Henry ParkerPublic Policy Manager, Asia-Pacific

hparker@gsma.com

The future of regulationImplications of the evolving digital ecosystem

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What is the digital ecosystem?

2

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The importance of the digital ecosystem to the global economy

3

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The competitive landscape

4

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The internet giants are branching out

5

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The regulatory landscape for the digital ecosystem

6

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Challenges and issues to be addressed

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High Level of Complexity

• Difficult to assess market performance and develop solutions

Very Rapid Market Change

• Regulations quickly become obsolete

• Policy becomes mismatched to market realities

Compliance Costs

• Harm new entrants • Hamper innovation

Regulatory Distortion

• Deterring market entry or skewing development through promoting special interests

Static Regulation

• A reliance on a prescriptive ex ante regulatory approach

• Overly complex and inflexible give how fast digital ecosystems are evolving

Inconsistent Regulation

• Regulation is ‘structure’ rather than ‘market’ based.

• Companies operating in the same market are subject

to different regulatory regimes.

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Case studies: inconsistent regulation

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Issue Applications Communications Content Devices

Consumer

Protection

Consumer

Protection Law

Portability, opt-in services, specific consumer

protection offices

Some age or activity related,

otherwise Consumer Protection

Law

Competition Law

CompetitionCompetition

Law

Sector specific obligations and regulators. Some

access and retail price/tariff regulation.

Some licensing, advertising time

and foreign ownership restrictionsCompetition Law

IPIP/Competition

LawIP Law

Some licensing requirements and

specific regulation of IP rights

management

IP Law, some mandated

licensing for

IP/Standards, Levies to

content rights owners

PrivacyGeneral Privacy

regulation

Industry specific regulation and licence

conditions

Specific regulation (e.g. ‘right to

be forgotten’)

General Privacy

Regulation

Resources NoneSpectrum, Numbering, rights of way, technology

transitions. State secrets regulation None

SecurityData Requests

by authorities

Legal interception, Call Data retention, military

interoperability requirements. State secrets regulation Currently little

Tax Sales TaxesSales tax, spectrum charges, other sector

specific taxes, luxury tax

Sales Tax, some levies for local

production and public TV

Sales Tax, Import

duties.

Universal

AccessNone

“Carrier of last resort”. Mandatory USO fund

payments. Broadcaster licence obligation None

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Key principles for future regulation

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A functionality based approach

• Be technology agnostic

• Regulate on basis of the nature of the service

Employ dynamic regulation

• Performance based rather than command and control

• Enforce after the fact (ex-post), not before (ex-ante)

Reform from the bottom up

• Regulate on the basis of outcomes regardless of legacy approaches

• Don’t start from ‘scratch’- take current regulation into account during implementation rather than design.

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Putting Principles into practice

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Area Legacy status quo A Future Approach

Access Regulation

Regulated access to termination and

roaming

Mandated re-sale under telecom

specific standards

Does mandated access improve or

harm economic welfare?

The same standard across the entire

digital ecosystem

Market Entry

Limits on entry and exit

Approval for new technologies or

business models

“Permission-less” innovation,

subject to general consumer and

completion law

Privacy & Data

Protection

Industry specific restrictions

Regulatory uncertainty for other digital

services

Symmetric Regulation focused on

preventing consumer harm

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Putting Principles into Practice (2)

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Area Legacy status quo A Future Approach

Merger Review

Static analysis and stricter standards for

telecoms than the rest of the ecosystem

Dynamic analysis with same criteria

across the whole ecosystem

Spectrum

Management

Technology specific licences

Huge variety of obligations within them

Flexible spectrum rights

Symmetric obligations through

general regulation

Availability and

Affordability

Financial, price and coverage

obligations all fall only on network

operators

Holistic approach that enhances

availability and affordability across

the entire ecosystem

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Key takeaways

Functional

Dynamic

‘Bottom Up’

The Challenge

The Solutions