Policy and Regulation in an Era

of Convergence

Policy & Regulation in the Era of Convergence2

Terms of Reference

We have been invited by the Select Committee on Labour and Public Enterprise to provide an objective

overview on Convergence and Convergence experiences

internationally

Policy & Regulation in the Era of Convergence3

Delegation

• Benito Lekalakala Executive

• Nozicelo Ngcobo Senior Manager (Parliament)

• Keso Mbali Senior Specialist (Convergence)

• Kenny Pasensie Specialist

• Leanda Kleinbooi Specialist

Policy & Regulation in the Era of Convergence4

Discussion Points

• Definitions of Convergence

• Types of Convergence

• Drivers of Convergence

• Key principles on Convergence

• Pre and post Convergence Mapping

• Convergence in Malaysia

• Key policy considerations w.r.t. Convergence

• Convergence and Social Obligations

Policy & Regulation in the Era of Convergence5

What is Convergence?

• There is no universal definition of Convergence.

• Convergence can mean:- “Provision of various communication services like text, data,

image and video over the existing infrastructure”

“Development of new infrastructure for handling multimedia transmission”

“Managing of technologically and commercially distinct markets such as Broadcasting, Publishing, Cable TV, Fixed Voice, Cellular Mobile Services and Internet Services

Most countries had adopted definitions closely aligned to the achievement of national objectives through use of ICT

Policy & Regulation in the Era of Convergence6

Types of Convergence

• Convergence of Technologies : A common platform to deliver Voice, Data and Video services

• Convergence of Services: Delivery of multiple services to the end users over the same

medium/ network

• Regulatory Convergence: Establishing a single Regulatory Authority by blurring the

regulatory boundaries for telecommunication, information technology and broadcasting

Policy & Regulation in the Era of Convergence7

Drivers of Convergence

• Technology

• Markets

• Customers

• Regulation

Policy & Regulation in the Era of Convergence8

Drivers of Convergence…1

1. Technology– Digitisation of transmission and switching networks– Global networks based on packet switching and open

standards (IP)– Increase in Processing power of Computers

2. Market– New markets and services such as Multimedia services,Video

on demand, Interactive TV, Internet Telephony, MNet, etc.– Integration of content service providers with access providers

e.g. SABC’s NewsBreak– Emergence of new Market players based on potential of ICT

e.g. 35050 services

Policy & Regulation in the Era of Convergence9

Drivers of Convergence…2

3. Customers – Cheaper access to communication

– Option for new value added services in a modular fashion

– Single Information Socket (for phone, data, video)

4. Regulation – Reduction in cost of regulation by optimum utilisation

of regulatory resources e.g. merger of SATRA and IBA

– Ease of Regulation and Interconnection

Policy & Regulation in the Era of Convergence10

Convergence Mapping: Pre-Convergence

Broadcasters Signal Distribution

(Sentech, Orbicom, etc.)

End

Users

TV & Radio

Sets

VANS,

ISP, etc.

Telecommunication Networks

(Telkom, SNO, Sentech, USALs)

Computers &

Data Terminals

Voice

Data

Voice/Data

Terminals

Broadcast

Content

Information

Services

End

Users

End Users Fixed Networks (Telkom, SNO, USALs) End

UsersMobile Networks (MCOs, USALs)

BROADCASTING (Broadcasting Act, IBA Act, ICASA Act, Sentech Act)

ENHANCED DATA SERVICES (Telecommunications Act, ECT Act , ICASA Act)

VOICE/DATA CONVEYANCE SERVICES (Telecommunications Act, ICASA Act)

Policy & Regulation in the Era of Convergence11

Convergence Mapping: Post Convergence

SERVICE PROVIDERS

(Broadcasters VANS, ISP, etc.)

NETWORK

SERVICES

CUSTOMER

PREMISES

EQUIPMENT

C0MMUNICATION SERVICES (Convergence Bill)

APPLICATION SERVICES

(Content Services)

(Information Services)

END

USERS

VOICE

DATA

END

USERS

END

USERS

ORIGINATION TRANSPORT DESTINATION

Policy & Regulation in the Era of Convergence12

Types of Licenses

• Individual licenses Radio Frequency Spectrum licences Communications network services Broadcasting services Other services (as may be prescribed)

• Class licenses Communications services Application services Other services (as may be prescribed)

• Licence exemptions

Policy & Regulation in the Era of Convergence13

Convergence in Malaysia

• Malaysia considered a good case study in understanding and implementing Convergence

• Malaysia follows a dual licensing regime

• Malaysia has experienced some market failure from which SA can draw lessons:– 138 individual licensees; 123 class licensees *– Majority of licensees are unprofitable– Investment in the sector is low

* Source: Impact Survey 2004 conducted by NRA Malaysia

Policy & Regulation in the Era of Convergence14

Key Principles on Convergence

• Clear Regulatory Environment

• Effective & Independent Regulator

• Self-regulation & Co-regulation

• Technology-neutral

• Fair & Balanced outcomes

• Consultative & Public process

Policy & Regulation in the Era of Convergence15

Licensing in an era of Convergence

• Rethinking the basic tenets of telecommunications regulation, licensing and spectrum management

• Convergence is raising a dizzying array of regulatory and legislative issues that policy-makers and regulators will have to address:

How can they move to a converged licensing framework without unduly benefiting either incumbents or new market entrants?

How can the licensing regime attain societal objectives such as universal service?

Policy & Regulation in the Era of Convergence16

Key regulatory considerations to narrow the digital divide

• The link between convergence and competition has a direct impact on the movement of the digital divide

• While infrastructure roll-out is key, it is not the only way to narrow the digital divide: Content, via that infrastructure, must be accessible and relevant to

those at the ‘bottom’ of the digital divide

• Access, interconnection and interoperability: Thereby supporting a consistent horizontal approach to regulation

and licensing

• Licence conditions: Efficacy of USO schemes to determine whether they are assisting

those who cannot to pay for ICT services

Policy & Regulation in the Era of Convergence17

Convergence and Social Obligations

• “You play, you pay” From a societal perspective, what does a license mean in terms

of improving quality of life ICT represents an opportunity for economic development and

poverty alleviation

• How can convergence benefit a normal man on the street?

• “Unrealistic” comparisons to countries such as S.Korea should be reconsidered

• SA needs a South African approach to convergence

Policy & Regulation in the Era of Convergence18

Concluding remarks

• South Africa needs a South African approach to Convergence

• Prioritisation of regulatory challenges for optimum utilisation of regulatory resources

• Drawing the roadmap for implementation of convergence

• Need for efficient and timely dispute resolution mechanisms for converged licensing regime

• Capacity and expertise building in the regulatory bodies to meet the challenges of convergence

Thank you

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