Executive Development Program January 30th February 4th

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(Executive Development Program)January 30th
February 4th
Licensing

University of Zambia
NetTel_at_Africa
prepared presented by David Mukosa
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• Licensing

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Sessions Learning Objectives

• Provide learners with knowledge of the role
  of licensing as it relates to competition

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Learning Outcomes

• Upon successful completion of this executive
  development program, the learner will be able to
  explain
• - the effective role of regulators in
• licensing and related issues

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Licensing Session Summary

• Definition of License
• Purposes of Licensing
• Principles of Licensing
• Methods of Issuance
• Public Participation
• Licensing Conditions and Content
• License Application
• Licensing Obligation
• Discusssion

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Licensing

• Definition of License
• - simply stated legal document authorizing
  an entity to provide telecom service or operate
  telecom facilities
• License defines rights and responsibilities
• License states regulatory certainty and use of
  Licensing

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Purpose of Licensing

• - manage market access
• - fair allocation of scarce resource
• - control markets
• - ensure quality of service and
• other standards necessary for
• interoperability

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Issues on Licensing

• Kind of License vs. its application
• What kind of known telecom licenses have
  issued in your country?
• License application bid items
• License process
• License vs. unlicensed but regulated

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Principles of Licensing

• The principles of licensing are based on
• The public interest
• Transparency
• Public participation
• Fairness
• Non-discrimination
• Efficiency

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Methods of Issuance

• Regulator / Ministry decides on market
• structure goal after investigating
  conditions
• Political influence
• - Do governments exert political influence on
  license issuance? Examples?
• Methods
• Comparative Evaluation Pprocess /
  Auctions / Lotteries

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Methods of Issuance

• Comparative Evaluation Process (Beauty Contest)D
• Regulator or another government agency decides
  to whom the relevant spectrum is to be assigned.
  It provides an approach for choosing among
  multiple applications that are substantially
  equal.
• raDisadvantages evaluation is slow and costly,
  a lengthy process, a subjective process likely to
  be reviewed in the courts
• Advantages if process is done properly, the
  best applicant is awarded the license

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Methods of Issuance

• Auction6
• Initial requirement technical and financial
  ability,local participation or empowerment /
  affirmative action for entry as auction bidder
• Advantage process is short and cost saving to
  gvt
• Disadvantage often money to be used to build a
  network is spent buying a license, thus,
  consumers disadvantaged with higher prices

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Methods of Issuance

• Lottery options
• Initial requirement technical and financial
  ability, local participation or empowerment /
  affirmative action for entry as lottery player
• Advantage- least time required to carry out a
  lottery and therefore a reduction in costs
• Disadvantage- in some cases winner simply use the
  process to buy a lottery ticket, resell license
  for profit and never operate a network. So
  getting the best applicant is difficult

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Process of Issuance

• Licensing the incumbent operator
• - Deemed license?
• Parallel licenses for incumbent and new entrants
• Licensing of new entrants
• individual licenses

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Public Participation

• Public should be invited to participate in the
  process
• Invitations should be transparent, e.g, published
  in electronic and/or other media freely available
  to the public
• Criteria for licensing be based on public
  interest (however defined) and not on the
  interests of any one or more of the parties

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Licensing Conditions/ Content

• Uniform conditions for similar category of
  operators
• Explicit conditions - eases enforcement
• Transparencys impact on incentives for
  investment and market entry

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Licensing Conditions /ctd.

• Rules for investigation and suspension or
• revocation of license
• Spectrum allocation
• Services offered
• Regional harmonization
• Resale or transfer restrictions
• Defines rights and responsibilities of
• Licensee

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License Application

• Prospective licensee must apply for and obtain a
  license before providing a service
• Advantage- is independent regulator has a chance
  to evaluate the type of service proposed to
  ensure that the right category of license is
  granted
• Disadvantage-is there is a high use of the
  independent regulators resources to consider
  such applications

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License Application

• Financial standing of operator
• National ownership
• Interconnection costs
• Licensing revenues
• -Initial fee and share of ongoing revenues

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License Obligations

• Universal service
• Other social obligations
• Human resource development
• Minimum ownership and control by
• certain categories of persons
• Donations to school, hospitals, and
• charities e.t.c

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Discussion

• In your country what conditions do you see as
  barriers to market entry?

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Reading Material

• Principles and Practices of Interconnection
  Networks, William James Dally Brian Towles
• Handbook of Telecommunications Economics, Vol 1.
  Martin E. Cave,Sumit K Majumdar Ingo Vogelsang
• Pricing Communication Networks, Costas Cour
  coubetis Richard Weber
• Competition in Telecommunication, Jean-Jacques
  Laffont and Jean Tirole

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• H. Intven, J. Oliver and E. Sepu'lveda,
  Telecommunications Regulation Handbook, Module 3
  - Interconnection (2000)
• http//www.infodev.org/projects/314regulationhandb
  ook/
• Asia-Pacific Economic Cooperation (APEC)
  Telecommunications and Information Working Group
  materials on interconnection from1999
  http//www.apectelwg.org/apecdata/telwg/interTG/AT
  TZ2FG1.htm
•  

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• International Telecommunication Union, Trends in
  Telecommunication Reform 2000-2001 -
  Interconnection Regulation
• Michael Klein and Philip Gray, Competition in
  Network Industries- Where and How to Introduce
  it, Note No.104, Private Sector, The World Bank
  Group, January 1997
• W Melody, Telecom Reform - Principles, Policies
  and Regulatory practice, Chapter 5-
  Interconnection Cornerstone of Competition
  (2001)

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• International Forum on Dispute resolution in
  Telecommunications (R Hill and J Watkinson eds),
  White paper - Telecommunications Disputes
  Specificities, Problems, Solutions (17 June 1999)
  
• (http//www.icc-uk.com/rhill.html)
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• Telecommunications Association of Southern Africa
  (TRASA), Guidelines on Interconnection for SADC
  countries, 29 May 2000

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• Oftel's November 2000 report on "Consultation on
  future interconnection arrangements for dial-up
  Internet in the United Kingdom"  
• 1997 EU Directive on Interconnection. The WTO
  Reference Paper is at http//www.wto.org/english/n
  ews_e/pres97_e/refpap-e.htm

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• http//europa.eu.int/ISPO/infosoc/telecompolicy/re
  view99/Welcome.html
• "Telecommunications Interconnection A Literature
  Survey, Prepared for Asia Pacific Economic
  Cooperation (APEC) Organization," by Julian K.
  Wright, Eric K. Ralph and D. Mark Kennet (2000).
• "Setting Up Interconnection Regimes References
  for Regulators," US Federal Communications
  Commission (FCC) (22 Nov 2002 

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• Links to laws and policies of a number of
  countries can be found at http//www.itu.int/ITU-
  D/treg/related-links/links-docs/interconnectlegisl
  .html
• The UK policy at http//www.oftel.gov.uk/publicat
  ions/1999/competition/gii799.htm  

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• The OECD has materials on the interconnection
  policies of its members at http//webnet1.oecd.org
  /oecd/pages/home/displaygeneral/0,3380,EN-document
  -41-1-no-no-5001-0,FF.html  

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The End______________________

• Thank you for your Attention