Simplification of Authorizations

This Practice Note is an excerpt from Regulatory Trends for Adapting Licensing Frameworks to a Converged Environment (Geneva: International Telecommunications Union, 2007), prepared by Telecommunications Management Group, Inc..  This document was prepared as a contribution to an ITU-D study group.

 

Regulatory Trends for Adapting Licensing Frameworks to a Converged Environment

 

2.  Simplification of Licences

2.1.  Consolidation of Licences

The consolidation of licences involves the reclassification of existing telecommunications services into different categories based on technology neutrality.  As a result, the number of licences is reduced and the services included in each expanded.  This has been the option followed by many countries, including Malaysia, Tanzania, Uganda, and Singapore. 

In Malaysia, the previous regulatory system recognized a total of 31 different licences based on networks and services, such as operators of international and national networks, mobile communications, trunking, Internet service providers, value added services, broadcasting, etc.  To adapt its licence regime to convergence, Malaysia reduced these 31 licences into the following four technology neutral categories:[1]

  • Network facilities provider includes all network infrastructure operators of any nature (satellite earth station systems, fibre optics, mobile communications systems base stations, etc.). 
  • Network services provider covers those that provide basic connectivity and broadband to support applications.  These licences allow connectivity and backhaul among different networks.
  • Application service provider is assigned to those operators that provide functions such as voice, data, content and electronic commerce services, among others. Generally, applications services are understood as the functionalities and capabilities offered to the end users. 
  • Content application service provider includes the traditional broadcast services (radio and television) and new services such as information services.

Within these four categories, two types of licences exist: individual, granted for activities with a high degree of regulation (e.g., the need to grant rights of use for spectrum) and registration, which is renewed yearly and recorded in the registry administered by the Communications and Multimedia Commission of Malaysia. Furthermore, lesser activities within each category are exempt from the requirement of obtaining a licence. 

Similar to Malaysia, Tanzania also simplified its licence regime with the introduction of the Converged Licensing Framework (CFL) in February 2005.  The CFL establishes four categories of licenses under the principles of technology neutrality and service neutrality.  The four categories of licenses are similar to those established in Malaysia, namely, Network Facility License, Network Service License, Application Service License and Content Service License. [2]

Uganda has also developed a new streamlined technology-neutral licensing regime that was implemented in January 2007.  Under the regime, there are three categories of licences: (i) public service provider licence; (ii) capacity provider licence; (iii) infrastructure provider licence; and (iv) general authorisation (Chart 1).

Chart 1: Uganda’s new licensing regime

Type of Licence

Services Covered Under Licence

Public Service Provider Licence

Category 1: Public Voice and Data - Cellular, Fixed voice, GMPCS, Internet access (including IP telephony + Virtual Private Networks), Internet exchange services, Virtual Private Networks (VPNs) that are not provided over the Internet

Category 2: Capacity Resale - Local and international capacity resale, calling cards

Capacity Provider Licence

Category 1: Licensees already permitted to install infrastructure of the type they have already invested in, for example Internet Access Providers with wireless networks

Category 2: Persons whose core business is not in telecommunications but who possess private communications facilities with surplus capacity and wish to resale this to third parties

Category 3: New entrants in the Internet Access market operating their networks using the Industrial, Scientific and Medical frequency (ISM) band, e.g., 2.4 GHz and 5.7 GHz bands

Infrastructure Provider Licence

Public Infrastructure Provider

Private Network Infrastructure

General Authorisation

Category 1: Public Pay Communication Services (e.g., Internet Cafés, Payphones, telephone bureaus, etc.)

Category 2: Private Networks

Source: UCC, Communications Licensing Application Guidelines, available at www.ucc.co.ug/licensing/default.php.

Finally, in Singapore, the simplified licensing system is composed of only two types of licences:

  • Facilities-based operator (FBO) and
  • Service-based operator (SBO).

The first is awarded to those telecommunications services providers that deploy their own infrastructure, such as operators of fixed and mobile telephone networks, trunking, etc.  The second type is awarded to those operators that provide services over a third party’s infrastructure, as for example, resellers of services, providers of virtual private networks, Internet access, etc.  While the FBO always takes the form of an individual licence, the SBO may be awarded via an individual licence or general authorisation or notification, depending on the service.

Other countries, such as India or Kenya, have also adopted proposed simplification plans and reductions in the number of service licences as a stepping stone to a unified licence system, as addressed in the following section. 

2.2.  Unified Licence

A second trend consists of introducing a unified licence system, in which a single licence is created that covers an extensive range of services.  This trend has been adopted, or is being adopted, with certain variations, in many countries, including Argentina, EU member states, India, Kenya, Nigeria, and Peru. 

In this regard, in 2000, Argentina introduced a unified licence that authorizes the provision, to the public, of all telecommunications services, whether fixed or mobile, wire line or wireless, national or international, with or without infrastructure.[3]  If spectrum is required for provision of the service, the corresponding authorisation and/or permit must be obtained as well. 

In the European Union, the new regulatory framework[4] created a system similar to that of a unified licence, although refined by means of simple notification, whereby the division of the different licences by networks and services was eliminated.  The unified licence, which only requires a prior notification as will be further addressed in the following section, allows the provision of any kind of telecommunications service and the deployment and operation of telecommunications networks.  Similar to Argentina, the assignment of spectrum rights requires a specific permit independent of the single licence.

The Telecommunications Regulatory Authority of India (TRAI) has proposed the adoption of a hierarchical unified licence regime that can be represented as an inverted pyramid, in which the major licence comprises all the services, while the minor licences cover a smaller number of services.  It should be noted that under the TRAI proposal, broadcasting services are to be offered through a stand alone or autonomous licence.  The proposed system includes the following classification of licences:  

  • Unified (Single) licence
  • Class Licence
  • Licence by authorisation 
  • Stand alone licence for broadcasting and cable television services

The unified (single) licence allows for the provision of all the telecommunications services, including those authorized services through the remaining categories of licences (class licence and licence by authorisation).  The class licence covers the services granted under the licence by authorisation, VSAT services and niche services (services in rural zones with teledensity lower than 1 percent).  The licence by authorisation includes the remaining services, among them, Internet access and paging.  Finally, for the case of the broadcasting and cable television services, the licence system requires a stand alone licence. 

Figure 3: Hierarchical system of unified licence proposed in India

India -- Hierarchical System of Unified Licensing

Source: TMG based on information from TRAI[5]

 



[1] See Malaysia Communications and Multimedia Act 1998, available at: http://www.mcmc.gov.my/mcmc/the_law/ViewAct.asp?cc=31478525&lg=e&arid=900722.

[2] For further details of the CFL, see the contribution of Tanzania to this Question 10-2/1, Tanzania’s Experience in Licensing of Communication Operators under Converged Licensing Framework, Document RPGQ10-2/1/006-E (May 31, 2007).

[3] Telecommunications being defined as any transmission, emission or reception of signs, signals, writings, images, sounds or information of any nature, by wire, radio electricity, optical mediums and/or any other electromagnetic systems. Article 3 and Article 5.1 of the Telecommunications Services Licence Regulations.

[4] Official Journal of the European Communities, Directive 2002/21/EC of the European Parliament and of the Council of March 7, 2002 on a common regulatory framework for electronic communications networks and services (Framework Directive), available at http://ec.europa.eu/information_society/topics/telecoms/regulatory/new_rf/index_en.htm#reg. 

[5] See TRAI Recommendations on Unified Licensing (January 13, 2005), available at http://www.trai.gov.in/trai/upload/Recommendations/13/recom13jan05.pdf. 

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