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Convergence, ICT Sector Development and New Information Economies: Challenges for Policy and Regulation

Convergence, ICT Sector Development and New Information Economies: Challenges for Policy and Regulation. Professor William H. Melody Managing Director, LIRNE.NET melody@lirne.net, www.lirne.net Presentation to Workshop Convergence of Media and ICT in Egypt:

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Convergence, ICT Sector Development and New Information Economies: Challenges for Policy and Regulation

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  1. Convergence, ICT Sector Development and New Information Economies: Challenges for Policy and Regulation Professor William H. Melody Managing Director, LIRNE.NET melody@lirne.net, www.lirne.net Presentation to Workshop Convergence of Media and ICT in Egypt: Challenges, Policies and Regulation Cairo, 3 May 2006

  2. Characteristics of 21st Century Economies • Driven by the services sectors • Founded on information/communication networks – next generation Internet • Dependent on effective reforms in the telecom sector – information infrastructure • Strengthening links among local, national, regional, internatonal networks and markets

  3. Stages of Telecom/Information Sector Reform • Telecom Liberalization (Participation, Univ. Access) • Expanding Network Capacity (Broadband) • Preparing the Network Foundation for New Services • Developing New Services - “killer applications!” • Applying Services Productively in Different Sectors • Telecom Reform & Regulation – Key Driver for Implementing Policy Reforms for the e-economy

  4. Finance/ Banking Regional Development Disaster Management Media & Cultural Sectors Manufacturing Travel & Tourism Health/Medical Education/Training Government Services Applications Content Broadcast Media Film Libraries Software etc Interactivity (Instant & Delayed) Voice Data Sound Graphics Video Electronic Services (Pay TV, VAS, Internet) Multimedia, etc. (Public, User group, Private) Telecommunication Facilities Network (Information Superhighway) Computing / Information Technology Telecommunication Equipment Manufacturing INFORMATION INFRASTRUCTURE

  5. Telecom Equipment Internet PTOs Computer Hardware VAS Software Databases Consumer Electronics Network Management The telecom sector value chain Equipment Supply Telecom Infrastructure Service Development Competitive Markets Monopoly/duopoly/oligopoly Competitive Markets

  6. Significance of Network Unbundling for Convergence • Industry Sectors - Equipment, Operator Networks, Services • Fixed and Mobile • Basic Network Layers • *Content *Communication Services *Network Protocols, OSS & Management *Equipment & Facility Capability

  7. The Dimensions of Convergence on the Information Infrastructure Convergence Sectors • Drivers of Convergence • Technology • Industry-Supply • Market-Demand • Policies/Regulation • Industry Specific • Convergent • Applications • Finance • Commerce • Education • Health • Publishing • Manufacturing • etc. Computing Content Telecom

  8. Technologies Markets Applications Services Regulations Policies Criteria for Economic Growth Policy & Regulation: Catalyst for, or Constraint upon Growth?

  9. Progress with Telecom Reform • Now 130+ Countries with Separate Telecom Regulatory Authorities • WTO Commitments to Liberalization • Industry Specific Focus of Reforms • Successes, Failures, Unanticipated Difficulties, Continuing Delays • Policy and Regulatory Reform is Proceeding at a Slower Pace than Technology Development or Market and Service Potential

  10. Progress with Telecom Reform • Regulation is often the limiting factor constraining growth • It is not a simple matter of removing regulations or eliminating regulators. It is enhancing their competence and credibility. • Sound regulatory foundations are needed to attract investment, foster applications of new technologies and development of new services. • The speed of regulatory reforms needs to increase and be directed to providing a foundation for network-based e- Economies.

  11. Information Infrastructure: Investment 1990s • Mobile - licenses - operating; spectrum - network development • Privatising telecom incumbents - licenses – operating; IPO - network development obligations • Competitive network operators - fibre transmission - city / business LANs • Software, services and content (e.g., Internet)

  12. Information Infrastructure: Investment Deficiencies 21st C • Local - basic services access - broadband access • Universal access - voice - broadband • Internet - local services and content • Applications - e-economy; e-society

  13. Policy, Regulation and Network Investment • Licensing - paying for the privilege • Annual Fees and charges • Restrictions on investment opportunities • Price and/or profit regulation • Policy & regulatory risk

  14. Unresolved Network Market Issues • Public Resource Infrastructures for Telecom Networks - Rights of Way, Spectrum, Numbers, Names • Interconnection • Termination Number Monopolies • Access Limitations in the Face of Positive Externalities • Leverage Opportunities for Monopoly Nodes in the Network • Achieving Faster Infrastructure Network Development

  15. Elements of Policy and Regulatory Risk in Information Infrastructure Development • Credibility – regulatory independence from political intervention on substantive issues • Credibility – Regulatory independence from incumbent monopoly power • Transparent processes • Accountability for performance • Competence and skills • Commitment to implement policy objectives • Evident fairness

  16. Shifting Policy/Regulatory Priorities to Stimulate Investment • From supply of network facilities to stimulation of demand to justify investment • From physical capital to human capital - awareness, skill, capabilities - applications by individuals & organisations • Diverse sources of private and public investment - operators, service providers, - intermediaries (e.g., Telecentres), user applications

  17. Regulatory Relations Affecting Sector Investment

  18. Next Generation Infrastructure (High Speed Access) • Role of the Market • Digital Divide • Role of Government *Promote Participation & Competition *Direct Regulation *Public Sector Applications *Public Investment - eg., Broadband *Public/Private Partnerships • At What Level Should Gov’t Intervene?

  19. Paths to Universal Access • Voice - prepaid mobile • Internet, e-economy, e-society - fixed & wireless network extensions - new operators – energy, transport - radio and TV distribution networks - retail service suppliers, ISPs, VANS - greater role for intermediaries

  20. Capacity – building for ICT Convergence Opportunities:RequiresInvestment in Human Capital • Policy analysis & regulation • Strategic analysis & management • Innovation, experimentation & flexibility • Demand-led diffusion of core skills • Network linkages

  21. Proactive Policy & Regulation for Implementing Convergence Opportunities • Create a favourable investment environment for physical & human capital • Minimize barriers to participation • Facilitate demand as well as supply • Apply skills and strategic management to achieve the spirit of the policy objectives • Can only be done if regulatory structure is transparent and credible

  22. World Dialogue on Regulation for Network Economies Mission: • to facilitate an international dialogue that generates and disseminates new knowledge • on frontier issues in regulation and governance • to support the development of network economies

  23. World Dialogue on Regulation for Network Economies Activities: • Research on priority policy/regulation issues • Dialogue – www.regulateonline.org - e-brief • Expert Forum Meetings • Reports

  24. World Dialogue on Regulation for Network Economies (WDR)(available at www.regulateonline.org) Reports • The Next Step in Telecom Reform: ICT Convergence Regulation or Multi sector Utility Regulation ? (2003) • Stimulating Investment in Network Development: Roles for Regulators (2005) • Diversifying Participation in Network Development (forthcoming late 2006)

  25. World Dialogue on Regulation for Network Economies: Institutional Partners • infoDev, World Bank • IDRC Canada • LIRNE.NET • Research Partner University Centres around the world

  26. World Dialogue on Regulation for Network Economies • Participate in the Dialogue; review and comment on the research, www.regulateonline.org LIRNE.NET, www.lirne.net • A Strategic Collaboration for applied research, training, policy and regulation support, relating to information infrastructure and new network economy development • Center for Tele-Information (CTI), TU Denmark • Economics of Infrastructures, TU Delft, Netherlands • LINK Centre, Wits University, South Africa • LIRNEasia, Colombo, Sri Lanka • LIRNEamericas, Montevideo, Uruguay • Media@lse, London School of Economics, UK

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