OVERVIEW OF

INTERNATIONAL BEST
PRACTICES IN
COMMUNICATIONS
REGULATION
Materials to Accompany Training for the
Afghanistan Telecommunications
Regulatory Authority
Kabul, Afghanistan
April 2016

Point of contact for questions about this document

Name: Douglas Griffin
Title: Director
Address: Albany Associates, Gable House, 18-24 Turnham Green Terrace,
London, UK
Telephone: +44 (0)208 996 5072
E-mail: doug@albanyassociates.com
Table of Contents

I. Communications regulators in a globalized world ............................................................. 1

II. What is good regulation? ................................................................................................... 4
III. Independence of regulators.............................................................................................. 7
IV. Licensing and license conditions..................................................................................... 10
V. Convergence in communications ................................................................................... 17
VI. Brief introduction to digital switchover.......................................................................... 18
VII. Brief introduction on telecommunications specific regulation .................................... 25
VIII. Brief introduction to regulating the Internet ............................................................... 29

2
I. Communications regulators in a globalized world

A. General principles of communications regulation

1. Reasons for regulation of communications generally

Why Regulate?

Protect Increase access

Avoid market Foster effective
consumer to technology
failure competition
interests and services

Source: ITU ICT Regulation Toolkit

2. Telecommunications v. broadcasting
 Telecommunications is largely about quality of service and fair competition.
 Different kind of monitoring of compliance—with broadcasting it is not merely a
question of service.
 With broadcast regulation, there are content issues as well as technical issues.
Protection of consumers primarily means protection from inappropriate content.
 With broadcast regulation, there are also policy goals such as diversity of opinion
and cultural policy through regulation. Certain types of programming—like public
service broadcasting, children’s programming and cultural and educational shows
can be encouraged or required. Local content can be incentivized or mandated.
 What makes someone a broadcaster?
o Sending content from one source to anyone with the capacity to receive it
(without specifying the identity of the recipient)
o Editorial control

3. Reasons for regulating broadcast content

 Ensure quality of technical aspects and programming
 Allow for diversity of opinion and diversity of programming
 Protect and promote local culture
 Protect local cultural, moral, social and religious values
 Promote a competitive environment
 Protect minors from material that would harm them emotionally, psychologically or
physically

1
 Regulation of broadcast content is often done through a code of content agreed with
the industry and included as an integral part of the broadcast license.

4. Trends and advancements in communications technology

 Rise of the Internet—the reach of communications has expanded exponentially.
 Broadcasting over the Internet and mobile networks is now standard.
 Transmission speed is increasing all the time with improved access to broadband.
 Cheap satellite receivers are more and more prevalent.
 Convergence of platforms—content can be viewed, seen and heard across a variety
of technological devices.
 Digital terrestrial television—more channels for broadcasting, while freeing up more
spectrum for other uses (this is discussed more below).

5. Effects of technological advances in electronic media

 Independent regulation—more specialized, fast-moving environment where real
technical expertise is needed
 Light-touch regulation—recognition that with everyone able to take photos on
mobile phones and post content on websites, the time when governments can easily
control the media sphere has passed
 Converged technology has led to converged regulation, and converged regulators
with authority over more than one type of communication (e.g., both broadcasting
and telecommunications)
 Media becoming more difficult to control—new questions of jurisdiction (discussed
more below)

B. International best practice

 Standards for regulation, etc. are generally accepted in various parts of the world
and certain principles have become models for legal reform
 Referred to as “International best practice” or “International standards”(or regional,
like “European best practices”)
 Specific rules should take into consideration similarities and differences between
countries
 There is not always 100% agreement, but there are a number of generally accepted
norms and principles

C. Requirements of international law

1. Legal protections for free speech and media

a. Constitutional provisions
 Most countries have a constitutional provision protecting freedom of expression in
some way.

2
  Most such provisions provide for the right for individuals to receive and impart
information, as well as freedom of opinion.
 Many such provisions expressly provide for protection of the freedom of the media.
 Article 34 of the Afghan Constitution:
Freedom of expression shall be inviolable. Every Afghan shall have the right
to express thoughts through speech, writing, illustrations as well as other
means in accordance with provisions of this constitution. Every Afghan shall
have the right, according to provisions of law, to print and publish on
subjects without prior submission to state authorities. Directives related to
the press, radio and television as well as publications and other mass media
shall be regulated by law.

b. International agreements
 Examples include the International Covenant on Civil and Political Rights (ICCPR) and
the Universal Declaration of Human Rights (UDHR), which contain provisions
protecting expression and specifying a right to impart and receive information
through any media.
 Most countries are signatories to these types of international accords, and thus are
bound by them to a certain extent.
 They tend to be viewed as goals even in countries that are not signatories.
 Article 19 of the UDHR states:
Everyone has the right to freedom of opinion and expression; this right
includes freedom to hold opinions without interference and to seek, receive
and impart information and ideas through any media and regardless of
frontiers.
 Afghanistan is a signatory of the ICCPR and voted in favor of the UDHR.

c. Legal standards for restrictions on media and expression

 The right to freedom of expression is not absolute.
 Every society restricts speech and media in certain circumstances.
 Legal certainty and consistent application of any restrictions are important.
 Restrictions should not be overly broad, but rather should be appropriately targeted
to accomplish a legitimate purpose.

2. Intellectual property
 Included as a requirement in international law and international agreements.
 National legislation on intellectual property, and sometimes communications law,
address these issues.
 The broadcast regulator and other organs are often assigned a role in enforcement.
 Collecting societies have the authority to license copyrighted works and collect
royalties as part of compulsory licensing or individual licenses negotiated on behalf
of their members. They collect royalty payments from users of copyrighted works
and distribute royalties to copyright owners.

3
D. Questions of jurisdiction

1. Changes in jurisdictional certainty with changes in technology

 With means of communication with infrastructure entirely within a country’s
borders jurisdiction was clear.
 Technological advancements, such as satellite transmission and the Internet, have
completely changed this.

2. Questions to ask in determining whether there is jurisdiction?

 Is the organization headquartered in the territory?
 Are there offices in the territory?
 Are the means of transmission in the territory?
 Are any other means of reception or distribution in the territory?
 What are the means of receiving, and can they be regulated?
 With satellite broadcasting, is it beamed in from abroad? Is there uplinking in the
country?
 With satellite broadcasting, can we regulate who obtains what receivers?
 Is it possible for users to access without any other presence by the media outlet in
the territory?
 Internet—how do we regulate something with no connection to the country?

2. How to enforce when jurisdiction is questionable or nearly nonexistent?

 Generally speaking, if there is no attachment to the country, there is no jurisdiction,
and the regulator cannot take action against the organization.
 There may be limited action possible, such as take down of content from cable or
Internet (notice and take down is discussed further below).
 Cooperation with other regulators may be a solution to some issues. Regulators can
assist each other in enforcing common goals. This shows the importance of
participating in professional networking events with other regulators.

II. What is good regulation?

A. Basic principles all regulators should follow

 Transparency: Regulators should be open and should keep regulations simple and
user-friendly.
 Accountability: Regulators should be able to justify decisions and be subject to public
scrutiny.
 Consistency: Rules and standards should be applied fairly to all licensees.
 Proportionality: Regulators should intervene only when necessary. Remedies should
be appropriate to the risk posed, and costs should be identified and minimized.
Regulation should be focused appropriately to address the problem at hand, and
should not be overbroad in its application.

4
B. Other goals for the regulator
 Objectivity, non-discrimination—treat all players equally and fairly.
 Legal certainty –adhere to rules and processes, and follow the rule of law.
 Light-touch regulation—license only when necessary.
 Credibility is key for a regulator—with the public and the industries it regulates.
 Working with the sector is important so that they understand the rules and how to
comply with them.
 Voluntary adherence to rules is the goal, resorting to regulatory intervention only
when necessary.

C. Main considerations for regulatory decision-making

 Is the decision within the legal authority of the regulator?
 Is there a proper factual basis for the decision?
 Was there sufficient and adequate knowledge by the persons involved in the
decision?
 How independent is the regulator?
 Was there objective, fair, transparent decision-making?
 Are there procedural guarantees in place?
 Were procedures followed?
 Were decisions properly recorded and published?

D. Transparency

1. Principles of transparency
 Transparency helps the regulator to show its independence and makes it more
difficult for anyone to try to influence its decisions.
 The rule should be openness, with exceptions to this rule only through very explicit
determinations as to what can be secret.
 Ideally, national access to information legislation should be enacted and followed.
 The regulator should have its own special rules and procedures to ensure that its
operations and decision-making are transparent. These may include rules on open
records, transparent fees schedules, requirements that names and biographical
information of leadership and management personnel be made public, and
requirements that budgets and financial records are made open to the public.
 It is not necessary to have open meetings, but decisions made at meetings should
be available to the public, and special open events can be organized.

2. Transparency through communication with stakeholders, government and licensees

 The regulator should work openly, create conditions of public access to its
operations and documents, and maintain a dialogue with the public and the industry
about its policies, plans and actions.
 Public consultation regarding its major policies should be the norm.

5
  Dialogue with, and outreach to, the industries it regulates and all interested parties
should also ensure widespread knowledge and understanding of the law, as well as
of the goals, procedures and criteria applied in all of the regulator’s work.
 Rulemaking should be public and transparent.
 Consultations should involve the sector (broadcasters, civil society), inviting
comments and holding outreach activities.
 Other relevant organizations (election bodies, copyright bodies, etc.) should
participate.

E. What concrete tasks does the regulation of communications entail?

 Licensing (discussed below)
 Codes of conduct for broadcasting and for advertising
 Programming policies and monitoring of content
 Public complaints handling. This means that:
o The regulator has to have a system in place for handling complaints from the
public
o The public has to understand how to use this system
o The system must provide efficient and effective redress
o The system must allow for proportional and effective enforcement
 Monitoring for compliance with license requirements. This will include:
o Spectrum monitoring
o Broadcast program monitoring to ensure compliance with broadcasting codes
o Monitoring of complaints handling procedures to ensure that licensees have
systems in place to address complaints from the public and subscribers
effectively
 Use of regulation and law to shape the market, for example:
o With telecommunications, in determining which technologies to allow or
encourage, or how many operators to license.
o With broadcasting, in encouraging diversity of programming, promoting cultural
policies, requiring quality programming or encouraging local content production.

F. How is broadcasting content regulated?

 Requirements on programming may be contained in a license. For example, a license
may require a certain number of hours of children’s programming or educational
shows.
 Broadcasting codes of content are often required as part of the license. These
provide significant detail explaining content standards. They are often accompanied
by guidelines clarifying certain issues further.
 Examples of content standards where certain content may be restricted:
o Indecent or offensive content and/or language
o Excessive violence
o Insult and defamation
o Inaccurate and biased news

6
  Content standards are often designed to protect children. This is often
accomplished through a “watershed” rule, whereby certain content deemed
inappropriate for children can be viewed or heard only once children are likely to be
in bed or otherwise not in the audience (e.g., during the school day).

G. Regulation of spectrum issues

 Radio frequency spectrum and satellite orbits are the common province of mankind
and a common good. They are a public resource.
 Radio frequency spectrum is scarce and thus not available for an unlimited number
of users.
 They often require coordination in order to minimize interference.
 Frequency spectrum is allocated for different uses and users.
 National use of spectrum is subject to international spectrum rules, governed by the
International Telecommunications Union.
 Spectrum requires management and monitoring to make sure rules are being
followed.
 Satellite orbital positions also require allocation.

III. Independence of regulators

A. Principles of independence
 The regulator must be independent and must be seen to be independent: only in
this way will it be able to gain the trust of the broadcasters and be able to work with
the sector.
 The regulator implements the policy set by the government and set out in law.
 The regulator independently implements the laws and takes various decisions in this
framework: it operates within the powers given to it.
 In countries with freedom of expression guarantees, such as Afghanistan, there
should be no interference in editorial policy of broadcasters and only such rules as
are necessary.
 Regulatory activity should be consistent and non-political in nature.

B. Independent staffing of all posts

 Management, board and staff must be selected based on expertise and personal
qualifications.
 Selection processes should involve different bodies and civil society and should be
non-political.
 Key positions should be secure for a set period of time (e.g. four years with
possibility of two terms).

1. Independence of the board

 The appointment process is essential.

7
  It should involve civil society and the sector: a call for candidates should be widely
publicized and open for all.
 There should be no direct government appointments. If one branch of the
government appoints, another should confirm. A special (external) body could be
used for appointments, or, at a minimum, a special committee of parliament that
also includes the opposition.
 Candidates themselves should not to be political.
 Candidates should have personal qualifications that give them credibility and
respect.
 There should be clear criteria in law for the qualifications of the members, as well as
disqualification (e.g. where there are personal financial interests or financial
interests of family members, political activities or serious crimes).
 Members must have secure positions (to be able to take also “uncomfortable”
decisions).

2. Independence of the director

 The director is the “face of the regulator.”
 The director’s competence and credibility are especially important.
 The term of office should not be too short, but should be limited in the number of
years and terms.
 There should be a clear division of competence between the Director and the Board
(as well as the Chairman of the Board), through law or regulation.

3. Independence of the staff

 The criteria for qualification will vary depending on the position and tasks.
 In many countries, staff members are not civil servants. Or, even if they are, special
rules may be needed to ensure independence, to the extent possible.

C. Financial independence
 Ideally, the regulator should have its own means of financing its activities (e.g., from
license fees).
 If the regulator does not have the ability to raise and manage its own revenues, and
must receive its budget from the national budget, there must be security in the
budget process. This might be accomplished through budgets established over a
number of years (three-year budgets, for example) and requirements that there is
no political interference in the details of the budget or expenditure.
D. Ensuring independence while maintaining proper accountability
 Independent regulation does not mean absence of control.
 The regulator shall be accountable for its work.
 The regulator can be held accountable by requiring annual financial and narrative
reports to parliament.
 In addition, its decisions should be appealable in court (not every decision, but
rather only significant ones on points of law only).

8
  Independence does not mean absence of control but that no one can interfere in
the decision-making of the regulator.
 Rules and regulations (rule-making activity) of the regulator cannot be appealed but
there may be responsibility and liability under general administrative principles for
maladministration and abuse of powers.

E. Relative roles and functions

 Within the communications industry, three stakeholders have distinct roles and
obligations to fulfill:
o Government: Creates laws, issues and addresses policy concerning investors
and operators and ensures that the communications sector is working in line
with national interest.
o Regulatory Authority: Acts as the overarching watchdog for the sector;
implements and enforces national policy, establishes regulation codes,
monitors compliance with its rules, reports on sector growth, and mediates
disputes between competitors and also consumers.
o Operators: Must be active participants in regulatory processes, including by
providing input on rule making, and must provide access to resources such
as infrastructure and customers. Operators include telecommunications
companies, broadcasters and other providers of communications services.
Effective competition among operators means more choices for customers.

Creates Policy Implements Policy Adhere to Code

& Enforces Code

Provide access

 Giving responsibility for regulation of the communications sectors to a body that is

not tied to any particular government administration reduces the likelihood of
political interference in communications and broadcasting, and thus encourages
freedom of expression and discourages political interference. This is particularly
important where there are significant financial stakes (as with the award of
telecommunications licenses) or political stakes (as is the case during elections).

9
IV. Licensing and license conditions

A. Different types of licenses and licensing

1. Individual licenses v. general authorizations (class licenses)

a. Common features
 Individual licenses and general authorizations (class licenses) are agreements
between the regulator and a licensee granting the licensee certain rights and
requiring the licensee to comply with certain conditions, including payment of a
license fee in certain cases.
 They can both be awarded by communications regulators in relation to spectrum
use or the right to provide certain other services (independent of spectrum).

b. Individual licenses
 Generally speaking, an individual license is an individually negotiated agreement
particular to a specific applicant.
 Individual licenses for new entrants in telecommunications markets are often
granted through a competitive license process, on the basis of an auction or a
competitive tender according to certain criteria, whereby one or more operators is
selected from a group of applicants.

c. General authorizations (class licenses)

 General authorizations (also referred to as class licenses) are generally less onerous
than individual licenses in terms of the application process and regulatory
involvement.
 Generally speaking, general authorizations provide for no exercise of discretion by
the regulator, meaning that the regulator does not approve or disapprove of an
application. The regulator may, however, attach eligibility and ongoing regulatory
conditions to the general authorization so long as all users of each service are subject
to the same conditions.

d. Developing v. developed markets

 The international trend is towards greater use of less onerous general authorizations
over individual licenses.
 More developed markets tend to favor general authorizations, whereas less
developed markets tend to require more individual licenses.
 This is in recognition of the fact that more regulation is often required in less
developed markets to spur competition.
 Even in more developed markets, individual licenses are used for spectrum, mobile
telephone services and broadcasting services.

2. Unified licensing regime

 Provides a one-stop shop for all communications license needs.

10
  Unified licenses are technology neutral, meaning that applicants apply to provide a
certain types of service and can provide that service on the platform of their choice.
 There is a minimum criteria for each type of license, suitable for each type of license
 The process should be designed to be very transparent and easy to understand.
 Regulators in with unified license regimes tend to assist applicants through the
process (to a reasonable degree).
 Applications are electronic.

B. Process of providing a general authorization

 Once all documents necessary for the application for the general authorization have
been supplied to the regulator, the applicant has the immediate right to use
frequency under the terms and conditions of the general authorization.
 An example of an activity often requiring a general authorization (as opposed to an
individual license) is the licensing of Very Small Aperture Terminals (VSATs).
 Generally speaking, fees for general authorizations are charged in a way that reflects
the relatively low regulatory burden they place on the regulator, meaning that they
are small, nominal or nonexistent.

C. Process of awarding an individual license

1. Expressions of interest
 In order to gather information and act transparently, regulators often start an award
process for an individual license with an expression of interest.
 Through this process, the regulator will publish a public notice describing its
intention to issue a certain type of license. By way of example, if the regulator were
to issue a license for radio frequency, it would issue a notice that would provide:
o A description of the services or uses to which the band(s) have been allocated,
o A description of the location and extent of the band(s) in the national frequency
registry,
o A band plan or description of how the spectrum to be assigned will be divided
into sustainable channels or blocks,
o A description of whether licenses will be awarded on a local, regional or national
basis, and what the boundaries between license areas will be,
o Any technical rules or requirements that will apply to use of the band or that
may circumscribe the potential use of the band,
o Any restrictions or requirements that will apply in terms of prescribed or
proscribed services that may be offered using the spectrum to be assigned, and
o A solicitation of written expressions of interest in applying for licenses in the
band, and a schedule for filing such expressions of interest.

 The regulator may determine, based on the number and character of the
expressions of interest it receives, that there is sufficient spectrum available in the
band to grant licenses to all applicants on a first-come, first-served basis, as
discussed below.

11
  If the regulator determines, based on the expressions of interest, that there are likely
to be multiple, mutually exclusive applications for the spectrum or other service it
can initiate an auction process or competitive tender process, as described below.
 Whatever its decision on the choice of licensing process, the regulator should
publish the decision, as well as any rules it considers appropriate for the conclusion
of the licensing process.
 Regardless of the way licenses are ultimately awarded, the process must be
objective, transparent and non-discriminatory.

2. First-come, first-served
 Generally speaking, individual licenses may be awarded on a first-come, first-served
basis if the regulator determines that there is no reason to limit the number of
operators.
 Instances where this might be appropriate include where spectrum is sufficiently
available to award spectrum to each interested applicant and where the market can
sustain the number of applicants that wish to have such a license.

3. Auction
 Licenses awarded through an auction are sold to the highest bidder meeting certain
predetermined pre-published criteria.
 Awards through auctions are most common with telecommunications and allocation
of spectrum for certain commercial services.
 The advantage of an auction is that it ensures that spectrum is generally sold at
market value, and that maximum revenue is generated for the national treasury and
to fund the operations of the regulator.
 But, it does not take into consideration where an operator should be chosen based
on criteria other than price, in which case a competitive tender, or beauty contest,
would be more appropriate.

4. Competitive tender
 Through a competitive tender process, the regulator determines the most suitable
licensee based on transparent and objective criteria. This is sometimes referred to
as a “beauty contest.”
 A competitive tender (as opposed to an auction) is favored where the regulator
determines that the public interest requires that the grant of particular licenses for
certain services should not be awarded by auction. Examples where this may be the
case include where there is an identified need for certain types of content or the
provision of certain services to underserved regions.
 Criteria for the award often include a demonstration of financial and technical
capability, as well as responsiveness to tender requirements (e.g., the ability to
provide certain types of programming for broadcast services). In the end, the
applicant that is best suited to satisfy end user demand for the relevant service
should be selected.

12
  Examples of the types of information that each applicant must provide as part of a
competitive tender process include:
o Clear evidence that it has the financial capability to provide the proposed
services and implement the proposed network,
o Clear evidence that the applicant has the technical capability and experience or
has access to the technical capability and experience to provide the proposed
services and implement the proposed network, and
o Any other information that the regulator deems necessary.
 There should be a call for applications in an open process.
 Competitive tenders are common in broadcasting, where certain programming,
plurality and other policy goals will need to be met through the issuance of the
license.

D. Contents of a license

1. Basic components
 The first part/page of the license is often a short stand-alone statement—a
document that may be displayed.
 Normally the license requires a signature or other form of documented acceptance.
 The nature of the license resembles both a contract (something accepted by both
sides) and a normative document from an authority.
 Applicable law and regulations may be mentioned in the license.
 Definitions of relevant terms should to be set out. Model definitions are found in
international documents (ITU, EU). It is good to use internationally accepted terms
and definitions: adds to clarity and international understanding. This is something
appreciated by international firms, but also facilitates the work of the regulator.
 It is important that the definitions include all terms used in the license and that the
list uses a consistent style so it is easy to use.
 Terms and concepts that are defined in law may not need extra definition or mention
in the license. But, if that are used, they should have the same terminology and
formulations used in the law.
 License text and content needs to be under constant review but should not be
changed too often.

2. Conditions of a license

a. General terms and conditions

 These are applicable to all licensees.
 Examples of general terms and conditions are as follows:
o Adherence to codes of content and other rules must be an explicit requirement
of the license.
o The regulator must reserve the possibility to make changes if necessary, for the
best use of the spectrum and the best functioning of the broadcasting sector.

13
 o At the same time, there should not be frequent or encompassing changes, as
this would endanger the requirement of legal certainty.
o The regulator should consult with users on any change through a public
consultation process prior to making any changes.

b. Specific terms and conditions

 These are specific to certain types of licenses or licensees.
 They can include:
o A requirement that major changes need to be approved
o Technical requirements in separate part/annex
o Frequency information in separate part/annex
o For broadcasting, they might include:
 Programming requirements, such as schedules or types of programs (but
they should not interfere with editorial freedom)
 Station identification requirements
 Licenses may give special requirements for election periods, such as
regarding political advertisements, equitable access and impartiality
 Public service requirements, for example, telling people where and how to
vote during an election or what to do in an emergency.

c. Systems for handling complaints

 Under many license regimes, particularly for broadcasters and mobile telephone
service providers, a licensee must have a system for handling complaints from the
public/subscribers.
 This system must be set out in the license application and approved by the regulator.
 This must be a “real” system that can adequately and efficiently respond to
complaints.
 This does not replace the possibility to complain to the regulator.

d. Financial conditions
 These could include the provision of financial information about the owners,
business plan how the broadcasting will be financed.
 Other information may be required to ensure that any ownership rules are not
violated.
 Financial information should normally not be publicly accessible (unlike most other
information held by the regulator, which is often required to be made available for
public inspection and oversight).

e. Technical conditions
 These may include health and safety measures, both for operators’ employees and
for the general public.
 There are often technical requirements for antennas, etc. (regulated by applicable
industry and regulatory standards).

14
  Maintenance requirements are often established. For broadcasters, this includes a
requirement that maintenance must not disrupt broadcasting services.
 Special requirements may be set out in annexes to the license.

f. Other law and rules

 A license does not release the licensee from the obligation to fulfill other legal or
contractual obligations necessary for provision of services.
 These may include planning permission, environmental licenses business
registration, tax registration.
 Any such permissions and licenses are seen as separate obligations.
 What is required for these permissions and how to obtain them will be in other
legislation and not handled by the regulator.
 There may be some overlap in enforcement, for example with copyright in
broadcasting, or enforcement may be entirely separate. Such authority must be
clarified in law and regulation.

3. Other issues set out in a license

a. Enforcement
 The license may set out rules on sanctions or refer to sanctions established in
legislation.
 Procedures for enforcement may be mentioned in the license or by reference to the
law.
 What is important is that the licensees are aware of their obligations and of the
conditions and procedures in case of any violation of these obligations.

b. Additional information and records

 The regulator can ask for a variety of information, as set out in the license and in law
(specifically or generally).
 Examples of such information may include inspection records, equipment approvals,
pricing information, copyright contracts, rebroadcasting contracts and financial
information.
 Broadcasters are often required to keep recordings of broadcasts for a certain time,
e.g., thirty days.

E. License fees
 These may include application or administrative fees, as well as annual fees (e.g., for
spectrum use)
 Whatever the type of fee, it should be clear what a fee goes toward.
 Administrative fees should be set to pay for reasonable regulatory costs.
 Other fees should not be so high as to deter applicants from applying or operators
from providing a service, but rather should be reasonably related to the costs of
regulation or to the market value (where spectrum is auctioned).

15
  For spectrum, fees should reflect that licensees are using a public good that they are
required to pay for.
 Fees not awarded according to auction may be determined based on a number of
factors, including revenues, market share or geographic reach. Regardless of the
formula chosen to determine any license fee, the formula and any resulting
calculations must be transparent and fair.
 License fees are often used to fund regulators. This is good because it increases
independence. Regulators should enforce obligations to pay license fees.

F. Transfer of licenses
 Normally, the regulator must approve all transfers of licenses.
 The license is tied to the original licensee—if the corporate structure or ownership
of the original licensee changes, the licensee is ordinarily required to inform the
regulator. The regulator then normally has the authority to approve or deny the
change.
 Legislation or regulation may set out circumstances where changes require only
notice and not approval, such as where changes in structure are such that the new
structure is considered the same legal person as the former structure.
 Licenses generally cannot be sold.

G. Spectrum allocation

1. Basic principles
 Most communications regulators have the authority to allocate frequency spectrum.
 Frequency can be allocated pursuant to an individual license or a general
authorization depending on the use and the licensing regime in place.
 It is normally allocated according to a frequency plan agreed with other parts of
government. Representative of relevant ministries and the military will be involved.
 The regulator must be given clear authority as to which bands it regulates.
 Military and international organizations are often exempted from full regulation, but
regulator is normally given some authority for record keeping and coordination.
 The regulator then keeps and publishes a database or register showing frequency
bands, who has been allocated which frequencies and for what use.
 Some types of spectrum use are exempt from any licensing or general authorization
requirements altogether, including spectrum used for cordless phones and small
appliances.

2. Types of regimes
 Some regulators require individual licenses for any use of frequency spectrum. As
mentioned above, most regimes are moving away from this and toward more
general authorizations.
 A common practice, particularly in more developed markets, is to require and
individual license for spectrum only where it is particularly scarce (including where

16
 coordination is required in order to manage its efficient use) or only where a specific
and exclusive frequency is assigned.
 Examples of activities requiring individual licenses for spectrum use are mobile
telephone services and broadcasting utilizing spectrum.

V. Convergence in communications

A. Technological convergence

Digital technologies are already changing the way services are delivered,
blurring the boundaries between types of service operation and means of
delivery, and eroding the technological distinctions between text, audio and
video. This process of change is often referred to as convergence.
UK Government Publication 1998

 That was a long time ago, but the process described there continued with great
speed, and it still continues to day.
 Traditionally, audio-visual programming was delivered through conventional
terrestrial broadcasting, but more recent technology has broken these monopolies.
 Programs can now be delivered through a variety of systems such as satellite, cable,
the Internet and mobile phones. New platforms are being created every day.

B. Move to converged regulation

 In most developed countries, as this distinction between media and compatible

technologies has become increasingly blurred, separate broadcast,
telecommunications and media regulators have been converged.
 This provides the possibility of having one agency, with one public rule-making
process, dealing with sectors with similar legal, social and economic characteristics
that will provide stability, business and consumer confidence, continuity and
efficiency.
 And, where regulators have remained distinct—with one regulator for
telecommunications and spectrum, and another for broadcasting content, as is the
case in Afghanistan—the requirement for greater cooperation and coordination
remains the same.
 International best practice calls for as efficient a licensing process as possible,
regardless of the regulatory structure involved.

C. Converged regulators around the world

Below is a list of examples of converged regulators charged with a variety of components

of communications regulation. It is clear that there is no one-size-fits-all approach.
 Broadcasting and telecommunications
o Canada, Switzerland, Brazil

17
  Broadcasting, telecommunications and spectrum management
o USA, South Africa, Italy, Iraq
 Broadcasting, telecommunications, spectrum management and online content
o Australia
 Broadcasting, telecommunications, spectrum management, and competition
o UK
 All of the above, plus postal services
o Malaysia

D. Advantages of converged regulators

 Ability to develop and work within a single strategic policy framework
 One strong regulator can lead to a reduction in risk of ‘industry' or political control
 Greater certainty and efficiency for investors, with a simple one-stop-shop
 Development and implementation of compatible uniform rules
 Economies of scale in administration and support services
 Better use of high-caliber professionals across similar sectors
 Ability to spread regulatory expertise across the sectors with shared programs of
research, market analysis and stakeholder involvement

VI. Brief introduction to digital switchover

 Digital switchover is further addressed in the Guide to Digital Switchover, published

by the OSCE and authored by Dr. Katrin Nyman Metcalf and Dr. Andrei Richter, also
provided to participants as resource materials prior to this training.
 Information below is based on discussions from 2014 and 2015.
 Discussions during visit and training planned for April 2016 could affect and change
this advice.
 However, even if specific facts have changed, the information below still provides
valuable context for discussion.

A. External drivers
 International Telecommunications Union set an international deadline of 2015 for
switchover to digital broadcasting. This is a binding obligation, but has been
extended due to logistical and financial problems, particularly in developing
countries
 Recommendations and standards from other organizations regionally–framework
and principles (best international principles) but details can vary
 Free-to-air DTTV represents an increasing share of the global market compared to
analogue TV and pay DTTV, as demonstrated in the graphic below (from Internews
and Albany report 2015)

18
B. Initial steps

1. Cross-government and industry coordination

 Normally, a digitalization plan is developed among the government, the
independent regulator, and the sector
 The public should be consulted and informed through the plan, via information
campaigns, public education, websites etc.
 Amendments to legislation to allow for digitalization should be identified and
initiated
 Incentives for sector to digitalize should be identified and initiated
 Pilot areas and test projects should be identified and initiated (digital islands)

2. Preliminary questions
 Is there order in the broadcasting sector? (regulation, licensing –plurality and
diversity as well as quality)
 Background information should be gather prior to the transition on the following:
o Cable penetration
o Other forms of broadcasting (direct broadcasting satellite, broadband)
o Voluntary purchase of equipment
o Other services interested in the infrastructure
 How will channels be selected?
o Is there room for all current broadcasters? If not, who will select?
o Are all current broadcasters guaranteed space on platforms?
o Must be fair for all operators
o Must be transparent

19
3. Establish the role of the regulator and roles of other policy makers and stakeholders
 In planning, roll-out and award of platform licenses
 The independent regulator retains an important role in:
o Ensuring access to broadcasting
o Establishing and applying content standards (broadcasting standards)
o Deciding frequency matters—establishing legal certainty for existing
broadcasters
o Establishing new types of licences: new licenses that separate transmission
(platform, multiplex licenses) from content (broadcast licenses)
 Involvement of different regulators (broadcasting, telecom, frequencies,
competition) – division of competence must be clear, mechanisms for cooperation,
no duplication, system and rules transparent and easy to understand, adequate
legislation
 Technical standards must be set by the regulator or ministry

C. Possible benefits

1. Lower overall transmission costs for broadcasters

 Estimates from mid-2015 show that Afghan broadcasters currently spend between
$2,000 and $8,000 per month per key site to broadcast their analog signals and that,
after digital switchover, they will pay only approximately $1,600 per month per
single-frequency network (SFN) transmitter.

2. Extended reach per transmitter

 Generally speaking, broadcasters who previously had low power transmission and a
small footprint per transmitter will reach a larger area with each transmitter. And,
broadcasters can pay for additional transmitters more to expand coverage further.

3. More and better content for the audience

 ABS will provide 50+ channels. At least 30 of these will be Afghan (including local
and regional); the others will be highly popular, technically superior foreign channels
like National Geographic, Al Jazeera, The History Channel, Cartoon Network and
MTV.

4. More local content

 Because DTTV has lower operational costs than countrywide cable or satellite uplink,
local broadcasters can better afford DTTV transmission, while satellite content is
largely foreign.
 Also, DTTV is more easily customized for local demand than is satellite because the
equipment used for DTTV (unlike satellite) is terrestrial and thus limited to a
particular geographical territory.

20
5. More channels
 Compared with analog transmission, digital transmission allows for more television
channels in the same amount of spectrum. So, there will be many more channels
available.

6. Free-to-air option
 Unlike with satellite or cable television (other ways that a digital signal can be
broadcast), DTTV provides for free-to-air only reception.

7. New services for the audience

 For example, on-demand, interactive, electronic program guides, e-governance and
e-education

8. More business opportunities

 More channels, new infrastructure (which will be local with DTTV, unlike the
extraterritorial infrastructure associated with satellite), more local content, and new
services (e.g. interactive content) will mean more business opportunities,
particularly for small local enterprises.

9. Digital dividend
 “Digital dividend” refers to the spectrum that is freed up due to the switch to DTTV,
which can be used to generate revenue. The term is also sometimes used to describe
the generated revenue itself.

 Because spectrum formerly used for broadcasting will now be able to provide more
channels in less space, spectrum is freed up for other uses. This spectrum could go
to telecommunications services, broadcasting, or other uses. Even with more
channels on the air, some spectrum will likely be set aside for more lucrative non-

21
 broadcast uses and thus will mean more funds in the national treasury that can be
used to support public needs.
 There will need to be a discussion in Afghanistan of how the digital dividend will be
used. Looking to other examples may be useful. Egypt, for instance, considered using
these revenues to subsidize set-top boxes for its population. In Afghanistan, where
affordability will pose a formidable challenge to the rollout of DTTV, this option could
prove beneficial.

D. Potential challenges

1. New and different costs for broadcasters

 For a transitional period there will be increased costs for broadcasters, e.g., new
studio equipment (e.g., special lights and cameras), new post-production efforts,
specially trained staff, and new technological demands (e.g., multiple audio streams
and metadata).
 Even though these costs will be offset by lower monthly transmission fees, they will
still have to be borne by broadcasters, particularly at the outset.

2. Changes in business models

 Broadcasters will be able to shift their focus away from transmission and toward
content production under DTTV. Broadcasters that have the cash to pay the monthly
DTTV transmission fee can generally continue to operate as they have, broadcasting
on one channel full-time. These broadcasters will likely have more money to
improve content, operations, and services because of lower monthly costs of DTTV
transmission.
 Other broadcasters that cannot pay the monthly cash amount to fund their own
channel independently full-time will have to look at their businesses in new ways.
They could, for example, try part-time broadcasting, form networks of broadcasters
and share channels and programs.

3. Costs of set-top boxes

 Homes that currently receive television through analog terrestrial will require either
televisions with digital receivers or set-top boxes that will allow their analog
televisions to receive the digital signal. It has been estimated that basic free-to-air
set-top boxes for the Afghan market may cost approximately $20 USD each.
 There needs to be a discussion about subsidizing these costs.

4. Set-top box subsidization

 In some markets, the government has subsidized set-top boxes.
 For example, in the United States, the government subsidized two $40 USD coupons
per household to go toward the purchase of any set-top box (e.g., to receive only
the free-to-air box, which cost $40 USD, or to pay part of the costs of more expensive
boxes with more services). These coupons were not means-tested, meaning they

22
 were available to all, and they were funded from proceeds of the DTTV spectrum
auction.
 Other countries have opted for means-tested subsidies. In a number of places with
a subsidy program, actual uptake of the subsidies was less than originally estimated
because the audience had or purchased digital televisions or opted for more
advanced, unsubsidized boxes.
 The socioeconomic situation of the country must be taken into consideration. The
poorest members of society are usually those using receiving equipment that cannot
be adapted for digital reception.
 There is thus a real risk that vulnerable groups will be deprived of broadcasting
content if the government does not address the issue of subsidies or other support.

5. Examples of set-top box subsidization from elsewhere

 South Africa—Subsidies proposed range from 66% for households with no income
to 15% for those earning up to a certain minimum amount. In certain geographical
areas with special need for digital services, the subsidy ranges from 29% to 77%
depending on income level.
 India—The government offers a plan of up-front partial payment and the balance in
installments.
 Kenya—The government pays subsidies directly to importers of the equipment in
order to cut by up to half the current prices of the digital receivers.

6. Potential digital cliff

 Those who fall off the “digital cliff” are those with televisions too remote to receive
a digital signal, and will thus lose all television service upon the switchover to DTTV.
 While DTTV will provide drastically improved picture and sound for many Afghans,
those outside transmission range run the risk of falling off what is referred to as the
“digital cliff:” while analog TV lets users far from a tower receive an image (albeit a
fuzzy one), the “all or nothing” aspect of DTTV may mean that televisions in the most
remote locations may stop receiving any kind of signal.

7. Regulatory changes
 The structure of licenses in the digital system is different than in the analog in that
transmission and content are separated: with DTTV, the license for broadcasters
does not include transmission. The MoIC will continue to license broadcasters for
content and conduct certain monitoring and enforcement activities.
 With regard to transmission, issues of access to platforms become paramount. There
is a risk of abuse of dominance of the multiplexes, which needs to be addressed.
Relevant ministries will have to implement new regulatory processes, and the
industry will have to adapt to those changes. For example, the MoCIT has issued a
new license for the DTTV network operator and will extend existing analog TV
licenses only where there is not sufficient digital coverage or where they have only
recently been introduced. The MoCIT will also have to conduct certain new
regulatory activities including monitoring quality of service and pricing.

23
8. New competition
 The digital transition will usher in new competition for broadcasters.
 They will find themselves competing with foreign content, often of a higher quality,
and Afghan content from other areas.
 They will no longer exist on discrete islands, protected geographically from their
competition.
 This is the same competition they have been receiving from satellite and cable
distribution in the past, and more recently from Internet and other new media, but
now new channels will be available to anyone with a television and a digital receiver.
 This competition—while likely to stoke the fears of broadcasters—is, however, good
for the Afghan consumer.

9. Need to offer something new

 It is widely understood by global industry experts that, given the changes and
expenses required on the part of broadcasters and the audience, digital transition
must offer something new: more content, better channels, new services, lower
operational costs, extended coverage, new audiences, and new business
opportunities.
 If, after transition takes place, television looks and feels the same as before, the
transition will be viewed as a failure. As a result, all stakeholders have an interest in
making the transition as broadly beneficial as possible.

24
VII. Brief introduction to telecommunications-specific regulation

A. Why regulate telecommunications markets?

1. Markets have liberalized

• Limited regulation because government is sole operator and regulator

Public
Monoply

• Greater regulation because private operator must know its rights and
obligations and government needs regulatory framework for oversight of
Private
Monopoly operator

• Greater need for regulation as the regulator must implement tools to

address new competitive market (e.g., rules regarding potentially anti-
Partial
Competition competitive practices, licensing framework, universal service, tariffs)

• More limited regulation as competitive market largely regulates itself;

Full there is a shift toward ex-post, competition-based regulation
Competition

Source: ITU ICT Regulation Toolkit

2. Need to encourage and protect investment

 Telecommunications regulation supports private investment in, and private
ownership of, telecommunications infrastructure.
 By giving investors legal certainty that they will be able to make investments and
supply particular types of goods and services, those investors will be able to retain
ownership and control over their assets and infrastructure.
 They will then be allowed to achieve a reasonable or acceptable real rate of return
on their investment/assets.
 They will then invest more and more willingly.
 This is particularly important for attracting foreign investment.

3. Need to regulate markets and encourage competition

The following excerpt, taken directly from an ITU Telecommunications Regulatory

Handbook, provides an excellent discussion of telecommunication markets and
competition:

25
Competition policy provides a set of tools to promote sustainable competition and to
preserve a market environment in which such competition can flourish. Competition
policy may be implemented through general competition laws or through competition
enhancing rules in specific sectors. In addition, it must be weighed against other policy
objectives, such as consumer protection and the development of a viable
telecommunications industry.

In the ICT sector, such rules might include:

 General prohibitions on anti-competitive behavior and mergers or acquisitions that
would reduce competition (as in the case of Hong Kong, [South African Republic],
China), or
 Specific rules designed to encourage competition in the sectors, such as
interconnection requirements or unbundling policies.

Competition laws (or antitrust laws, as they are called in the [United States]) aim to
promote efficient competition by penalizing or undoing conduct that reduces
competition in a market. Competition laws generally include provisions to:
 Prevent competing firms from banding together (“colluding”) to increase prices or
reduce quantities of goods and services, or to exclude other firms from a market,
 Prevent firms with a dominant position, or significant market power, from using their
market power to exclude competitors from the market, or otherwise reduce
competition,
 Stop mergers or acquisitions that would reduce competition. With the exception of
provisions for mergers and acquisitions, competition laws are generally ex post
regulation. They give the competition authority or the courts powers to respond to anti-
competitive behavior once it has occurred.

Regulation is useful where the market alone would produce undesirable or socially
unacceptable outcomes. Regulation attempts to prevent socially undesirable outcomes
and to direct market activity toward desired outcomes. For example, ICT regulation is
widely used to promote prices that reflect efficient costs and promote universal access
to basic services.

However, regulation has potentially high costs. The regulatory process is inherently
time consuming to administer and requires considerable expenditure of resources. In
addition, regulation can have unintended consequences which may be detrimental to
customers and the public interest. No matter how capable and well-intentioned
regulators are, they will never be able to produce outcomes as efficient as a well-
functioning market.

Accordingly, regulation should only focus on those parts of the ICT sector where there
is a clear need for regulation (that is, where effective competition is not feasible) and
should only be a temporary measure. Over time, regulators should aim to establish or

26
 restore the conditions that provide for effective competition on a sustained basis. This
entails, for example, removing or reducing barriers to entry and exit. It also involves
enabling the market itself to prevent the incumbent from abusing its market power, for
example, through the entry of additional competitors.
Source: ITU Telecommunications Regulations Handbook, 2011, The International Bank for Reconstruction and Development/The
World Bank, InfoDev, and The International Telecommunication Union

B. Important telecommunications issues requiring a regulatory response

1. Mobile number portability

 Mobile number portability (MNP) enables mobile telephone users to retain their
mobile telephone numbers when changing from one mobile network operator to
another.
 MNP is normally required of mobile operators through regulations and is enforced
as part of the license. Regulations will set out rules making the process of switching
operators easy and standardized.
 MNP is important for telecoms markets because it removes a bar to switching that
keeps those with much equity in the number—in particular many business users—
prisoner behind a high switching barrier.
 The reduction in barriers to switching is of particular benefit to challenger operators
against dominant incumbents.
 Typically, when MNP is implemented in a country, a rise in churn (where users switch
between providers) follows.
 This thus fosters competition among providers by incentivizing them provide
services at prices that will help them retain their customers.

2. Access to networks and infrastructure and interconnection

a. Economic justification
 Telecommunications infrastructure is expensive, and space for it is necessarily
limited
 Regulators therefore require colocation and sharing of this infrastructure through
regulations requiring access to networks and infrastructure.
 Such regulation is designed to cut down on costs and encourage the efficient use of
resources
 This will result in savings that can be passed on to the consumer, resulting in lower
tariffs.

b. Regulatory response
 Regulations often encourage operators to negotiate and agree to allow and obtain
access on their own, with no regulatory intervention, according to terms determined
by the market.

27
  Regulation must allow, however, for the regulator to step in and require access
where agreement is not voluntarily agreed, including a regulatory determination of
fair compensation to the operator providing access.

c. Interconnection
 Interconnection is a type of access to networks.
 Specifically, interconnection is the physical linking of a carrier’s network with
equipment or facilities not belonging to that network.
 The term may refer to a connection between a carrier's facilities and the equipment
belonging to its customer, or to a connection between two (or more) carriers.

3. Universal service obligations

 A universal service obligation is the obligation placed on universal service providers
to ensure that telephone service and other services, such as internet, are reasonably
accessible across a territory on an equitable basis, wherever people reside or carry
on business.
 Sometimes funds are developed to pay for universal service obligations, from
telecommunications license fees, for example.
 An example of a universal service obligation is found in the EU Universal Service
Directive), which requires that basic services must be available throughout the
country, including connection to telephone networks at a reasonable price.
 Normally, the selection of any universal service provider must be based on an
efficient, objective, transparent and non-discriminatory procedure.
 All interested companies should be able to take part, and no company excluded from
tendering.

4. Consumer protection issues

 Regulations will set out customer protections, sometimes in concert with other
more general consumer protection legislation.
 The goal of such regulations is to ensure the efficient supply of telecommunication
services to consumers at the minimum cost and minimum sustainable price.
 Consumer protections typically include regulations on billing transparency,
complaints mechanisms and complaints handling, data protection (perhaps in
addition to more general legislation), publication of tariffs and more.

C. Other relatively recent trends in telecommunications regulation

 In developed markets, there is a functional separation between the provision of
services and the establishment and operation of a network. In such regimes, they
are licensed separately, and owners of one cannot own another in order to prevent
monopolies or other anti-competitive behaviors.
 There is increased attention to the need to protect consumers against personal data
breaches and spam, particularly in the European Union.

28
VIII. Brief introduction to regulating the Internet

A. Challenges
 International hosting sites and global sharing mechanisms make determinations of
jurisdiction and liability extremely difficult.
 Anonymity is possible, and even encouraged, on the Internet.
 Determining liability among the various actors involved in the publication of online
content and the operation of online services is a very thorny issue. If, for example,
content is deemed inappropriate, who should be held liable (if anyone)? The
Internet Service Provider (companies or organizations that provide users access to
the Internet, often through a cable or ADSL company), hosting companies (such as
Yahoo and Wordpress) or social media platforms (like Facebook and Twitter)?

B. Examples of regulatory regimes found around the world

 Most stakeholders apart from intellectual property rights holders argue that filtering
is inappropriate, as it is a blunt instrument that over-filters and thus infringes on
freedom of expression or under-filters and is ineffective.
 In most Western countries, online comments are self-regulated or co-regulated,
guided by laws that require news sites or blog owners to manage comments. Blog
hosts like Wordpress have moderating tools to filter comments and require
commenters to provide their names and e-mail addresses.
 All countries apply laws of general application to the Internet in someway, making
activity that is illegal offline (child pornography or theft) illegal when performed
online.
 The United States has very little content beyond laws of general application.
 The European Union has little regulation, other than the fact that it has issued a
directive on notice and takedown.

C. Filtering software at ISP/server level

 Symbolic list of banned URLs (Bahrain, Singapore)
 Filtering software that prevents access to certain broad categories of content (UAE,
Saudi Arabia)
 Pro
o Prevents access to large percentage of content deemed inappropriate in the
country
 Cons
o Prevents access to acceptable content
o Fails to prohibit some content

D. Complaints-based enforcement
 Regulator issues a take-down order in response to user complaints
 Used in Australia
 Pro

29
 o Is not as “overbroad” as filtering software, as it targets only inappropriate
content
 Con
o Is removed only after being visible online
o Only blocks access to content hosted abroad for those who voluntarily use
filtering software

E. Notice and take-down (EU example)

 From the European Union Directive on Electronic Commerce (July 2000)
 A ‘notice-based take-down procedure’
 The EU Directive makes ISPs and hosting companies liable within limits and after
being notified of illegal content on their sites.
 ISPs must have sufficient knowledge of illegal material on the sites they host in order
to be held liable, though ISPs and holders of intellectual property rights differ on
what it means to have ‘sufficient knowledge’

F. Intermediary liability

1. Example from Estonia

 A case from 2009, Delfi AS versus Estonia, regarding the controversy over the
European Directive and the challenge of regulating comments
 Delfi is a popular, widely read Internet platform in Estonia and has its own journalists
and provides original news.
 Delfi published a news story about a private company planning to destroy roads
linking Estonia mainland to its islands, and readers posted offensive comments
about the company’s majority shareholder, who sued for defamation in Estonian
courts. The courts found that the comments were slanderous and awarded the
plaintiff a small sum of money while also ruling that Delfi should instate a policy to
prevent or remove defaming comments.
 As a result, Delfi and other sites have introduced monitoring of offensive comments
and many require user registration to add comments. Such monitoring and codes
of conduct are managed by each private website, and not the state. Delfi has joined
Estonia’s press council in the wake of the case, subscribing to the same self-
regulatory system as print newspapers.

2. United Nations Special Rapporteur position

 The United Nations Special Rapporteur on the promotion and protection of freedom
of expression and opinion, who has stated:

Holding intermediaries liable for the content disseminated or created by

their users severely undermines the enjoyment of the right to freedom
of opinion and expression, because it leads to self-protective and over-
broad private censorship, often without transparency and the due
process of the law…. Censorship measures should never be delegated to

30
a private entity and…no one should be held liable for content on the
Internet of which they are not the author.’ (Report of the Special
Rapporteur on the promotion and protection of the right to freedom of
opinion and expression, Frank La Rue, May 2011.)

31