HONG KONG, December 4, 2006–Global regulators had a mixed message for the telecommunications industry here on Monday: Governments should ease restrictions on companies in the presence of competition–but otherwise tighten them.
At the opening forum at Telecom World 2006, government officials from China, Hong Kong, the European Commission and International Telecommunications Union delivered a similar message, but with varying degrees of specificity.
Vivian Reding, the European commissioner responsible for information society and media, was the most direct: “Competition and open markets drive investment and innovation. Monopolies don’t.”
Reding and the other regulators spoke here at the triennial conference of the ITU, a hybrid international body based in Geneva, Switzerland, that is part of the United Nations. The union represents telecommunications companies as well as U.N. member states.
Taking a jab at the U.S. approach to telecommunications, Reding said, “When we look at fiber by incumbents, the mere installation of a new technology cannot, in itself, change the application [of rules]. That is why the European Commission rejects regulatory holidays for next-generation networks.”
She went even further, suggesting a long-term role overseeing a “functional separation between the access loop, or bottleneck, from the rest of the business,” and praised recent actions by regulators in Britain, Ireland, Italy and New Zealand aimed at doing that.
By contrast, over the past three years the U.S. Federal Communications Commission has rejected a long-term role overseeing the local access loops of Bell telecommunications carriers. And it has liberalized regulations when Bell companies like AT&T, BellSouth, Qwest Communications International, and Verizon Communications deployed fiber-optic investments.
Reding also suggested that the government exit the business of regulating radio frequencies. “The way we manage spectrum has to change,” she said. “With spectrum, we should get out of the rigid command and control and move to a more flexible approach.”
Reding, whose responsibilities include suggesting legislation for implementation by European Union member states, said that the wireless market was more competitive than its land-line counterpart. “The barriers [to competition] are bureaucratic; they are not technical. It is these governments’ duty to get rid of those barriers.”
Speaking at a news conference that followed the opening forum, outgoing ITU Secretary-General Yoshio Utsumi noted the contrast between the heavily regulated telecommunications industry and the generally unregulated technology industry. Agreeing with Reding, he said that the convergence of these sectors into a unified “information and communications technology” sector poses challenges for regulators.
“My personal view is that less and less regulation is necessary. The reason why the telecommunications industries were heavily regulated was that it was a monopoly dominated by a monopolistic service provider,” Utsumi said.
“Telecommunications is the hub of the society and it was a public utility, and there were many reasons to protect users from abuse of power,” he said. “However, telecommunications services are becoming more and more normal commodities. I may be wrong on this, but it becoming an ordinary thing due to competition. The reason or basis for regulation is becoming less and less” necessary.
Regulators from China and Hong Kong offered more general comments on the future role of regulators.
Xudong Wang, head of the Department of Foreign Affairs’ Ministry of Information Industry, said during the forum that China aims to foster greater Internet deployment in its rural areas.
“The Internet has brought us a great convenience, but also a challenge of hacking and computer viruses,” Wang said through an interpreter. “To address these problems, the Chinese government is improving laws fostering industry self-discipline and regulatory mechanisms : to encourage healthy cyberspace activities.”
China has the largest number of telephone subscribers, leading the world with more than 400 million wireless and more than 350 land-line subscribers, said Wang. But it comes in second in gross number of broadband subscribers: China had 38 million subscribers at the end of 2005 to the United States’ 49 million, according to an ITU report released Sunday.
“China is still a developing country with low telephone and Internet [penetration] rates,” said Wang. Although almost all government administrative villages in rural areas have access to telephones, he said that the government’s goal is to provide broadband access to citizens–including farmers–in every town by 2010 “so as to achieve coordinated, secure and harmonious” economic development.
Wang also encouraged foreign telecommunications and electronics companies to invest in China. “The Chinese government will protect the lawful rights of all foreign investors; we also encourage Chinese” companies to compete in that marketplace, he said.
Henry Tang, financial secretary in the government of the Hong Kong–which is considered a “special administrative region” of China–also raised the issue of expanding broadband access to the world’s poor, a subject that emerged Monday as another key theme of the conference.
“It is squarely government’s responsibility to reduce this digital divide in a modern and progressive society,” said Tang.
He referred to an “access divide, a usage divide, and a usage quality divide” that each need to be rectified. He, Utsumi and others touted the ITU’s role in hosting the forums constituting the World Summit on the Information Society in 2003 and 2005, which they credited with initiating the current debate on the global digital divide.
Also speaking at the conference on Monday were the chief executive officers of top telecommunications carriers and equipment providers Cisco, Ericcson, Motorola, NTT DoCoMo, Nortel and Orange.
On Monday, Cisco announced that it would contribute $1 million to a joint project with the Grameen Bank, the ITU and Qualcomm designed to help bring information and communications technologies to the world’s poor.
Originally published at:
http://www.drewclark.com/2006/12/global-regulators-mixed-message.shtml
and
http://www.publicintegrity.org/telecom/telecomwatch.aspx?eid=2247
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