The Regulatory and Spectrum Management Scenario in Telecom Network Optimization

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Telecom Network Optimization Asia 2009
Hong Kong, 12-13 November 2009

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  • 1. Is the problem correctly defined? The problem to be solved should be precisely stated, giving evidence of its nature and magnitude, and explaining why it has arisen (identifying the incentives of affected entities). 2. Is government action justified? Government intervention should be based on explicit evidence that government action is justified, given the nature of the problem, the likely benefits and costs of action (based on a realistic assessment of government effectiveness), and alternative mechanisms for addressing the problem. 3. Is regulation the best form of government action? Regulators should carry out, early in the regulatory process, an informed comparison of a variety of regulatory and non-regulatory policy instruments, considering relevant issues such as costs, benefits, distributional effects and administrative requirements. 4. Is there a legal basis for regulation? Regulatory processes should be structured so that all regulatory decisions rigorously respect the “rule of law”; that is, responsibility should be explicit for ensuring that all regulations are authorised by higher-level regulations and consistent with treaty obligations, and comply with relevant legal principles such as certainty, proportionality and applicable procedural requirements. 5. What is the appropriate level (or levels) of government for this action? Regulators should choose the most appropriate level of government to take action, or if multiple levels are involved, should design effective systems of co-ordination between levels of government. 6. Do the benefits of regulation justify the costs? Regulators should estimate the total expected costs and benefits of each regulatory proposal and of feasible alternatives, and should make the estimates available in accessible format to decision-makers. The costs of government action should be justified by its benefits before action is taken. 7. Is the distribution of effects across society transparent? To the extent that distributive and equity values are affected by government intervention, regulators should make transparent the distribution of regulatory costs and benefits across social groups. 8. Is the regulation clear, consistent, comprehensible and accessible to users? Regulators should assess whether rules will be understood by likely users, and to that end should take steps to ensure that the text and structure of rules are as clear as possible. 9. Have all interested parties had the opportunity to present their views? Regulations should be developed in an open and transparent fashion, with appropriate procedures for effective and timely input from interested parties such as affected businesses and trade unions, other interest groups, or other levels of government. 10. How will compliance be achieved? Regulators should assess the incentives and institutions through which the regulation will take effect, and should design responsive implementation strategies that make the best use of them.
  • Establish principles of “good regulation”, drawing on the 1995 OECD Recommendation on Improving the Quality of Government Regulation. Good regulation should: serve clearly identified policy goals, and be effective in achieving those goals; have a sound legal and empirical basis; produce benefits that justify costs, considering the distribution of effects across society and taking economic, environmental and social effects into account; minimise costs and market distortions; promote innovation through market incentives and goal-based approaches; be clear, simple, and practical for users; be consistent with other regulations and policies; and (viii) be compatible as far as possible with competition, trade and investment-facilitating principles at domestic and international levels.
  • RIA then is an adjunct to good decision-making. In the United Kingdom, Compliance Cost Assessments are used to inform ministers of likely costs to businesses and to ‘‘identify the key factors on both sides of the equation as an aid (not a substitute for) the Government’s social and political judgement....’’ (UK Department of Trade and Industry, 1985). RIA is perhaps best understood as one ‘‘decision method’’ among several methods used to reach regulatory decisions. The methods used by regulators in OECD countries to reach decisions can be simplified into five categories: 1. Expert – The decision is reached by a trusted expert, either a regulator or an outside expert, who uses professional judgement to decide what should be done. 2. Consensus – The decision is reached by a group of stakeholders who reach a common position that balances their interests. 3. Political – The decision is reached by political representatives based on partisan issues of importance to the political process. 4. Benchmarking – The decision is based on reliance on an outside model, such as international regulation. 5. Empirical – The decision is based on fact-finding and analysis that defines the parameters of action according to established criteria.
  • As users increasingly demand anywhere, anytime connectivity, the use of wireless technologies has become more and more widespread inevitably forcing an increase in demand for the radio spectrum, particularly at UHF frequencies which support the high bandwidths as well excellent propagation characteristics enabling cost effective network roll-out. However, conflicting requirements from many different users can make it difficult to manage the spectrum efficiently unless there is a policy which a regulator or administration can use to inform critical decisions. The spectrum management policy, therefore, is a key instrument. It documents the basis on which spectrum managers will take decisions concerning which uses of the radio spectrum to permit, which uses and users of the radio spectrum to give priority to over others and, very importantly, what mechanisms will be used in charging for access to radio spectrum. Its core objective should be to create a predictable environment for current and future use of the radio spectrum, and to enable spectrum to be used in a manner which will bring the greatest benefits to society. This may be achieved through policy elements which: Encourage efficient spectrum use; Encourage the introduction of more spectrally efficient technologies; Support the development of rural communications; Support the spectrum needs of the emergency and security services; and Encourage technological innovation and competitiveness. Developing such policies requires analysis of a number of key factors, notably government policies towards the different sectors which require access to radio spectrum, the future demand for spectrum from the various potential users, the availability of spectrum and international and regional agreements, regulations and restrictions. Policymakers must also understand and take into account the views of many disparate (and often conflicting) users and, where appropriate, international best practice. Reconciling all these requirements and restrictions in creating a policy which can be used in practical circumstances to inform decisions on spectrum often requires an independent party to work with all interested agencies, providing an unbiased approach to reaching reasonable and workable solutions. InterConnect Communications has extensive experience in working with regulators, administrations and other interested parties worldwide to produce robust, useable policies either for the whole of the radio spectrum or for specific services (such as mobile, broadcasting, maritime, aviation or governmental).
  • Availability of the Frequency Bands RR S4.2: “ Members undertake that in assigning frequencies to stations which are capable of causing harmful interference to the services rendered by the stations of another country, such assignments are to be made in accordance with the Table of Frequency Allocations and other provisions of the Radio Regulations." Article S5 of the Radio Regulations : basic condition and starting point in the selection of the appropriate frequency band.
  • Allocation of Frequency Bands worldwide allocations regional allocations (for the purpose of the allocation of frequencies the world has been divided into three Regions) sub-regional allocations and national allocations. worldwide character of the international aeronautical and maritime mobile services tendency of having worldwide allocations governed by provisions of the Radio Regulations which are generally applicable all over the world
  • The Regulatory and Spectrum Management Scenario in Telecom Network Optimization

    1. 1. Examining The Regulatory and Spectrum Management Scenario in Telecom Network Optimization Arief Hamdani Gunawan Senior Officer Regulatory Management Unit TELKOM INDONESIA
    2. 2. Outline Understanding the perspective of regulatory authority : regulatory impact analysis Optimizing license regime uncertainty and cost of capital Facing limited resources + Frequency allocation and spectrum management optimization Scenario in Telecom Network Optimization
    3. 3. Regulatory Impact Analysis <ul><li>Regulatory Impact Analysis (RIA) is a policy tool widely used in OECD countries. RIA examines and measures the likely benefits, costs and effects of new or changed regulations. </li></ul><ul><li>Tools: </li></ul><ul><ul><li>Reference Checklist for Regulatory Decision-Making </li></ul></ul><ul><ul><li>Principles of “Good Regulation” </li></ul></ul><ul><ul><li>Methods of Regulatory Decision-Making </li></ul></ul>
    4. 4. 10 Reference Checklist for Regulatory Decision-Making <ul><li>1. Is the problem correctly defined? </li></ul><ul><li>2. Is government action justified? </li></ul><ul><li>3. Is regulation the best form of government action? </li></ul><ul><li>4. Is there a legal basis for regulation? </li></ul><ul><li>5. What is the appropriate level (or levels) of government for this action? </li></ul><ul><li>6. Do the benefits of regulation justify the costs? </li></ul><ul><li>7. Is the distribution of effects across society transparent? </li></ul><ul><li>8. Is the regulation clear, consistent, comprehensible and accessible to users? </li></ul><ul><li>9. Have all interested parties had the opportunity to present their views? </li></ul><ul><li>10. How will compliance be achieved? </li></ul>
    5. 5. 8 Principles of “Good Regulation” <ul><li>(i) serve clearly identified policy goals, and be effective in achieving those goals; </li></ul><ul><li>(ii) have a sound legal and empirical basis; </li></ul><ul><li>(iii) produce benefits that justify costs, considering the distribution of effects across society and taking economic, environmental and social effects into account; </li></ul><ul><li>(iv) minimise costs and market distortions; </li></ul><ul><li>(v) promote innovation through market incentives and goal-based approaches; </li></ul><ul><li>(vi) be clear, simple, and practical for users; </li></ul><ul><li>(vii) be consistent with other regulations and policies; and </li></ul><ul><li>(viii) be compatible as far as possible with competition, trade and investment-facilitating principles at domestic and international levels. </li></ul>
    6. 6. 5 Methods of Regulatory Decision-Making <ul><li>Expert </li></ul><ul><li>Consensus </li></ul><ul><li>Political </li></ul><ul><li>Benchmarking </li></ul><ul><li>Empirical </li></ul>
    7. 7. Outline Understanding the perspective of regulatory authority : regulatory impact analysis Optimizing license regime uncertainty and cost of capital Facing limited resources + Frequency allocation and spectrum management optimization Scenario in Telecom Network Optimization
    8. 8. License Regime <ul><li>Traditionally regulators have awarded separate telecom licenses, </li></ul><ul><li>There is a growing consensus that these licenses need to be unified. </li></ul><ul><li>Offering of fixed mobile services is allowed by the regulator </li></ul><ul><li>Separate fixed-mobile licenses are needed, </li></ul><ul><li>Regulators can allow different degrees of converged technology use. </li></ul>Option 1: Separate Licensing Option 2: Hybrid Licensing Option 3: Unified Licensing <ul><li>A single fixed license allows the use of “nomadic technology” (fixed mobile technology fixed-services that offer mobility within a limited area), </li></ul><ul><li>Promotion of universal access: Implementation of mobile tele-centres, </li></ul><ul><li>Hybrid licences are more attractive to investors compared to a separate license. </li></ul><ul><li>Single license for fixed and mobile services </li></ul><ul><li>Spectrum could be awarded separately, </li></ul><ul><li>Licenses are often both technology neutral and service neutral, </li></ul><ul><li>Unified license can stimulate new technologies and innovation, and let customers benefit from most efficient solution. </li></ul>
    9. 9. License Types <ul><li>Overall trend: reduction of licensing requirements for various services provision, </li></ul><ul><li>Internet Service Providers and Value-Added Services are not subject to licenses anymore in developed countries. </li></ul><ul><li>An operator specific license allowing it to offer a set of services, </li></ul><ul><li>Often strict obligations on network roll-out and quality of service, </li></ul><ul><li>The regulator has significant interest in ensuring that the service is provided in a particular manner. </li></ul>Type 1: Individual License Type 2: Class License Type 3: No License <ul><li>Class licenses are general authorization that determine the criteria that operators have to meet to offer that class of services, </li></ul><ul><li>Generally issued without competitive selection process. </li></ul><ul><li>No licensing process or qualification requirements, </li></ul><ul><li>General requirements can be imposed through a general regulation order or decision. </li></ul>
    10. 10. Scope of Services <ul><li>The license holder is expected to deploy its own infrastructure to offer the desired telecommunication service, </li></ul><ul><li>Investment in the network layer is required, </li></ul><ul><li>Impose roll-out conditions, but limit the number of licenses to allow operator to achieve ROI. </li></ul>Facilities Based License Service Based License <ul><li>The license holder is not expected to deploy its own infrastructure, but can utilize existing infrastructure (through unbundling, resale, carrier selection, etc.), </li></ul><ul><li>Investment in network layer might reduce, but infrastructure is already well developed. </li></ul>
    11. 11. Generic Licensing and Cost of Capital Option 1: Separate Licensing Option 2: Hybrid Licensing Option 3: Unified Licensing Type 1: Individual License Type 2: Class License Type 3: No License Facilities Based License Service Based License R e g u l a t o r y C o s t R e g u l a t o r y C o m p l e x I t y
    12. 12. Outline Understanding the perspective of regulatory authority : regulatory impact analysis Optimizing license regime uncertainty and cost of capital Facing limited resources + Frequency allocation and spectrum management optimization Scenario in Telecom Network Optimization
    13. 13. WTO regulatory reference paper, principles Competitive safeguards Interconnection Universal service Transparency Independent regulators Allocation and use of scarce resources
    14. 14. Technology, Service, Channel, Allocation Considerations
    15. 15. Frequency Allocations of ITU <ul><li>The Radio Regulations define the &quot;law&quot; relating to the use of spectrum. International frequency allocations are defined in article S5 and all administrations must adhere to these allocations. The only exception is use on a non-interference basis. Article S5: Regions </li></ul><ul><li>The ITU Radio Regulations, and particularly its Table of Frequency Allocations, have been revised and updated according to demand for spectrum utilization. </li></ul><ul><li>The ITU World Radio communication Conference (WRC), which convenes every three to four years, is at the core of the international spectrum management process and constitutes the starting point for national practices </li></ul><ul><li>ITU is mandated by its Constitution to allocate spectrum and register frequency assignments, orbital positions and other </li></ul><ul><li>parameters of satellites, “in order to avoid harmful interference between radio stations of different countries”. </li></ul><ul><li>The international spectrum management system is therefore based on regulatory procedures for frequency notification, coordination and registration. </li></ul>
    16. 16. Radio Spectrum Management <ul><li>The spectrum management policy documents the basis on which spectrum managers will take decisions concerning which uses of the radio spectrum to permit, which uses and users of the radio spectrum to give priority to over others and, very importantly, what mechanisms will be used in charging for access to radio spectrum. </li></ul><ul><ul><li>Encourage efficient spectrum use; </li></ul></ul><ul><ul><li>Encourage the introduction of more spectrally efficient technologies; </li></ul></ul><ul><ul><li>Support the development of rural communications; </li></ul></ul><ul><ul><li>Support the spectrum needs of the emergency and security services; and </li></ul></ul><ul><ul><li>Encourage technological innovation and competitiveness. </li></ul></ul><ul><li>Developing such policies requires analysis of a number of key factors, notably government policies towards the different sectors which require access to radio spectrum, the future demand for spectrum from the various potential users, the availability of spectrum and international and regional agreements, regulations and restrictions. </li></ul>
    17. 17. Availability of the Frequency Bands <ul><li>Harmonized development of many radiocommunication services </li></ul><ul><li>Their efficient and interference-free operation </li></ul><ul><li>General rules for the assignment and use of frequencies as well as some special rules (Article S4). </li></ul>
    18. 18. Availability of the Frequency Bands Rules for assignment and use of frequencies (AR S4) Allocation of frequencies (AR S5) Special rules and specific provisions (AR S46 to S58) Notification and use of frequency assignments Efficient and interference-free operation Radio Regulations Administration
    19. 19. Availability of the Frequency Bands Sub- regional National Sub- regional Sub- regional National National Regional allocations Regional allocations Regional allocations Worldwide allocations Article S5 Frequency allocations
    20. 20. Outline Understanding the perspective of regulatory authority : regulatory impact analysis Optimizing license regime uncertainty and cost of capital Facing limited resources + Frequency allocation and spectrum management optimization Scenario in Telecom Network Optimization
    21. 21. Closing: Scenarios in Telecom Network Optimization
    22. 22. Arief Hamdani Gunawan [email_address] Thank You

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