESENT THE OPTIMAL WAY FORWARD FOR THE REGULATION OF THE COMMUNICATIONS SECTOR" DISCUSS Telecommunications Law:

an attempt to answer the lingering questions, this essay clearly depicts the role that converged regulatory authorities shall play in the communications sector  by focusing upon the regulation of the communications industry in the United Kingdom. PART I: CONVERGENCE OF THE COMMUNICATIONS SECTOR In order to be able to comprehend what converged regulatory authorities are and how they shall function in the regulation of the communications sector, it is vital to take a brief look at convergence which has essentially led to the creation of converged regulatory authorities. What is convergence? Convergence

is the erosion of traditional distinctions between media, telecommunications and information technology, the take over of the media  sector by the telecommunications and computing industries and the collapse of  technological and regulatory barriers to market entry. 1 From 1980 various service sectors began integrating both vertically (as depicted in figure 1) and horizontally (as depicted in figure 2), which, eventually lead to convergence. Convergence, in the areas of ICT and media, essentially refers to the coming together of IT, telecoms, broadcasting and other media, technologically, market wise and policy wise. Figure 1: Vertical convergence2 IT

Telecom

Broadcasting

Other  media

Content / Service Transport / Software Equipement / Hardware

Figure 2: Horizontal convergence 3

1Rijo

Calleja "Convergence: Gone Digital, Going Interactive - Markets and Regulation in the Audio-Visual Sector" Ent. L.R. 1999, 10(3),64 2ibid at p.15 3 ibid at p.16

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"DO CONVERGED REGULATORY AUTHORITIES REPRESENT THE OPTIMAL WAY FORWARD FOR THE REGULATION OF THE COMMUNICATIONS SECTOR" DISCUSS Telecommunications Law:

IT

Telecom

Broadcasting

Other  media

Content / Service Transport / Software Equipement / Hardware

Convergence of the communications market is taking place at different levels, shaped by mergers and alliances, leading to the creation of new layers in the value chain, across industries4 (i.e.): Convergence in content production and convergence of services, Convergence in distri bution and convergence of networks, Convergence in equipment production and terminal convergence.

y y y

Convergence between services implies that the same content can be reached from different technical platforms (e.g.) internet accessed via the telecom network. It also implies that content providers will become cross-sectional; providing content to more than one sector. Convergence of content, services, distri bution, equipment production and terminal convergence encompasses convergence between telecoms and broadcasting (e.g.) where British Telecom wishes to acquire a broadcasting licence, and convergence between IT and broadcasting (e.g.) where Microsoft is involved in the development of American cable TV.5 The trends of convergence are clearly depicted Figure 3: Trends in convergence IT

Telecom

by

the diagram below6

Broadcasting

Other media

mass

Content ervices ransport software ipment ardware

4

ibid at p.14 Moore & S.Koprice: "A Digital Television Ecosystem", in D. Ger barg (ed), The economics, technology and content of digital T.V., Kluwer, 1999 6 Anders Henten, Morten Falch & Reza Tadayoni, "Some implications for regulation of ICT and Media Convergence" WDR Discussion Paper No. 0202, January 30, 2002 at p.20 5J.F.

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"DO CONVERGED REGULATORY AUTHORITIES REPRESENT THE OPTIMAL WAY FORWARD FOR THE REGULATION OF THE COMMUNICATIONS SECTOR" DISCUSS Telecommunications Law:

Convergence is shaping the development of the communications sector  by enabling different network platforms to carry similar kinds of services and making it possi ble for  service providers to provide the existing products and services in innovative ways (e.g.) on-line publishing of newspapers and journals, ca ble news on the Internet, on-line distribution of software, telephony service over ca ble TV networks, Video-on-demand service over telephone networks, and telephony service over the Internet. This has resulted in increased competition between different service platforms as the traditionally defined boundaries within the communications sector  between IT, telecom, cable television, broadcasting, satellite, cellular mobile and other mass media companies and between the communications industry, content industry and information technology

industries are redefined, become less and less distinguishable and are less viable.7 In turn the increasingly competitive industry sector, is resulting into cost reduction (e.g.) of transmission and switching capacity in the telecommunications sector. Following on from above, it is evident that the communications sector markets are linked economically and therefore the regulatory regime needs to be in tandem with the market (i.e.) multiple and overlapping regulation in the midst of several media of communication. Consequently, policy makers are faced with the task of ensuring that they are able to manage demand at the same time as ensuring technology neutral consistency. And that all new players in the market have reasona ble access to it in a way that is simple, easy to understand and promotes maximised consumer choice. Therefore, it is necessary for the we b of regulatory agencies that developed prior to convergence, to be amalgamated. The communications sector needs to be regulated in a minimal manner, yet an extremely powerful regulator must exist to be responsible for  everything from telephony to television sex, bearing in mind that the numerous issues that shall arise will not be easily regulated on an industry basis. The effects of convergence Convergence has had the following effects upon United Kingdom's communications sector: y

y

y

y

y

It has boosted the growth in communications industries as they exploit new technologies to provide more and better services to consumers. Convergence has led to the growth of e-commerce, which notwithstanding the current spectacular ups and downs for "dotcoms" will come to play a significant part in the United Kingdom's national economy. As a result of convergence there is enhanced a bility of the United Kingdom's hightech creative industries to access and manipulate the information and other content they need to grow their  businesses. Convergence has enforced efficiency gains in esta blished industries, particularly services, as they fight to compete with new online entrants with lower overheads. Due to convergence, the level of savings in pu blic expenditure resulting from providing more government and other services online, has increased.

7D.

Ypsolanti and P. Xavier "Towards next generation regulation", Telecommunications Policy, Vol. 22, No. 8, at p.644

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"DO CONVERGED REGULATORY AUTHORITIES REPRESENT THE OPTIMAL WAY FORWARD FOR THE REGULATION OF THE COMMUNICATIONS SECTOR" DISCUSS Telecommunications Law: y

y

y

The access to the international market for British companies, meeting the demands for high quality services and content around the glo be, has been improved by convergence. There is more efficient use of communications infrastructure, especially radio spectrum: (i.e.) turning off the existing analogue signals will release spectrum worth billions of pounds, as recent mo bile telecoms licence auctions across the European Union have shown. With convergence there is the exploitation of digital technologies and content to deliver education and training in a rich variety of forms tailored to the needs and circumstances of individuals, helping deliver a well-educated and highly skilled workforce.

Convergence has had an immense impact upon all aspects of communication in the United Kingdom as the distinction between three different industry segments continues to blur. Subsequently with market forces shaping the direction of the communications industry, regulation shall be forced to follow suit. Hence a look regulatory issues in a converged market is essential. Regulatory issues in a converged communications sector  There are a number of policy and regulatory issues that relate to convergence namely 8: y

y y y y

y y

How to create a framework that improves general social benefits in terms of services and possibilities. How to balance the benefits and market power pro blems in media synergies. How to secure the best possible access to networks and content. How far to go in establishing converging content regulation. What content issues with regard to privacy protection, consumer protection, and intellectual property rights (etc) to include in convergence regulation. The degree to which infrastructure and content regulation can be separated. And how to establish the best possible institutional regulatory structure.

With the above mentioned issues at hand, the question continues to linger, "Will converged regulatory authorities set the policy and regulatory queries to rest?  A re converged regulatory authorities the optimal way forward for the regulation of the communications sector ?" A look at conventional regulation and the move towards converged regulatory authorities in the chapter  below shall seek to answer this question. PART II CONVENTIONAL REGULATION What is regulation? Regulation is the sustained focused control exercised by a public agency over activities that are valued by the community, and therefore represents all actions that limit the extent to which players in a given field of activity, such as an industry, can freely operate 8

Anders Henten, Morten Falch & Reza Tadayoni, "Some implications for regulation of ICT and Media Convergence" WDR Discussion Paper No. 0202, January 30, 2002

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"DO CONVERGED REGULATORY AUTHORITIES REPRESENT THE OPTIMAL WAY FORWARD FOR THE REGULATION OF THE COMMUNICATIONS SECTOR" DISCUSS Telecommunications Law:

in carrying out that activity. However, regulation is not an end in itself which might be used to achieve policy ob jectives.

but

simply a tool

How should the communications sector be regulated? Like all other aspects of service provision, it is vital to ensure the regulation of the communications industry in order to ensure the protection and promotion of the interests of the consumer  by furthering the following: y y y y y

y y y y y y y y

Universal access to basic services, Remedying market failures in terms of barriers to competition, Good quality and efficient services, Efficient prices, Utilisation of cutting edge technology in the provision of services,

Prevention of the abuse of market power, Promotion of public confidence in the provision of the service in question, Technical limitations, Protection of consumer rights, Control of service content, Advancement in industrial development, Wealth and job creation, Interopera bility and interconnection of network systems.

Initially, regulation in the United Kingdom was based purely upon sector specific regulation whereby the mode of regulation depended on the industry type. For  example, regulation of both the telecommunications sector and the broadcasting sector  was previously kept disengaged in sequence with the ideals of the market situation at the time. The telecommunications sector evolved from a government controlled monopoly with direct political intervention forming the basis of regulation9, whilst the broadcasting sector regulation developed from the desire to provide universal signal coverage with a necessity to restrict access to scarce spectrum, 10 and was based upon political and cultural criteria.11 And while telecommunications regulation hovered over  the provision and operation of the physical infrastructure, the network and access to the network with the crux of the focus upon 12: y y y y

Common carriage (i.e.) universal access rights, Non - discriminatory tariffs, Interconnection, and Price and/or profit control,

Broadcasting regulation concentrated on the plurality of ownership and provision of a balanced and impartial range of programme content consisting of information, 9

Jeremy Landau "The Future of Broadcasting and Telecommunications in the United Kingdom" C.T.L.R. 1997,3 (4) at pg.145 10 ibid at pg.146 11 Professor Nicholas Garnham "Convergence between telecommunications and audiovisual: consequences for  the rules governing the information market" Regulatory Issues, European Commission - Legal Advisory Board Brussels, 30 April 1996 12i bid

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"DO CONVERGED REGULATORY AUTHORITIES REPRESENT THE OPTIMAL WAY FORWARD FOR THE REGULATION OF THE COMMUNICATIONS SECTOR" DISCUSS Telecommunications Law:

entertainment and regulation. Thus under  broadcasting, both the distribution networks and content were being regulated. Whilst access to scarce spectrum was controlled by licences which were in turn used to ensure universal coverage as a basis for content regulation. Content regulation was supposed to ensure the following13: y

y

y

y

Pluralism (i.e.) o provision of a balanced range of programme types, access to a range of voices within each programme type, o o provision for a range of audiences, both majority and minority (e.g.) children, ethnic and linguistic minorities, Impartiality (i.e.) the balanced coverage and presentation of information to ensure that no special interest group had undue influence over output, Protection of vulnerable social categories (i.e.) children,

Promotion of cultural heritage (i.e.) high artistic standards, fostering national production, ensuring public access to major sporting events and the provision of education.

In order for communications regulation in the United Kingdom to guarantee14: y y y y

be

effectual it must

Creation of dynamic competitive markets, Maximisation of access to a diverse range of communications services, Delivery of quality, choice and value for money, And consumer protection.

In addition to the above criteria, any form of communications regulation in the United Kingdom must be at par with the European Union Directives adopted on Fe bruary 14, 2002, by the European Communities, relating to the provision of communications networks and services and entered into force on April 24, 2002 when they were pu blished in the Official Journal. United Kingdom like other mem ber states is required to implement the directives into national legislation by July 25, 2003. 15 The basis for the new EU regulatory framework is five (5) major EU Communications Directives which are intended to converge and harmonise communications regulation throughout the community these are: y

y

Directive 2002/19/EC on access to, and interconnection of electronic communications networks and associated facilities(the Access Directive), Directive 2002/20/EC on the authorisation of electronic communications networks and services (the Authorisation Directive),

13

ibid Oftel "Communications Regulation in the UK" availa ble at http://www.oftel.gov.uk/pu blications/a bout_oftel/whit0700.htm 15 Graeme Maguire and Jason Romer "An Overview of the Draft United Kingdom Communications Bill" C.T.L.R 2002, 8(6) 141 14

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"DO CONVERGED REGULATORY AUTHORITIES REPRESENT THE OPTIMAL WAY FORWARD FOR THE REGULATION OF THE COMMUNICATIONS SECTOR" DISCUSS Telecommunications Law: y

y

y

Directive 2002/21/EC on a common regulatory framework for electronic communications and services ( the Framework Directive), Directive 2002/22/EC on universal service and users' rights relating to electronic communications networks and services (the Universal Service Directive), and Directive 2002/58/EC concerning the processing of personal data and the protection of privacy in the electronic communications sector (the Privacy Directive).

As illustrated above, it is evident that the communications regulatory framework in the United Kingdom is being driven by the vitality of convergence. Currently there are approximately fourteen (14) regulatory bodies in the United Kingdom which claim  jurisdiction over the matters of media and telecommunications16 some of which shall be merged together to form a converged regulatory authority em bodied in the Office of Communications (OFCOM) these include the following: y y y

y y

The Broadcasting Standards Commission, The Radio Authority, The Radiocommunications Agency,

The Independent Television Commission (ITC), The Office of Telecommunications (Oftel).

The Broadcasting Standards Commission As established by the Broadcasting Act of 1996, its tasks are to 17: y y y

Produce codes of conduct relating to standards and fairness, Consider and adjudicate complaints, Monitor research and report on standards and fairness in broadcasting.

Essentially therefore, this is a statutory body for both standards and fairness in broadcasting. It covers all television and radio, both terrestrial and satellite. The Radio Authority This body was set up by the Broadcasting Act 1990 to license and regulate commercial radio within the United Kingdom. By virtue of the said Broadcasting Act, the Authority must conduct wide consultation subsequent to which it must draw up, review, and enforce codes which set standards and practices for advertising and sponsorship, programming and engineering.18 It is also required to draw up and enforce the rules on ownership of radio licenses. The Radio Authority licences and regulates independent radio in accordance with the statutory requirements of the Broadcasting Acts of 1990 and 1996. It also: y y

Plans frequencies, Awards licences,

16Jeremy

Landau "The Future of Broadcasting and Telecommunications in the United Kingdom" C.T.L.R. 1997,3 (4) at pg.145 17The Broadcasting Standards Commission at http: // www. bsc.org.uk/ a bout.htm 18The Radio Authority; http://www.radioauthority.org.uk/regulation/whatwere.g.html

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"DO CONVERGED REGULATORY AUTHORITIES REPRESENT THE OPTIMAL WAY FORWARD FOR THE REGULATION OF THE COMMUNICATIONS SECTOR" DISCUSS Telecommunications Law: y y y y

Regulates programming and radio advertising, Supervises the radio ownership system, Develops policies which affect the independent radio industry and its listeners, And ensures the provision of high quality services offering a wide listening choice.

The Radiocommunications Agency The Radiocommunications Agency is an Executive Agency of the Department of Trade and Industry responsible for the management of non-military radio spectrum in the United Kingdom, which involves international representation, commissioning research, allocating spectrum, licensing its use and keeping the radio spectrum clean. 19 The Independent Television Commission (ITC) This is a statutory body established by the Broadcasting Act of 1990. It regulates programme content including advertising and sponsorship, and also controls the licence compliance and cross media ownership, frequency planning for terrestrial services, and also ensures fair and effective competition in the provision of licensed services and

services connected with them.20 The ITC is also responsible for licensing television and multiplex digital programmes and digital additional services (i.e.) electronic programming guides whether these are ca ble, satellite or terrestrial services.21The ITC therefore regulates programme content by ensuring that standards of decency, incitement, impartiality, and all other programme services satisfy pu blic service broadcasting requirements including the provision of international and national news, regional programmes, current affairs, religious and children's programmes. Since broadcasting in the United Kingdom is concerned with not only the regulation of programme content but also the use of radio spectrum, ITC's jurisdiction extends to the regulation of telecommunications signals sent by wireless telegraphy, if such signals are used to carry television or radio broadcast services. The Office of Telecommunications (Oftel) The Office of Telecommunications (Oftel), set up under the Telecommunications Act of 1984 is the regulator for the United Kingdom telecommunications industry. Its functions include22: y y y

Promoting the interests of consumers, Maintaining and promoting effective telecommunications services, Making sure that telecommunications services are provided in the United Kingdom to meet all reasonable demands, including: Emergency services, o o Public call boxes,

19

The Radio communications Agency Home Page at http://www.radio.gov.uk  Landau "The Future of Broadcasting and Telecommunications in the United Kingdom" C.T.L.R. 1997,3 (4) at pg.146 21 ibid 22 http://www.oftel.gov.uk/a bout/index.htm 20Jeremy

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"DO CONVERGED REGULATORY AUTHORITIES REPRESENT THE OPTIMAL WAY FORWARD FOR THE REGULATION OF THE COMMUNICATIONS SECTOR" DISCUSS Telecommunications Law: o o

Directory information, And services in rural areas.

So far OFTEL is the one regulator that has produced the most su bstantial thinking about the future of the communications sector and how it should be regulated by seeking to tackle issues such as broadband switched mass market services, conditional access, interconnection, and universal services. 23 With convergence therefore, the question is whether the rationalisation where by the existing regulators are merged into an "Office of Communications" (i.e. OFCOM) to reduce multiplicity of regulatory intervention is the most suita ble and most favourable way to regulate the communications sector.

23

op.cit at pg.146

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PART III - CONVERGED REGULATORY AUTHORITIES AND THE REGULATION OF THE COMMUNICATIONS SECTOR Converged Regulatory Authorities "If a system of regulation is to be transparent and accountable to the public and to the Parliament, there is a strong argument to suggest that a single regulatory authority for communication is the most appropriate means by which these criteria can be satisfied" 24 The onset of technological, infrastructure and service convergence between telecommunications, broadcasting, information technology and content sectors has exerted pressure on communication regulators to look  beyond communications regulatory preoccupation and esta blish a dynamic regulatory framework that does not present barriers to convergence. Regulation during the era of convergence must essentially ensure that the communications sector is a ble to flourish in an age of increasing competition and technological change, bringing both clarity and leadership to the sector  based upon clear thinking and the a bility to take tough decisions.25 It must be effective, consistent, responsive to different emerging techniques for delivering forms of communications to the end user, as well as to the economic and technical constraints which apply to them.26 And it must encourage competition, to flourish, and innovative services to be developed, while ensuring universal access to the necessary components of the communications sector and providing effective consumer protection and deterrence to anti-competitive practises. It is my belief that only a converged regulatory authority will be able to meet the demands of the dynamic communications sector. Regulatory convergence refers to the increasing centralisation of regulatory authority towards a system based on functional units instead of industry divisions.27 The ob jective being to have similar issues centralised in one office instead of being divided across various bureaus.28 The scope of regulation in all communication sectors has converged and will continue to converge as a result of market and technological developments. 29 Thus several media of communication shall be sub  ject to multiple and overlapping regulation. It is important to note that telecommunications and broadcasting are two sectors which historically had different regulatory traditions and concerns, 30 and convergence has occurred between sectors that have traditionally been regulated (i.e.) telecommunications and broadcasting and those that have not (i.e.) information

24Jeremy

Landau " the Future Regulation of Broadcasting and Telecommunications in the United Kingdom" C.T.L.R. 1997 AT Pg 145 25Thomas Crane "OFCOM - A New Order for Communications regulation or a Bureaucratic Nightmare" C.T.L.R 2003, 9 (2), 37 26op.cit 27Martha. A. Garcia-Murillo and Ian MacInnes "Regulatory Convergence in the Information Industry" Twenty eighth Telecommunications Policy Research Conference, Alexandria, VA 28i bid 29i bid at pg.146 30i bid

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"DO CONVERGED REGULATORY AUTHORITIES REPRESENT THE OPTIMAL WAY FORWARD FOR THE REGULATION OF THE COMMUNICATIONS SECTOR" DISCUSS Telecommunications Law:

technology, multimedia products and internet services.31 Therefore sector specific regulation has to be phased out and replaced with the regulation of networks and

regulation of content32 under a strong regulatory body with "platform - neutral" uniformity33 and the ability to ensure that potential monopoly situations are controlled to ensure non discriminatory access to network infrastructure and programme content and to prevent undue discrimination and anti competitive behaviour in the provision of services. Yet it must be li beralised enough to promote investment and growth in network  infrastructure and programme services. The Office for Communications Regulation (OFCOM) OFCOM, established by the Office of Communications Act 2002 is one example of a converged regulatory authority and is the regulatory body created to merge or rather  replace the functions of the Broadcasting Standards Commission, the Independent Television Commission, the Office of Telecommunications (OFTEL), the Radio Authority and the Radio Communications Agency. As an independent body, it shall be responsible for the following34: y

y

y

y

y

y

y

y

y

Taking over the functions of the statutory bodies and office holders that currently regulate the electronic communications sector, Encouraging effective self regulation and co-regulation, with a streamlined and integrated strategic approach, Replacing the current system of licensing of telecommunications systems with a new framework for the regulation of electronic communications networks and services, As part of its wider spectrum management duties, Ofcom will have the power  to develop new mechanisms to enable spectrum to be traded in accordance with regulations made by Ofcom, and scheme of recognised spectrum access, Develop the current system for regulating broadcasting to reflect technological change, to accommodate the switchover from analogue to digital broadcasting and to rationalise the regulation of public service broadcasters, Establishing a content board to advise it on a wide range of content issues as they affect viewers, listeners and citizens, predominantly dealing with broadcasting but also responsible for the development of media literacy, Establishing a consumer Panel to advise and assist it and to represent and protect consumer interests, Exercising concurrent powers under the Competition Act 1998 and the Enterprise Act 2002 across the whole of the communications sector (Including broadcasting), Establishing procedures for appeal of decisions relating to networks and services and rights of use of spectrum.

31i bid 32Professor

Nicholas Garnham "Convergence between telecommunications and audiovisual: consequences for  the rules governing the information market" Regulatory Issues, European Commission - Legal Advisory Board Brussels, 30 April 1996 33Thomas Crane "OFCOM - A New Order for Communications regulation or a Bureaucratic Nightmare" C.T.L.R 2003, 9 (2), 39 34 http://www.ofcom.org.uk 

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"DO CONVERGED REGULATORY AUTHORITIES REPRESENT THE OPTIMAL WAY FORWARD FOR THE REGULATION OF THE COMMUNICATIONS SECTOR" DISCUSS Telecommunications Law:

In essence therefore Ofcom shall be responsible for: Furthering the interests of consumers in relevant markets, Securing the optimal use of radio spectrum, y y y

y

y

y y

Ensuring that a wide range of television and radio services are availa ble in the United Kingdom, comprising of high quality services of broad appeal, Protecting the public from any offensive or potentially harmful effects of broadcast media and safeguarding the public from being unfairly treated in television and radio programmes, Promoting competition, Securing a wide range of TV and radio services both of high quality and calculated to appeal to a variety of tastes and interests.

OFCOM's duties are not prioritised and in carrying out its functions OFCOM will have to balance the respective importance of each duty in individual cases. Where OFOCM has specific duties under the European Directives these will take precedence in the event of conflict.35 OFCOM will roll back regulation by adoption of "light touch" regulation and as sector specific regulation is rolled back; OFCOM will be able to rely increasingly on general competition powers. The new converged regulator will exercise its powers by reference to a set of fixed principles which will be consistently applied, whatever the particular segment of the sector the company in question operates in.36 OFCOM will also bear the task of ensuring that in such a diverse sector key decisions are determined rather than avoided as has been seen to be the case with Oftel.37 As clearly portrayed above, OFCOM has an immense task ahead of it; however there is evidence to show that OFCOM will do a better job at the task as a converged regulatory authority in a converged communications market than a multitude of regulators attempting to regulate various industries independently in the age of convergence. The said evidence is embodied in the advantages of converged regulatory authorities outlined below. The Advantages of converged regulatory authorities The key advantages of converged regulatory authorities include the following 38:y

y

Converged regulatory authorities reduce the risk of "industry capture" because the creation of a regulator with responsi bility for more than one sector can help avoid the rule-making process being captured by industry specific groups, Regulation by way of converged regulatory authorities reduces the risk of political capture because a regulator with responsi bility for more than one sector will

35Graeme

Maguire and Jason Romer "An Overview of the Draft United Kingdom Communications Bill" C.T.L.R 2002, 8(6) 139 36 ibid. 37 ibid 38Schwartz. T and Satola. D (2000), "Telecommunications legislation in transitional and developing economies" World Bank Technical paper No.489, Washington D.C.: The World Bank Group at http://global011.world bank.org/site/products.nsg

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"DO CONVERGED REGULATORY AUTHORITIES REPRESENT THE OPTIMAL WAY FORWARD FOR THE REGULATION OF THE COMMUNICATIONS SECTOR" DISCUSS Telecommunications Law: be

more independent of the relevant Minister. The broader range of entities regulated by such a regulator will be more likely to resist political interference in a

y

y

y

y

y

y

y

y

decision on, say, price regulation in one sector since that could set a precedent for  the others, Converged regulatory authorities ensure an effective means of dealing with the bundled provision of services (e.g.) provision of both telecoms and cable television by the same company) and with the co-ordination requirements between sectors (e.g.) where companies from different sectors all need to dig up the same roads to construct their networks, Where regulation is merged through the converged regulatory bodies, there is the creation of more precedents and therefore less uncertainty, for investors because a decision by the regulator in relation to one sector on a regulatory issue common to other sectors (e.g. the application of price cap regulation or cost accounting rules) will set a precedent that is valuable to potential investors in other sectors, Under a converged regulatory basis, there is the transfer of know how between regulators responsible for different sectors, Converged regulatory authorities ensure effective means of dealing with converging sectors (e.g.) telecoms and broadcasting where it is increasingly difficult to decide which services should be classified as telecoms services and which should be classified as broadcasting services such as video on demand, or telecoms and posts such as e-mail and fax re-mailing, During peak load periods, converged regulatory approaches can ensure flexibility such as periodic price reviews, where intensive regulatory expertise is needed which may spread across sectors, Converged regulatory authorities lead to economies of scale in by using one set of high calibre professionals (e.g. economists, lawyers, financial analysts). Such economies are particularly important during the early stages of li beralisation and privatisation. In cases where there is no converged regulatory authority there are too many regulators, creating uncertainty a bout regulators powers, too much duplication and a lack of transparent and accounta ble regulation,39 Converged regulatory authorities could lead to the elimination of unnecessary redundancy, save on agency resources, reduce jurisdictional conflicts and possi bly lead to lower rates as a result of simplified regulation of the industries 40.

In answering the question whether converged regulatory authorities are the optimal way forward for the regulation of the communications sector, it is vital to highlight the advantages of converged regulatory authorities and also look at the disadvantages of converged regulatory authorities, in order to unmistaka bly illustrate that converged regulatory authorities will bring more benefit than loss to the communications sector and are therefore the optimal way forward for the regulation of the communications sector. See Jeremy Landau "The Future of Broadcasting and Telecommunications in the United Kingdom" C.T.L.R. 1997,3 (4) at pg.148 40See Lehr William and Thomas Kiessling "Telecommunication Regulation in the United States and Europe: The Case for Centralised Authority" in Competition, Regulation and Convergence: Trends in Telecommunications Policy Research, S.E. Gillett and I.Vogelsang (Eds), Lawrence Erl baum Associates: Mahwah, NJ, 1999 39

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Disadvantages of Converged Regulatory Authorities The key disadvantages of Converged Regulatory Authorities include the following 41: y

y

y

y

y y

y

y

They increase the risk of industry capture by a dominant industry player not only of the single sector regulator  but of the entire regulatory body, Converged regulatory authorities, increase the risk of political capture by a dominant ministry of not only the single sector regulator  but of the entire regulatory body, They increase the risk that a precedent set in relation to one sector could be applied inappropriately in another sector (although this can be mitigated by creating strong sector departments underneath a central cross sectoral decision making body), Converged regulatory authorities can lead to the dilution of sector specific technical expertise required where, for example, the skills of a tariff expert for one sector are not transfera ble to similar tariff issues in another sector, for example, of a frequency engineer, Failure by the regulator in one sector can cascade to other sectors, Converged regulatory authorities experience difficulty in achieving acceptance by relevant line Ministries of the concept of having a converged regulatory authority, and subsequent difficulty in achieving consensus from the relevant line ministries on the type of converged regulatory authority to be established. Converged regulatory authorities have greater complexity in esta blishing the legal framework including the level of independence and allocation of functions as between the Minister and the regulator, Merging existing regulatory agencies may be problematic.

PART IV: CONCLUSION As outlined by the disadvantages of converged regulatory authorities in Part III, it is evident that the practical effects of seeking to regulate quite diverse industries using the same principles is a daunting task, however since the traditionally distinct industries have begun to merge making it ar bitrary to designate individual operators and/or services as falling in one category or another and it will also become unsustainable to designate infrastructure to a particular service the communications sector has no choice but to ensure the collision of regulation, cross their fingers and hope for the very best. In the final analysis therefore it is right to asset that converged regulatory authorities are the optimal way forward for the regulation of the communications sector.

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ibid

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"DO CONVERGED REGULATORY AUTHORITIES REPRESENT THE OPTIMAL WAY FORWARD FOR THE REGULATION OF THE COMMUNICATIONS SECTOR" DISCUSS Telecommunications Law:

BIBLIOGRAPHY Anders Henten, Morten Falch & Reza Tadayoni, "Some implications for regulation of ICT and Media Convergence" WDR Discussion Paper No. 0202, January 30, 2002 D. Ypsolanti and P. Xavier "Towards next generation regulation", Telecommunications Policy, Vol. 22, No. 8, at p.644 Freeman. C. and F. Louca (2001) As time goes by: From the Industrial Revolutions to the Information revolution, Oxford. Oxford University Press. Graeme Maguire and Jason Romer "An Overview of the Draft United Kingdom Communications Bill" C.T.L.R 2002, 8(6) 139 Hank Intven and McCarthy Tetrault, Telecommunications Regulation Hand book Module 1 Overview of Telecommunications Regulation, The World Bank 2000 Jeremy Landau "The future of Regulation of Broadcasting and Telecommunications in the United Kingdom" C.T.L.R 1997, 3(4), 145-149 Mardsen C "Convergence or Coexistence? Television and Telecommunications Policies Diverge in the Convergence De bate", Work in Progress, 1997 (3) The Journal of Information, Law and Technology (JILT). <http://elj.warwick.ac.uk/jilt/wip/97_3mars/> Martha. A. Garcia-Murillo and Ian MacInnes "Regulatory Convergence in the Information Industry" Twenty eighth Telecommunications Policy Research Conference, Alexandria, VA Michael Sinclair "A New European Communications Services Regulatory Package: Overview" C.T.L.R. 2001 7(6), 156 -165 Michael Sinclair and Des Hughes "The European Communications Services Regulatory Package: An Update" C.T.L.R. 2002, 8(4) 97-101 Nicholas Higham "The Future of United Kingdom Content Regulation: A Round Peg in a rectangular Box or Something Old, Something New, Something Borrowed, Something Blue" C.T.L.R. 2001 7(8), 220 - 224 Professor Nicholas Garnham "Convergence between telecommunications and audiovisual: consequences for the rules governing the information market" Regulatory Issues, European Commission - Legal Advisory Board -Brussels, 30 April 1996 Rijo Calleja "Convergence: Gone Digital, Going Interactive - Markets and Regulation in the Audio-Visual Sector" Entertainment Law Review 1999, 10(3),64 - 70 R. Ono and K. Aoki "Convergence and new regulatory frameworks: A comparative study of regulatory approaches to internet telephony" Telecommunications Policy Vol.22, No.10 pp.817-838

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"DO CONVERGED REGULATORY AUTHORITIES REPRESENT THE OPTIMAL WAY FORWARD FOR THE REGULATION OF THE COMMUNICATIONS SECTOR" DISCUSS Telecommunications Law:

Sanford. V. Berg and R. Dean Foreman "Incentive Regulation and telco performance: a primer" Telecommunications Policy, Vol.20, No.9 pp 641-652 Thomas Crane "OFCOM - A New Order for Communications regulation or a Bureaucratic Nightmare" C.T.L.R 2003, 9 (2), 37 - 40 William. H. Melody "Building the Regulatory Foundations for growth in network  economies" WDR Discussion paper No. 0201, January 2001 availa ble at http://www.regulatyeonline.org

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