Enforcement and Implementation

Monitoring and enforcing regulation

 Whilst it is expected that licensees will uphold their side of the contract, and would do anything not to contravene their contract, experience has shown that operators will attempt to minimize costs sometimes at the detriment of customer service or spirit of competition.   In order to ensure that regulators are able to respond effectively to regulatory contraventions they have to establish effective mechanisms to fulfill their roles.   The latter is achieved through monitoring and enforcement techniques and mechanisms.  

Monitoring activity is mainly conducted in the wireless environment in order to monitor: 

• frequency spectrum usage to limit interference
• extent of usage of available frequency by licensees
• illegal operations
• collect information for recording purposes

 Theorists have identified two broad categories of enforcement mechanisms; imposed sanctions and compliance through gentle persuasion (See Ayres and Braithwaite 1992).   They maintain that corporations are likely to conform with the rules if tough sanctions are imposed.    However, what constitutes “tough sanctions” is relative.  For instance, a decision to impose a 0.1 percent of profit to fine and penalize operators who do not meet their universal service targets may appear significant at first, but if the company is reaching profit levels of 14 billion annually then the latter 0.1 percent is miniscule. Gentle persuasion allows for a less hostile regulatory environment, but is not always effective. 

 There several examples of mechanisms available to regulators to enforce rules, these include

• Making routine inspection of licensee operations, and measuring conformity with license conditions
• Conducting tests to measure performance of operators or equipment of manufacturers
• Liasing with law enforcement agencies or setting up a dedicated law enforcement agency as in  Kenya
• Issuing licences which can be revoked should the licensee not comply with rules.  Revoking a license is not a common option for regulators but presents a significant deterrent to resistant operators.  A license is especially useful because it constitutes a formal contract between the regulator and the service provider, and in the process confers additional powers to the regulator.
• Using official letters or notices of intention to suspend, take to court or revoke a license also increases cooperation from operators. 
• Investigating complaints, and conducting follow-ups with further inspection.  Consumers are an excellent source of information
• Issuing compliance forms to operators and service providers, and stipulating the time frame and information required.  This gives the firm the opportunity to independently adopt corrective behavior
• Using media to expose negative operator behaviour, such as refusal to publish unbundled costs or refusal to permit interconnection.  Bad publicity is especially effective when an operator is due for sales of its shares, or is seeking to buy shares in other operators. 
• Imposing penalties when a license is breached.  In Hong Kong up to 10% of turnover is possible. 
• Prosecution through the courts.  This can be time consuming and used as a delaying tactic for the implementation of decisions
• Provide reports using accounting manuals enables regulators to measure pofit levels.

  The ability of a regulator to monitor and enforce regulations is commensurate with funds it has available to hire a skilled and motivated workforce.  'Skilled' , because monitoring activity is based on specialized functions, and 'motivated' because monitoring work can be tedious and routine. Monitoring activity requires regulators to collect and analyse data systematically or to benchmark.  The latter technique is increasingly adopted because it enables regulators to measure operator performance, test validity of information and determine price caps.