UNION INTERNATIONALE DES TELECOMMUNICATIONS INTERNATIONAL TELECOMMUNICATION UNION UNIÓN INTERNACIONAL DE TELECOMUNICACIONES International Institute of Communications Annual Conference Montreal, 10 September, 1992 Multilateral Organizations and the Global Information Society Presentation by Pekka Tarjanne Secretary-General 1. Introduction As stated in its Constitution, the ITU's mission is to foster cooperation among its member countries (currently 172 in number) in order to harmonize and promote the development and efficient use of telecommunications facilities. This is done with a view to: - improving the efficiency of telecommunications services; - increasing their usefulness for economic and social development; and - making them generally available to the public, so far as possible. The ITU is founded on the principle of national sovereignty. The structure of meetings, conferences and elected offices which governs the ITU is built on this principle. - The preamble to the Constitution recognizes "the sovereign right of each State to regulate its telecommunications". - Each member country has the right to participate in all the decision-making and consultative activities of the ITU, and to nominate candidates for elective positions. - Each country has one vote in ITU conferences and meetings. In the past, there was no fundamental difficulty in reconciling the ITU mission and the principle of national sovereignty. - The telecommunications industry was nationally owned and controlled, and telecommunications companies operated mainly within national boundaries. Global companies, in the sense in which the word is now used, did not exist; instead, there were a small number of inter-national consortia established as a result of agreements between sovereign states. - Standards and regulations were agreed to by the representatives of nation states and applied through national structures. - Development proceeded largely through agreements between national actors, with the ITU and other multilateral agencies acting essentially as middlemen. As a result of the rise of the global information society, the telecommunications industry has changed in ways that raise questions about whether the structure of governance which has been built on the principle of national sovereignty is still the most effective way of achieving the ITU mission: - Privatization has reduced the competence of ITU member countries in dealing with technical issues, particularly in the area of standardization. - Competition has reduced the importance of governments' traditional regulatory role in controlling the industry and transferred power to the marketplace. - Deregulation has become the new model for telecommunications development, displacing traditional approaches based on bi- and multilateral financial and technical assistance. - Regionalization has created new standardization, regulatory and development structures between the nation state and the ITU. - Globalization may change the basic structure of the telecommunications industry so that it is dominated by a small number of global actors or alliances which extend beyond national boundaries. One of the central strategic challenges facing the ITU is to adapt its governing structures, which are based on the principles and presuppositions of national sovereignty and multilateralism as it is practiced in the United Nations, to the realities of a telecommunications industry which is leading the way to the global information society of the future. 2. Strategic Issues Some of the key strategic issues are the following: - Membership: For many years, "small-m" members - recognized private operating agencies (RPOAs), scientific and research establishments, and regional telecommunications organizations - have participated in the work of the ITU alongside their "big M" brothers from Member Administrations. However, their rights in ITU decision-making processes have been very limited. As the ads for American Express are fond of saying, "Membership has its privileges". If the ITU is to retain a leading role in the globalized, privatized, competitive telecommunications industry of the future, and not become simply a bureaucratic rump of the industry as it was, it must enlarge both its membership and their rights. As well as involving new players from the telecommunications industry, the ITU must expand its constituency to include "convergent" industries, such as computing and broadcasting, as well as the user community. - Financial Foundations: The issue of membership and its privileges is closely linked with the issue of financing. Although industry currently contributes to the ITU budget, the lion's share is provided by Member Administrations. However, for a number of reasons the willingness and ability of governments to support the ITU is clearly on the decline. If the ITU is to continue to serve the needs of the telecommunications industry in the future, it will have to do more than ease current restrictions on membership and participation. It will have to attract new sources of financing from the private sector. - Value for Money: To maintain its government membership and attract private sector revenues, the ITU will have to offer services that are of value to members. In the past and as long as the ITU was primarily an inter- governmental organization, hard questions about return on investment and value of service tended not to be asked. As governments everywhere tighten budgets and reduce their direct involvement in telecommunications, these questions are beginning to be asked by public authorities. They will certainly be asked by the private companies that are now beginning to dominate the telecommunications industry, and asked with increasing sharpness as competition heats up in the industry and guaranteed rates of return become a thing of the past. - Quality of Service: These considerations lead us directly to the issue of quality of service. The ITU has already taken a number of steps to streamline its procedures, reduce its overhead, and improve customer responsiveness, principally through new working methods, extensive computerization of internal operations, and by providing electronic remote access to ITU products, processes, and services. The ITU is also in the process of terminating old lines of business - such as the Telecommunications Journal - that no longer have a market, and is opening up new lines of business. For example, our Telecom exhibits and fora have been very successful in the marketplace. In the future, the ITU will need to keep its portfolio of products and services under continuous review, to make certain that they anticipate and respond to our customers' changing needs. - Organizational and Human Resource Development: Responding to the changes that are taking place in the telecommunications industry along the lines described in the previous sections will require new capabilities, a transformation of the ITU's organizational culture, and significant changes in the way it does business. In the past, the ITU was a bureaucratic organization, bound by rules and past practices. Some have said that it was not sufficiently sensitive to changes in the telecommunications industry and the economic, social and political environment. To the extent this was the case, the ITU was surely no more than a faithful mirror of the industry it regulated, and the administrations that governed it. The industry is changing. Even governments are changing. The ITU must change too - in the direction of becoming more client and market oriented, more innovative, more entrepreneurial. If not, it will cease to be relevant to the needs of the telecommunications industry. - Management: In order to bring about these changes, there will have to be changes in the way the ITU is managed. To begin at the top, Member Administrations will have to share the power they have reserved to themselves with other players in the telecommunications industry, and eliminate unnecessary distinctions between "Members" and "Non-Member participants". The political aspects of meetings and conferences will have to be reduced, so that less time is spent listening to Ministerial pronouncements, scoring debating points, and putting views on the record for domestic consumption - and more time is spent on the business of developing telecommunications. Member Administrations will also have to be willing to delegate more authority to the officials who are elected and appointed to manage the ITU, and to hold them accountable for results. Within the ITU secretariat, the efforts now underway to introduce modern management practices will have to be intensified. 3. Conclusions In this presentation, I have used a number of unusual terms to describe the strategic challenges facing the ITU - client needs, quality of service, value for money, organizational and human resource development, management accountability. These are the kinds of terms which are commonplace in current management theories, particularly in the private sector, but are not usually used by the heads of UN specialized agencies, or heard in telecommunications policy fora. This has been a deliberate choice. All of us with a public responsibility for telecommunications policy - or an interest in public policy issues related to the telecommunications industry - must recognize certain facts. These facts are that profound changes have taken place in the telecommunications industry; and that this industry is in the process of changing the world. Together these changes - which may conveniently be labeled "the global information society" - have diminished the role of governments, in telecommunications, in the economy, and in society. I believe that these changes do not challenge the fundamental values on which telecommunications policy has always rested - values such as freedom of expression and universal access to telecommunications service. In fact, they have arguably made it more important than ever that we realize these values. However, there is no question that the rise of the global information society has made traditional approaches to governing the telecommunications industry obsolete - at both the national and the international level. I would also venture to suggest that these changes call into question much of the language and many of the concepts that policy- makers and regulators have traditionally used to describe and justify their actions. What will "basic service" mean in the information age? Are there any "natural monopolies" left? Is anything, even radio spectrum, really "scarce"? We need to invent new concepts for public policy in the global information society, and new structures to put them in place. Personally, I would like to see us begin by adding the right to telecommunicate to the Universal Declaration of Human Rights - but that is the subject for another discussion. Before inventing this new "grammar" for telecommunications policy in the information society, we need to understand better where the telecommunications industry is going, what its needs are, and how these needs fit into the broader perspective of human values. Like other telecommunication policy agencies - and perhaps like the other multilateral agencies represented at this forum - the ITU needs to follow the industry as it moves from an era in which its actions were governed by national values, which were primarily bureaucratic and political in origin, into an era in which its actions will be governed by global values, which originate primarily in the marketplace. As a first step in this direction, I would suggest that the ITU - and perhaps other multilateral agencies as well - has to stop seeing the world through the eyes of politicians and bureaucrats, and start seeing it through the eyes of the industry. Only then can we begin the dialogue needed to ensure that the industry continues, as it has for a century and a half, to develop in the best interests of mankind. ****