ulr regime presentation
TRANSCRIPT
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David Butcher and Associates
Bangladesh Telecommunications
Regulatory CommissionUnified Licensing Regime Consultancy
Stakeholder Meeting 27 September 2009
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Todays Agenda
The purpose of todays meeting is to: gain feedback on the discussion document we prepared before we arrived and
circulated in advance of this meeting,
to update all stakeholders on what we have learned in two and a half weeks in
Bangladesh,
give you an opportunity to provide us with verbal comments on what you have
read and what you have heard,
give you a basis on which to write your views.
The Agenda is as follows:
a presentation of our findings,
an open discussion of our findings,
a request for written comments by the 25 October to:[email protected]
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The Assignment
TOR Task
Task-1: Preparing and Engaging in Consultation
Task-2 Identifying an Appropriate Migration Path
Task-3: Final Recommendations on Licensing Regime
Task 4: Preparing the Final License Agreement and completion of all otherRelevant Tasks
Task 5: Capacity building in the BTRC
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Licensing Overall
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What is a Unified License
Network Services
Applications Services
Content Services
Network Facilities
Unified Licenses are technology-neutral
and service-neutral
ULR licensing promotes vertical separationbetween facilities, network, applications, and
content
Mobile
license
Old licenses were issued based on specific
technologies, and services to vertically
integrated businesses
All activities related to the provision of a
particular service are verticallyintegrated for the provision of that
service
Service
Licence
Network
Licence
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Licensing: - International Best Practice
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Details of Licensing
FINDINGS the unusual feature of licensing in
Bangladesh is the licensing of alarge number of activities that arenot normally licensed at all
ISSUES insufficient use is made of
exemption from licensing,
activities such as call centres, ISPproviders are CUSTOMERs of ICTthey are not suppliers of ICT.
RECOMMENDATIONS BTRC should review all existing
licenses
BTRC should exempt fromlicensing those activities that areessentially final users of ICT
(rather than suppliers ofwholesale services),
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Best Practice Objectives
FINDINGSITU defines Licensing Objectives as:
efficient resources allocation
expansion networks-services
privatisation- commercialisation
regulatory certainty
framework for competition
consumer protection
regulatory market structure
generating government cash
ISSUES to which of these objectives
should Bangladesh give priority?
which of these objectives supportthe poverty alleviation goals ofthe GOB?
RECOMMEDATIONSWe recommend the following order
of priorities:
efficient allocation of resources
efficient regulatory structure
digital dividend
framework for competition
regulatory certainty
privatisation- commercialisation
consumer protection
generating government cash
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Efficient Network Configuration
FINDINGS should there be a separate circuit
switched voice and data network?
most administrations haveseparate networks for voice anddata.
ISSUES voice network is more expensive
to operate,
requires more investment and
it is uneconomic to terminate data
calls on a voice network.
RECOMMENDATIONS investors should be able to
recover their investment in theirvoice network before being forcedto terminate data calls.
we need to separate out data
including (VOIP) until we canestablish a clear migration path tothe fully integrated data platform.
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Number of Licenses
FINDINGS there are too many activities
licensed (e.g. including callcentres, ISPs, PSTN operators (toomany) and vendors.
the proliferation of networklicenses complicates rational
network planning and best uses ofavailable capacity.
ISSUES decisions need to be made soon to
exempt many activities, torationalise the network,
what are the requirements of abest practice national architecturethat maximises capacity andminimises costs.
RECOMMENDATIONS non-strategic activities like call
centres and ISPs should beexempt from licensing,
exempted activities shouldregister (like a car driver) with afee that covers administrationcosts.
stakeholders should considerwhat an optimal national networkarchitecture should look like.
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Future Shape of Licenses
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Objective: Neutrality, Flexibility, Efficiency
BTRC Objective Decision Response
Unified License Regime
Multiple Categories
Single or Multiple?
1
Many Categories
Exemptions
Categories or Facilities-Services split
2
Design Authorisation
Exemptions
Single Authorisation
Individual-spectrum
Exemptions
Services (SBO)
3
Facilities (FBO)
Individual
dominant
3
Exemptions
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Which Model is Appropriate for Bangladesh?
FINDINGS Options are:
single authorization (license),
multiple categories or
two categories focused on facilities(infrastructure) and servicesrespectively?
currently in Bangladesh there isno coherent demarcation betweeninfrastructure and services, butboth have to be licensed alongwith many other things, such ascall centres, sim cards etc
ISSUES
ICT businesses dual nature: (1) management of easements
and the construction andmaintenance of networks.
(2) a sophisticated servicesoperation (including exchanges).
RECOMMENDATIONS there should be two forms of license:
infrastructure - services.
an infrastructure operator shouldbe able to hold a service license,
a party holding only a servicelicense should have to apply
separately for an infrastructurelicense.
infrastructure should comprise:
1. either a complete nationalnetwork including backbonenetwork (backhaul or core), localaccess networks (local Loop) and
the collection network, or2. one or more parts of a national
network described above.
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What is Efficient use of Infrastructure?
FINDING efficient use is shared use and
equal charges for associatedparties using infrastructure andexternal users,
in Bangladesh sharing of networks
by operators and entrants helpsmake best use of facilities.
ISSUES competition issues can arise
where incumbents:
offer only low quality lines,
overcharge for interconnection and
use the money to compete unfairlyin complementary markets,
use information gained from usersto poach customers.
regional franchises do not create acompetition framework.
RECOMMENDATIONS sharing should be obligatory, for
infrastructure license holders,
charges for shared infrastructureshould be equal for own use andfor external users,
stakeholders should comment onthe necessity or otherwise ofunbundling wholesaleinfrastructure and service tariffs,
service providers should beallowed to provide their own localaccess,
regional franchises should beremoved.
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Technological Neutrality
FINDINGS in Bangladesh licenses are
currently technology specific,
ISSUES the license holder should be able
to choose the most appropriatetechnology or the mostappropriate service,
the regulator does not need to beinvolved in the choice oftechnology or service.
RECOMMENDATIONS all licenses should be technology
neutral and flexible,
infrastructure licences shouldallowing the use of any technologyand
service licences should allow the
provision16 of any service.
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Content and Applications
FINDINGS Bangladesh currently has no
regulation of content orapplications,
ISSUES is there a role for licensingcontent and applications?
some other jurisdictions (e.g.Malaysia) have licensing forcontent and applications.
RECOMMENDATIONS we can identify no useful purpose
served by licensing content andapplications,
most international jurisdictions donot have any form of censorship
through the ICT licensing system.
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Appropriate Fees, Charges, Revenue Shares
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Revenue Sharing
FINDINGS the total of fees and revenue
shares currently account for about9 percent of the national budget,
this figure was calculated byAMTOB and agreed by others.
ISSUES how much should the telecom
sector contribute towards thegovernment budget?
is the current revenue share
inhibiting sector growth? is the revenue share making it
harder to expand both network orservices?
RECOMMENDATIONS the government should seek a
declining percentage of a growingsector.
in most countries the share ofgovernment revenue from
telecoms is less than 3 percent, focus should be on the
contribution of the sector to GDPand business activity.
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Bangladesh has Many Fees
FINDINGS fees include acquisition, annual
renewal, sales taxes, revenuesharing, taxes on equipment (simcards), radio equipment etc.
the total amount collected from
the sector is inhibiting sectorgrowth, long-term profitabilityand inhibiting long-termgovernment revenues,
the large number of collections isproving to be an impediment toefficient management of firms.
ISSUES a rational and fair method of
collecting taxes, fees and revenueshares from the sector is urgentlyrequired.
RECOMMENDATIONS SHORT TERM: the GOB and BTRC
should phase down and removemany of the smaller fees andcharges on the sector.
LONG-TERM: an appraisal isneeded of the level of contributionto the national budget from thesector and
a fair system of collection isrequired that no longer inhibitsinvestment and growth and long-
term government revenues.
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Migration Issues
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Content of Licenses
FINDINGS most licenses have a term of 15
years, some are due to expiresoon (2012?).
ISSUES should licenses be rolled over or
should they be reissued as ULRs?
to what extent should existingpractices be grandfathered?
RECOMMENDATIONS there should be voluntary
movement to ULRs until licenserenewal,
renewed licenses should bereissued as ULRs,
any license with a term beyond 5years should be reissued as ULR 5years from the date ofintroduction.
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Amortization of Legacy Investments
FINDINGS the proliferation of licenses has
led many investors to consumelarge proportion of Bangladeshsinvestment capital in businessesthat are not viable withoutgovernment protection,
a migration plan will not beacceptable must amortize theseinvestments.
ISSUES a migration plan will not be
acceptable unless a way can be
found for these investments to beamortized and liquidated withinreasonable timeframe (e.g. 5
years)
RECOMMENDATONS BTRC should facilitate formation
of at least two national networksfor otherwise stranded investorsto join.
legacy license holders need at
least 2-5 years to reorganisethemselves before exposure toadded competition.
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Asset Registers
FINDINGS currently there are many licenses
issued for PSTN,
it is not clear if there are sufficientPSTN assets in place to allow theformation of a national network
provider.
ISSUES need a nation infrastructure plan
or maybe plans so that BTRC canbe assured there is capacity in thesystem to provide nationwideservice
RECOMMENDATIONS all license holders should submit
asset plans and registers to theBTRC, along with totals ofsubscribers connected,
BTRC or a cooperative of
operators need to review allexisting asset registers todetermine if there isinfrastructure in place to provide anationwide service.
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ULR i t f ilit ti N t G ti N t k (NGN)
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ULRs aim at facilitating Next Generation Networks (NGN)Service Convergence via an IP Network Digital Platform
IP Network Platform
IP CORE Network /
VPNs
Access
WLAN
DSL
TDMIXC
Frame/ X.25
GPRS
SCDMA
Ethernet
CDMAWCDMA
InternetTransport
IP Transit
Hosting & ContentVoIPService
Application
IP VPN
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Schedule of Interventions
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Time Total
Name Activities30/08/09
6/09/09
13/09/09
20/09/09
27/09/09 4/10/09 11/10/09 18/10/09 25/10/09 1/11/09 8/11/09 15/11/09 22/11/09 29/11/09 6/12/09 13/12/09
David ButcherT1, T2, T3,
T4Field 0.5 0.5 1.0 0.5 0.5 0.5 1.0 0.5 5.00
6.00Home 0.5 0.5 1.00
Shaan Stevens T1, T2, T3 Field 1.0 0.5 1.0 1.0 3.504.50
Home 0.5 0.5 1.00
John Durkin T1, T2, T3 Field 0.5 1.0 0.5 1.0 1.0 4.004.50
Home 0.5 0.50
Chris Doyle T1, T2, Field 1.0 1.0 2.00 2.50Home 0.5 0.50
SharfuddinAhmed
T1, T2, T3 Field 0.003.50
Home 0.5 0.5 0.5 0.5 0.5 0.5 0.5 3.50
I
nceptonBrief
ConsultationPaper
M
igrationPaper
Stake
holderWorkshop
Analysisof
S
ubmissions-
WorkshopReport
Reco
mmendationson
Regime
DraftLicence
Agreement
WorkshshoponDraft
Agreement
FinalLicence
Ag
reement-Final
Report
14.50
TASK 1 2 1 1,3 3 3 3 4 Total
LEGEND 3.00 21.00
stakeholderworkshop 3.50
deliverabledeadlines
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Common Issues to Address
Irrespective of the structure of the license the same issues need to beaddressed in detail in the new licenses,
Major issues include:
criteria that must be satisfied to obtain a license, infrastructure and
services respectively the criteria will be different, revenue share that will be enjoyed by the national government,
other charges that will apply to license holders,
services that will be covered by the license,
content of schedules.
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Conclusion
A lot of work has to be done and the time is short,
We appreciate the importance of the task for Bangladesh bringing the ITsector into the Next Generation,
The priority must be given to the proposed ULR text and the accompanyingpolicy decisions,
We need: input on the current industry structure in Bangladesh,
analysis of the constraints facing the ICT sector operators,
useful suggestions on how a ULR might work,
potential benefits and pitfalls,
frank and pertinent comment on our proposals, advice on where we misunderstand or have the wrong information!