Column : Talking Telecom with Maxwell Massaquoi

Independence: Blueprint for an effective regulatory environment

Situation
From many corners of the universe, there is a growing trend by national governments to extrapolate from government ministries (communications ministries), the responsibility for sector (telecommunications) regulation. The ministries are being left with the responsibility for policy formulation. The reason for this trend can be attributed to two major factors. Firstly, the proliferation of new technologies and communications platforms has pressured most of these states and especially the developing world to reconsider their existing position on telecommunications (a Natural Monopoly). Yes, one may say that some of the attention or responses directed toward such new platforms (e.g. mobile communications, VoIP, etc.) are mere knee-jerk reactions from markets that had been starved of significant technology development. However, the new technologies are serving as propellants for the overall development in most of these countries (including Sierra Leone) enduring the communications revolution. Secondly, many states in the last five years as part of their commitments to the World Trade Organization's Basic Telecommunications Agreement have reengineered their telecommunications sectors and introduced policies that promote competition, direct private sector investments and independent regulation. This development has played a significant role in the dramatic increase in the number of independent regulatory agencies around the world today.

Devolving the regulatory functions from the standing ministries and crafting a legal framework on paper does not automatically catapult the regulator to industry/sector or market prominence. These are very important things in the development of a regulatory environment and their significance cannot be downplayed by any measurement. However, there are other elements of regulation that are equally as important and some of these elements include regulatory strategy, policy and regulation divide, sector harmonization and capacity development and enhancement. These elements can only be achieved if the regulator is effective in executing its fiduciary duties and legal mandates. So, how can we produce an effective regulator for our evolving telecom sector in Sierra Leone?

Perspectives
Generally, being an effective regulator in a dynamic and complex sector such as the telecom sector comes with a certain requirement that is a “must-have” in order for the regulatory body to function in an effective manner. The global body of knowledge on telecom regulation prizes the independence of the regulator and the degree of functionality to be attained by the regulator in performing its functions as probably the two main drivers in achieving regulatory effectiveness. The independence of the regulator has multi-dimensional attributes in that the regulator must retain and display structural independence and financial independence. The regulator is bound to be on the receiving end of political pressure from diverse sources (consumers, industry players and other government agencies) and it is paramount for the regulator to demonstrate its independence in dealing with any of these sources or risk being “captured” by these interest groups. For a donor-heavy economy as that of Sierra Leone, I will add foreign donors (multilateral and unilateral donor agencies) as possible source of political pressure. The possibility exists for these donors to assist the new regulator in the mold of technical assistance and this assistance is mainly through third-parties that come with their own country-specific or region-specific experience. As exemplary as those experiences may be, the uniqueness of our market within the web of the global market must be preserved. In short, we should build from “inside-out” and try to mitigate the risk involved in the regulator's exposure to foreign influence that may have worked well in Antigua but potentially ineffective in our market. As we continue to thread towards sector reform efforts, these assertions must resonate in the heads and minds of our sector stakeholders, policy and regulatory architects. In fact, I will go a step further to suggest that in addition to these well-rounded assertions within the context of Sierra Leone, the regulator must be project-oriented and goal-driven in effectively and efficiently addressing mandated and non-mandated requirements. We must not fool ourselves by thinking that regulating our telecom sector effectively will be a “cake-walk”. Actually, it will be everything else but easy.

Implications
As a young management consultant (telecom policy and regulatory solutions) with the largest telecom-specific consultancy (Telcordia formerly BellCore) in the world, I remember attending the NANC – North American Numbering Council monthly meetings at the FCC – Federal Communications Commission. This bi-monthly gathering represented a cross section of industry players, FCC, state PUCs, federal agencies, consultants and consumer agencies. The focus of these meetings then was around number pooling and number portability. NANC is a Federal Advisory Committee created to counsel the FCC on numbering issues and make calculated recommendations that facilitate impartial and efficient number management. As diverse as the representations were at the NANC meetings, the interests of the participants were probably more diverse and conflicting. For example, on the part of the industry players, there was overwhelming opposition from the RBOCs – Regional Bell Operating Companies or ILECs to Local Number Portability – LNP. But the CLECs – Competitive Local Exchange Carriers, State PUCs, DOJ and members of the public were strongly in favour. Some four years later after receiving preponderance of information from multiple sources (NANC, DOJ, State PUCs, consumers, and service providers), the FCC finally acted on its mandate and LNP became a reality for the US telecom industry. As a seasoned telecom expert, I worked on two number portability implementation projects several years later for two separate service providers. These organizations were at one time vehemently opposed to number portability. However, these same operators today will fight strongly any move to eliminate this service option from the “regulatory menu”. What is the lesson here? Well, attending those NANC meetings (before the FCC decision) some five to six years earlier, seeing the strong and overwhelming opposition from the industry players then and observing the way these very operators accepted the advent and reality of number portability speaks volume of the decision taken by the FCC. The regulator collectively gave audience to opposing parties and then moved on with making an informed decision on the issue. Today, no one can say that its decision on number portability has not been effective. Being steadfast, independent and collectively informed on issues will position the regulator to make well-informed decisions, which creates an “enabling foundation” for regulatory effectiveness. The FCC's position on number portability was never a “happy affair” for many dominant players in the industry.

Nevertheless, today after several years of number portability being implemented across the top 100 MSAs in the US, the industry and consumers alike see it as an inextricable fabric of the competitive telecom industry. The independence of our new regulator must not be something that is tradable under any circumstance. For seasoned regulators like the FCC (US) and CRTC (Canada) or “young but coming into-their-own” regulator like the NCC (Nigeria), independence to evaluate and implement policy without undue pressure and interference from government, consumers or industry is paramount to their effectiveness. In implementing our government's telecom policies, the new regulator must be cognizant of new technological and market trends and must possess the capability to probe, plan and forecast for sector issues. This should enable the regulator to implement the government's policies effectively and progressively and systematically address issues and also act as the government's “outpost” for problems that will require policy attention from the government. This current administration must be commended for its effort in giving us the opportunity to put in discourse such topics as “independent regulation and competition” for our buoyant telecom sector. This is a far cry from where we were a decade ago. Nevertheless, the storyline must not revert to just characters and words on paper. The telecom bill enacted by the parliament recently lays the foundation for regulatory effectiveness. Nonetheless, the “pillars” for an effective regulatory environment will be the level of independence enshrined in the legal framework for the sector”



• Massaquoi is a telecom expert with expertise on regulation, BSS/OSS, revenue assurance and telecom systems implementation. He works and lives in Freetown, Sierra Leone.

 

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