1. Module 7 Slide 1 NATIONAL COMMUNICATIONS COMMISSION REGULATORY PRACTICES WORKSHOP - 2006 MODULE: 7 Enforcement

2. Module 7 Slide 2 NATIONAL COMMUNICATIONS COMMISSION REGULATORY PRACTICES WORKSHOP - 2006 Topic 1 - Principles and Procedures Critical Questions 1. What is enforcement in the context of a deregulated telecommunications regime? 2. Why is an enforcement regime needed? 3. What are the features of an effective enforcement regime? Module 7 – Pages 7-8

3. Module 7 Slide 3 NATIONAL COMMUNICATIONS COMMISSION REGULATORY PRACTICES WORKSHOP - 2006 Enforcement Principles Fair A system that is perceived as fair would abide the regulators decisions. A system that is perceived as unfair creates uncertainty leading to reduced investment. Transparency creates certainty with known procedures. Commercial confidentiality is essential. Module 7 – Page 9

4. Module 7 Slide 4 NATIONAL COMMUNICATIONS COMMISSION REGULATORY PRACTICES WORKSHOP - 2006 Enforcement Principles Fast Prompt decisions allow companies to continue with their business plans. Swift decisions and timely penalties deter future violations. Pre- established deadlines keep the process moving. Module 7 – Page 10

5. Module 7 Slide 5 NATIONAL COMMUNICATIONS COMMISSION REGULATORY PRACTICES WORKSHOP - 2006 Enforcement Principles Firm Regulator needs adequate sanction authority to give companies incentives to follow the rules. Penalties must be severe enough to deter violations. Module 7 – Page 10

6. Module 7 Slide 6 NATIONAL COMMUNICATIONS COMMISSION REGULATORY PRACTICES WORKSHOP - 2006 Enforcement Principles Flexible Regulator needs a range of tools with more than just formal litigation to resolve enforcement. Compliance not punishment Module 7 – Page 10

7. Module 7 Slide 7 NATIONAL COMMUNICATIONS COMMISSION REGULATORY PRACTICES WORKSHOP - 2006 Enforcement Principles Purpose of Enforcement is to ensure Compliance NOT punishment

8. Module 7 Slide 8 NATIONAL COMMUNICATIONS COMMISSION REGULATORY PRACTICES WORKSHOP - 2006 Independent Regulator Requires: The power to investigate the actions and records of all telecommunications providers. The authority to impose sanctions and penalties for violation of regulations with authority based in law. Module 7 – Page 11

9. Module 7 Slide 9 NATIONAL COMMUNICATIONS COMMISSION REGULATORY PRACTICES WORKSHOP - 2006 Enforcement Procedures Procedures should take account of: The principles of fast, fair, firm and flexible Fit the economy’s legal system to make the process familiar and to facilitate the appeals process Ensure procedures are clear and well defined That each step in the process has a clear timeline Module 7 – Page 11

10. Module 7 Slide 10 NATIONAL COMMUNICATIONS COMMISSION REGULATORY PRACTICES WORKSHOP - 2006 Enforcement Procedures The enforcement regime must provide for: 1. Regulator-initiated investigation 2. Consumer’s complaints 3. Carrier complaints against other carriers 4. A mechanism for the outcome to be appealed. 5. Alternative dispute resolution options Module 7 – Page 11

11. Module 7 Slide 11 NATIONAL COMMUNICATIONS COMMISSION REGULATORY PRACTICES WORKSHOP - 2006 Enforcement Procedures Discussion points Are these enforcement features in use in your country? Which are not? List three features that are working well and three that need improvement How could improvements be made? Module 7 – Page 12

12. Module 7 Slide 12 NATIONAL COMMUNICATIONS COMMISSION REGULATORY PRACTICES WORKSHOP - 2006 Topic 2 – Applying Procedures Three types of complaint Regulator Initiated Investigations Consumer Complaints Carrier to carrier Complaints Module 7 – Page 14

13. Module 7 Slide 13 NATIONAL COMMUNICATIONS COMMISSION REGULATORY PRACTICES WORKSHOP - 2006 Tools for Gathering Information Letter of Inquiry Inspections Legal Order Module 7 – Pages 15-16

14. Module 7 Slide 14 NATIONAL COMMUNICATIONS COMMISSION REGULATORY PRACTICES WORKSHOP - 2006 Penalties Module 7 – Page 17

15. Module 7 Slide 15 NATIONAL COMMUNICATIONS COMMISSION REGULATORY PRACTICES WORKSHOP - 2006 Penalties Warnings Violation Notice Order to cease non-compliance Fines Seizure Licence revocation Criminal Proceedings Module 7 – Pages 17-20

16. Module 7 Slide 16 NATIONAL COMMUNICATIONS COMMISSION REGULATORY PRACTICES WORKSHOP - 2006 Case Study Regulator Initiated Investigation How effective the ACCC was in applying the principles of fast, firmness, fairness and flexibility in its enforcement approach? Did the actions taken matched the violation? List 2 suggestions to improve the ACCC approach

17. Module 7 Slide 17 NATIONAL COMMUNICATIONS COMMISSION REGULATORY PRACTICES WORKSHOP - 2006 Features of a Complaints Process Resolved quickly Simple and inexpensive Do not require an attorney The regulator keeps statistics of informal complaints A pattern of complaints can initiate an investigation Ombudsman - another option

18. Module 7 Slide 18 NATIONAL COMMUNICATIONS COMMISSION REGULATORY PRACTICES WORKSHOP - 2006 Managing Customer Complaints Consumer letter initiates complaint The regulator sends letter to the carrier Voluntary “satisfaction” by the carrier is most common resolution. The complainant can file a formal complaint. Carriers don’t ignore a consumer complaint, because the regulator can pursue it on its own motion. Module 7 – Page 20

19. Module 7 Slide 19 NATIONAL COMMUNICATIONS COMMISSION REGULATORY PRACTICES WORKSHOP - 2006 Features of a Complaints Process Telecommunications Industry Ombudsman (TIO) – Australia Set up under the Telecommunications Act & totally independent from government, regulator and operators Funded by industry, had 1043 members in 2003/2004, fixed line & mobile operators and internet service providers Budget of $A 6.6 for 2003/2004 with 65 staff. Received 76,000 customer complaints in same year from a base of 32 million customers

20. Module 7 Slide 20 NATIONAL COMMUNICATIONS COMMISSION REGULATORY PRACTICES WORKSHOP - 2006 Customer Complaint - Case Study Discussion points The adequacy of the response? Was the outcome reasonable for the customer in this instance?

21. Module 7 Slide 21 NATIONAL COMMUNICATIONS COMMISSION REGULATORY PRACTICES WORKSHOP - 2006 Managing Carrier to Carrier Complaints Upon receipt of complaint, the regulator determines if it complies with the lodgment rules. If the complaint complies it is forwarded to the carrier, who must file an answer. The defendant is permitted to file an answer responding to the allegations in the complaint. Module 7 – Page 30

22. Module 7 Slide 22 NATIONAL COMMUNICATIONS COMMISSION REGULATORY PRACTICES WORKSHOP - 2006 Carrier to Carrier Complaints Process Features Detailed rules and timelines Complainant fully informs the regulator of the law or rules allegedly violated Complainant needs to establish violation with evidence The regulator does not gather information; it is an adjudicator Decisions serve as precedent Module 7 – Page 31

23. Module 7 Slide 23 NATIONAL COMMUNICATIONS COMMISSION REGULATORY PRACTICES WORKSHOP - 2006 Carrier to Carrier Complaints Process Discussion points List the features of the Carrier to Carrier complaints process that works well? Also list those you believe are not working so well Describe the possible difficulties for a regulator to be independent from an incumbent operator in these kind of complaints Module 7 – Page 32

24. Module 7 Slide 24 NATIONAL COMMUNICATIONS COMMISSION REGULATORY PRACTICES WORKSHOP - 2006 Topic 3 – Appeals Features Decisions by regulator’s staff - appealed to the head regulator Decisions by head regulator - appellant requests regulator to reconsider Parties not be able to raise new arguments Next step appeals to next in the hierarchy – court system or Ministry. Appeals consistent with court system: no multiply avenues for appeal Module 7 – Pages 33-34

25. Module 7 Slide 25 NATIONAL COMMUNICATIONS COMMISSION REGULATORY PRACTICES WORKSHOP - 2006 Customer Complaint - Case Study Discussion points What are the appeals processes that operate in an economy you know? How well are these working? What could be improved

26. Module 7 Slide 26 NATIONAL COMMUNICATIONS COMMISSION REGULATORY PRACTICES WORKSHOP - 2006 Appeals - Case Study In small groups consider and comment on : The adequacy of the appeals provisions in Hong Kong China

27. Module 7 Slide 27 NATIONAL COMMUNICATIONS COMMISSION REGULATORY PRACTICES WORKSHOP - 2006 Alternative Dispute Resolution Mediation Private settlements

28. Module 7 Slide 28 NATIONAL COMMUNICATIONS COMMISSION REGULATORY PRACTICES WORKSHOP - 2006 Mediation Process Features Carriers exchange letters Regulator’s staff meets with both sides Regulator would find areas of agreement Disputes resolved quickly It narrows the issues in dispute Some cases reflect the unequal power of the parties

29. Module 7 Slide 29 NATIONAL COMMUNICATIONS COMMISSION REGULATORY PRACTICES WORKSHOP - 2006 Aggravating and Mitigating Factors Aggravating Penalties or judgments could be harsher Violation resulted in injury to persons, property, business Previous history of violations Mitigating Discovered the violation before it was reported and acted Voluntarily disclosed the contravention to the regulator

30. Module 7 Slide 30 NATIONAL COMMUNICATIONS COMMISSION REGULATORY PRACTICES WORKSHOP - 2006 Appeals practices in APEC economies Discussion Point In the Case Studies from Japan, United States, Korea and Singapore Identify the escalation processes, and any Alternative dispute resolution processes