International Co-operation in Utility Regulation Models for Telecommunications Regulation in South East Europe

1. International Co-operation in Utility RegulationModels for Telecommunications Regulationin South East Europe Andrew Taylor, Associate Director Stone & Webster Consultants South East Europe Conference on Policy and Co-operation in Telecommunications Belgrade, 29 October 2002

2. Overview of Presentation • Regulatory competition vs co-operation • Alternative models of regulatory co-operation • supranational institutions • inter-governmental agreements • regulatory networks • Regulatory co-operation in telecommunications in South East Europe

3. Regulatory Competition reducing regulatory standards compared to neighbouring countries as a way of reducing business costs and thus attracting investment also known as the ‘race to the bottom’ increasing regulatory standards as a way of protecting local producers also known as the ‘race to the top’ or the ‘California effect’ Regulatory Co-operation international co-operation between regulatory or governmental authorities to co-ordinate standards make take different forms, such as harmonisation, minimum standards, mutual recognition Regulatory Competition and Co-operation

4. Co-operation vs Competition in Telecommunications Regulation • Competition • concept of ‘race to the bottom’ or ‘race to the top’ not immediately transferable to telecoms (compared to environment, tax etc) • telecoms regulation is more complex than simply raising or lowering regulatory standards • Co-operation • create a single market for telecommunications – lower business input costs, aid economic growth • increase regional attractiveness as an investment location for telecommunications and other industries • address transnational regulatory issues • promote policy learning

5. Models for Regulatory Co-operation • Supranational regulatory institutions • international organisations able to make either binding decisions or authoritative recommendations • WTO, EU, East Caribbean Telecommunications Agency, ITU, ETSI • Intergovernmental agreements • agreements to facilitate co-operation in telecoms regulation • Southern African Development Community, Asia-Pacific Telecommunity, Inter-American xxx • Regulatory networks • arrangements for co-operation between national regulatory agencies • Independent Regulators Group, South Asian Telecommunications Regulators’ Council

6. Supranational institutions Inter-governmental agreements Regulatory networks Characteristics Internationaluniformity High level of commitment Lower levels of commitment Nationalflexibility Co-operative models:characteristics and prerequisites Prerequisites Willingness to cede sovereign decision making powers Political co-operation Recognition ofpotential benefits Tools Binding decisionsEnforcement mechanisms Non-binding agreementsModel legislation and policies ConsultationCapacity building

7. Regulatory Co-operation in Telecommunications in South East Europe • Countries in the region are already members of relevant international organisations • WTO (but, telecoms liberalisation commitments are not uniform across the region), ETSI, ITU • region also aspires to membership of EU • Key questions: • Is additional co-operation required? • What form of co-operation best meets the region’s needs?

8. Is additional co-operation required? • Existing arrangements could usefully be supplemented • ITU and ETSI membership cover technical issues • WTO commitments from countries in SEE not uniform • Aspiration of EU membership is not a binding commitment • Potential gains from: • policy learning • co-ordination of regional issues • creation of a single market?

9. What form of co-operation best meets the region’s needs? • Supranational • commitment costs in short term • long term aim of EU membership renders irrelevant(?) • Inter-governmental • political commitment to EU membership means broadly common approach has been adopted • Regulatory network • low costs for establishment, limited commitment

10. European Union • European Union competence in telecommunications services derived from: • competition law responsibilities • creation of the single market for the EU • EU issues directives to be implemented by Members • Members have some flexibility in implementation • EU in some areas sets minimum standards • EU does not strictly define required institutional design for national regulatory agencies • National Regulatory Agencies retain responsibility for day to day administration of the regulatory framework

11. East Caribbean Telecommunications Authority • Supranational telecommunications sector regulatory agency for five Caribbean countries • Dominica, Grenada, St Christopher and Nevis, St Lucia, St Vincent and Grenadines • Reflects single private operator in each of the five states • Functions: • spectrum management • dispute resolution between operators • www.ectel.info

12. Southern African Development Community • Intergovernmental organisation that includes 15 countries from Southern Africa • aims to evolve common political systems and institutions • Southern African Transport and Communications Commission established under SADC • provides co-ordination to address regional transport and communications issues • has developed model telecommunications legislation and policies for member countries

13. Independent Regulators’ Group • Forum for national telecommunications regulatory agencies in the EU • seeks to have informal character and avoid inter-governmental agenda • comments/contributes to EU regulatory agenda • Objectives: • seek to evolve best practice • working groups on: local loop unbundling, cross border interconnection, market analysis, mobile access

14. Telecommunications Regulators’ Association of Southern Africa • Regulatory network for independent telecoms regulatory agencies in SADC • Objectives: • Address training and skills needs of regulatory agencies • seminars, workshops, co-operation with educational institutions • Develop model policies and procedures for member institutions • universal service and access, licensing, tariffs, interconnection, numbering, standards • Co-ordination of spectrum management and frequency planning • Assist in creation of investor friendly environment • provide regional information on demand, supply, technologies, operating entities and services in each country

15. South Asia Telecommunications Regulators’ Council • Established under auspices of Asia Pacific Telecommunity • includes agencies from 9 countries from South Asia • forum for discussion and co-ordination • Working groups on: • tariff re-balancing • universal service • numbering • quality of service • operates on a consensus basis • www.aptsec.org/satrc

16. African Forum for Utility Regulation • 30 regulatory agencies from 17 countries, covering telecoms, energy, water • Objectives: • facilitate information exchange and capacity building • focus on region wide issues that are common across sectors • information collection, compliance monitoring, regulatory decision making, enforcement, transparency • develops its work program in response to needs and interests of participants • communications through newsletter and website (www.worldbank.org/afur)

17. Contact details Andrew Taylor andrew.taylor@shawgrp.com Stone & Webster Consultants Tennyson House 159 - 165 Great Portland Street London WIW 5PA United Kingdom Phone: +44 207 907 0600 Fax: +44 207 907 0601