2 Policy and regulation in ICT In the mid-1990s, most countries had public telecom utilities and fixed-line telephones

Box 12.2 Policy and regulation in ICT In the mid-1990s, most countries had public telecom utilities and fixed-line telephones

were the only type available. Privatizations were pushed hard by the World Bank and the Washington Consensus in many developing countries, without much thought to competition, resulting initially in many private monopolies. Proponents of these inter- national policies argue with some justification that privatizations had to happen to break the patterns of vested interests and inefficiency.

But the lack of competition with the new privatized monopolies meant in practice that the stagnation in the growth of fixed lines continued. In many developing countries, there has been no recent growth, or indeed shrinkage, in fixed-line connectivity at exactly the time when the internet was becoming prominent in more advanced countries. In contrast, mobile phone providers were numerous, and escaped being trapped in the poor regulation of vested interests. Mobile connectivity has expanded rapidly since the 1990s, particularly in this decade, and has extended to the ‘bottom of the pyramid’ through low- cost handsets and business plans based on large volumes and very low margins. This has enabled many other services and activities and has also been instrumental in expanding political freedoms and empowerment. Here are some examples of the impact of ICT in several sectors:

• Market-based services and activities: – finance: (micro-)credit, banking, (micro-)insurance, remittances; – trade: getting market information, advertising/marketing/selling goods or

services; – agriculture and fisheries: reducing middle margins, selling directly to multiple

markets – employment: learning about jobs, getting jobs, making jobs better;

POLICY

– personal services: arranging household services (e.g. child care, family and

other); – skills: farming know-how, other employment or income-related skills, and other

life skills. • Civil activities and public services:

– understanding: knowledge of government agencies and services, knowledge of

rights; – organization and action to increase political and civil service transparency and

performance; – health: receiving tele-health services or medical/health information, arranging

medical care; – education: distance learning courses, receiving other useful information; – security: contacting police, family or friends in emergencies; – disaster warning and relief: advanced warning, getting relief and rebuilding

assistance. • Other impacts and benefits: – dignity and empowerment: mobilizing support, expressing views in communities or politics; family and social relations, sense of value or opportunities, music and entertainment.

In short, ICTs facilitate the expansion of economic, political and social activity, and are instrumental to human flourishing. The main job of public policy is to expand access and lower its cost. More specifically, the broad functions of ICT/telecom regulators are to ensure low-cost interconnectivity among providers, ensure competition in the market, facilitate cost reduction and organize universal service mechanisms. As all these functions are typically political, regulators are given independence from politicians in many countries, and are governed by processes involving stakeholders.

Regulators are now more regularly assessed using quantitative and qualitative data, and this comparative cross-country policy analysis has helped policy analysts and advocates bring pressure on countries performing poorly. At this moment, for example, Pakistan leads South Asia in terms of its Telecom Regulatory Environment. 5

This box was written by Randy Spence.