Table of Contents

  • I am pleased to present the 12th edition of Trends in Telecommunication Reform. Each year, this publication explores a central theme in the regulation of the information-communication technology (ICT) sector, in addition to taking stock more generally of important developments in the ICT sectors around the world.

  • In these troubled times of economic uncertainty, ensuring investment and innovation without stifling competition is today the key challenge policy-makers and regulators face. Telecom operators are struggling to make investments to handle a growing tsunami in data traffic. Although revenues from telcos are broadly expected to grow over the coming years, following a small downturn in 2010, in many countries, public funds will likely be needed to support deployments in broadband networks.

  • The digital economy presents unprecedented challenges for ICT policy makers and regulators alike. Previous periods of major technological change occurred in an era of mostly government-owned monopolies – a regulatory model that lent itself to command and control investments. Indeed, in many countries, public ownership of the telecommunication networks was instigated precisely to enable the largescale network investment needed to provide affordable, ubiquitous telecommunication services.

  • Chatting, tweeting, blogging and browsing are becoming the norm for the estimated 2.4 billion Internet users globally in 2011.1 However, over five billion people have never experienced the Internet, let alone participated in the impending “broadband revolution” or have only experienced it through public or shared access. The mobile voice story, however, is very different. Mobile voice and SMS, now considered “basic” in many countries are available to 90 percent of the global population, and 85 percent of people living in rural areas. The challenge in this area relates to affordability.

  • This chapter examines the relationship between broadband networks and innovation. Innovations are inventions that have some sort of (economic) impact, e.g., raising productivity and competitiveness. This chapter considers a particular category of innovations, namely broadband-enabled innovation. An innovation is broadband-enabled if it, at some fundamental level, requires, uses, and perhaps enhances broadband Internet. So, for example, cloud computing is a class of broadband-enabled innovation since many aspects of cloud computing are inventions that are having a market impact and without high-capacity Internet connectivity, most cloud computing services will falter. Similarly, social media and online video streaming are a class of broadband-enabled innovations for the same reasons. And so forth. A special class of these innovations is that which includes inventions of the broadband network technologies itself, for instance impactful engineering enhancements in high-speed data networking. New high-speed wireless network technologies, for instance, would fall into this category. These are direct broadband innovations on top of being broadband-enabled innovations.

  • Social media has emerged in recent years as an essential tool for hundreds of millions of Internet users worldwide. From status updates to photos to voice communication, many rely on social media services such as Facebook, Twitter, LinkedIn, and Google Plus as a key source for online social interaction, news gathering, creative sharing, and advocacy. Indeed, for a growing number of Internet users, social media and the Internet are virtually synonymous, since most of their “online time” is spent interacting in a social media environment.

  • Intellectual property rights (IPR) play a critical role in the digital economy. They provide the foundation upon which innovation is shared, creativity encouraged and consumer trust reinforced. This is not a new paradigm; IPR has been playing an important role in providing an incentive for creativity and innovation since first introduced in the Statute of Anne in 17091. By 1776, IPR was already significant enough to be included in the US Constitution.

  • Nearly 2.7 billion adults in the developing world are considered “financially excluded,” that is they do not have access to basic financial services such as bank accounts. Approximately 2.2 billion of the unserved adults live in Africa, Asia, Latin America, and the Middle East. 2 Research indicates that within developing countries, on average, one bank branch and one automated teller machine (ATM) exists for every 10,000 people. This lack of, or limited access to, banking and financial services constrains growth and prosperity for consumers and the economy. For these “unbanked” individuals, lack of access to banking services oftentimes leaves them trapped in poor, cash only society. 4 For a country’s economy, limiting banking activity to traditional approaches can stifle entrepreneurship, stunt development, and even stall economic growth through the effective exclusion of large numbers of potential banking customers.

  • The information and communication technologies (ICT) sector has experienced unprecedented growth in the last decade. This trend has been boosted by market liberalization and augmented by convergence, new technologies and resultant innovations such as mobile phones which continue to be the most rapidly adopted technology in history. While sector growth has been experienced worldwide, the impact has been exponential in developing countries. Today the mobile phone is the most popular and widespread personal communication technology on the planet, with an estimated average subscription world rate of 87 per 100 inhabitants in 2011. The subscription for the developing world stands at 78.8 percent in the same period, a very close match, given the wide disparities that existed for fixed lines in years past and the differences in terms of social and economic development.

  • This twelfth edition of Trends in Telecommunication Reform has focused on regulating the informationcommunication technology (ICT) sector in a broadband world. The nature and the reach of the ICT sector have fundamentally changed, and broadband holds the key to realizing the full benefits of the new applications, services, and business that exist in a digital society. “Smart” regulation is needed for the “smart” services and products that broadband facilitates.