PRESENTATION TO MCIT STUDY GROUP ON CONVERGENCE REGULATION CONVERGENCE LAW AND REGULATION: SOME LESSONS FROM MALAYSIA

Jakarta 4 May 2011

AXIATA GROUP BERHAD (242188-H)

AGENDA
1. WHY CONVERGENCE REGULATION 2. INTEGRATION OF POLICY SETTINGS AND REGULATORY FRAMEWORKS 3. 3 THE IMPORTANCE OF PRATICAL TRANSITIONAL MECHANISMS 4. INSTITUTIONAL FRAMEWORK - THE CONVERGENCE POLICY MAKER AND SECTOR REGULATOR 5. LICENSING KEY PRINCIPLES, MAPPING AND MIGRATION 6. CLOSING KEY POINTS TO NOTE ON CONVERGENCE LICENSING

1. WHY CONVERGENCE LEGISLATION

What is convergence all about?

The term has variously been used to describe recent technological developments, merger and acquisition strategies and new service and application types. Major global institutions have been attempting to define convergence for the purpose of legislative and regulatory reform:

The ability of different network platforms to carry essentially similar types of services and applications. European Union (1998) Digital convergence can be seen as the coming together of previously technologically y g, p publishing, cable g, and commercially distinct markets such as broadcasting, print p television, fixed wire voice telephony and cellular mobile and fixed wireless access. ITU (1999) p y , previously y The processes by which communications networks and services, which were p considered separate, are being transformed such that: different networks and services carry a similar range of voice, audio-visual and data transmission services, different consumer appliances receive a similar range of services and new services are being ( ) created. OECD (2004)

GRA/Presentation Convergence Law and Licensing /4 May 2011

As a prelude, convergence strategies are now following broader market liberalisation and has led to new licensing approaches

South Africa
Establishment of ICASA - Expansion of broadband - Promotion of cross platform competition (especially cable v DSL) e-Korea Plan Electronics Comms Act

Korea

- Convergence regulator established - Technical neutral licensing - Encouraging alternative facilities operators (eg power utilities etc)

India
National Telecommunications Policy Communications Convergence Bill

Australia
Telecommunications Act

- Technical neutral licensing - Service and facilities exemptions + class licensing - General competition provisions

Malaysia
National Telecommunications Policy Market liberalisation Convergence Provisions 1994 1995 1996 1997 1998 1999 Communications and Multimedia Act

- Convergence regulator established - Technical neutral licensing - Service and facilities exemptions + class licensing

2000

2001

2002

2003

2004

GRA/Presentation Convergence Law and Licensing /4 May 2011

So, who has adopted a convergence framework closer home?

Countries Malaysia Singapore Indonesia I d i Philippines Thailand Brunei B i Cambodia Vietnam Myanmar Laos
Note: (*) Convergence at Ministerial level (**) Single Regulatory body

Technology Neutral Licensing

Convergent Framework/ Convergence Regulator

* underway d underway d ** ** * X X X X X X X X

GRA/Presentation Convergence Law and Licensing /4 May 2011

Emerging characteristics are now beginning to define the licensing dynamics in convergence markets
Past Segmented modes of service delivery Analogue, dedicated channel, circuit switched Vertically integrated, end-toend delivery Distribution networks as a natural monopoly Investment dominated by physical plant h i l l t Key regulatory focus on interconnection Business markets drive innovation and rollout Discrete national and international markets Stable comparative advantage Future Market pressures

Integrated modes of service Fluid market boundaries and customer segments Increasingly diverse, hybrid solutions for connectivity delivery Digital, synchronous channel, Shift from time-based to flat rate (eg VoIP) charging Shift to commodity based pricing (eg international bandwidth) packet switched Highly segmented, specialised delivery Customer access is fully contestable Investment dominated by software and systems ft d t Key regulatory focus on access and interworking Multi-carrier markets have become the norm Continuing growth of niche market opportunities and vendors Substantially lower barrier to market entry Alternative access technologies (eg cable, fixed wireless) Increased focus on wholesale markets and competition Facilities sharing emerging as a viable strategy for 3G/WiMax Calls for an adaptive and flexible regulatory environment General competition principles apply to sector management

g g Consumer markets drive new Changing economics of network investment Emphasis on retail distribution and service applications applications Interdependent national and Communications industry globalised and trade exposed Alignment of national regulations with global realities international markets Dynamic comparative advantage Skills and IP are key sources of competitive advantage Increasing propensity and velocity of customer churn

GRA/Presentation Convergence Law and Licensing /4 May 2011

Convergence in the Malaysian context integration of value chains of the information & multimedia industries
Integrated convergence business models and policy solutions

P Postal Serv vices

Legacy Business & Policy Frameworks

New Imperatives

GRA/Presentation Convergence Law and Licensing /4 May 2011

Convergence in the Malaysian context defined contd

Convergence is the progressive integration of the value chains of the information and multimedia content industries telecommunications, posts, broadcasting, print, multimedia, e-commerce and data processing into a g, p , , p g single value chain based on the use of distributed digital technology.

Convergence markets are economic markets for: Network services and related services Applications services, i l di A li ti i including content applications services, and related t t li ti i d l t d services Access to necessary facilities

GRA/Presentation Convergence Law and Licensing /4 May 2011

Scope of the convergence regulatory framework networked services

NETWORK SERVICES MARKET
Substitutable services
Postal, physical transport, logistics services

network facilities & services licensing and conditions

TRANSPORT

Network Services Provider

Connectivity services

Networked applications provider pp p

voice & data services, transaction services

Network Facilities Providers

Operating systems &h d hardware

(financial, education, health services)

Networked content providers

radio, cable, free-to-air TV, Interactive content services

Substitutable services Non - networked content

applications providers Traditional financial, education health, media services

Content/applications licensing and conditions - economic & social APPLICATIONS SERVICES MARKET FUNCTION
GRA/Presentation Convergence Law and Licensing /4 May 2011

Newspapers, magazines, CDs, books

Scope of the convergence regulatory framework networked services, contd

Network Facilities Operating systems & hardware

Network Service Connectivity services ser ices

Content and Applications Voice, data, interactive content, e-transactions, radio, TV, Internet

Networked Environment convergence between telecoms and broadcasting

GRA/Presentation Convergence Law and Licensing /4 May 2011

2.

INTEGERATION OF POLICY SETTINGS & REGULATORY FRAMEWORKS

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General Overview of ICT Policy and Initiatives in Malaysia 1983 2010:

Clear policy settings & regulatory mechanisms essential
1983 1986 1991 1994 1996 1997 1998 2005 National Broadband Plan & MyICMS 886 2010

Po olicies

Privatisation Policy

Science & Technology Policy y

National Development Policy y

National Telecomms Policy y

National IT Policy

Economic Transformation Program

Digital Signature Act Copyright Act py g Computer Crimes Act Telemedicine Act Electronic Government Act

Communications & Multimedia Act Malaysian Communications & Multimedia Commission Act

Laws

Im mplementation

Knowledge Economy

Vision 2020

MSC Flagship E-Government Smart School Tele-health Multi Purpose Card R&D Cl t Cluster Cross Flagship

Framework for Industry Development MY Creative Content y 1MY Payment Connecting 1MY E-Learning E-Healthcare

10 Entry Point Projects (EPP) E-Government Broadband for all Broadband Reach Smart Network Regional Network

Multimedia Super Corridor

GRA/Presentation Convergence Law and Licensing /4 May 2011

3 KEY THEMES DRIVING THE 10 EPPs - REFOCUSING IN STIMULATING DEMANDS

DRIVETOWARDSCONTINUEDHIGHGROWTHINCOMMUNICATIONSERVICESANDENABLEPARADIGM SHIFTFROMINFRASTURE&ACCESSTOAPPLICATION&CONTENT

Theme1:ServingTomorrow Platform,Application,Content

Theme2:PushingBoundaries IndustryEnablement

Theme3:Enhancing Foundations NextGeneration Infrastructure

EPP7

EPP1 NurturingMYscreative contentindustry t ti d t EPP2 Deploying1MY payments EPP3 Connecting1MY Connecting 1MY

EPP4 EstablishingELearning

EnsuringBroadband forall EPP8 ExtendingBroadband Reach EPP9 OfferingaSmart Network EPP10 ExtendingRegional Extending Regional Network

EPP5 g LaunchingEHealthcare EPP6 Deepening EGovernment

GRA/Presentation Convergence Law and Licensing /4 May 2011

Capturing policy intent in legislation:

The 10 National Policy Objectives for Communications & Multimedia: Section 3(2) CMA 98

1. Creating a global hub: To establish Malaysia as a major global centre and hub for communications and multimedia information and content services 2. Building a civil society: To promote a civil society where information-based services will provide the basis of continuing enhancements to quality of work and life 3. Nurturing local content & culture: To T grow and nurture local i f d t l l information resources and cultural representation th t f ilit t the ti d lt l t ti that facilitates th national identity and global diversity 4. 4 Ensuring long term benefits for end-users To regulate for the long term benefit of end users 5. 5 Nurturing user confidence To promote a high level of consumer confidence in service delivery from the industry
GRA/Presentation Convergence Law and Licensing /4 May 2011

Capturing policy intent in legislation: Cont

The 10 National Policy Objectives for Communications & Multimedia: Section 3(2) CMA 98

6. Promoting access & equity To ensure an equitable provision affordable service delivery over ubiquitous national infrastructure 7. Creating a robust applications environment To create a robust applications environment for end users 8. Facilitating efficient allocation of resources To facilitate the efficient allocation of resources such as skilled labour, capital, knowledge and national assets 9. Developing industry capabilities To promote the development of capabilities and skills within Malaysias convergence industries 10. Promoting secure and safe networking To ensure information security and network reliability and integrity

GRA/Presentation Convergence Law and Licensing /4 May 2011

An explicit statement of regulatory guiding principles is essential

1.

Transparency and clarity: Transparency and clarity are necessary to ensure that all market participants have a full understanding of the way the regulator implements the Governments policies and have confidence in their investment decisions. Less rather than more regulation: In line with the liberalisation policy for the sector, the focus of the legislation has been in the context of moving towards less regulation where market participants play key roles in developing voluntary industry codes Flexibility: Elements of flexibility have been incorporated to enable long lasting application in line with rapid changes in the industry environment. Focus on generic rules: In developing the new legislative rules, the bias was towards establishing generic rules which have widespread application to provide flexibility so that when there is need for amending any of its provisions, the recourse is only to amend the regulations or subsidiary legislation

2.

3.

4.

Source: MCMC 2002

GRA/Presentation Convergence Law and Licensing /4 May 2011

Key legislation and initial regulatory instruments (1998 2002)

Communications and Multimedia Act 1998 came into force 1 April 1999 law to regulate the converging communications & multimedia industry 10 national policy objectives enshrined principles of new regime: transparency and clarity, less rather than more regulation, flexibility, focus on generic rules, technology neutral, self-regulation, social responsibility, consumer i t t l lf l ti i l ibilit interest t Malaysian Communications and Multimedia Commission Act 1998 setting up of the independent regulatory authority Communications & Multimedia (Licensing) Regulations 2000 Communications & Multimedia (Licensing) (Exemption) Order 2000 Communications & Multimedia ((Spectrum) Regulations 2000 Communications & Multimedia (Spectrum) (Exemption) Order 2000 Notification of Issuance of Class Assignments published Government AssignmentsGazette 1 April 2000 Communications & Multimedia (Technical Standards) Regulations 2000

LEGISLATION

REGULATIONS

Chronology and timing of issuance of instruments is important to provide transparency, clarity and certainty to process
GRA/Presentation Convergence Law and Licensing /4 May 2011

Key legislation and initial regulatory instruments (1998 2002), contd

Ministerial Direction on Universal Service Provision (Direction No. 1 of 2000) Ministerial Direction on Universal Service Provision (Direction No. 1 of 2001) Ministerial Direction on Equal Access (Direction No. 2 of 2001) Ministerial Direction on General Licensing Policies (Direction No. 3 of 2001) Ministerial Direction on Interworking With Other Authorities (Direction No 4 of No. 2001) Ministerial Direction on the Standards on International Mobile Telecommunications 2000 Terrestrial Component (Direction No. 5 of 2001) Ministerial Direction on Quality of Service (Direction No. 1 of 2002) Ministerial Direction to Determine a Mandatory Standard on Access Pricing (Direction No. 1 of 2003) Ministerial Direction to Determine a Mandatory Standard on Access (Direction No 2 of 2003) No. Ministerial Direction on Quality of Service, Phase Two (Direction No. 3 of 2003)

INSTRUMENTS

Ministerial Instruments

Ministerial Determination on Spectrum Reallocation (Determination No. 1 of 2002)

Commission Instruments

C Commission D t i i Determination on Access List (Determination No. 1 of 2001) i ti A Li t (D t i ti N f Commission Determination on Universal Service Provision (Determination No. 2 of 2001) Commission Determination on the Mandatory Standards for Quality of Service ( (Public Switched Telephone Network Service) p ) (Determination No. 1 of 2002) Commission Determination on the Mandatory Standards for Quality of Service (Public Cellular Service) (Determination No. 2 of 2002)

GRA/Presentation Convergence Law and Licensing /4 May 2011

3.

THE IMPORTANCE OF PRACTICAL TRANSITIONAL MECHANISMS

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Broad overview of the Communications & Multimedia Act 1998: Clear Transition Provisions Essential for Regulatory Certainty
Legislation divided into 11 Parts Part II: Ministerial Powers & Procedures Ministerial Determination Ministerial Declaration Power to make regulations Part III: Appeal Tribunal Appointment of Chairman (High Court Judge) by Minister Review decision/direction of MCMC Part IV: Licences 2t types of li f licences i di id l and class individual d l Part V: Powers & Procedures of the MCMC Commission Direction & Determination Conduct of public inquiry Resolution of disputes Power to gather information / investigate Industry forums Mandatory standards Part XI: T P t XI Transitional provisions iti l i i Transition process
GRA/Presentation Convergence Law and Licensing /4 May 2011

Part VI: Economic Regulation Licensing Prohibition on anti-competitive conduct p Access regime Part VII: Technical Regulation Prohibition to use spectrum without assignment Numbering/electronic addressing/standards Part VIII: Consumer Protection Consumer complaints Universal Service Part IX: Social Regulation Licensing of content Prohibition on offensive content Content Forum Part X: General Offences/penalties/general enforcement

Transition Process

The CMA has specific provisions to address the transition process from old regime to new regime. A clear transition process is important as it provides certainty to existing licensees. Key issues for an existing licensee would typically be: What happens to the existing licence? Is there a requirement to migrate? If yes, what are the advantages and disadvantages of migrating to a new licence? Relevant procedures for transition or maintenance of an R l t d f t iti i t f existing licence Timeframe for transition

GRA/Presentation Convergence Law and Licensing /4 May 2011

Transitional Provisions Under CMA

Operator Licences
Choice of migrating to new licences or remain on old licence

New Operator Licences Communicati ions & Mul ltimedia Ac 1998 ct

Telecomm munications Act 1950 s

Broadc casting Act 1988

Determination of initial

Regulations
Preserved P d

Listed services & facilities

Customer equipment licensing Equipment retail licensing tariffs

New Regulations
Supersede old regulations p g

GRA/Presentation Convergence Law and Licensing /4 May 2011

Transitional Provisions Under CMA, contd

Existing licensees have certain transitional obligations
Intention to migrate to new licence Intention to retain existing licence

Licensee indicates intention to migrate or remain on existing licence

Register existing licence

Register existing licence

Apply for new licence

Old licence continues

New licence granted / refused

GRA/Presentation Convergence Law and Licensing /4 May 2011

Transitional Provisions Under CMA, contd

Commencement of new regime

Last day for existing licensees to register existing licence (s 278) & indicate intention to migrate (s 280)

1 April 1999

1 April 2000

Licensees indicate intention to migrate or not migrate (s 280) Licensees register existing licences (s 278)

Holders of registered licences may seek new licence (s 281)

Registered licences g Continue in existence (s 278) Holders of registered licences may seek new licences (s 281)

GRA/Presentation Convergence Law and Licensing /4 May 2011

4.

INSTITUTIONAL FRAMEWORK : THE CONVERGENCE POLICY MAKER AND SECTOR REGULATOR

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Institutional Framework
The set up 1 Nov 98 Redefinition of the Ministrys functions and f i d formation of MCMC Ministry of Energy, Telecommunications & Post 1 Apr 99

Ministry of Energy, Communications & Multimedia* Malaysian Communications and Multimedia Commission formed

Replacement of sectoral Acts by a convergence Act Replacement of sectoral regulators b a l t by convergence regulator

Telecommunications Act 1950 Communications and Multimedia Act 1998 Broadcasting Act 1988

JTM Ministry of Information (Licensing Division)

Malaysian Communications and M lti di d Multimedia Commission Act 1998

(*) Note: 7 January 2003 - Ministry of Energy, Water & Communication (MEWC) 9 April 2009 Ministry of Information, Communications & Culture (MICC)
GRA/Presentation Convergence Law and Licensing /4 May 2011

Institutional Framework
The set up..

Parliament

Ministry (Policy Setting)

Direction Di ti Appeal Tribunal

Recommendation R d ti
Selfregulation: Access Consumer C&M Postal Digital Signature Content Technical

Referral

Commission (Regulator)

Liaison

Industry Fora

Industry Players

GRA/Presentation Convergence Law and Licensing /4 May 2011

Institutional Framework
Roles and Responsibilities of Policy Maker Ministry of Information, Communications & Culture

To PLAN, IMPLEMENT, FACILITATE AND RE-EVALUATE policies and information programs to elevate peoples receptiveness towards Vision 2020 To PLAN, IMPLEMENT AND FACILITATE management services and delivery systems To DISSEMINATE information related to philosophy policy and national program effectively to PRODUCE philosophy, knowledgeable, informative and cultured community. To DEVELOP, SET UP AND REGULATE communication facilities and services and content industry To INSTILL arts, culture and heritage through arts and culture programs and activities towards One Malaysia To ENHANCE national revenue through contribution from creative and communication industry To PRODUCE knowledgeable, creative and innovative human capital

GRA/Presentation Convergence Law and Licensing /4 May 2011

Institutional Framework
Roles and Responsibilities of Regulator Regulator - Malaysian Communications and Multimedia Commission (MCMC)

to ADVISE the Minister on all matters concerning the national policy objectives for communications and multimedia activities; to IMPLEMENT and ENFORCE the provisions of the CMA to REGULATE all matters relating to communications and multimedia activities not provided for in the CMA to CONSIDER and RECOMMEND reforms to the law; to SUPERVISE and MONITOR communications and multimedia activities; to ENCOURAGE and PROMOTE the development of the C&M industry; p y; to ENCOURAGE and PROMOTE self-regulation; to PROMOTE and MAINTAIN the integrity of all persons licenced or otherwise authorised; to RENDER ASSISTANCE in any form to, and to promote cooperation and coordination amongst, persons engaged i C&M activities; and d in ti iti d to CARRY OUT ANY FUNCTION under any written law as may be prescribed by the Minister by notification published in the Gazette.
Note: N t on 1 N November 2001 MCMC took over the regulatory functions of the Postal Services Act 1991 and th Di it l Si b t k th l t f ti f th P t l S i A t d the Digital Signature A t 1997 t Act 1997.

GRA/Presentation Convergence Law and Licensing /4 May 2011

Institutional Framework
Roles and Responsibilities of Industry Fora Industry Fora Self Regulating Bodies

Access Forum

Content Forum

Consumer Forum

Technical Forum

to PRODUCE Voluntary Industry Codes which guides industry conduct participation from both consumer and service suppliers for the benefit of consumers

GRA/Presentation Convergence Law and Licensing /4 May 2011

5.

LICENSING KEY PRINCIPLES, MAPPING AND MIGRATION

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Licensing under the CMA Its role:

To facilitate market access and competition - via a transparent licensing framework where the processes to apply and qualify for a licence are clear p pp y q y To control market behaviour once a licensee, there are conditions and rules to govern what conduct is permissible and what is not To promote the national policy objectives espoused under the CMA and development of the C&M industry

Implementation involved:
Facilitating the entry of new players into the market g y p y Migrating the old licensees issued under the repealed Telecommunications Act and Broadcasting Act into the new converged licensing framework under the CMA

GRA/Presentation Convergence Law and Licensing /4 May 2011

What economic licensing for convergence actually means

Repealed Telecommunications Act and Broadcasting Act

Communications and Multimedia Act 1998 Content Services Applications Services Network Services Network Facilities

* In total, there were 29 types of telecom licences

Broadcast ting licence e

Under the old licensing framework, all activities related to the provision of a particular service are vertically integrated for th f the provision of that service i i f th t i
Source: MCMC presentation to industry 2005
GRA/Presentation Convergence Law and Licensing /4 May 2011

The new licensing framework promotes vertical separation between facilities, network, applications, and content Caters for new convergence service that may not be in market today

Thus, service-specific licenses are no longer issued

Various licensing combinations

CASP ASP NSP Service specific licenses, e.g. for the provision of telecommunications or broadcasting services will no longer be issued. Providers can therefore now P id h f choose which segment of a market they wish to enter facilities and/or service.
Source: MCMC presentation to industry 2005
GRA/Presentation Convergence Law and Licensing /4 May 2011

ASP

ASP NSP

NFP As an example, a company wishing to example provide facilities-based telecommunications and wholesale services need only be issued with individual NFP and NSP l d d l d licences. This company will not require separate or additional licensing if it wishes to deploy new technologies, e.g. 3G. d l t h l i 3G

Types of economic licences under the CMA

Two types of licenses are issued for each category, t for ASP* except f ASP*. Only activities with significant economic or g social impact are individually licensed. The long term objective is to move towards less regulation. CASP ASP NSP NFP

Less regulation g
CASP ASP NSP NFP
Class

CASP ASP NSP NFP

Exempt

Individual
Source: MCMC presentation to industry 2005 * From 1 April 2005
GRA/Presentation Convergence Law and Licensing /4 May 2011

Licensed

Unlicensed

CMA Licensing Environment

Generic provisions of Act apply to all relevant activities p pp y Standard licence conditions common to Individual and Class licences d dua a d C ass ce ces Standard Licence Conditions common to Individual Licences Special conditions Undertakings Individual
Source: MCMC presentation to industry 2005
GRA/Presentation Convergence Law and Licensing /4 May 2011

Class

Exempt

Licence mapping process

Old Licence Under Telecommunications Act / Broadcasting Act

CMA Licence

Remarks

Domestic Network Operators Mobile Cellular Very Small Aperture Terminal Services

NFP individual NSP individual

Control market entry and ownership of significant national assets Monitor operations Compliance with minimum standards Monitor operations & compliance with minimum standards Monitor operations & compliance with minimum standards

ASP class NFP class NSP class ASP class CASP individual

Paging Service Trunk Radio System

Commercial free-to-air TV Commercial radio broadcasting

Control market entry & monitor operations Protect community values & standards Compliance with minimum standards

GRA/Presentation Convergence Law and Licensing /4 May 2011

Snapshot of licensable activities under CMA

INDIVIDUAL LICENCE CASP

Satellite broadcasting Subscription broadcasting Terrestrial free to air TV T t i lf t i Terrestrial radio broadcasting

CLASS LICENCE
Limited content applications service limited in its availability to (i) vehicles, vessels, etc; (ii) single commercial or residential building; (iii) restricted geographical area PSTN, Public cellular services, IP telephony Public payphone service Public switched data service Audiotext hosting services, Directory services Internet access services, Messaging services Niche customer access Niche connection service

EXEMPTED ACTIVITIES
Internet content services

ASP

PSTN, Public cellular services, IP telephony Public payphone service Public switched data service (note: shifted to class from 1 April 2005)

Electronic transaction services Interactive transaction services Networked advertising boards Web hosting or client server

NSP

Bandwidth services Broadcasting distribution services Cellular mobile services Access applications services, Space services Switching services, Gateway services

Incidental network services LAN service Private network service

NFP

Earth station, Fixed links and cables Radio communications transmitters and links Satellite hubs, Satellite control station, Space station, Submarine cable landing centre, Towers, poles, ducts and pits used in conjunction with other network facilities

Niche or limited purpose network facilities

Broadcasting and production studios t di Incidental network facilities Private network facilities

Source: MCMC website

GRA/Presentation Convergence Law and Licensing /4 May 2011

Technical authorisation for spectrum use options available

Spectrum Assignment Overall purpose: p p

Apparatus Assignments Overall purpose: p p

Class Assignment Overall purpose: p p

Control the use of scarce spectrum resources Minimise spectrum interference Authorises a person to use one or more specfied frequency bands for any purpose in accordance with the assignment conditions

Control the use of devices which use scarce spectrum resources Minimise spectrum interference Authorises a person to use a specified frequency band to operate a network facility of a specified kind or for a specified purpose

Minimise spectrum interference Ensure compliance with minimum standards

When used:

When used:

When used:

Spectrum frequencies which are used for provision of major communication services or command a high market value

Apparatus which use spectrum for the provision of major communications services

Apparatus which use spectrum which may cause interference with other licensed activities

GRA/Presentation Convergence Law and Licensing /4 May 2011

Technical authorisation for spectrum use, contd

Spectrum Assignment

Apparatus Assignments

Class Assignment

Previously under old regime, no y g spectrum assignments were issued. There is no migration issues to be dealt with. First spectrum assignment was issued f 3G i 2003 i d for in 2003.

Fixed e.g. coast station, g aeronautical fixed station, land station. Space e.g. space station, broadcasting satellite station, fixed t llit t ti fi d satellite station Mobile e.g. aircraft station, ship station, aeronautical mobile station, mobile station, cellular radio base station trunked radio station, station, paging base station, Broadcasting e.g. broadcasting transmitter, broadcasting repeater Migration issues as previously regulated as radiostation licences under old regime.

Amateur station Cellular station Citizen band station Cordless telephone Medical and biological telemetry Security devices Wireless microphone station

Liberalisation

GRA/Presentation Convergence Law and Licensing /4 May 2011

The migrating process was most challenging migrating old licensees to new regime

1998 MCMC

1999 - 2000 Regulations

2001 2002 Migration I

2003 Migration II

MCMC - 1 Nov 08 Staffing Resources

Industry sessions y Drafting subsidiary legislations Managing transition process - interim arrangements on access, numbering - registration of old licences by designated date (1.4.00) to ensure continued validity Migration for radio & broadcasters completed first by July 2000

Series of consultations with licensees Mapping process Principle of no worse off Draft licence template Indication of intention to migrate All major telcos issued their individual licences from May 2001 onwards Minister issues niche guidelines & NFP/NSP class licences Sept 02 Briefing to licensees - Nov 2002 & break out breaksessions

Migration of remainder of licensees to class licence regime from Jan 03 onwards

GRA/Presentation Convergence Law and Licensing /4 May 2011

Number of CMA licensees (as at Quarter 4 2010)

NumberofLicences
600 500 Individual 400 Class 300 200 100 0 NetworkFacilities Provider NFP NetworkService provider NSP ApplicationsService Content Provider ASP ApplicationsService provider CASP 114 29 116 30 52 29 526

Note: Licenses issued under the repealed Acts but registered pursuant to s 278 of CMA.
GRA/Presentation Convergence Law and Licensing /4 May 2011

Some suggested overarching principles that can govern licence migration are as follows:
Facilitate entry into convergence markets (including ability to offer content services if applicable; Is not inconsistent with the local Companies Act and does not jeopardise listing on any stock exchange, where applicable; Adds value to underlying asset base, service offerings and competitive position so as to increase a companys market capitalisation; Conditions leave the company no worse off than its old licence; Avoids the imposition of asymmetrical regulation on the company which reduces its freedom and ability to compete; Allows corporate restructuring to meet the challenges posed by market and technology convergence; Minimises licence fees, administration and compliance costs;

GRA/Presentation Convergence Law and Licensing /4 May 2011

6.

CLOSING SIGNIFICANT POINTS TO NOTE ON CONVERGENCE LICENSING

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The push for convergence licensing arrangements should focus on the following:
Clear policy settings and national vision for the ICT sector; Adopting industry licensing structures where there is a split between facility and service based operators (such as that in jurisdictions such as Malaysia Singapore Malaysia, etc). Endorsing a framework where there is both individual and class licensing arrangements for both facilities and service based operators to reduce the burden of unnecessary and intrusive regulation in certain parts of the industry. Creating a set of practical transitional mechanisms for existing licenses (such as sunset provisions) where moving to a technologically neutral licensing regime regime. Ensuring fair and transparent conditions and obligations should be universal in the licence, that leave the company no worse off than its old licences. Making the reasons for not granting a license [or an extension to a license] transparent and known to the applicant. Clear licence mapping and migration processes that aim to provide certainty to licencees and potential investors.
GRA/Presentation Convergence Law and Licensing /4 May 2011

Thank You
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