facilitating convergence : licensing - the malaysian ...€¦ · points provision of a particular...

www.cmc.gov.my© Malaysian Communications and Multimedia Commission

EI/July 2002

FACILITATING CONVERGENCE : Licensing - The Malaysian Experience

ITU Regional Regulatory Seminar Dalian, China, 5 – 8 August 2002


EI/July 2002

AGENDA

1. New ‘convergence’ based Licensing Regime2. Implementation – Migration of Licensees 3. Licensing Environment under the Communications

and Multimedia Act 1998 (CMA 1998)A. Universal Service Provision

4. MCMC as a convergence regulatorA. Digital Signatures Act 1998B. Postal Services Act 1991

5. Conclusion


EI/July 2002

New ‘convergence’ based Licensing Regime


EI/July 2002

The sector used to have many different categories of licenses

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Licenses issued under the old regulatory framework were service-specific and technology-specific.

These restricted competition into narrow markets and did not allow licensees to move freely into related and adjacent activities.

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EI/July 2002

The Communications and Multimedia Act 1998 has organized

the sector under four markets

Network Facilities

Network Services

Applications Services

Content ServicesLicenses issued under the new regulatory framework are

service-neutral and technology-neutral.

Licensees compete in four economic markets, i.e. Facilities, Connectivity,

Applications, and Content Applications.


EI/July 2002

The New Licenses allow for greater business flexibility

Range of business options

Old Verticallicense

New HorizontalLicenses

Confined to service(s)

and technology defined in old license

New licensees may enter market


EI/July 2002

Determination of Licensable Activities

Ownership or operation of

network facilities

Provisionof basic

connectivity & bandwidth to enable

transport of communications

between points

Provision of a particular

function or capability to end user(s)

Provision of content services

What is the activity?

Network FacilitiesProvider

NetworkServicesProvider

ApplicationsServicesProvider

ContentApplications

ServicesProvider


EI/July 2002

Licence Categories

Individual Licenses

• Content applications service provider

• Applications service provider• Network service provider• Network facilities provider

Class Licenses (Current)

• Applications service provider


EI/July 2002

-Earth stationsFixed links and cablesPublic payphone facilitiesRadiocommunications transmitters and linksSatellite hubsTowers, poles, ducts and pits used in conjunction with other network facilities

Network Facility Provider

-Bandwidth servicesBroadcasting distribution servicesCellular mobile servicesCustomer access servicesMobile satellite services

Network Service Provider

Audiotext hosting services provided on an opt-in basisDirectory servicesInternet access servicesMessaging servicesPrivate payphone serviceTelegram services

PSTN TelephonyPublic cellular telephony servicesIP telephonyPublic payphone servicePublic switched data service

Application Service Provider

-Satellite BroadcastingSubscription BroadcastingTerrestrial free to air TVTerrestrial radio broadcasting

Content Application Service Provider

Class (Current)IndividualLicensing Category


EI/July 2002

Migration to the New Licensing Regime


EI/July 2002

Transition Options for Licensees

Register existinglicense

Register existinglicense

Apply for newlicense

New licensegranted / refused

Old licensecontinues

Existing licensees have certain transitional obligations.

Licensee indicates intent to migrate or remain on existing

licenseIntention tomigrate to

new license

Intention toretain existinglicense


EI/July 2002

The Steps to Convergence

Licensesissued by Dept of

Telecommunications

Licensesissued by

Ministry of Information

Register licensewith MCMC andindicate intentto migrate to

Minister

Licenses forconvergent activities

1 Apr 99 1 Apr 00 Phased

MCMC issues transitional

licenses for licenseesopting to migrate

and to new applicants

Old licenses not migratedcontinues until expiry

Licenses forconvergentactivities

New applications


EI/July 2002

Categories of Licences

Individual Class Exempt

Licensed Unlicensed

Within the four markets, activities may fall into any of three categories for licensing purposes.

Only activities with significant economic or social impact are individually licensed.

The long term objective is to move into less regulation.

Less regulation


EI/July 2002

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Network Facilities

Network Services

Applications Services

Content Services

The old licenses that were issued based on specific technologies, and

specific services map onto

New technology-neutral and service-neutral

licenses

Licensing Migration


EI/July 2002

Licensing Migration Scenarios

Existing operators may require more than one license. But service-specific licenses such as licenses for broadcasting and ISP will no longer be issued. This, however, does not restrict the licensee from describing itself as a broadcaster or a telecommunications service provider. These are commercial decisions.

LicenseeA

LicenseeB

LicenseeC

LicenseeD

INTERIM RESTRICTIONS

Some restrictions may apply in the interim. The reasons for these include the following:

• To ensure the orderly growth of the convergent sector

• To take into account commitments already made to some existing licensees; significant investments have been made on the basis of these commitments.


EI/July 2002

Licensing Environment under the CMA 1998


EI/July 2002

Registration For Class Licence

APPLICANT COMMISSION MINISTER

SubmitsForm D

Acknowledge;Check for

completenessProcess

Qualifies forregistration

PaymentRegistrationCopy of licence

IssuesClass licence

Issuesnotification

Does notqualifyNotified


EI/July 2002

Process For Individual Licence

APPLICANT COMMISSION MINISTER

Submitapplication

Acknowledge;Check for

completeness

Processand

RecommendDecision

Registerand

Inform

Issuelicence

Notgranted

Licencegranted

Informedof reasons

for rejection

s.30(3)

s.30(6) – s.30(8)


EI/July 2002

Fees Payable & Licence Tenure

5 or 10 yearsTenure

RM25,000Renewal fee

0.50% or 0.15% of Gross Annual

Turnover (minimum RM50,000)

Annual licence fee

RM2,500Annual registrationRM50,000Processing fee

RM2,500Registration feeRM10,000Application fee

CLASS LICENSEES

INDIVIDUAL LICENSEES


EI/July 2002

Individual Licence

No. of licencesissued

Licence Category

19592322

Content Application

Service Provider

Individual Licence (CASP)

Application Service Provider

Individual Licence (ASP)

Network Service Provider

Individual Licence (NSP)

Network Facility Provider

Individual Licence (NFP)


EI/July 2002

Licensing Environment

Generic provisions of Act apply to all relevant activities

Standard license conditions commonto Individual and Class licences

Standard LicenceConditions common

to Individual Licences

Specialconditions

Undertakings

Individual Class Exempt


EI/July 2002

Standard Conditions For Class Licence

1. Permitted activities2. Sole licence3. Compliance with the law4. Compliance with the

numbering plan, the electronic addressing plan, and Consumer Codes

1. Safety measures2. Charging mechanism3. Indemnity4. Fees5. Change of particulars of the

registration notice


EI/July 2002

Standard Conditions For Individual Licence

1. CorporateA. IncorporationB. Share holding, JVC. Sole licence for activityD. Compliance with CMA

2. Indemnity3. Change in licence

condition

1. OperationsA. Numbering plan, electronic

addressing, spectrum planB. Consumer codeC. RatesD. Safety measuresE. Charge mechanismF. Licence fees


EI/July 2002

Special Licence Conditions (Examples)

1. Obligation to provide Universal Service And/Or To Contribute To Universal Service Fund- The licensee shall comply with any

determination made by the Commission on universal service provision.

- CONTRIBUTION TO USP FUND: - All licensees except Content

Application Service Provider (CASP)

- Licensees whose annual total revenue derived from designated services exceeds RM500,000

- Contribution is determined at 6% of the total weighted net revenue from designated services

2. For all individual licensees [Reg. 18]

A. Notify the Minister of any restructuring or rationalization of the individual’s corporate structure

3. Additional for CASP(I) [Reg. 22(2)]

A. Provide local content programmes and those that promote Malaysian culture and national identity

B. Carry public announcements for the purposes of the government or for public or national interest.


EI/July 2002

USP Overall Objectives

network services and/orapplications services

by encouragingthe installation of network facilities

and the provision of network services and/or

applications servicesin underserved areas

orfor underserved groupswithin the community.

WHAT

FOR WHICH

SERVICES

WHERE

HOW

FOR WHOM

To promote the widespreadavailability and usage of

throughout Malaysia

To set targets and timelines.

Basic communications services, initially focusing on public payphones, basic telephony and internet access services.

USP funding to be provided to incumbents in brown field areas and successful bidders in green field areas.

Through collective access (e.g. payphones) or individual access (e.g. residential phones).

STATEMENT OF OBJECTIVE OPERATIONALISING THE OBJECTIVE


EI/July 2002

UNIVERSAL SERVICE OBJECTIVES

Underserved Area is defined as an area where the penetrationrate for basic telephony is 20% below the national penetration rate

22% (Current National Penetration Rate)

17.6% (20% below National Penetration Rate)

PenetrationRate

Underserved Area

Highly Served Area 100 %

80 %

20 %


EI/July 2002

UNIVERSAL SERVICE PROVISION : UPDATES

1. Ministerial Direction Universal Service Provision 1/2000, 1/2001

• Direction from Minister to determine a system of the USP

2. Commission Determination on Universal Service Provision 2/2001

• Outlines the mechanism of USP in the country

3. Underserved areas identified throughout the country

4. Areas for roll-out in 2002 identified and bid documents issued

5. Project implementation by 4th Quarter 2002


EI/July 2002

MCMC as a Convergence Regulatorfor the entire communications and

multimedia industry


EI/July 2002

MCMC as a Convergence Regulator

1. Apart from implementing the Communications and Multimedia Act 1998, MCMC is also has jurisdiction over the following Acts:

A. Digital Signatures Act 1997B. Postal Services Act 1991


EI/July 2002

1. To exercise regulatory functions including the determination of performance standards and standards of facilities and services and the enforcement thereof;

2. To ensure the licensees comply with their license terms and conditions;

3. To promote competition in providing for postal services;4. To promote the interests of users such as the prices to be

charged, the continuity of postal services and the quality of the postal services;

Postal Regulatory : Role & Functions


EI/July 2002

5. To secure all reasonable demands for postal services are satisfied;

6. To promote and encourage the expansion of postal services with a view to the economic development of Malaysia;

7. To regulate the fixing of rates to be charged in respect of postal article;

8. To regulate the fees and commissions on postal financial services; and

9. To regulate the issuance of postage stamps.

Postal Regulatory : Role & Functions


EI/July 2002

Postal Licensing Regime in Malaysia

1. The Postal Services Act (PSA) 1991 governs the postal services industry in Malaysia. Regulations based on the Postal Act:

I. Postage Rate Rules; andII. Post Office Rules

2. The PSA (Amendment) 2001 came into effect on I November 2001. This Amendment Act empowers the Commission to regulate the postal services industry in Malaysia.


EI/July 2002

The Digital Signature Act 1997

1. DSA 1997 came into effect on 1st October 1998.2. It requires mandatory licensing whereby a

company that Wishes to operate as a Certification Authority (CA) must be licensed first.

3. The Regulator of the DSA is the MCMC – Controller of Certification Authority.

4. The DSA 1997 enforces legal recognition to digital signatures and gives the same force of law as hand-written signatures.

5. The DSA 1997 also outlines the main standards and minimum requirements of operating as a CA.


EI/July 2002

Regulator’s responsibility…

1. Oversee and regulate the operations of CA s, Repositories and Date/Time Stamping Service in Malaysia;

2. Ensure that licensed CA s, recognized Repositories and recognized Date/Time Stamping services maintain a high level of integrity and quality in rendering their services;

3. Determine and coordinate CA trust model in Malaysia; and

4. Determine cross-certification policies with foreign CA s.


EI/July 2002

Digital Signature : Licensing Framework

ControllerController

Date/Time StampServices

CertificationAuthority

Repository

Certificate of recognition

Certificate of recognitionLicense

• Digicert Sdn Bhd • Digicert Sdn Bhd • MSCtrustgate .com Sdn Bhd• Bank Negara (Restricted)

• Digicert Sdn Bhd • MSCtrustgate .com Sdn Bhd• Bank Negara (Restricted)

1. Two stages for CA license and recognition of repository/ date/ time stamp service:A. The establishment stage; andB. The operation stage.


EI/July 2002

Conclusion

1. The communications and multimedia sector in Malaysia now operates under a converged Act and a single convergent regulator.

2. The new licensing structure, which is technology and service neutral, makes it easy for license holders to provide new services as and when technological development enable these services to be provided.

3. Licensing framework reflects the principles of promoting the national interest, transparency, less rather than more regulation and flexibility to foster industry’s dynamism.

4. MCMC is a convergent regulator overseeing the entire communications and multimedia industry, including the postal services and digital signatures.


EI/July 2002

Thank you

Malaysian Communications and Multimedia CommissionLevel 11, Menara Dato’ OnnPutra World Trade Centre

45 Jalan Tun Ismail50480 Kuala Lumpur

MALAYSIA

Tel : +60 3 4047-7000

Fax : +60 3 4042-3337/+60 3 2694-1803

facilitating convergence : licensing - the malaysian ...€¦ · points provision of a particular...

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