Why regulator/regulation

and what to regulate in the

telecom sector ?

Training on competition policy and

interconnection in
telecommunications market of
Mongolia
5 July 2003
© 2002 Malaysian Communications and Multimedia Commission © 2002 Malaysian Communications and Multimedia Commission

Convergence of the communications and

Evolution of market structure in Malaysia
multimedia sector as a national strategy
1996
1980-85 1986-90 1990-95
onwards Vision 2020 – to make Malaysia
a developed and industrialized
Fixed line Monopoly Monopoly Two players Five players The rationale for nation
reform of the
communications Knowledge is the driver of the
Monopoly Two players Five players Eight players sector and introduction New Economy
Cellular
of a convergence C&M related activities would be
legislation at the core of the new engine
Internet access Monopoly Monopoly Five players
of growth.

Broadcast Two players Two players Three players Five players

© 2002 Malaysian Communications and Multimedia Commission © 2002 Malaysian Communications and Multimedia Commission

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 Global & local trends in 1997 THE NATIONAL AGENDA
• Technological development in communications Agenda: Move Malaysia into the K-Economy
moving rapidly with impact of digitilisation –
convergence of technologies and services already a Design an
reality Formulate
institutional Design a
National convergence
framework
Convergence regulatory
for
Policy
• Malaysia’s telecommunications, broadcasting and Objectives
convergence framework

Internet sector was beginning to be more competitive sector

• Globalisation and commitments to the World Trade The Malaysian Communications and Multimedia Act 1998 (CMA) was
Organisation would have an impact on national a key legislation to facilitate the growth of convergence activities.
strategies

© 2002 Malaysian Communications and Multimedia Commission © 2002 Malaysian Communications and Multimedia Commission

10 National Policy Objectives

Principles of the CMA 1998
1. Creating a global hub 7. Creating a robust
2. Building a civil society applications
environment
3. Nurturing local content – Transparency
and culture 8. Facilitating efficient – Technology Neutrality
4. Ensuring long-term allocation of resources
benefits for end-users – Industry Self Regulation
9. Developing industry
5. Nurturing user capabilities – Consumer Protection
confidence – Competitive Market
6. Promoting access and 10. Promoting secure and
safe networking Environment
equity
NOTE: Abbreviated from Section 3(2) of the Communications and Multimedia Act 1998 (Act 588)
© 2002 Malaysian Communications and Multimedia Commission © 2002 Malaysian Communications and Multimedia Commission

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 The Powers and Functions of the MCMC –
Changes to facilitate convergence under the MCMCA 1998
1. To advise the Minister on 6. To encourage and promote
1 Nov 98 1 Apr 99 1 Nov 01 national policy objectives development of the
Redefinition of Ministry of Energy, Ministry of Energy, communications and
Telecommunications & Post Communications & Multimedia 2. To implement and enforce
the Ministry’s communications and multimedia industry
functions and Malaysian Communications and multimedia laws 7. To encourage and promote
formation of CMC Multimedia Commission Act 1998
came into force and MCMC formed 3. To regulate matters self regulation
Replacement Malaysian relating to communications 8. To promote and maintain
Telecommunications Act 1950
of sectoral Acts Communications and multimedia activities the integrity of licensees
by a convergence and Multimedia not related to 9. To render assistance to
Broadcasting Act 1988 communications and persons engaged in
Act Act 1998
multimedia laws communications and
Postal Services Act 1991
Digital Signature Act 1997 4. To consider and multimedia
recommend reforms to the 10. To carry out any function
Sectoral regulators TDM(JTM) communications and as the Minister may
replaced by a
multimedia laws prescribe
convergence
MOI (Licensing Division) 5. To supervise and monitor NOTE: Abbreviated from Section 16 of the
regulator
communications and Malaysian Communications and Multimedia
Postal Department multimedia activities Commission Act 1998 (Act 589)
© 2002 Malaysian Communications and Multimedia Commission © 2002 Malaysian Communications and Multimedia Commission

MCMC has management independence

MCMC has a dual role in the C&M sector • Independent operational management
– Chairman is also the CEO
› responsible for overall administration and management of day
to day affairs & acts under the general authority of the
Commission
Regulatory Developmental
• Commission does its own recruitment & sets its own
(Conformance) (Performance) terms of appointment
› Payment of employees is subject to terms that the Commission
determines
› Commission has disciplinary authority over employees & can
make its own regulations subject to Ministerial approval
Present Future › staff not government servants but public officials

In fulfilling its role, the Commission is guided by the – Free to interact with public and private sector
10 National Policy objectives for communications and – MCMC has powers to appoint agents & technical advisors &
carries out consultancies, public inquiries on competition,
multimedia provided in the CMA access, tariff issues etc.
© 2002 Malaysian Communications and Multimedia Commission © 2002 Malaysian Communications and Multimedia Commission

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 MCMC has financial autonomy Parliament The MCMC and
• MCMC Fund set up & controlled by Commission its decision
Cabinet
– Comes from monies from Telecommunications Fund, sums from
Parliament, licence fees, charges, levies, investments etc.
making process
– Spent on paying expenditure of the Commission in carrying out
functions, remuneration, purchases, grants of loans etc. Ministry Minister
– Prepares and controls its own budget but is subject to Ministerial Consumers
approval Consultative
Directions
– Annual Financial Report subject to Parliamentary oversight relationship Recommendations

• Has powers to borrow and invest, subject to approval of Appeal Industry

The MCMC
Minister & Minister of Finance Tribunal Referral Liaison Forums
• Power to enter into contract but limited up to RM5million
– Anything beyond requires approval of Minister & Minister of Regulation
Finance Enforcement • Access
MCMC is central to the • Consumer
convergence sector Industry
• MCMC takes only what it needs for the cost of regulation and institutional framework • Content
the balance is spent on industry development that has been adopted by Players
© 2002 Malaysian Communications and Multimedia Commission the Government . © 2002 Malaysian Communications and Multimedia Commission • Technical

Roles of the Key Players in the Industry The Commission members

CONSUMERS Tan Sri
Exercise choice of services and Nuraizah Abdul Hamid
service providers Chairman
Monitors & enforces
Impose market compliance with & Chief Executive
discipline legislation & license
Issues license, requirements,
imposes license INDUSTRY promotes industry Tan Sri Kamarul Datuk Tan Sri Datu Dr
conditions, and Responsible for service self-regulation, Ariffin (Content Dr Gan Khuan P o h Zaki Tun Azmi Sulaiman Mahbob
confers implementation and delivery allocates public expert/Lawyer) (Economist) (Lawyer) (Economist)
regulatory rights resources
Directs on matters of general
MINISTER policy & procedures COMMISSION Raja Dato‘ Arshad Datuk C. Rajendram
Sets policies and priorities in Implements policies in
legislation, and issues subordinate (Accountant) (Finance)
Recommends policies legislation and
instruments in accordance with Ministerial directions
the objects of the legislation
•Commission members appointed by Minister
–Tenure is for not less than 2 years but not more than 5 years
ENABLING LAWS –Commission can further appoint committees to carry out its work
© 2002 Malaysian Communications and Multimedia Commission © 2002 Malaysian Communications and Multimedia Commission

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 MALAYSIAN COMMUNICATIONS & MULTIMEDIA COMMISSION
ORGANISATIONAL CHART
Self-regulation through Industry Forums
CHAIRMAN Tan Sri Nuraizah Abdul Hamid

Secretary

REGULATORY DIV. INDUSTRY DEV.DIVISION TECHNICAL DIVISION MANAGEMENT & SUPPORT Consumers For the
SERVICES DIVISION
As well as
and
Nasaruddin Che Abu Bistamam S.Abdul Rahman Zamani Zakariah Maria Osman
benefit of
P & R Initiatives Technical Applications & suppliers
Consumers
Licensing / Assignment
Industry players
& Development Finance and Accounting
Practices
Monitoring & Supervision P & Regulatory Reviews Electronic Addressing / Human Resource
Numbering
Enforcement Industry Research & Analysis Spectrum Management Administration
Form
Universal Service Info Systems & Resource Which Access
Center
would Industry Consumer
LEGAL ADVISORY CORPORATE & INTER.
AFFAIRS DEPT
CORPORATE COMM. DEPT
REGIONAL OFFICES guide Forums Content
DEPT
Pushpa Nair Nur Sulyna Lim Sheena Gurbakhash Johor Bahru Industry Technical
To produce
Abdullah Zulkarnain Md Yasin
Penang conduct
Mohd HussinAli
Kuantan
Mohd Shafie Harun Voluntary
Industry Codes
Kota Kinabalu
Muhd Tahir Muhd Noor
© 2002 Malaysian Communications and Multimedia Commission Kuching © 2002 Malaysian Communications and Multimedia Commission
Md Rusli Ahmad

Self regulating mechanism MCMC’s Vision for the Future

-Industry Forum Areas of Focus
SELF-REGULATORY
MARKETS
Content
MECHANISMS A globally competitive,
Applications
(CASP) efficient and increasingly self-
Applications
Services
(ASP) regulating communications
Network
Services
(NSP)
and multimedia industry
Network
Facilities generating growth to meet
(NFP)

Access Forum the economic and social

Consumer Forum
Content Forum
Technical Forum
needs of Malaysia.
© 2002 Malaysian Communications and Multimedia Commission © 2002 Malaysian Communications and Multimedia Commission

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 The MCMC takes into consideration Converting our Vision into Action
the needs of various stakeholders
10 National Policy Objectives for communications and multimedia
Value for Consumer Numbers and Transparent
money services interest Access spectrum Consumer choice regulatory processes

Upgrading Managing Improving service Regulating

network resources quality and choice effectively
capabilities efficiently of services
Transparency
and fairness. Building capacity
Stable National
regulatory
environment interest Return on Consultations
investment A globally competitive, efficient and increasingly self-regulating
communications and multimedia industry generating growth to
Industry Investor meet the economic and social needs of Malaysia
interest
© 2002 Malaysian Communications and Multimedia Commission interest © 2002 Malaysian Communications and Multimedia Commission

MCMC CONTACT INFORMATION

Address: Level 11 Menara Dato’ Onn

Putra World Trade Centre
45 Jalan Tun Ismail
50480 Kuala Lumpur

Thank you
Telephone: +603-4047 7000

Fax: +603-2693 4881

Website: www.mcmc.gov.my

© 2002 Malaysian Communications and Multimedia Commission

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