When the print version of the Telecom Regulators’ Handbook was first published in 2000, the idea then was to provide regulators with a comprehensive resource on fundamental regulatory issues. Since that time, telecommunications markets have been transformed radically by new services and technological advances. In the six years that have passed, the number of mobile subscribers globally has overtaken those of fixed while broadband has been fast replacing dial-up as a means to access the internet.

The speed and extent of this transformation poses significant challenges to regulators and policy-makers worldwide. "The struggle to continue the provision of effective and relevant regulation in a communications orbit marked by constant change is a daunting reality," says Dr. John Prince, Executive Director of the Telecommunications Authority of Trinidad and Tobago.

Indeed, the desire to remain effective and relevant has spurred regulatory agencies around the world, many of whom have just been established over the past few years, to build their knowledge base and develop their skills set to deal with the challenges that have been brought about by these changes.

Giving a leg-up to regulators at this critical time, the International Telecommunication Union (ITU), the United Nations specialized agency for telecommunications, and infoDev, a multi-donor programme focusing on information and communication technologies (ICT) for development, have jointly developed an online ICT Regulation Toolkit — as an update and expansion to the Telecom Regulators’ Handbook, the Toolkit consists of a series of modules on key regulatory issues. Currently, it offers regulators information on five topics: Authorization of telecommunications services; Legal and institutional aspects of regulation; Regulating competition, interconnection and pricing; Radio spectrum management; and New technologies and their impact on regulation.

Conceived as a permanently evolving resource that keeps pace with new developments in the sector, the Toolkit was designed on the basis that regulatory activities and organizations must reflect both changing technology and market developments. Good regulation is a vital factor in supporting market growth and in spreading the use and development of new technologies. Failed regulation can be a major barrier to this process.

Regulators today already face such challenges in the area of traditional voice communication where voice traffic is migrating from circuit switched to packet switched networks. By 2008, ITU predicts that Voice over Internet Protocol (VoIP) is expected to account for at least half of all international calls with many carriers relying solely on IP-based networks by that time. A failure to fully grasp the policy and regulatory implications of VoIP technology may lead to short-sighted decisions in terms of stymied competition and a lost opportunity to provide affordable services for the masses, particularly those in developing countries.

It is no coincidence that the Toolkit’s module on new technologies and their impact on regulation specifically addresses this concern by analyzing the often seemingly disparate regulatory responses that follow the introduction of new technologies and by subsequently highlighting the best practices that develop in that area. "The increasing pace of technological change creates the need for a tool that can help regulators anticipate new trends and have access to impartial and up-to-date information on best practices," affirms Patrick Masambu, Executive Director of the Uganda Communications Commission. "This is the unique niche that the ICT Regulation Toolkit has filled, and proudly so."

Understanding the regulatory implications of new technologies, however, is just one aspect of a larger challenge faced by regulators today, that of regulating in a pluralistic market. Against the background of a "Multi-Operator Multi-Service Multi-Technology competitive scenario", Rakesh Kumar Bhatnagar, Advisor at the Telecommunications Regulatory Authority of India says that "sharing and capacity building support through the toolkit will be of vital importance".

Increased complexities in the areas of competition policy, interconnection and price regulation, in particular, will pose new challenges to regulators. Changing dynamics in the ICT sector, such as the increasing market share enjoyed by mobile operators and the growing amount of traffic being carried on IP-based networks have undermined the relevance of traditional regulatory measures such as cost-of-service regulation that were typically used on monopoly landline operators. Instead, in a competitive market regulators now need to consider first how competition constrains the behavior of different operators. In many cases it is no longer appropriate for a regulator to assume that the market power resides solely with the incumbent fixed-line provider.

The Toolkit’s module on regulating competition, interconnection and pricing provides a thorough discussion of the issues that arise when considering regulatory action. By offering a primer on the principles of competition policy, for example, and case studies of how these principles are applied, regulators are placed in a better position to identify market failure and to decide on what measures to take.

A similar approach is also taken with regard to the challenges regulators face in the area of interconnection and price regulation. The former, in particular, has become more complex with networks supporting different technologies and services having to interconnect. Wired and wireless, and data and voice networks have to be interconnected to provide the seamless level of communication consumers have come to expect today. In this regard, the Toolkit provides an analysis of the challenges surrounding interconnection regulation today and an overview of the regulatory approaches taken to meet them. "Regulators as well as operators will find this tool most useful because it can provide them with substantive information on how to tackle the challenges posed by interconnexion issues and understand their stakes" affirms Dr. Zouakia Rochdi, Head of the Interconnection Division of the National Telecommunications Regulatory Agency of Morocco.

Alongside the challenges faced in regulating the market behavior of operators, regulators in a pluralistic market environment face fundamental questions in determining which operator and what services should be allowed entry into the market. Priorities accorded to different considerations such as facilitating market entry and preventing infrastructure duplication have led many regulators to adopt different approaches to market entry authorizations. In many countries, regulators face difficulties in finding a balance between these priorities. The use of more individual licenses may allow regulators a greater degree of control over infrastructure deployment and market structure; however, it may also raise barriers to market entry, stifling competition. In view of these concerns, the Toolkit’s module on authorization of telecommunications services showcases examples of countries that allow for an individual licensing and a general authorization regime. An accompanying analysis of the general trend towards the greater use of general authorization regimes allows regulators to subsequently adapt these approaches and practices to their local context.

Being closely linked to the topic of authorization, the management of radio-spectrum is similarly addressed in the Toolkit. With increasing demands being placed on spectrum by the phenomenal take up of wireless services and the accompanying entry of new operators, concern over radio-spectrum shortages, especially in populated areas has taken centre-stage. In today’s pluralistic market, regulators are grappling with the need to ensure that radio-spectrum is distributed efficiently and transparently among the many operators, services and technologies present. Regulatory failure here inevitably leads to market inefficiencies and disputes that could unduly hamper the development and adoption of innovative and affordable wireless services.

With the limitations of the traditional command and control approach to spectrum management becoming more evident in an increasingly competitive market, many regulators are turning towards proven alternatives, such as spectrum auctions, that have been tried and tested by regulators elsewhere. Spectrum auctions and similar approaches are described in the spectrum management module of the ICT Regulation Toolkit. By providing a detailed background and case studies on spectrum management practices worldwide, the Toolkit’s module on radio spectrum management demystifies much of the complexities surrounding the subject. More importantly, the module examines a range of alternative approaches taken by a growing number of regulators to improve the spectrum planning and assignment process to reflect the true economic value of spectrum in the market.

While regulators concentrate on delivering substantive regulations to promote a healthy ICT market, there is a corresponding need to ensure that the regulatory process itself rests on a strong legal foundation, a robust and capable institutional structure and a transparent and accountable decision-making process. Although 140 countries worldwide already have a national regulatory authority, there nevertheless remains a continual need to improve and reinforce the basic foundations on which regulations and regulatory decisions are made. In the present multi-stakeholder environment, transparency, operational independence, public accountability and the rule of law in the regulatory process assume an increased importance. Any perceived failure in these areas significantly undermines a regulator’s credibility and, eventually, a country’s ability to attract investment in its ICT sector.

The Toolkit’s module on the legal and institutional aspects of regulation addresses this concern by providing an analytical framework for defining the notion of an effective regulator and the rationale for independent regulatory functions. It also provides guidelines for instituting an effective regulatory process which include open and transparent decision-making procedures and various approaches that ensure the accountability of regulators to the government and to the public.

Dealing holistically with the basic legal and institutional elements of regulation, this module also addresses comprehensively the impact of convergence in establishing a legal and regulatory framework and on the importance of dispute resolution and enforcement mechanisms in maintaining stability in regulation. "The legal module is the single most helpful regulatory tool that I have seen. It has such a tremendous potential to assist all the staff at the INCM.," says Dr. Salomão Manhiça, Chairman of the National Communications Institute of Mozambique (INCM).

Drawing from regulatory trends and best practices worldwide, the ICT Regulation Toolkit as a whole is regarded as the quintessential resource for regulators working in the challenging ICT environment of today. Leveraging on the general body of experience built up by regulators worldwide, Patrick Masambu affirms "it provides a wealth of resources that allow regulators to think globally and act locally".

The ICT Regulation Toolkit can be accessed at http://www.ictregulationtoolkit.org/