Institutional and Organization Changes in the Era of Convergence

This Practice Note presents an excerpt from “Chapter 9: Enabling Environment for NGN” in Trends in Telecommunications Reform 2007 (Geneva: International Telecommunications Union, 2007) by Janet Hernandez & Daniel Leza.

Institutional and organizational changes

There are three primary institutional designs for regulatory authorities with responsibility over the communications sector.  The most prevalent model is the single-sector regulator whose sole function is to regulate the telecommunication sector, such as regulators in Botswana, Spain and Peru.  In addition, numerous regulators such as those in Jamaica, Costa Rica, Germany, Latvia and Panama are multi-sector regulators with responsibility over various utility sectors that typically include telecommunications, water, electricity and transportation.  In recent years, however, there has been an increase in regulators with responsibility over broadcasting, telecommunications and information technology. These regulators are commonly referred to as converged regulators.  Today, such regulators are found in most EU countries, including Finland, Italy and the United Kingdom, as well as in Australia, Hong Kong, China, Malawi, Malaysia, South Africa and Tanzania.  Governments in these countries believe that such structures are better equipped to address convergent environments where different services are increasingly offered over the same platform.   For the same reason, such a move may also facilitate the transition to NGN.

The origins of converged regulators vary from country to country.  The FCC in the United States, for example, has had responsibility over telecommunications and broadcasting since its inception. In the United Kingdom and Australia, however, the creation of a converged regulator occurred as a result of institutional changes. For example, in 2002, the UK government established Ofcom by merging five regulatory bodies into one, the Independent Television Commission, the Broadcasting Standards Commission, the Office of Telecommunications, the Radio Authority, and the Radiocommunications Agency. In 2005 in Australia, the Australian Communications Authority and the Australian Broadcasting Authority were merged to form the Australian Communications and Media Authority (ACMA) which has responsibility over telecommunications and broadcasting, including radio spectrum management and online content regulation.  In Hong Kong, China, the government has proposed to merge the Broadcasting Authority and Telecommunications Authority into a unified regulator called the Communications Authority through a comprehensive Communications Bill.[1] 

Governments have identified various reasons for moving to a single regulator with responsibility over various industry sectors. By shifting regulatory responsibilities regarding the communications sector into one government agency, stakeholders have a one-stop-shop for resolving regulatory issues, resulting in greater consistency in regulatory approach and practice.  In addition, certain operational efficiencies should result in (sic) and greater resources should be available, since the single regulator now has a larger pool of experts.  Furthermore, less overlap and turf battles between government agencies would be the natural result of a single regulator.  Operators find it easier to have to comply with only one regulatory authority and to address their issues in one place.  Another benefit of having a converged regulator is that it better reflects the marketplace, given that operators now offer triple and quadruple play offerings. 

When considering whether to introduce institutional or organizational change to facilitate NGN development, governments should assess the objectives that they are trying to achieve and then think about what functions are best placed under the converged regulator.  For example, in certain countries, such as Venezuela, the regulator has responsibility over broadcasting and telecommunications but may not have authority over consumer protection and competition issues which are the responsibility of other authorities.  Similarly, in Canada, spectrum matters are addressed by Industry Canada rather than by the regulator, the Canadian Radio-television and Telecommunications Commission (CRTC).  In other instances, responsibility over broadcasting content may reside with a separate regulatory authority.  In Singapore, the Infocomm Development Authority (IDA) has responsibility over telecommunication and information technology matters, but the Media Development Authority (MDA) licences over-the-air television and regulates content.

In addition, governments also need to consider the relationship between telecommunication, broadcasting, and competition laws.  Should the regulator have any responsibility over competition issues? Different countries take different approaches.  In Australia, for example, the communications regulator has no authority over competition issues whereas in the United Kingdom, Ofcom has jurisdiction concurrently with the Office of Fair Trading. The issue of whether a sector regulator will generally be subordinate to a general competition authority with regard to telecommunication and broadcasting issues that include a competition element is important.  For example, in Singapore the IDA only has authority only to the extent that such responsibility has not been granted to the Competition Commission.  If the jurisdiction and responsibilities of these two authorities are not appropriately balanced, inefficiencies and jurisdictional debates may ensue.

[1] Consultation on the Establishment of a Communications Authority, Communications and Technology Branch, Commerce, Industry and Technology Bureau, March 2006.

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