Legal Framework to Support ICT Reform

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Legal Framework to Support ICT Reform Paul
Moffatt Counsel, Legal Transition Team,
EBRD International Seminar on ICT Policy Reform
and Rural Communication Infrastructure Keio
University, Fujisawa, Japan, 24th August 2004

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Overview

• Access to ICT is determined by reach and capacity
  of the physical communications infrastructure
• Limited traditional financial resources has
  restricted the extension of infrastructure
• State management of communications infrastructure
  has restricted its extension
• Even where infrastructure is in place - often old
  and antiquated - requires upgrading to host the
  capacity and interactivity necessary for ICT
  applications
• Key to enhancing this infrastructure is the
  attraction of investment for network extension
  and upgrade

Investment Capital is Key but Scarce
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Availability of Investment Capital ITelecom
Stock Value US Operators
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Availability of Investment Capital IITelecom
Stock Value European Operators
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Availability of Investment Capital III Private
Participation in telecoms Investment in Emerging
Markets, US Billions
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Result..

• Declining levels of private investment globally
• Increased demand for capital investment -
  upgrade, roll-out

Increasing demands on limited capital resources
Investors will look to where their concerns are
best met
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What are Investor Concerns?

• Transparency
• Lack of Independent Regulator
• Unclear and Harsh Legal and Regulatory
  Environment
• Absence of Controls on Anti-Competitive Conduct
• Property Rights
• Intellectual Property

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How Can These Concerns be Addressed?

• Modern, clear and coherent policy
• Clear and precise primary legislation supported
  by appropriate secondary legislation
• Solid institutional foundation
• Institutional independence and appropriate
  accountability
• Effective, well trained independent judiciary
• Modern licensing policy and procedure
• Other appropriate legal controls.

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Modern, clear and coherent policy I

• Not legally binding
• Gives clear signals with respect to the
  development of the sector
• It can impose certain obligations on the
  government to act with respect to particular
  issues
• Where properly constructed and published, can add
  political pressure to pursue the development of a
  particular sector.

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Modern, clear and coherent policy II

• Sets out in broad, clear, certain and easily
  identifiable form
• key objectives
• specific timetable for the achievement of those
  objectives
• parties responsible for the development of the
  sector
• means by which these objectives are to be
  achieved
• means for monitoring implementation
• Acts as guidance for the marketplace to optimum
  (competitive) state, while providing for
  achievement of social objectives such as
  universal access.

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Clear and precise primary legislation
supplemented by appropriate secondary legislation
- I

• Government policy statements must be followed up
  with primary legislation.
• Primary legislation should provide a clear and
  concise statement of rights and obligations
• Generally speaking, primary legislation will be
  prepared by the responsible ministry and
  presented to parliament who will debate and pass
  this legislation as a law of parliament.
• Fundamental incontrovertible sector principles,
  such as liberalisation, network access, costing
  methodologies, etc. should be contained in
  primary legislation.
• Detailed procedures applicable to individual
  elements of the sector should be contained in
  secondary legislation

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Clear and precise primary legislation
supplemented by appropriate secondary legislation
- II

• Quality of entrenchment and permanence to
  critical elements
• Amendment is somewhat lengthy and cumbersome in
  most countries
• Even where democratic credentials of parliaments
  in certain countries may not be as solid as they
  could be, parliamentary legislation nonetheless
  acts as a solidification of basic principles
• Actual content and level of detail of primary
  legislation will vary from country to country
• Because of the quality of quasi-permanence that
  take place before passage.

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Solid Institutional Foundation

• Separation of telecom operations from post,
  broadcasting and other functions
• Separation of state ownership from regulation
• Separation of policy making from regulation, i.e.
  establishment of an independent regulatory
  authority
• Independently financed
• Independent of political and operational
  influence
• Possessing appropriate powers.

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Appropriate Institutional Accountability

• Parliamentary oversight and judicial review
• Parliamentary oversight exercised through
  appointment of the board and chairperson of the
  institutions charged with implementation,
  administration and enforcement of the legal and
  regulatory framework for the sector
• Similarly, parliament should have the power to
  dismiss such official in the strict circumstances
  provided for in law, through the strict exercise
  of procedures also set out in law
• Judicial review comes from the scope of the
  courts to review decisions of the institutions
  where such decisions appear unreasonable or
  exceeded authority possessed by the institution.

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Effective Independent Judiciary

• Essential to effective economic performance are
  properly constituted, independent courts staffed
  with appropriately trained and paid officials.
• Requires a well-trained, well-paid body of
  judges
• Such a judiciary must also be capable of
  reviewing acts and decisions of the government
• Justice and access thereto must be efficient
• Court administration process need to be
  modernised and clerks and support staff better
  trained
• Additionally, the judiciary itself must also be
  accountable.

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Modern Licensing Procedure

• Licensing policy market structure to be clear
  for all market segments
• International trend to general authorisations
• Specific licensing rules transparent licensing
  mechanisms to be applied
• Clear rules for allocation of scarce resources,
  e.g. radio spectrum
• Regulator to enforce compliance with licence
  conditions
• Fair and equitable process
• Reasonable fees
• Appropriate rights and obligations

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Other Legal Controls

• Strong control on anti-competitive conduct
  essential
• Consumer protection
• Property rights
• Intellectual property
• Privatisation

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• Thank You