Regulatory _ Policy Challenges for the ICT Sector Lessons from

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Regulatory _ Policy Challenges for the ICT Sector Lessons from Powered By Docstoc
					 Policy Issues to Enhance
Consumer and Earn Global
    Market Confidence



            September 27, 2006
Government’s Main Role

 “Creating an Enabling Environment”
 which means addressing, in a holistic
 manner, the various policy, legal, market
 and social considerations that interact
 both at domestic and global levels to
 create fertile conditions for ICT-led
 growth.
PROMOTING COMPETITION
Why Competition?

   Competition policy goals; not an end to itself, but a
    means to improved economic performance
   Competition in the ICT sector will lead to:
    –   Better ICT sector performance: More investment, more
        consumer choice, greater efficiency in the use of scarce
        resources, supplier adaptation, technological dynamism,
        responsiveness to users, and others
    –   Better macroeconomic performance: Jobs, productivity,
        economic growth, and price stability
How Does Competition Work?

   Competition refocuses management
    attention to:
    –   User needs
    –   Rivals’ rate/service offerings
   Competition creates
    –   Creates new incentive structures;
    –   Forces innovative conduct;
    –   Gives consumers greater power
THE GOAL:
EFFECTIVE AND SUSTAINABLE
COMPETITION


• EFFECTIVE COMPETITION
   •   actual and/or potential competitors restrains
       incumbents’ market behavior
   •   absence of players with significant market power

• SUSTAINABLE COMPETITION
   •   Long-run financial viability of competitors
Role of Government in Competition Policy


   Enabling, not Managing Competition

   Government can improve performance by
    –   Enabling competitive market structures
         Through licensing, spectrum allocation
    –   Requiring competitive conduct
    –   Prosecuting anticompetitive conduct
Critical Question Faced by All Regulators


  How does government compel, induce or
  otherwise persuade firms with commercial,
  technological, legal and political power to
  change market behavior in ways their
  principals consider to be against their
  commercial interests?
        PROMOTING COMPETITION
CASE STUDY: VOIP IN THE PHILIPPINES
Why Does VOIP Matter?



               internet




Because it allows you to make phone
calls over the Internet!
How VoIP
Works
What are the policy objectives for
encouraging the deployment of VOIP?


                     Consumer Welfare
                      (lower communication
                      costs)
                     Increased Competition
                      & Competitiveness
                     Fundamental Fairness
                      (investment returns)
                     Innovation
IS VOIP A TELECOM SERVICE, OR AN
INTERNET SERVICE?


            If it is a telecommunications
            service, then only telephone
            companies can offer VOIP to the
            public.



            If it is an internet or value-added
            service, then anyone can offer
            VOIP to the public.
Should the NTC issue
rules for VOIP?

EFFECTS OF NO RULES:
•Discourages investment in
VoIP
•Dampens innovation in ICT
•High long distance costs

BUT: No rules is better than
bad rules!
How VoIP can be deployed has always been
framed in the context of one legal question.


                If it is a telecommunications
                service, then only telephone
                companies can offer VOIP to the
                public.

                If it is an internet or value-added
                service, then anyone can offer
                VOIP to the public.
Is VoIP a Telecommunications
Service?

       Argument for YES: VoIP is a voice
       service. The voice at starting point is
       also the voice at the point of
       destination.
       Argument for NO: IP telephony is
       different from traditional PSTN
       telephony. IP makes possible a diverse
       range of data and voice applications,
       including VoIP. It is an enhancement.
Ruinous competition for Telcos?

 Huge investments have been made in the traditional PSTN
 network. This cannot be ignored.

 PSTN will not be replaced in one day. The main service
 method of VoIP still depends on PSTN for access.

 With IP, the business model will have
 to shift from quantity to quality, i.e.,
 from total call minutes to total
 available bandwidth.
The Outcome

   NTC ruled that VoIP is a value-added
    service, effectively opening the service up to
    competition.
   Within days, long distance rate offers started
    plummeting, in some cases, as much as 75%
    (from 40 cents/minute to 10 cents/minute).
BRIDGING THE DIGITAL DIVIDE
THE DIGITAL DIVIDE

   Refers to the gap between those with
    regular, effective access to digital
    technologies and those without.
   The presence of a digital divide, particularly
    between rural communities and urban
    centers, directly affects the ability of SMEs to
    reach, and compete, in the larger markets.
Why bridge the digital divide?

   Internet access will enable SMEs and entrepreneurs to
    use email and VoIP to coordinate directly with buyers of
    local goods and products in the cities, effectively
    bypassing middlemen and earning a greater share of the
    revenues.
   Numerous websites allow local artisans to sell directly to
    the mature markets in the developed countries where
    their products are likely to fetch higher prices.
   The internet also helps to level the playing field for SMEs
    in remote areas by providing them with key information
    ideas on market prices, opportunities and trends.
Last Mile Initiative

   LMIP is working with the CICT, as well as
    with LGUs, NGOs and other interested
    persons/entities to:
    –   Design, develop, support, and/or set-up at least
        10 sustainable CeCs in rural and unserved areas.
    –   Identify and facilitate access to appropriate
        technologies, particularly VoIP and broadband.
    –   Document lessons learned, and best practices
        and models for broader replication.
Last Mile Initiative (Status)

   Over the past year, LMI assisted in the set-up and/or training of
    34 CeCs.
   Various promising models have been identified:
     –   E-Commerce
     –   Ecotourism
     –   Jobs
     –   Telehealth
     –   Out-of-school youth
     –   Education
The key word is Community

   The success of the CeC depends on the
    commitment and support of various
    stakeholders:
    –   Government
    –   School
    –   Students
    –   NGOs
    –   Private Sector
Catmon, Cebu. LMI provided a brand new server, 6-month DSL
connectivity and will provide VoIP solutions. World Corps and
private sector donors provided computers and basic training. The
local government provides rent-free facilities.
Catmon, Cebu. LMI provided a brand new server, 6-month DSL
connectivity and will provide VoIP solutions. World Corps and
private sector donors provided computers and basic training. The
local government provides rent-free facilities.
Manolo Fortich, Bukidnon. The congressman provided the
computers. The local government shouldered the initial costs of
broadband connectivity, as well as two facilities (school and town
hall). The telecom operator will provide VoIP solutions. LMI will bring
in private sector players (Microsoft, World Corps) to provide basic
training (trainors’ training, computer and internet literacy, as well as
teachers’ trainings)
Manolo Fortich, Bukidnon. The congressman provided the
computers. The local government shouldered the initial costs of
broadband connectivity, as well as two facilities (school and town
hall). The telecom operator will provide VoIP solutions. LMI will bring
in private sector players (Microsoft, World Corps) to provide basic
training (trainors’ training, computer and internet literacy, as well as
teachers’ trainings). CICT will provide e-government software.
SUSTAINABILITY:
It’s not just a matter of setting-up

   Multi-stakeholder support is important, but
    not enough.
   CeCs must be sustainable. I.e., it must
    provide services that the community is willing
    and able to pay for.
   Demand for use of CeC facilities must be
    increased.
Trainor’s trainings
• To provide the community with basic computer and
internet skills; and
• As a means of increasing demand for CeC facilities.




  Renren Mariano, a former out of school youth is trained to provide free
  computer/internet trainings to anyone who’s interested in Borbon, Cebu.
Identifying Useful Applications


                   Other Services:
                   •   Photocopying
                   •   Fax
                   •   Telephone
                   •   Research
E-Government Solutions




 The eLGU project of the CICT and its National Computer Center
 aims to enable local governments to integrate ICT in their operations
 for better public service

 • Real Property Tax Assessment and Billing
 • Business Permits and Licensing
Exploring Partnerships with Private
Sector Players

   Intel - Wimax trials in unserved areas
   RuralNet - Official CICT partner to provide fee-
    based government frontline services through
    rural banks
   Mozcom, SMART, Globe, SOTELCO, Linksys, etc.
    - Connectivity and VoIP solutions
   Microsoft - Unlimited Potential, and software
    grants
Challenges & Initial Lessons

   Setting up sustainable CeCs is possible.
     –   Awareness of internet possibilities is high, even in remote areas.
     –   People are willing to pay.


     BUT often, communities do need a little help or push:
     –   Connectivity – How? What are their options?
     –   Funding – often, small one-time costs are what causes delays
     –   Training assistance


   CeCs will provide benefits to poor and remote communities, but their
    poverty and remoteness still limits the potential of CeCs:
     –   Service providers (e.g. VoIP, e-commerce) are reluctant to provide services.
     –   Even with CeCs, the community is still a very small market.
Challenges & Initial Lessons

   AGGREGATION – A Major Challenge
     –   Would make it easier to sell the community and its programs and products.
     –   Would create a bigger market that service providers cannot ignore,
     –   Could make it easier for overseas citizens to contribute and participate.
     –   Will facilitate interaction between CeCs


   DOCUMENTATION AND SHARING
     –   Documentation and sharing of successes and failures, and of best practices must be
         systematized.
SOME POINTS TO REMEMBER

   CAPACITY BUILDING: Ease of access to the
    Internet is a fundamental aspect, but it is not
    the sole factor. Effective access also
    depends on ability to use ICT effectively, and
    on the quality of digital content that is
    available and can be provided.
   BROADBAND DEPLOYMENT: The
    availability of broadband connections affects
    SMEs’ decisions to adopt e-commerce.
POLICY OPTIONS FOR BRIDGING THE
DIGITAL DIVIDE

   Competition Policy
   Universal Access Fund and other related
    schemes
   CD-based applications
   Education & Training
PROTECTING THE CONSUMER
Consumer Concerns

   Consumer’s exposure to unfair marketing practices
   Insufficient information disclosure, for example,
    refund policies, cancellation terms, warranty
    information
   Contract terms, for example, their enforceability
   Merchandise and delivery practices, for example,
    failure to perform and lateness
Consumer Concerns (con’t.)

   Payment, for example, recovering fraudulent
    charges if credit card information falls into criminal
    hands
   Transaction confirmation and cancellation policies,
    for example, consumer’s lack of knowledge on
    cancellation rights for online transactions, including
    for mistakenly made purchases
   Fraud and deception, for example, lack means to
    authenticate merchandise purchased online.
   Unsafe products
Consumer Concerns (con’t.)

   Insecure payment methods
   Loss of personal privacy and protection of
    confidential data
   Risk misuse of personal information
   Other concerns including computer fraud, hacking,
    virus, interception and alteration of financial data,
    and misuse of personal information
Principles for Protection Consumers
Online

   Transparent and effective protection
   Fair Business, Advertising and Marketing Practices
   Online Disclosures
   Confirmation
   Process Payment
   Dispute Resolution
   Privacy
   Education and Awareness
BALANCING OF INTERESTS

   Marketing vs. Spamming
   Privacy vs. Online Transactions
   E-Commerce vs. Dispute Resolution
Public-Private Partnerships (PPP)

 To emphasize: Both the private sector
  and the public sector have crucial roles
  to play.
 The private sector leads, the
  government enables.
 It is important that both agree and are
  aware of their respective roles.
EARNING GLOBAL
  CONFIDENCE
Three key issues of global interest

   Privacy & Data Protection
   Intellectual Property Rights
   The Need for Cross Border Cooperation
Privacy & Data Protection

   Businesses need data to do business
    –   Name
    –   Age
    –   Addresses
    –   Sex
    –   Civil Status
    –   Social Security Numbers
    –   Credit Card Numbers
   Data allows businesses to provide better service
   Data enables e-transactions
Privacy & Data Protection – The
Flipside

   Identity Theft
   Fraud
   Loss of privacy

    Bottom line: There is therefore a need to strike a
    balance between privacy and the various needs to
    transmit personal data. Sform of legal protection of
    privacy is important for generating trust in e-
    commerce.
Why Privacy is important for small
businesses

   Developing countries who wish to participate
    in the global information economy, will
    increasingly need to consider laws that
    protect personal data.
   E.g. medical transcription, business process
    outsourcing
   EU Data Protection Directive
EU DATA PROTECTION DIRECTIVE


 Article 25 provides that member states must
 ensure that the transfer of personal data to
 non-E.U. countries takes place only if the
 non-E.U. country provides an adequate level
 of privacy protection.
OECD Guidelines on the Protection of Privacy and
Transborder Flows of Personal Data


   Collection Limitation Principle
   Data Quality Principle
   Purpose Specification Principle
   Use Limitation Principle
   Security Safeguards Principle
   Openness Principle
   Individual Participation Principle
   Accountability Principle
BALANCING OF INTERESTS – THE
CHALLENGE OF INTELLECTUAL
PROPERTY RIGHTS

   Developed countries vs. Developing
    Countries
   Copyright holders vs.
    Educators/Scientists/General Public
   Online Newspapers vs. Database
    producers/Information analysts
   SMEs
The Challenges Posed by New
Technologies

   Identifying authorship
   Identifying infringements
   Enforcement of rights
   When is use private?
   Public goals vs. private sector interests
   Integrity
   Cross border considerations
The Need for Cross Border Cooperation

   Privacy & Data Protection
   Cybercrime & Security
   Intellectual Property Rights
CASE STUDY: ONE INTERNET, MANY
COPYRIGHTS

   PROJECT GUTENBERG is a volunteer effort
    to put the world's literature online.
   Early in 2004, the Australian affiliate of
    Project Gutenberg posted the 1936 novel
    "Gone With the Wind" by Margaret Mitchell
    on its Web site for downloading at no charge.
   In Australia, as in a handful of other places,
    the book was free of copyright restrictions in
    1999, 50 years after Mitchell's death.
The Need for Cross Border Cooperation
– CASE STUDY: COPYRIGHT

   PROBLEM: In the United States, under an
    extension of copyright law, "Gone With the
    Wind'' will not enter the public domain until
    2031, 95 years after its original publication.
   So, after an email threat from the estate of
    Margaret Mitchell, “Gone with the Wind” was
    pulled from the website.
The Need for Cross Border Cooperation
– CASE STUDY: COPYRIGHT

   This is not an isolated incident. It is just the
    start: Elvis and Beatles songs are set to
    enter the public domain in Europe by the
    2010s. In the US, not until the 2050s.
   This is one more example of the Internet's
    inherent lack of respect for national borders,
    and the need for international cooperation.
THE END

				
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