Unit 1: Basic Principles of Regulation

Introduction

Public operators initially both provided services and regulated themselves throughout most of the nineteenth and twentieth centuries in most countries, excluding the USA where regulatory activity was always separated from service provision.  However, the wide scale introduction of liberalisation of telecommunications markets provoked by growth of new technologies such as mobile communications and internet, increased availability of capital to expand telecommunications services and networks, and inability of public operators to meet demand efficiently, compelled governments to establish regulators to manage the market along national policy objectives.  

These objectives inevitably varied from country to country, as governments were guided by different socio-political and economic challenges of their countries as they shaped telecommunications regulations.  It is thus not surprising that the detail of telecommunications regulation varies across different countries. What is constant across different countries is the acceptance that telecommunications is a basic right and is regarded as instrumental to economic growth.  Governments of most countries today view telecommunications provision as an essential public service and have accordingly sought to ensure that telecommunications accords with public interest ethos of national policies.

Why do we regulate? There are several reasons for the establishment of regulators in the ICT sector. The obvious answer is that policies established by governments cannot on their own regulate the sector, an institutional vehicle is required to translate policy to rules and regulations (a more in-depth discussion is provided in module 509: Policy, Law and Institutions).  However, there is general consensus that the regulator's intervention is required to ensure that fair play prevails in the market and that consumers are protected and catered for. Regulators fulfill five main functions which can also be broadly classified as:

1. Meeting social and political objectives (Social regulation)
2. Meeting economic goals (Often labelled Economic regulation)
3. Meet technical requirements (technical regulation)
4. Enforcement and implementation of policies and regulations