PNG ICT Policy, Phase 2 Recommendations

By Emmanuel Narokobi

Further to a past post (where you can download Phase 2 of the ICT Policy),  I decided to list the recommendations suggested below in case you are unable to download what is a 4.8 MB file.

After the invitation for comments on Phase 2, the Minister for Communication and Information is to report to the National executive Council by March 2009 with a timetable and mechanism for the introduction of Open Competition in the ICT sector. So hopefully we should be hearing from them soon.

Below are the Six Key Recommendations made in the draft Experts’ Report for the National ICT Policy Phase 2. (These are just summaries so read the full report for details):

The move to open competition should be comprehensive and implemented on a timely basis, subject to transitional arrangements and the time required for proper formulation and introduction of new regulatory structures.

Under a substantially revised licensing regime, existing licensees and new entrants should be able to identify where and how they wish to compete within the terms of new individual and class licences. Such entities should have a greater ability to tailor their individual operations to match their chosen business model.

The existing approach of dividing telecommunications markets based on technology and reserved rights should be replaced with a licensing regime that is more technologically neutral and therefore better reflects PNG’s technologically-convergent markets.

A move to such a technology-neutral licensing regime does not imply a change in Government Policy with respect to the number of mobile operators or of broadcasters.

However, the new regime will be capable of accommodating such a change, should one occur, which is a matter that would have to be determined by Government Policy and the ICT Regulator operating within the framework of PNG law.

Immediate liberalisation of the international gateway should occur by permitting all network licensees to operate international gateways if they meet certain minimum licensing criteria.

Liberalising the gateway in this way means operators can secure a legal substitute to Telikom’s international links. This creates an opportunity for Telikom to maximise the commercial potential of its assets but with the competitive discipline imposed by the alternatives available.

International gateway infrastructure should initially be exempted from the access regime in order to preserve investment incentives. However, that exemption should be subject to periodic review with regard to competition criteria.

The cooperative development of important ICT infrastructure should be encouraged by implementing a new regulatory regime for wholesale access and interconnection. The amended regime should address weaknesses in the current regulatory regime by extending the potential scope of regulatory protection and ensuring that regulation is more efficiently and predictably applied.

Specifically, certain services such as fixed terminating access, mobile terminating access, domestic backhaul, inter-carrier roaming and co-location (tower sharing) should be deemed to be declared services within these new access arrangements. Other wholesale services should be capable of being declared by the Minister on recommendation by the ICT Regulator.

Declaration of additional services should occur based on whether access to the facility or service provided over the facility is essential to the promotion of competition. In considering this, the ICT Regulator must take into account:

  • whether the facility to which access is sought is provided exclusively or predominantly by a single or very limited number of suppliers;
  • whether the facility can be economically or technically substituted in order to provide the service;
  • whether lack of access would pose a barrier to entry that is likely to make otherwise efficient entry into the market uneconomic; and
  • whether access would compromise the incentives for otherwise efficient investment, including as a result of creating undesirable regulatory risk.

Once services are declared, licensees should continue to commercially negotiate their terms of access and facilities sharing. However, if such commercial negotiations fail, licensees should have the ability to seek arbitration from the ICT Regulator.

The ICT Regulator should resolve arbitrations by identifying reasonable terms with regard to legislated price and non-price principles.

These recommendations take the current negotiate/arbitrate model that applies only to interconnection services, extending a refined model to a greater range of services.

The implementation of more effective and efficient access regulation will enhance the competitive disciplines applied to retail pricing, hence existing retail regulation will become redundant and potentially harmful. Existing retail price regulation should therefore be removed from mobile and fixed network services.

A new universal access scheme should be developed for the ICT sector that retains existing mobile network mandatory roll-out obligations but improves their effectiveness.

A Rural Communications Fund should also be established. The Fund should be administered by a Board under accountable and transparent Government oversight.

The Rural Communications Fund should be financed by a combination of industry levies, international donor funding and the Government.

The introduction of a new regulatory regime calls for a new converged regulator that has all powers and functions for the sector.

PANGTEL should be re-organised and restructured to form this new ICT Regulator.

The new ICT Regulator should be the primary regulator for all issues in the ICT sector, including both telecommunications and broadcasting. It should be required to consult with ICCC on certain competition and economic matters.

The ICCC will continue to administer the competition provisions of the Independent Consumer and Competition Commission Act 2002 (ICCC Act) as applied to the ICT sector.


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