Driven by convergence and competition, several countries that have liberalized their telecom markets have either already gone for technology-neutral and a service-neutral licensing framework or are in the process of doing so. This essentially means that once a service provider or network operator fulfills certain standard conditions, there are no restrictions on them for offering any service they want. Telecom-licensing frameworks in countries like Malaysia, Australia, Finland, Singapore and Germany and European Union have been moving in that direction for some time now. Unlike India, where telecom service licenses are often not just service-specific but also technology-specific, telecom operators in these countries can, for example, offer CDMA and GSM or any other technology-based services under just one license. In fact, in Finland, a highly competitive market, no license is required unless the operator is getting into a mobile service. And in Germany, which has been relatively slow in liberalizing its telecom market, service providers themselves have supported a move towards unified licensing. Some like Denmark have done away with licensing completely. 

In most of these competitive telecom markets, the nature and extent of regulation including the nature of licensing framework are driven by the changes in both technology and the telecom business. As such, the movement towards a converged or what can be termed minimal licensing regime in these countries has been guided by the fact that regulatory regimes that previously existed had become inadequate to take care of new technological and business realities. On the other hand, in India, the current effort by the regulator to bring about a unified licensing is more of an attempt by the regulator and government to get out of a self-made quagmire, like the CDMA-limited mobility controversy. The proposed unified-license regime here is aimed at setting to rest the ongoing litigation and not, as has been the case with regulators in UK or other European Union countries, to allow a vastly greater array of services to be carried by any one of the services providers. It is another matter that the emerging Indian market realities also demand a converged and flexible licensing framework. 

The new framework in EU calls for the use of general authorizations rather than individual licenses wherever possible, for allowing of telecom services

Finland the Free Land!
Finland has perhaps the most liberal licensing regime in the world and it has been a highly competitive market since the early years of the 20th century with more than 50 operators competing with each other. In this Nordic country, practically no licensing is needed at all except if somebody wants to offer mobile services. Perhaps Finland could have done away with mobile licensing as well had it not been for the scarce spectrum that mobile operators are always hungry for. So in effect, Finland implemented a unified licensing regime in 1997, when it adopted a new licensing procedure that did away with the need of a mandatory license for all telecom services other than mobile services. Interestingly, Finland has its own version of limited-mobility service. The Helsinki Telephone Company offers a flat-rate low mobility DCS1800 service, called Cityphone.

The service is integrated within the PSTN numbering plan and offers single billing and a single voicemail box. Calls to the fixed-line number are automatically diverted when the fixed phone is not answered.

Malaysia: Convergence-friendly Licensing
Taking note of the growing reality of convergence of technologies as well as services, Malaysia was, perhaps, one of the first countries to formulate a licensing regime that was technology and service neutral. As early as 1998, Malaysia enacted legislation (the Communications and Multimedia Act 1998) that allowed a licensee to undertake activities that are market specific. According to the Malaysian regulator Malaysian Communications and Multimedia Commission (MCMC), this would create opportunities for expansion 

into the industry particularly in the area of Applications Service Providers and would allow a more effective utilization of Network Infrastructure. Under the Communications and Multimedia Act 1998, there are four categories of licensable activities. These are Network Facilities Providers, Network Services Providers, Applications Service Providers and Content Applications Service Providers—who are a special subset of applications service providers including traditional broadcast services and newer services such as online publishing and information services. (see details in the table on Malaysian Licensing Framework).

Within the four categories listed, there are two types of licenses—individual licenses and class licenses. Individual licenses are granted for activities where a high degree of regulatory control is required.

Class licenses are meant for services and operations that have limited impact on the general public.

Singapore: One Entity, One License for all Services
Singapore has possibly one of the most flexible licensing frameworks that allows network infrastructure operators or service providers to offer an array of telecom services under one license. The Info-communications Development Authority (IDA) of Singapore has adopted a two-pronged licensing approach that differentiates between licensees based on the nature of their operations, that is, whether facilities-based or services-based type of operations. Under the existing licensing regime in the island city-state, just two types of licenses are issued—a Facilities-Based Operator (FBO) License and a Services-Based Operator (SBO) License. A FBO licensee can also offer services that a SBO licensee can offer. However, if a SBO licensee wants to build network facilities of its own, it needs to upgrade its license to a FBO license. One of the key intentions of the licensing framework in Singapore is that an entity should be issued a single license for all the networks/services it intends to operate/offer. Hence, if a SBO decides to build its own network after building up its market share, it can apply to be licensed as a FBO. The FBO license will then replace its SBO license.

EU: Harmonization in Motion
The European Union adopted in March 2002 a new regulatory package comprising five directives, also known as harmonization measures, for making the regulation of telecommunications operations and services more convergence and competition friendly. These directives were the Framework Directive (2002/21/EC), the Authorization Directive (2002/20/EC), the Access and Interconnection Directive (2002/19/EC), the Universal Service Directive (2002/22/EC) and the Data Protection Directive (2002/58/EC, adopted in July 2002). Of these, the Framework Directive establishes a harmonized framework for the regulation of electronic communications services, electronic communications networks, associated facilities and associated services. It lays down the tasks of national regulatory authorities and establishes a set of procedures to ensure the harmonized application of the regulatory framework throughout the community. The Authorization Directive aims to implement an internal market in electronic communications networks and services through the harmonization and simplification of authorization rules and conditions in order to facilitate their provision throughout the Community.

The new framework calls for the use of general authorizations rather than individual licenses wherever possible, for allowing of telecom services. For example, UK, one of the five EU members to have incorporated the framework directives in its national laws, has a provision for class licenses that are basically general authorizations, which permit the operation of a wide range of telecom systems from “an ordinary telephone handset to an office network”. A class license holder need not register itself or even pay a fee. However, it must run the system in such a way as to conform to the terms of the relevant license. Similarly, in France, operators no longer need to obtain an individual authorization as proposed by the EU authorization directive. 

All the European Union members were expected to implement the directives by the 25 July 2003, the deadline set by the Commission. However, by then only five countries (out of fifteen) had taken the necessary steps to harmonize their national laws with the new EU regulatory framework.

The movement towards a single or unified license regime in EU countries and others discussed here has been largely encouraged by an early acceptance of the reality of convergence and its benefits. In fact, it is likely that in the next few years many countries would prefer to a no license model as is the case in Denmark or at least the framework that exists in Finland where only mobile operators need a license because of spectrum allocation issues. 

Ravi Shekhar Pandey
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Singapore’s Licensing Framework