 | Issue: | Latin America II 1999 |
| Article no.: | 3 | |
| Topic: | Organisation of Eastern Caribbean States: Liberalisation through the Introduction of Competitive Reforms in the Telecommunications Sector | |
| Author: | Donnie DeFreitas | |
| Title: | Not available | |
| Organisation: | Organisation of Eastern Caribbean States, St Lucia | |
| PDF size: | 24KB |
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Article abstract
The Organisation of Eastern Caribbean States (OECS) has embarked on a project of telecommunications sector reform that is focused, in part, on modernisation of the regulatory framework and establishment of a regional regulatory body consistent with national policy objectives and international best practices. Governments have agreed to maximise the economic benefits to be derived from a competitive telecommunications environment through developing informatics-related skills.
Full Article
The Organisation of Eastern Caribbean States (OECS) has embarked on a project of telecommunications sector reform that is focused, in part, on modernisation of the regulatory framework and establishment of a regional regulatory body consistent with national policy objectives and international best practices. In addition, the Member State Governments have agreed to maximise the economic benefits to be derived from a competitive telecommunications environment through developing informatics-related skills. The OECS Telecom Project has been established to pilot this reform program. The Centre for Strategic and International Studies (CSIS) and the Federal Communications Commission (FCC) have provided assistance to the OECS Telecom Project through a series of seminars addressing various regulatory policies and processes required to support a competitive telecommunications market. The seminars have been supported by grants from the US Department of State and USAID. The Telecoms Project is currently evaluating the: · development of a policy unit within the OECS to address needs such as updating national telecommunications acts and defining appropriate regulatory structures and functions at a national and regional level; · development of a process to ensure that emerging telecommunications/datacom services benefit from competition; · need for rate rebalancing and restructuring of subsidy flows to improve social and economic results; and, · introduction of new services. In co-ordinating the approach of OECS Governments to regional regulation, the Telecom Project will address the preparation of a regulatory framework for the OECS, the preparation of legal instruments needed to support such a framework, the establishment of a regional regulator, and the implementation of efficient spectrum management. The objective of the informatics component of the Project is to design an efficiently administered, well-focused, transparent, and limited subsidy aimed at human capital formation. The Project has assessed current supply and demand for informatics training and is now addressing the design of market-promoting subsidy mechanisms along with core curriculum guidelines and criteria for the delivery of training. Regulatory Framework Various options for a regional regulatory authority are being evaluated in the context of an examination of liberalisation opportunities. Commitments contained in the World Trade Organisation (WTO) offers of OECS Member State Governments are being examined to ensure that a regional regulatory environment conforms to the regulatory principles of the Agreement on Basic Telecommunications Services. In addition, the implications of the reform of the international accounting rates for service provision in the region are being examined. The evaluation of all regulatory options available to the OECS is addressing issues such as: · overall policy and liberalisation objectives at the regional and national levels; · assessment of international good practices in the context of transitional and developing economies; and · analysis of options available for adopting such good practices at the national and regional level. A detailed analysis will be carried out to determine the state of the existing telecommunications market in the OECS Member States and to identify the constraints and opportunities that may exist for liberalising the sector in accordance with Member States’ policy objectives. Determination is being made of the best strategy for Member State response to implementation of the WTO agreement and to developments in international accounting rate reform. Particular attention is being given to the question of how best to implement the WTO principles on interconnection, independent regulation, open access, and transparency in the context of a regional liberalisation strategy. Legal and Regulatory Instruments In order to implement a regional liberalisation strategy, new legal documents are required to support operator licenses for both incumbents and new entrants, new national telecommunications legislation, and a model interconnect agreement. Licences for incumbent operators will contain, for example, controls on anti-competitive behaviour, universal service and access obligations, procurement controls, and tariff requirements. Model licences for new entrants will be developed on a transparent, objective, and fair basis that will be in accord with the WTO regulatory principles. New model legislation will be prepared for consideration by each Member State Government. The model legislation will be synchronised with the requirements for the new regional regulatory authority. Appropriate provisions defining and allocating the respective functions and jurisdiction to regional and national levels will be developed to the extent that the structure, functions, and powers of the new regulator need to be reflected in new legislation. The new regulator will use the model interconnection agreement in order to enable new entrants to interconnect with incumbent operators under consistent terms and conditions. The agreement will address key issues such as points of interconnections, traffic charges, technical interfaces, and exchange of customer information. Establishment of a Regional Regulator The organisational structure for the new Regional Telecommunications Authority (RTA) is a critical issue for the Project. The geographic proximity of Member States and the common features of their respective national telecommunications markets make a regional approach to sector policy and regulation potentially beneficial, both individually and collectively, to OECS Member States. The presence of an in-place regional organisational structure in the form of the OECS represents a potentially useful building block for the creation of such an authority. A key issue to be addressed is the legal, functional, and operational basis pursuant to which the power and functions of sector regulations should be distributed between the RTA and the constituent national authorities. Various models are available and can be arrayed on a continuum from weak to strong. At its weakest, a regional authority could be a policy body, such as the Organisation for Economic Cooperation and Development (OECD) that issue recommendations and draft model laws and regulations for national implementation. Somewhat further along the continuum is the model of regional conferences, such as those employed by the International Telecommunication Union (ITU) for adoption of regional frequency allocations. A strong model is the Fourth General Directorate of the European Commission (EC) with its independent regulatory jurisdiction over competition policy where certain issues meet threshold requirements. A strong regional regulator would have to be ceded some measure of authority currently held by the Member States in areas where a regional approach could maximise consumer benefits. One such area, for example, is spectrum allocation, where the geographic proximity of the Member States militates in favour of a regional approach. Similar dimensions that must be addressed are enforcement, police powers, and the legal basis for judicial appeals of the regional regulator’s decisions. If the ‘threshold’ concept is deemed applicable, the Project will suggest an appropriate mechanism for separating regional from wholly national issues. A key issue will be the development of a structure to ensure that the measure of independence and autonomy is granted to the RTA by the Member States. Conversely, the measure of sovereignty that is retained by each individual Member State must also be protected by strong procedural mechanisms. In devising the appropriate structure for the RTA, precise definition of the roles and responsibilities of the authority and the lines of communications between the authority and the Member States is required. The definition must be accomplished through the agreement between the Member States establishing the RTA, through the necessary modifications to national law, and through the rules and regulations of the authority itself. Spectrum Management Guidelines will be developed for efficient management of spectrum resources and for effective monitoring of frequency use. These guidelines will facilitate expanded telecoms and broadcast services and will allow the OECS Member States to open the communications sector to increased competition and innovative solutions. The following critical elements are the focus of Project work: · detailed evaluation of spectrum requirements; · identification of spectrum usage problems affecting spectrum valuation; · determination of spectrum management computer automation system requirements; · determination of effective monitoring system requirements; and, · development of tender documents for procurement of spectrum management equipment. The OECS Project will assess existing spectrum management and monitoring operations regarding the entire range of spectrum management functions. Review of all administrative rules and regulations and procedural manuals will be undertaken. Recommendations for co-ordination and centralisation of spectrum management will be developed in line with internationally accepted best practices, procedures, and guidelines. Procedures for the migration of some users to new frequencies will also be developed. In order to maximise the value of radio spectrum and to ensure that users pay fair value for this public resource, the Project will assess current and future market requirements for spectrum under conditions of effective and transparent regulation. The Project will provide recommendations as to which vehicles (i.e., lottery, auction, comparative hearing, etc.) will best allow the maximisation of spectrum value. The RTA will require a series of computer databases in order to ensure compliance with international frequency allocation agreements and to maintain co-ordination of domestic frequency assignments. The structure of these databases will generally follow the ITU’s Handbook of National Spectrum Management and Handbook of Spectrum Management and Computer Aided Techniques. The Project will compare existing national databases to likely future requirements and will recommend either improvements in those databases or a transition to a new system. The goal is to have these databases support all the region’s spectrum management functions, including licence approvals, frequency assignments, and compliance monitoring, thereby improving the RTA’s ability to ensure proper and efficient use of available spectrum. Informatics Training The Project is designing a Pilot Informatics Training Program with the objective to increase the supply of informatics-related skills in the five OECS borrowing countries. The rationale for the Program itself is that an improved telecoms sector will create an increased demand for skilled workers. The OECS will need to upgrade rapidly its technology-based skills in order to attract investment from foreign companies wanting to outsource information processing tasks and to support local firms needing to implement new technologies to increase competitiveness. The Program is intended to support development of efficiently administered, well-focused, transparent, and limited subsidy, aimed at human capital formulation in the informatics area. Cost-sharing grants will be used to support the costs of training. This mechanism will leave the choice of training product and provider in the hands of the purchaser in order to support a wide variety of training needs. This will foster development of an active market of training products and services and, thereby, offer diversity, responsiveness, and choice to purchasers. Costs will be shared, so that purchasers will have to pay a substantial contribution to the costs of training. This contribution should promote a strong sense of ‘ownership’ in the outcome and create pressure to ensure the delivery of training that will be of quality and value to the purchasers. Program grants will support a range of training offerings. While most offering will be in the form of classroom courses, the Program will support any saleable form of training, including home study courses, interactive CD-ROMs, video cassette courses, etc. Eligible training offerings must be designed specifically so that the primary benefit consists of enhancing skills directly useful in telecommunications/computing applications or of building awareness of opportunities available through such applications. Examples include call centre operations, PC repairs, network cabling, operating systems installation and management, electronic commerce applications, web page design, programming, applications design, competitive telecom service provision, etc. If the experience with the Pilot Program is positive, OECS Government should consider continued financing once the Program training funds are depleted. Conclusion Integral to the accomplishment of the Project’s goals, the OECS Member States have engaged the region’s incumbent telecommunications service provider in negotiations to ensure that a liberalised environment can be achieved in the shortest possible time. At the same time, work is progressing on the creation of the RTA, the adoption of a new legislative framework in all Member States, and the development of efficient, region-wide spectrum management. In their entire endeavour, the OECS seeks the involvement and co-operation of all their neighbours and trading partners throughout the region.
