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CANTO 24th Annual Seminar
Enhancing competitiveness in the Caribbean through the harmonization of ICT policies, legislation and regulation
Bahamas, July 15, 2008
Richard FraserHead of Mergers and Acquisitions
Agenda
• The wider importance of ICT
• Realising the “Connected Caribbean” Vision– Legal– Technical– Treatment of scarce resources
• Conclusions
ICT a key enabler
“The introduction of new and updated technologies increases both physical and economic productivity. Computer technologies impact all aspects of our lives and are critical to the process of development and efficiency in all productive industries and sectors of all societies,”
Minister Mullings - President, General Conference CTUApril 16 2008
Effects of ICT
1. Efficiencies are realised through rapid technological progress in the production of ICT goods and services in ICT producing industries. Thus, the ICT sector is a driver of productivity growth for the whole economy.
2. Investments in ICTs provide more capital for workers, which raises their productivity.
3. Greater use of ICTs in all sectors in the economy helps firms to increase their efficiency.
• Globally, ICT spending is estimated at US$3 trillion
• Growing at an average of 8.9%
• Representing 6.8% of global GDP.
• ICT growth must be a part of a strategic plan to drive economic stability
• Essential part of global market participation
ICT’s Economic Importance
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
14.00%
Irela
ndFi
nlan
d USJa
mai
caEU
Ave
rage
Germ
any
Fran
ceIta
lyDe
nmar
k
% ICT Contribution to GDP
Ireland
Finland
US
Jamaica
EU Average
Germany
France
Italy
Denmark
Realising the “Connected Caribbean” vision
Factors to facilitate the widespread deployment of ICT:
• Legal– Development of new policies– Dangers of copying the EU model– Cost/benefit assessment– Focus on future, but do not ignore the past
• Technical– Neutrality
• Management of scarce resources– Spectrum– Numbers
Legal (1)
• Policies must facilitate competition and development– Political will is essential– Certain issues of national importance must supersede commercial concerns– Liberalisation is merely the start of the process – Regulation must ensure a level playing field exists– Engagement with industry is key to develop policies that will work
• Industry is a resource• Essential to understand commercial reality of policy decisions
• Current legislation and approaches often “copied” from EU – Failure to adequately reflect huge differences between Caribbean/European
countries– Availability of financial and human resources to replicate European
regulatory practices, • e.g. Current focus on cost modelling to assess MTRs
– Resource intensive– General under-recovery of costs– Risk of cost misallocation between fixed/mobile
– Benefit of benchmarking• Cayman experience
Legal (2)
• Cost / benefit analysis essential – Difference in regulatory costs and benefits attributable to
each competing regulatory approach – Regulator must also factor in the total cost to the industry
• Competition law– Effective competition law and an authority competent to
enforce are basic requirements for effective regulation• Jamaican experience: Fair Trading Commission
– Important to ensure incumbent operator not permitted to stifle innovation/deployment of new services
– Timely intervention by the regulator may be required
Legal (3)
• Legal certainty– Operators will only make significant new investment required
where regulatory environment is appropriate– Regulatory forbearance for new / emerging services– Essential that new policies do not undermine previous
investments– Importance of effective dispute resolution process cannot be
underestimated– Judiciary needs to be suitably skilled to deal with ICT
matters in a timely manner
• Resolve outstanding issues today before seeking to regulate new areas– Physical interconnect
Technical/scarce resources
• Technical– Neutrality is essential – regulator should not dictate the technology
to be used• e.g. Different technologies can be used to deliver broadband services:
xDSL, CATV, WBB– Important regulatory polices do not stifle innovation
• Facilitate entrepreneurship and innovation
• Management of scarce resources– Spectrum
• Digicel supports the Caribbean Spectrum Management Policy • Allocation process which enables operators to offer a commercially
viable service – e.g. Jamaica 2.5GHz spectrum • Reasonable spectrum fees – not based on subscriber numbers
– Numbers• Need for flexibility in relation to innovative services• Old paradigms of fixed/mobile no longer appropriate
Conclusions
• ICT instrumental to economic growth and development
• Competitive ICT services will only be deployed if an appropriate framework exists:– Legal
• Regulate to ensure a level playing field and avoid regulation of new services
– Technical• Regulation must not stifle innovation
– Management of scarce resources• Decision makers must adopt a flexible approach to new
services
Thank You!