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  • Slide 1
  • David Butcher and Associates Bangladesh Telecommunications Regulatory Commission Unified Licensing Regime Consultancy Stakeholder Meeting 27 September 2009
  • Slide 2
  • David Butcher and Associates 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: david@dba.org.nz
  • Slide 3
  • David Butcher and Associates 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 other Relevant Tasks Task 5: Capacity building in the BTRC 3
  • Slide 4
  • David Butcher and Associates Licensing Overall
  • Slide 5
  • David Butcher and Associates 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 separation between facilities, network, applications, and content Telecom fixed line license Mobile license ISP license VA 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 vertically integrated for the provision of that service Service Licence Network Licence 5
  • Slide 6
  • David Butcher and Associates Objectives of Licensing FINDING PSTN and mobile operators report that licenses conditions make them unprofitable, too much money taken from the sector will stunt its growth, inappropriate design of licensing distorts the technological relationships in the sector. ISSUES it is difficult to discern the principal objective of licensing in Bangladesh, is it to promote an efficient sector, to promote some activities or others we find it is not clear? RECOMMENDATIONS the principal objective should be to encourage the efficient development of the sector, licensing should have as its Long Term objective a converged ICT sector, the goal should be a sector that operates like any other sector: under general economic, health - safety rules 6
  • Slide 7
  • David Butcher and Associates Licensing: - International Best Practice
  • Slide 8
  • David Butcher and Associates Details of Licensing FINDINGS the unusual feature of licensing in Bangladesh is the licensing of a large number of activities that are not normally licensed at all ISSUES insufficient use is made of exemption from licensing, activities such as call centres, ISP providers are CUSTOMERs of ICT they are not suppliers of ICT. RECOMMENDATIONS BTRC should review all existing licenses BTRC should exempt from licensing those activities that are essentially final users of ICT (rather than suppliers of wholesale services), 8
  • Slide 9
  • David Butcher and Associates Best Practice Objectives FINDINGS ITU 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 support the poverty alleviation goals of the GOB? RECOMMEDATIONS We 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 9
  • Slide 10
  • David Butcher and Associates Efficient Network Configuration FINDINGS should there be a separate circuit switched voice and data network? most administrations have separate networks for voice and data. 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 their voice network before being forced to terminate data calls. we need to separate out data including (VOIP) until we can establish a clear migration path to the fully integrated data platform. 10
  • Slide 11
  • David Butcher and Associates Number of Licenses FINDINGS there are too many activities licensed (e.g. including call centres, ISPs, PSTN operators (too many) and vendors. the proliferation of network licenses complicates rational network planning and best uses of available capacity. ISSUES decisions need to be made soon to exempt many activities, to rationalise the network, what are the requirements of a best practice national architecture that maximises capacity and minimises costs. RECOMMENDATIONS non-strategic activities like call centres and ISPs should be exempt from licensing, exempted activities should register (like a car driver) with a fee that covers administration costs. stakeholders should consider what an optimal national network architecture should look like. 11
  • Slide 12
  • David Butcher and Associates Future Shape of Licenses
  • Slide 13
  • David Butcher and Associates 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 13
  • Slide 14
  • David Butcher and Associates Which Model is Appropriate for Bangladesh? FINDINGS Options are: single authorization (license), multiple categories or two categories focused on facilities (infrastructure) and services respectively? currently in Bangladesh there is no coherent demarcation between infrastructure and services, but both have to be licensed along with many other things, such as call centres, sim cards etc ISSUES ICT businesses dual nature: (1) management of easements and the construction and maintenance of networks. (2) a sophisticated services operation (including exchanges). RECOMMENDATIONS there should be two forms of license: infrastructure - services. an infrastructure operator should be able to hold a service license, a party holding only a service license should have to apply separately for an infrastructure license. infrastructure should comprise: 1.either a complete national network including backbone network (backhaul or core), local access networks (local Loop) and the collection network, or 2.one or more parts of a national network described above. 14
  • Slide 15
  • David Butcher and Associates What is Efficient use of Infrastructure? FINDING efficient use is shared use and equal charges for associated parties using infrastructure and external users, in Bangladesh sharing of networks by operators and entrants helps make 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 unfairly in complementary markets, use information gained from users to poach customers. regional franchises do not create a competition framework. RECOMMENDATIONS sharing should be obligatory, for infrastructure license holders, charges for shared infrastructure should be equal for own use and for external users, stakeholders should comment on the necessity or otherwise of unbundling wholesale infrastructure and service tariffs, service providers should be allowed to provide their own local access, regional franchises should be removed. 15
  • Slide 16
  • David Butcher and Associates Technological Neutrality FINDINGS in Bangladesh licenses are currently technology specific, ISSUES the license holder should be able to choose the most appropriate technology or the most appropriate service, the regulator does not need to be involved in the choice of technology or service. RECOMMENDATIONS all licenses should be technology neutral and flexible, infrastructure licences should allowing the use of any technology and service licences should allow the provision16 of any service. 16
  • Slide 17
  • David Butcher and Associates Content and Applications FINDINGS Bangladesh currently has no regulation of content or applications, ISSUES is there a role for licensing content and applications? some other jurisdictions (e.g. Malaysia) have licensing for content and applications. RECOMMENDATIONS we can identify no useful purpose served by licensing content and applications, most international jurisdictions do not have any form of censorship through the ICT licensing system. 17
  • Slide 18
  • David Butcher and Associates Appropriate Fees, Charges, Revenue Shares
  • Slide 19
  • David Butcher and Associates Revenue Sharing FINDINGS the total of fees and revenue shares currently account for about 9 percent of the national budget, this figure was calculated by AMTOB and agreed by others. ISSUES how much should the telecom sector contribute towards the government budget? is the cu