How Has The Telecommunications Industry Evolved Commerce Essay


Human beings need communication, and from time immemorial various ways have been used to talk from one indicate the other. Communication deals generally with the dissemination of information which includes been found to be one of the most, if not the most important elements for the efficient expansion of any market and "Telecommunication" in this time has proven to play a vital role in information management and development of any country's current economic climate.

Technology has performed an important role in the progression of telecommunication as the telecommunication market advanced, so warranted the need for a solid effective regulatory program. Bringing about a new wave of regulatory reforms in the telecommunications service sector, focusing on eradicating the already existing monopoly market segments to full competition and also ensure services are sent to the finish users effectively and fairly. The main element element of regulatory success to reaching each one of these is the life of an unbiased and separate regulatory agency outside the influence of both administration policies and the private-sector interest.

The purport of this essay is to look at regulatory independence in telecommunication, its key aspects and constraints/restrictions where necessary, to a regulator's independence in the telecommunication sector. Throughout this work the researcher shall make reference to the United Kingdom's Regulatory Firms and this of Nigeria respectively.

1. 1 The Evolution of Telecommunication

Electronic communication started out in the 19th century and "Telecommunication has advanced greatly from its beginning to the present. " But looking back at the old telecoms industry the "conventional wisdom" then was that telecoms is an excellent exemplory case of natural monopoly and services rendered in the sector could only be provided effectively by a monopoly provider.

In most countries of the world telecoms services were provided under status managed monopoly or by private companies in some instances (all under monopoly conditions). For instance in america of America the monopoly conferred on Bell by the patent

granted guaranteed that Bell Cell phone Corporation developed its network without competition. The result this had was, even after the expiration of the patent, Bell's phone company's dominance was still in existence and not "until landmark antitrust activities in the 1970's sought to break the marketplace".

In the uk electronic communications was in public ownership (be aware, apart from services in Kingston upon Hull) manipulated by the Post Office latterly by English Telecommunications. Then your post office made a decision what can and may not be connected to its network and decided who gets phone services thereby making phone services to users more of a privilege when compared to a right that should be open to all.

Not until the enactment of the British Telecommunication Work, 1981 did English Telecom's severe its links with the Postal Office. The Function also established an independent procedure to create expectations and approve improvement for interconnection of network and and yes it was at the moment that first steps were being taken in the uk to introduce competition in to the telecommunication industry. For example this process led to licence being awarded to Mercury to provide telecoms services, building a competition with a then privatised British isles Telecom (this privatisation was provided for by then new 1984 telecommunication Work).

United Kingdom in the 1980's with the enactment of the 1981 and consequently the 1984 telecommunication Function opened up the market for competition and also developed regulatory mechanisms (Director General of Communication office known as Office of Telecommunication (OFTEL). This is designed to ensure that incumbent providers cannot use their position to drive new operators from the market.

In Nigeria telecommunication was a complete monopoly by NITEL (NITEL came up to being in 1985 because of this of the merger between Post & Telegraph Department and Nigerian External Telecommunication Ltd) "wholly managed and handled by the government. " During this

period there is no competition in the provision of telecommunication service and there been around a free unregulated market in the sector.

In 1992 the Government Military Administration made a Decree (Decree No. 75 of 1992 (as amended) creating the Nigerian Communication Commission rate (NCC) with the primary aim of promoting and regulating competition in the service provision. The NCC as of this period was not effective has it been under the control of the federal government and there was little or no change in the telecom sector, with NITEL almost working aground.

Not before introduction of Civilian Federal government in 1999 were programs released for the privatisation of NITEL and visit of additional service providers and also not before start of the 21st hundred years was there an independent regulatory organization for the sector. This designated the start of the liberalisation of the communication industry in Nigeria with the licensing of several Digital Mobile Operators and Service Providers as well as the enactment of the Communications Act 2003.

In the 20th hundred years the telecommunications industry of all countries was being run by state or its businesses. But with the liberalisation of the communication industry from that of the monopoly to a far more competitive market, privatisation of the sector and the licensing of several operators and providers, coupled with technological development. Led to the transformation and development of the telecommunication industry into the Information and Communication Technology (ICT) sector, these created new legalities and challenges causing the need for an "Independent Regulator. "


In the previous three decades there have been innovative changes in technology and the market forces driving marketing communications. With the upsurge in corporatization and privatization, the liberalization of various market segments bringing about competition and the change in services provided by telecommunication operators, the necessity for a regulator to serve as an unbiased referee is needed.

Regulation is also required because even after privatization the status of the national carrier (which is usually the incumbent) remains and new operators are required to interconnect if

they aren't to suffer from undue market disadvantage created by the incumbent. Therefore an Independent Regulator is required to remove explicit obstacles to admittance "(for example the incapability to interconnect with the incumbent operator), and dismantle implicit barriers (like the potential effect of the incumbent telecommunication operator above the regulator). "

Therefore in creating an unbiased Regulator for the sector certain regulatory reform must maintain place and it must strive towards attaining the next;

To create impartial entities to oversee the introduction of competition on the market and create regulatory mechanisms for issues such as interconnection, licensing and tariff rebalancing.

Preparing the incumbent operator to handle competition, including timetables placing deadlines for termination of market exclusivity.

Allocating and managing scarce resources such as numbers and range resources in a non-discriminatory way within the liberalized market.

Expanding and boosting usage of telecommunication and ICT networks and services.

Promoting and safeguarding consumer interest, including general service and privateness.

Focus of the regulator therefore is to ensure an even taking part in field for the providers and ensure that there is no abuse of dominating market position. In order for the regulator to attain each one of these, "it is essential that the regulator establishes and maintains effective relationships with the three central groups most damaged by its functions: the users, operators and federal government. "

2. 1 Regulatory Freedom In Telecommunication

With the arrival of the liberalisation time the United Kingdom took one of the first initiatives in creating an unbiased Regulatory Body (OFTEL now known as OFCOM (Office of Communication). Other nations followed suit following the (especially the encouraging countries) World Trade Company (WTO) General Arrangement on Trade and Services (GATS) and the Contract on Basic Telecommunications) annexed to it, provided a

Reference Paper which came into effect on the very first of January 1998. The Research Paper packages out six key ideas by which the market for basic telecommunication services should be governed. This article is focused on one of these six key rules; there has to be an Independent Regulator in the telecommunication sector.

The Indie Regulatory body must be different and not responsible to any distributor of basic telecommunication services. Decision come to by the regulator and methods used in getting those decisions will be impartial regarding all market participant.

The term "independence" as found in the telecoms sector shouldn't be misconstrued. The word does not imply freedom from government insurance policy or usurping the power to make such policy, but the freedom to implement coverage without undue interference from the federal government or industry lobbyist.

Former USA Chairman of the Government Communication Commission payment Michael K. Powell mentioned that, "to be independent, not only should a regulator be physical and operationally segregated from those it regulates, but also be empowered to handle policy by making objective well-reasoned, written decisions showed up through transparent functions and predicated on a complete consumer record. "

The EU Guarantees the self-reliance of its countrywide regulatory regulators by making certain;

"member says shall ensure the freedom of nationwide regulatory power by ensuring that they are legally distinctive from and functionally indie of most organisations providing digital marketing communications network equipment or services. Member Says that retain possession or control of undertakings providing electronic communication networks and/ or services shall ensure effective structural parting of the regulatory function from the actions associated with ownership or control. "

The Directive also stipulates that regulatory specialists of member says should exercise their power "impartially and transparently. "

In the United Kingdom the present impartial regulatory body is known as Office of Communication (OFCOM). OFCOM later received its full power from Communication Action 2003 also inheriting the duties that had recently been the duties of five regulatory bodies (OFTEL inclusive) rendering it a converged impartial regulatory authority. OFCOM is independent of any governmental/providers intervention or effect in carrying out its organisational goals/functions and also meting out its responsibilities. But the Secretary of Talk about answers questions in Parliament about OFCOM and OFCOM is also accountable to Parliament through various parliamentary committees and countrywide audit office, this can be seen as method of making sure transparency and accountability by your body rather than under federal control.

In 1996, African Leaders endorsed an ITU sponsored African Green Newspaper which called for major reform in the telecommunications sector in Africa. Nigeria put this into result by enacting the Communication Act 2003 which founded "a regulatory construction for the Nigerian Communication industry and for this purpose to create an effective, impartial and indie regulatory power. " This piece of legislation has reformed the regulatory power in Nigeria which makes it an independent Country wide Regulatory Power. The NCC has henceforth been in charge of creating an allowing environment for competition among providers "as well as ensuring the provision of qualitative and effective telecommunication services throughout the country. "

In practice the amount of independence of the national regulatory specialist depends on several factors differing from country to country. A genuine independent regulatory expert will bring about self confidence in operators, consumers and shareholders that the telecoms market will be governed transparently and objectively. This can only lead to increased investment in the sector and enormous growth and gain to the market (a good example of this is Nigeria, the positive impact the telecoms sector has already established on the economy).


An unbiased regulatory authority is an essential aspect in the success of any country's effort to introduce competition, to privatize and liberalize the telecommunication sector. It really is very important on every country to establish an impartial and 3rd party referee by means of a regulator to produce the rules and processes by which the telecommunication industry is to be regulated and service to the general public will be provided. In reaching this, certain fundamental

elements must be present in virtually any country's countrywide regulatory expert and these are; Structural Self-reliance, Financial Freedom and Functional/Operational Freedom.

3. 1 Structural Independence

National Regulatory Specialists (NRA) has been created in many forms with regards to the country where it is being created. Some countries have regulatory department within government ministry, some are different from the ministry but are accountable to the ministry while others have regulatory organizations that are different from, and not accountable to federal government or its ministries. Whatever structure NRA takes it should be one with a distinct legal mandate with the capacity of engaging and retaining qualified personnel in a position to understand, assess scientific and industry developments and enforcing complex requirements with up-to-date technological tools. Structural independent also reduces the "possibility of political or commercial take" of the regulatory authority. Creating a clear division between a regulator and the government/operators and increasing the degree to which the actions of the regulator are identified to be neutral and transparent in that way boosting market confidence in the sector. A regulator not tied to the lifestyle of any government is also immune from the result of short-term political expediency making the sector a far more attractive potential client for permanent in-ward investment.

Any NRA well structured and effectively self-employed from external affect are advantageous to the telecommunication sector in the next ways;

It meets the main element requirement of the globe Trade Organisation's Reference point Paper on Regulation that the NRA should be structurally different from any provider of basic telecommunication services;

It helps the transparent and non-discriminatory execution and request of insurance plan even where the federal government may still maintain ownership rights to one or more of the main operators;

It facilitates increased impartiality of decision making, both when implementing coverage and in recommending to policymakers ideal courses for the future action.

For occasion in Nigeria the statute creating the NCC and its functions creates a structural foundation for its freedom. Section II of the Nigerian Communication Act 2003 establishes the

NCC as a body commercial with perpetual succession, clothing it has a legal person capable of suing and being sued in its corporate name. A Governing Board (known as "the Board") is created to see to the administration of the commission payment. It also offers the fee to be set up into departments by the Mother board for the purpose of effective release of its functions. It should be known that though visit of commissioners to the table is performed by the President of the country this does not at all make the NCC a section of the executive arm of government.

In the UK OFCOM has a Plank comprising a Chairman and both executive and non exec members. The professional arm of the Plank is responsible for the running of the organisation and reports back to the Board. To further ensure OFCOM's structural independence, the Communication Take action 2003 provides that the principal responsibility of OFCOM is to handle its functions and this is enshrined in OFCOM no other governmental agency. The Board users of OFCOM are appointed by the Secretary of Express and he shall have such power as to set the maximum or minimum amount for the exec participants but this electricity does not increase to what sort of Panel run the affairs of the regulatory organization.

In most countries, it is inescapable that NRA should work carefully with other recognized and even non governmental physiques in other to fulfil its objectives. That is why ". . . folks appointed to these positions will need to have personal qualities to resist inappropriate stresses and inducements. They must exercise their specialist with skill to gain the admiration of stakeholders, improve the legitimacy of these role and decisions and create a constituency for his or her self-reliance. "

3. 2 Financial Independence

An effective legislation cannot be achieved without adequate funding. The foundation of any NRA funds and means where such cash are received and becomes area of the agency's budget is vital as it could determine the amount of a regulator's autonomy and competence when carrying out its functions. Money is crucial in making sure a regulator's performance. While a

regulator's budget may come from administration (in form of administration appropriation) or from the sector it regulates through licensing fees, fines and other administrative and service charges etc. The fundamental part of these is that funding should get rid any politics and private interest.

In a number of countries NRA has been allowed to retain revenues produced from other means other than government appropriation. This is because reliance on multiple sources of funding other than budgetary allocation by the federal government allows regulators to become more financially indie and less subject to outside impact (an independent source of revenue, therefore, can effectively guard a regulators self-reliance).

For instance in Nigeria the regulatory authority have diverse way to obtain funding which provide some degree of financial freedom from the federal government. The Nigerian Communication Take action 2003 requires that the NCC "shall create and maintain a fund from which all expenses incurred by the percentage will be defrayed. " Further continues on to state that this finance shall not be limited by funds made from more than one source such as federal appropriation, licensing fees, spectrum fees, grants, loans, aids.

In UK the regulatory body (OFCOM) also generates its cash from more than one source. Among such means is the making of grants available or the improvements of cash to OFCOM from the Secretary of Express. It also produces cash from the issuance of administrative charges enforced on providers, fines in form of fines, and even contributions by service operators.

The option of diverse source of funding to any NRA offers a degree of financial self-reliance and also unties the regulatory company from the apron of the government. Therefore financial self-reliance, in conjunction with a NRA's capability to control and administer its own funds offers it more regulatory certainty to assert more freedom in regulating the telecommunication sector.

3. 3 Practical/Operational Independence

The establishment of the regulatory construction of an independent regulator is the duty of the federal government, but the implementation and administration of the regulatory platform is the duty of the indie regulator. Therefore for a regulator to handle its functions and become a reliable watch-dog for the sector it's important that sufficient regulatory power is given to the impartial regulator. Not only by the legal construction creating its lifestyle but also by the government in utilizing their plans.

It should be noted that there surely is no particular characteristics for determining the functionality of a regulator; alternatively it is comprised of elements which allow a regulator perform its functions effectively as a going-concern and in doing so establish its trustworthiness. Therefore for a regulators guaranteed self-reliance in undertaking its functions, its responsibilities and forces must be set out in clear conditions in the statute creating it. To build effectiveness and certainty, regulators power to manage the sector will include the next;

the ability to give thoughts and opinions on draft laws relevant to the telecommunication sector;

the ability to make decisions and carry out measures relative to the procedures of regulations, the principles of any good regulatory decision making process must contain transparency, objectivity, professionalism and reliability and self-reliance;

the regulator should be accountable for the issuing of licenses in telecommunication activities, the guidance of their implementation, their monitoring, amendment and enforcement and, if required, their suspension system and revocation relative to the enabling regulation;

the establishment of interconnection guidelines and review of interconnection deals;

the creation of technical standards for providers and rules ensuring compliance;

the establishment and management of the Country wide Numbering Plan;

the supervision of tariffs of service providers deemed to exercise Significant Market Ability;

the perseverance and collection of tariffs and fees;

the enforcement of the law within the limits of the power granted the regulator;

the establishment of regulations emanating from regulations, like the establishment of the standards and methods for the ability to hear and adjudication of issues, do investigations and other says that may come up having the ability to impose appropriate penalties and sanctions without exterior influence;

acting as a mediator and arbitrator to settle issues between licensees;

the ability to promote competition in the sector and preventing anti-competitive behaviour by the providers and also ensuring market transparency;

supporting educational and health companies in undertaking their programs through telecommunications and facilitate access telecommunication services for the actually disadvantaged and the security of customers right by the providers;

to implement each one of these the staffing of the regulatory body must consist of "technical, legal, regulatory, financial and professional expertise" with the head of the regulatory body having the autonomy to recruit personnel, and remuneration different from that of normal civil servants.

In Nigeria the Communication Take action 2003 in Chapter II, Part I (Establishment and Functions of Commission payment) offers the functions of the NCC. These functions are purely within the powers of the NCC to carry out, and these has resulted in guaranteeing the freedom of the percentage, attract traders to the sector and development to the Nigerian economy.

In United Kingdom the responsibilities and functions of OFCOM is assured under the Office of Communication Work 2002 and the Communication Work 2003. These tasks are the duties imposed also to be carried out by the regulatory body.

"Without functional effectiveness, it is difficult if not impossible, for a regulator to achieve the necessary trustworthiness among members in the sector and potential investors. " Its one thing for a regulator with an independent structural bottom and a financial framework for funds that guarantees independence. But where in fact the apparatus to carry out its functions are connected to exterior factors outside the body, a regulatory body cannot operate effectively.


Independence connotes liberty, but this will not guarantee the regulatory body's liberty from government procedures, but instead has independence to use its regulation and guidelines without treatment from the government or the operators. There should be a process ensuring sufficient assessments and balances on the activities of the regulator, to ensure the regulator does not stray from its mandate, take part in corrupt routines or become grossly insufficient. In obtaining this several countries have tend to attack a balance between

regulator's independence and the accountability with their functions, by creating the next measures;

Providing Effective Arrangements for Interesting Against Decisions- By creating an efficient appellate system the actions of your regulator are subject to charm by consumers or providers and appeal can lie to a body specifically appointed for this purpose (pre-designated tribunals or arbitration mechanisms) or by judicial review in the law courts. The European union in its Framework Directive requires that

"Member areas shall ensure that effective mechanisms exist at countrywide level under which any individual or starting providing electronic marketing communications networks and/or services who's affected by a decision of nationwide regulatory authority has a right to appeal against the decision to an charm body that is independent of the functions. . . "

The purport of this is the appeal body can nullify, uphold or impose a new decision on the regulatory body within the ambits of the law. The UK carried out this requirement in its Communication Work (2003). By giving that appeals contrary to the decisions of OFCOM shall lay to your competition Appeals Tribunal and further appeal shall lie to Court docket of Charm or Courtroom of Program, but purely on issues of legislation. For instance regarding Freeserve. com PLC V Director General of Telecommunication, "the tribunal found that the Director General had given insufficient known reasons for rejecting one of the lands of Freeserve's claims about BT's actions. The Tribunal reserve this facet of the director's decision (relating to allegations of predatory rates). . . "

In Nigeria nevertheless the Federal High Court is empowered with the "jurisdiction over-all things, suits and circumstances howsoever arising out of or pursuant to or consequent after this Act or its subsidiary legislation. . . " and section 88 further expresses that "an aggrieved person may charm to the Court docket for a judicial overview of the Commission's decision or other action. "

Process of Session and Removal from Office of the Regulator in situations of Misconduct and Incapacity- That is implemented typically by authorities (ministry, leader or parliament) beyond your ambits of the regulatory body. In the united kingdom this electric power is executed by the Secretary of Status, while in Nigeria the president exercises this electric power within the NCC.

The Subjecting of the Regulator's Conduct and Efficiency to Scrutiny by External Auditors or Other People Watchdog- This is when the regulator is required to provide audited claims and annual information to the ministry or even to the parliament, to supply the extent to which they have satisfied their mandate.

Existence of Adequate Scrutiny for Agency's Budget- Cases the regulator must surrender income to the government and having its budget approved by the federal government creates a kind of checks and amounts that can prevent against reckless spending and over charging of the sector.

Mandating a Compulsory System of Transparency- Regulators must be made to get and put into practice an open up decision making policy, publications of such decisions and other relevant information and reasons for making those decisions. This is to foster against any partiality on any of the providers or even the consumers.

Prohibiting against Issue of Interest- The regulator is precluded from having any direct or indirect financial interest or investment in the sector it regulates.


The description by ITU on regulatory independence being truly a "complex and extensively misunderstood notion" can be traced to just how different countries execute their regulatory system and exactly how much of self-reliance is actually directed at these regulators. The idea to be observed his regulatory accountability is essentially the other part of the gold coin of regulatory independence. An appropriate level of independence therefore has to be balanced by an appropriate degree accountability; to build an effective, reliable and credible regulator.

Henceforth, it is important to bear in mind that the best target behind a regulator's self-reliance is never to have a regulatory body with definite freedom. But a highly effective regulatory platform which enables this market to be competitive, stimulate technical diffusion and enhance efficiency while making certain consumer advantage.



Professor Ian Lloyds and Teacher David Mellor: Telecommunications Law (Butterworths 2003)

Telecommunication Regulation Handbook: Edited by Hank Intven and McCarthy Tetrault (InfoDev 2000)

The Telecommunication Handbook- Kornel Terplan and Patricia Morreale (CRC PRESS 2000)

Principles of Telecommunications Regulation Second Model - Interconnect Communications

John Buckley: Telecommunications Regulation (IET 2003)

Websites & Online Publications (Link Citations up to date as of 29th 0f May 2009)

http://www. associatedcontent. com/article/299909/the_importance_of_telecommunication. html

Evolution of Telecommunication- Musee des Telecommunication LaSalle, Quebec http://www. virtualmuseum. ca/pm_v2. php?id=exhibit_home&fl=0&lg=English&ex=00000267

Evolution of the Telecommunication Industry into the Internet Age group Martin Fransman http://www. telecomvisions. com/articlespdf/FransmanTelecomsHistory. pdf

A Record of British POSTOFFICE (BPO)

http://www. britishtelephones. com/bpo. htm

OECD Insurance plan ROUNDTABLES Competition in Telecommunications 1995 http://www. oecd. org/dataoecd/34/501920287. pdf

Telecommunication in Nigeria Legal Framework

http://paulusoro. com/publication/LegalFramework. pdf

Investment Opportunities in Nigeria- Telecommunication Industry

http://paulusoro. com/publication/InvestmentOpportunities. pdf

Independent Regulation and Telecommunication Performance in Expanding Countries - Audrey Baudrier http://www. isnieorg/ISNIE01/Papers01/baudriers. pdf

ICT Legislation Toolkit- Why Regulate- Regulation in Change to Competitive Market. http://www. ictregulationtoolkit. org/en/Section. 1686. html

http://www. ictregulationtoolkit. org/en/Section. 1686. html

ICT Legislation Toolkit- RESEARCH STUDY Converged Rules: OFCOM

http://wwwictregulationtoolkit. org/en/PracticeNote. 2030html

http://www. ncc. gov. ng/index1. htm

What Constitute a highly effective Regulator?

http://www. ictregulationtoolkit. org/en/section. 2093. html

http://www. ofcom. org. uk/about/csg/ofcom_board/role/

http://www. ictregulationtoolkit. org/en/section. 2114. html

http://www. catribunal. org. uk/328-734/Final-Judgement. html

The Independence and Accountability of Africa's Infrastructure Regulators: Prof Anton Eberhard

http://www. gsb. uct. ac. za/gsbwebb/mir/documents/AfurkeynoteAddress. pdf

http://www. gsb. uct. ac. za/gsbwebb/mir/documents/AfurkeynoteAddress. pdf

Journals & Publications

Fintan Healy: The Effect of Regulatory Responsibilities on the Incumbent Operator (Interconnect Communication)

WTO Guidelines and Telecommunications in Developing Nations: Obstacles and Effects. Telecommunication Policy Amount 29, Issues 2-3 Apr 2005

Warrick Smith: Ict Rules Toolkit; Public Insurance plan for the Private Sector. Electricity Regulators- The Freedom Debate. Notice No. 127 Oct 1997

Thomas E. Leavey: Benchmarking Postal Regulator Efficiency, General Postal Union, January 30, 2004

OECD- Directorate for Science: Technology and Industry- Committee for Information Policy.

Working Party on Telecommunications and Information Services Procedures; Telecommunication Regulatory Institutional Structures and Tasks; 11-Jan-2006

Statutes & Directives

British Telecommunications Action 1981

British Telecommunications Action 1984

United Kingdom Office of Communication Work 2002

United Kingdom Communication Act 2003

Nigerian Communication Act 2003

Directive 2002/21/EC of the Western european Parliament Council of March 2002 Over a Common Regulatory Construction for electronic digital communication systems and services (Construction Directive)


Freeserve. com PLC V Director Standard of Telecommunication (2003) Kitten 5

Vodafone Ltd V Office of Communication (2008) Kitty 22 2008 WL 3996443

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