OVERVIEW OF INTERNATIONAL

TELECOMMUNICATIONS LAW
AND POLICY

Prof. Dr. Ian Lloyd

Introduction
Perhaps 30 years ago if anyone had suggested running a course in telecoms
policy, the response would have been along these lines:

© GSMA 2015 2
Why the laughter?

Then:
 There was almost no law
 And policy was a matter for the wishes of the government of the day
 Times have changed
 We arguably have too much law and mountains of policy documents

© GSMA 2015 3
Aim of this presentation
 To introduce some of the topics that we will be considering in the next
three weeks
 To try to put issues into context. As is often said:

© GSMA 2015 4
 Law and policy
 It is important to recognise the distinction between law and policy
 Policy is essentially within the remit of government and regulators
 The decision to have liberalised telecommunications markets is a
policy matter
 Law is then a key tool to be used in giving effect to (or rejecting)
policy decisions

© GSMA 2015 5
 Making and enforcing policy
 Another important distinction
 Generally, policy making is for government and enforcing it is a
matter for regulators
 But where does the boundary lie?

© GSMA 2015 6
 Local Loop Unbundling
 An important concept in Europe – allowing competitors access to
the exchanges owned by former incumbents
 The policy was to allow this
 It did not happen in the UK and the regulator declined to act
 Implementing or making policy?

© GSMA 2015 7
A new regulator
 According to OFCOM:
“Our actions have already opened up competition in broadband
based on investment in infrastructure. And companies have already
seized the resulting opportunities for innovation and differentiation.
That’s been particularly through local loop unbundling which stood
at just 100,000 lines when in 2005 we agreed a set of undertakings
with BT in lieu of a reference to the Competition Commission. Today
– two and a half years on - local loop unbundlers account for
almost 4m lines, prices have fallen sharply and a massive range of
services is now available.” (Speech by Peter Phillips)
 In 2014 the UK had 22 million broadband lines, half of which were
unbundled
 Speedy communications
 Have always been valued
 The ability to communicate faster than competitors has always
been an important issue:
− The Roman Empire relied on its roads
− The French built semaphore telegraphs, spending massive
amounts of money at the height of the Revolutionary wars
− The Rothschild banking empire had its origins in pigeons
relaying news of the battle of Waterloo

© GSMA 2015 9
 The electric telegraph
 Beginning in the 1830s
 In many ways the precursor of the modern age
 It has been described as the Victorian Internet
 And is the precursor to other modern notions such as convergence

© GSMA 2015 10
 The telegraph and the railways
 An early example of what we now talk about as convergence
 The telegraph provided a solution to a major problem
‒ How to know when and where it was safe to allow a train to
proceed?
‒ Originally signallers were given flags (red and green) and
watches and ordered to stand by the tracks with the instruction:
‘Don’t let another train by until 10 minutes have passed’
‒ Fine – except where the preceding train had broken down or
had an accident

© GSMA 2015 11
 The inevitable consequence

© GSMA 2015 12
 Enter the telegraph
 You can have instantaneous communication between signallers
(now given signal boxes)
 Box 1, faced with an approaching train, telegraphs the message to
Box 2 some miles down the line: ‘Has the previous train passed
you?’
 If yes, the second train could proceed. If no, it had to stop

© GSMA 2015 13
 Some long running issues arise
 Who is to provide the service?
 In some countries railway and telegraph networks were always
provided by the state
 In others, notably the United States and the United Kingdom, the
railways and initial telegraph networks were developed by private
companies
 This began to prove problematic for a variety of reasons

© GSMA 2015 14
 Competition is not always efficient
 In the nineteenth century there was a manic scramble to build
railways in the UK
 Cities might be linked by a number of competing railway lines
 Not all stayed in business for long
 Interconnection was also a major problem. Different railways were
built to different sizes (gauges)

© GSMA 2015 15
 Or environmentally friendly

© GSMA 2015 16
 A move to monopoly
 By 1870, with the exception of the United States, virtually every
country had state-run telegraph services
 In the UK we had the Telegraph Acts of 1868 and 1869 which
provided for the transfer of ownership of the private networks
 As operators, for the UK we had the Post Office and for the then
Empire there was Cable and Wireless, also a state corporation

© GSMA 2015 17
 Public sector good, private bad
 The present system of electric telegraphy was exceedingly
defective.
 It was maimed and crippled in every point from a want of
independent and effective means for the distribution of messages
 Messages were delivered as best they could, with a great delay, and
at heavy cost
 It was also quite obvious that the Post Office possessed machinery
which would afford immense facilities for the distribution of
telegraphic messages

© GSMA 2015 18
 Confidentiality
 The contents of telegrams were frequently communicated to parties
interested in their contents, who were able to obtain from the poorly-
paid clerks information which defeated the purpose of sending telegrams
at all
 Breaches of date security are clearly not a twenty first century
phenomenon! Government control, it was argued, would secure the
honour and reputation of the British Government as a guarantee for the
privacy of communications: “Necessary more confidential than those
conveyed under sealed envelope through the post, to establish a
conviction that the public are dependent, not upon the discretion of
individuals but upon the faith of a Ministry responsible at any moment
to a vigilant Parliament”

© GSMA 2015 19
 A History of Telegraphy:
Its Technology and Applications
(Beauchamp)

© GSMA 2015 20
 The implications of the telegraph
 The telegraph had at least as profound an impact on 19th century
society as the Internet has today
 See Tom Standage’s book, the Victorian Internet
 The world shrank with great speed, with massive consequences for
government and commerce

© GSMA 2015 21
 The world becomes smaller
 By the 1860s international telegrams were becoming very important
 Internally the UK’s telegraph companies struggled to compete with
what was then a very efficient postal service
 In major cities there were up to 12 collections and deliveries a
day
 You could send a letter, have it delivered, receive a reply and
reply in turn all within a day
 By way of contrast, while a letter took 10 weeks to travel from
London to Bombay (Mumbai) and back, a telegraph took four
minutes

© GSMA 2015 22
 Think about the difference
 The UK Government could govern India – or states in the
Caribbean. The Secretary of State for India based in London
became more powerful than the Governor General.
 Markets start to become global
 The full impact of telegraph operations in Britain was realised after
1851 when links were established with the continent so that ‘a
London wine merchant could telegraph his supplier in the middle
of France and ask about the grape harvest and speculate
accordingly’

© GSMA 2015 23
 The International Telegraph Union
 Now known as the International Telecommunications Union (ITU)
– was established in 1865
 The world’s first international, inter-governmental organisation
 It predates the Universal Postal Union (UPO) by 10 years
 Based on the notion of state ownership of telegraph networks

© GSMA 2015 24
 We have largely forgotten the telegraph

 The last major network (India) was decommissioned in July 2013

 BT withdrew its telegraph service in 2003, although a
niche activity remains
 But the first transatlantic telegraph cable was completed in 1866
and the first telephone cable only in 1956
 For 90 years data was King – and is again!

© GSMA 2015 25
 Enter the telephone
 A story with many elements
 The telephone, as we all know, was invented by Alexander Graham
Bell
 Or was it Elisha Gray?
 Who????

© GSMA 2015 26
 Time means money
 Elisha Gray invented a telephone and went to the US Patent Office
in 1875
 Bell had got there a few hours earlier. Possibly! If interested, I
recommend the book, ‘The Telephone Gambit’ by Seth Schulman
 Bell got the patent and a monopoly over the exploitation of the
technology
 The Bell Telephone Company (later AT&T) dominated the US
market – even long after the patents had expired

© GSMA 2015 27
For most of the twentieth century
 Telecommunications were for the elite:
− in short supply
− expensive
− limited in their scope and reliability
− and almost always provided by a monopolistic provider – normally
some form of State organisation – a natural monopoly

© GSMA 2015 28
 And the law …?
 The sector virtually disappeared from the legal radar
 Telephone services were provided at the will of the appropriate
government department
 Telephone equipment could be rented but not bought
 Telephones came in any colour

© GSMA 2015 29
© GSMA 2015 30
 The winds of change
 The British were perhaps always a little wary of the telephone
 A Post Office comment from 1879 was to the effect that Britain had
little use of the telephone because: ‘Here we have a superabundance
of messengers, errand boys and things of that kind’
 Usage developed but quite slowly
 In the 1950s and 1960s concerns mounted

© GSMA 2015 31
 A few statistics
 Between 1955 and 1965 the percentage of households using
specified items of equipment increased as follows:

Televisions From 40 to 88%

Washing machines From 20 to 56%

Fridges From 10 to 39%

Telephones From 21 to 22%

© GSMA 2015 32
 What to do about it?
 Throughout the 1960s and 1970s there were various reorganisations
concerning the provision of telephone services
 The chief effect was to give a greater measure of independence to the
operators in matters concerned with the day to day running of the
service
 In 1979 the Conservative government under Margaret Thatcher was
voted into office. It had a strong belief that public services were
inefficient and of poor quality compared with what might be provided
in the private sector
 A process of privatisation began, with telecommunications in the
vanguard

© GSMA 2015 33
 From Cinderella to Princess

© GSMA 2015 34
 Two processes
 There have been two developments in the past few decades:
– Privatisation – transferring ownership of the existing operator
from the public to the private sector
– Liberalisation – allowing a range of operators to develop
competing networks

© GSMA 2015 35
The World Trade Organisation and GATS

 International action to encourage and facilitate international trade

dates back to the GATT agreement of 1947
 Initially GATT applied to trade in goods
 Slowly trade began in the services sector
 The GATS agreement was opened for signature in 1994
In summary
 The Services Agreement which forms part of the Final Act rests on
three pillars:
− The first is a Framework Agreement containing basic
obligations which apply to all member countries
− The second concerns national schedules of commitments
containing specific further national commitments which will be
the subject of a continuing process of liberalisation
− The third is a number of annexes addressing the special
situations of individual services sectors
Forms of services
 Trade in services is defined as the supply of a service:
− (a) from the territory of one Member into the territory of any
other Member
− (b) in the territory of one Member to the service consumers of
any other Member
− (c) by a service supplier of one Member, through commercial
presence in the territory of any other Member
− (d) by a service supplier of one Member, through presence of
natural persons of a Member in the territory of any other
Member
What does this mean for
telecommunications?
 There might be ‘call back’ services offered by a foreign supplier
 A foreign-based company may seek access to the domestic market
General principles
 Most favoured nation:
– With respect to any measure covered by this Agreement, each
Member shall accord immediately and unconditionally to
services and service suppliers of any other Member treatment
no less favourable than that it accords to like services and
service suppliers of any other country
General principles
 Transparency:
− Each Member shall publish promptly and, except in emergency
situations, at the latest by the time of their entry into force, all
relevant measures of general application which pertain to or
affect the operation of this Agreement. International
agreements pertaining to or affecting trade in services to which
a Member is a signatory shall also be published.
General principles
 Regulation:
− In sectors where specific commitments are undertaken, each
Member shall ensure that all measures of general application
affecting trade in services are administered in a reasonable,
objective and impartial manner.
Specific commitments
 With respect to market access through the modes of supply
identified in Article I, each Member shall accord services and
service suppliers of any other Member treatment no less
favourable than that provided for under the terms, limitations and
conditions agreed and specified in its Schedule.
Telecoms specifics
 GATS makes extensive provision for telecoms:
− Telecommunications services are a global market worth over
US$ 1.5 trillion in revenue. Mobile services account for
roughly 40 per cent of this, while mobile subscribers
worldwide currently outnumber the use of fixed telephone
lines by more than two to one. Over the past decade, the
market has witnessed far-reaching changes, with the
introduction of competition into a sector that was once
principally a monopoly.
 Globalisation
 Vodafone operates in 22 countries
 www.vodafone.com/content/index/about/about_us/where.html

© GSMA 2015 45
 Partnerships
 Has partner agreements in around 50 countries
 And owns approximately 65% of Vodacom

© GSMA 2015 46
 New alliances?

© GSMA 2015 47
 Too much competition?
• We currently have four mobile networks In the United Kingdom
– Everything Everywhere
– O2
– Three
– Vodafone
• Plus a range (more than 50) of virtual networks

© GSMA 2015 48
 But increasing consolidation
 Everything Everywhere was a merger of two networks. It is now
the subject of a takeover bid from BT
 Three’s parent company is looking to buy O2
 Vodafone bought Cable and Wireless
− We are seeing fewer mobile networks and linkage between
fixed and mobile networks

© GSMA 2015 49
 Quality concerns
 There have been concerns about the quality and coverage of mobile
networks.
 See: http
://stakeholders.ofcom.org.uk/binaries/research/telecoms-research/cons
umer-experiences-mobile-phone-calls/
report.pdf

© GSMA 2015 50
Do we need this?
Or this?
Today
 Monopolies have been broken up – although there are signs that some
are returning
 Business models are being challenged. Will anyone pay for voice calls
in a few years time?
 Two years ago I spent $100 on phone calls home from Tanzania (very
poor quality)
 This year I used free wifi access in my hotel and spent nothing
No such thing as a free lunch
 We have to find charging mechanisms
 Monopolies at the network level perhaps seem more and more
attractive
 With competition at the level of service provision