Managing relationships with licensees, enforcement of license conditions & managing appeals

1. Managing relationships with licensees, enforcement of license conditions & managing appeals Rohan Samarajiva Course on Regulatory Design and Practice Nay Pyi Taw, September 2017 This work was carried out with the aid of a grant from the International Development Research Centre, Canada and the Department for International Development UK..

2. Licenses and concessions • Unlike traditional licenses in the Common Law, modern telecom licenses are hybrid legal instruments which are • In the nature of concession contracts, which impose rights and obligations on both licensor and licensee • Serve as safeguard against administrative expropriation • Companies value them and do not like to see them amended unilaterally or “creatively” interpreted

3. Myanmar licensing objectives • On one hand, the Licensing Rules should afford the greatest amount of flexibility to allow licensees to adopt and offer to consumers new and useful technologies and services. This is to be accomplished largely through technology- and service-neutral rules, as well as through the multi-service licensing framework addressed below. On the other hand, the Licensing Rules should provide regulatory certainty to support the substantial investments that licensees must make when building out and maintaining infrastructure and offering new services. This is to be accomplished through a variety of mechanisms based on transparency and non-discrimination principles, including treating similarly situated licensees in the same manner, subjecting changes to policies and rules to public consultation processes, and ensuring that licensees have access to objective dispute resolution and appeals processes. MCIT Public Consultation Document

4. Licenses are central to relationship between regulator and regulated entities • Ideally, all licenses within each class are identical, except perhaps for effective date • Members of the Commission and responsible staff are fully conversant with licenses • The Law and the regulations are also important • MCRC must expect licensees to live within the four corners of the Law, Regulations and License • It must also keep its side of the bargain, by strictly adhering to the provisions • Involvement of multiple entities in licensing adds complexity to Myanmar relationship

5. Amendments & renewals • Despite best efforts to ensure certainty, licenses may require amendment • Should be done with fullest consultation and with the consent of licensees • Last few years of a license are problematic for continued investment needed in ICT sector • Essential to plan ahead and ensure minimization of uncertainty by making the conditions for renewal clear • Usually, condition for non-renewal is license-condition violation • Specify a date (e.g., before end of 3/4th of license term as in Pakistan) before which intention to not renew must be given

6. License-condition violations • Must be dealt with, not swept under the rug • But always, persuasion must precede formal process • Must be carefully addressed, according to law and following principles of natural justice • Hear both sides • Judge must be unbiased • Make decision based on the record

7. Appeals • Telecom Law provides for Appeal Tribunal, with appeal to Minister as intermediate step • Hope that MCRC Law will permit appeals only to Appeal Tribunal • Appeals to Minister will nullify independence • Minister will become ultimate decision-maker, and MCRC an advisory body • This was the case in Sri Lanka between 1991 and 1997 until Sri Lanka Telecom Act was amended

8. Legal versus political appeals • Legal appeals • Tend to be decided on whether the challenged decision was • Within the law: was it ultra vires? • Did it adhere to rules of natural justice/due process? • Generalist judges usually avoid getting into the substance of decisions • Though it’s not possible to completely exclude their views on emotive issues such as prices/quality of service seeping into judgments • One justification for review and specialized appellate tribunals • Political appeals • Tend to be decided on a balance of factors, including public perception, impacts on powerful stakeholders, etc. • Not optimal for regulatory certainty and level playing field

9. “Appeal-proofing” • No one can give advice on how to protect a decision from a political appeal • Because the key factor is the “man” not the “law” • Case-by-case, depending on the personality of the man/woman • To prevent decisions from being overturned by appellate bodies • Stay within the law • Follow the rules of natural justice • Carefully document all actions relevant to decision • If a decision can be “framed” in multiple ways, take initiative to frame it in the right way in documents and in media

10. Key elements of appeal-proofing • Staff should be fully conversant with relevant legal provisions in law, regulations, and licenses • Internal “red team-blue team” debates should be encouraged • Legal counsel who will have to argue appeals should be consulted from the beginning, so they have ownership of decision they have to defend • Everyone at MCRC should internalize and follow rules of natural justice • Hear both sides • Judge must be unbiased • Make decision based on the record

11. Win the first few cases • If MCRC prevails in the first few appeals, operators and others are likely to think twice about appealing every decision • If, on the other hand, MCRC loses early cases, it’s blood on the water and sharks will start circling

12. Pay attention to stay orders • In many cases, the stay order is critical • If the decision is not stayed while appeal is ongoing, it may be as good as winning