Download July 2008 - v2 + speaker notes - final

CANTO
24th Annual Seminar
Enhancing competitiveness in the Caribbean through the
harmonization of ICT policies, legislation and regulation
Bahamas, July 15, 2008
Richard Fraser
Head 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 CTU
April 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.
ICT’s Economic Importance
% ICT Contribution to GDP
14.00%
•
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
12.00%
Ireland
10.00%
Finland
8.00%
US
6.00%
Jamaica
4.00%
EU Average
Germany
Denmark
Italy
France
Germany
EU Average
Jamaica
Italy
US
0.00%
Finland
France
Ireland
2.00%
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!