COURSE: TELECOMMUNICATION ECONOMICS PROFESSOR: WUHONG School of Economics and Management BUPT Economics Research Center (MING GUANG 504) Tel:

Chapter 6 Telecommunication Regulation who and how to regulate? Section 1 Regulatory organizations Section 2 The Regulator’s Role

Regulatory Organizations The most common institutional model used in developed market economics around the world today is as follows: (from the World Bank) FunctionResponsible Organization Policy DevelopmentGovernment Ministry or Executive Branch RegulationSeparate Regulatory Authority Network Operations /Service Provision PTOs (private or commercially operated )

The National Regulatory Authority Five major issues that have been developed to establish and operate regulatory authorities: -Independence of the Regulator -Funding of the Regulatory Process -Single Regulators and Collegial Commissions -Multi-Sector Regulators -Organization of Regulatory Staff

International Agencies International Telecommunications Union (ITU) Other International Organizations - Organizations Interested in Telecommunications Regulation - Multilateral and Bilateral Development Organizations - The World Bank

International Telecommunications Union (ITU) The ITU was founded in Paris in 1865 as the International Telegraph Union. It changed its name to the International Telecommunication Union in1934, and became a specialized agency of the United Nations in The ITU is a global organization which includes public and private sector participation on telecommunications matters. The ITU's mission covers the following areas or "domains": - technical domain - development domain - policy domain

International Telecommunication Union(2) Structure of the ITU Under its constitution, the ITU’s organizational structure comprises the following elements: - Plenipotentiary Conference - Council - World Conferences - Radio communication Sector (ITU-R) - Telecommunication Standardization Sector (ITU-T) -Telecommunication Development Sector (ITU-D) - The General Secretariat

Organizations Interested in Telecommunications Regulation International organizations with a major role in telecommunication regulation are listed as follows: - European Commission- DGIS - European Telecommunications Office (ETO) - Gulf Co-operation Council (GCC) - Inter-American Development Bank (IADB) - Inter-American Telecommunications Commission (CITEL) - International Finance Corporation (IFC) - International Institute of Communications (IIC) - Pacific Telecommunications Council (PTC) - ……

Multilateral and Bilateral Development Organizations These organizations focus on countries with developing and transitional economies. The goal of such development organizations is generally to assist in establishing a regulatory framework that will promote telecommunications sector development - and with it, general economic development. These organizations generally provide technical assistance to governments and regulators to promote the development of a sound regulatory structure. Such technical assistance may include advice from expert staff resources, payment for independent telecommunications advisors (economists, lawyers and other consultants), training programs, seminars, workshops and staff exchanges.

The Regulator’s Role in Interconnection Negotiations Establishing guidelines in advance of negotiations Setting default interconnection arrangements in advance Establishing deadlines for various stages Establish Industry Technical committees Incentives to complete interconnection arrangements Appoint mediators or arbitrators

Proposal for China Principle: –government responsibility –limited scope: one phone per village (150K) –promote competition, not to subsidize monopoly Universal Service Fund –source: privatization proceeds, uniform taxation on operators’ revenue –assets: government, not operator –bidding for providing service (switch connection) bundled with maintenance

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