Documente Academic
Documente Profesional
Documente Cultură
2001, 09:39
The Info-Communications Development Authority (IDA):
A Case Study on Singapores Converged
Regulatory Agency
Effective regulation
2001 ITU
International Telecommunication Union
Place des Nations
CH-1211 Geneva, Switzerland
Effective regulation Case study: Singapore
TABLE OF CONTENTS
Page
1 Introduction ......................................................................................................................... 1
1.1 Purpose of the Case Study ...................................................................................... 1
2 Singapore: Country Background ......................................................................................... 2
2.1 Overview................................................................................................................. 2
2.2 Geography............................................................................................................... 2
2.3 Demography............................................................................................................ 2
2.4 Economy ................................................................................................................. 3
2.5 Government and History......................................................................................... 4
2.6 Human Development .............................................................................................. 4
3 The Governments Role in Developing Singapore as an Info-Communications Hub..... 4
3.1 Singapores Vision of Info-Communications...................................................... 5
3.2 The Hub Concept: From Traffic Transmission to Content and Software ............... 5
3.3 Singapore, Inc: Government Investments .............................................................. 6
4 Sector Reform Overview..................................................................................................... 8
4.1 The Acceleration of Liberalization and Creation Of ICT Regulatory Bodies ........ 8
4.2 Major Players in the Telecommunications Market ................................................. 11
4.3 Telecom Market Indicators ..................................................................................... 14
4.4 WTO Commitments................................................................................................ 15
4.5 Regulating Broadcasting: The Singapore Broadcasting Authority ........................ 15
4.5.1 SBA and the Internet ................................................................................ 16
4.5.2 Chances of Future Consolidation.............................................................. 17
5 IDAs Role within Singapores Government ...................................................................... 17
5.1 Policy Goals for the Creation of IDA ..................................................................... 17
5.2 The Role of the Statutory Board in Singapore ........................................................ 18
5.3 Seat of IDAs Authority.......................................................................................... 19
5.4 Role of the IDA Board of Directors........................................................................ 21
5.5 The Ongoing Role of MCIT.................................................................................... 21
6 Regulatory Functions of IDA .............................................................................................. 22
6.1 Licensing................................................................................................................. 22
6.2 Rulemaking: Codes Of Practice .............................................................................. 24
6.3 Elements of the Code of Practice for Competition ................................................. 26
6.3.1 Dominant And Non-Dominant Licensees................................................. 26
6.3.2 Mandatory and Optional Review.............................................................. 27
6.3.3 Consumer Protection and Service Quality................................................ 27
6.3.4 Interconnection ......................................................................................... 30
6.3.5 Preventing Unfair Competition................................................................. 33
6.4 Equipment Approval, Property Access, Police and Other Functions...................... 33
6.5 Resource Management ............................................................................................ 34
6.5.1 Spectrum Allocations................................................................................ 34
6.5.2 Numbering ................................................................................................ 35
6.5.3 Building Access ........................................................................................ 35
6.6 Broadband Policy.................................................................................................... 35
6.7 Antitrust Concerns and Merger Reviews ................................................................ 36
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Effective regulation Case study: Singapore
Page
7 Internal Organization and Operations.................................................................................. 36
7.1 The Organizational Chart ........................................................................................ 36
7.2 Policy and Regulation ............................................................................................. 37
7.2.1 Policy Division ......................................................................................... 38
7.2.2 Regulatory Division.................................................................................. 38
7.2.3 Strategic Planning and International Units ............................................... 39
7.3 Promotional Groups ................................................................................................ 39
7.3.1 The Online Development Group............................................................... 40
7.3.2 The InfoComm Industry Programme Development Group ...................... 40
7.3.3 The Local Enterprise Internationalization and International Operations
Group ........................................................................................................ 41
7.4 Government Systems and Technology Groups ....................................................... 41
7.5 Promotion and Regulatory: Conflict or Complement?............................................ 42
8 Staffing and Personnel......................................................................................................... 43
8.1 Staffing and Allocation of Staff .............................................................................. 43
8.2 Staff Compensation................................................................................................. 43
8.3 Recruitment and Training........................................................................................ 44
8.4 Outsourcing ............................................................................................................. 44
8.4.1 Intra and Inter-Agency Committees and Virtual Teams ........................... 44
8.5 Staffing Issues Arising From The Merger of TAS and NCB.................................. 45
9 Financial Resources............................................................................................................. 45
9.1 Operational Budget ................................................................................................. 45
9.2 Grant Money for Promotions .................................................................................. 46
9.3 Assets ...................................................................................................................... 46
9.4 Regulatory Fees....................................................................................................... 46
10 Transparency and Fairness .................................................................................................. 47
10.1 Regulatory Due Process .......................................................................................... 47
10.1.1 Public Meetings ........................................................................................ 47
10.1.2 Public Consultation................................................................................... 48
10.1.3 Confidentiality .......................................................................................... 48
10.2 Right of Appeal ....................................................................................................... 49
10.2.1 Appeals to the Ministry............................................................................. 49
10.2.2 Appeals to the Courts................................................................................ 49
10.3 Openness and Access .............................................................................................. 50
10.4 Ethics Rules............................................................................................................. 50
11 Assessment .......................................................................................................................... 51
11.1 Best Practices .......................................................................................................... 51
11.1.1 Speed and Efficiency ................................................................................ 51
11.1.2 Orientation toward Results ....................................................................... 51
11.1.3 Independence and Credibility ................................................................... 52
11.1.4 Transparency............................................................................................. 52
11.1.5 Convergence And Technological Neutrality............................................. 53
11.2 Challenges ............................................................................................................... 53
11.2.1 Separation from Political Power ............................................................... 53
11.2.2 Transparency............................................................................................. 54
11.2.3 Balancing Promotional and Regulatory Values ........................................ 54
11.2.4 Flexibility.................................................................................................. 54
11.3 Conclusion............................................................................................................... 55
ii
Effective regulation Case study: Singapore
Page
Figures
Map of Singapore .......................................................................................................................... 2
Figure 3.1 Government Ownership of the Singaporean Telecom Industry ................................ 7
Figure 4.1 Singapores telecommunication sector reform process............................................. 10
Figure 4.2 TAS and NCB activities............................................................................................ 11
Figure 4.3 Facilities-Based Operator (FBO) Licenses................................................................ 13
Figure 4.4 Fixed and mobile telephone subscribers (000s), Singapore. ..................................... 14
Figure 5.1 IDAS Main Functions .............................................................................................. 18
Figure 5.2 The Statutory Board in Singapore ............................................................................. 19
Figure 5.3 Members of IDA Board............................................................................................. 20
Figure 5.4 Role of Ministry of Communications and Information Technology (MCIT) ........... 22
Figure 6.1 Regulatory Functions of IDA .................................................................................... 23
Figure 6.2 Web-Based Consultation On Code of Practice for Competition............................... 25
Figure 6.3 Code of practice for competition in the provision of telecommunications services.. 26
Figure 6.4 Quality of Service Standards..................................................................................... 28
Figure 6.5 Web-based Public Consultations on IDAs website.................................................. 31
Figure 7.1 IDAs Organizational Chart ...................................................................................... 37
Figure 7.2 IDA: The Regulator and Policy Maker ...................................................................... 38
Figure 7.3 IDA: Info-Communications Promoter....................................................................... 39
Figure 7.4 IDA: IT Manager....................................................................................................... 41
Figure 7.5 IDA: Info-Communications Analyst And Security Monitor..................................... 41
Boxes
Box 4.1 TAS: Singapores First Telecom Regulator.................................................................. 8
Box 4.2 The Role of the National Computer Board ................................................................... 9
Box 4.3 Singapores Major Facilities Based Operators.............................................................. 12
iii
Effective regulation Case study: Singapore
1
Effective regulation Case study: Singapore
private sector input in marshaling national polyglot worldview. Known for years as one of
resources and achieving national goals. Asias economic tigers, Singapore is one of
the most sophisticated and developed markets in
This case study examines how one country the world. In keeping with that, Singapore has
established its regulatory authority and examines worked hard to develop itself as a high-techno-
how that authoritys relations with other logy pioneer, including in the communications
institutions and market players help determine sector. As the cultural and political inheritor of
its overall effectiveness. It views IDA within the the title Singa Pura (Sanskrit for Lion City),
context of the goals for regulation and develop- the republic sees itself as a strong competitor in
ment set by the government of Singapore, while the drive to become a hub for East Asian tele-
applying the metrics of intra-governmental communications networks. This effort has been
reporting and independence, transparency, staff- a national one, calling upon the resources of the
ing, and financing that have been identified as government and the private sector to coordinate
common issues for all regulators. It will also the development of the countrys telecommuni-
evaluate how effective IDA has been in cations and computing resources.
transforming Singapore into an info-communi-
cations hub and its regulatory response to the
phenomenon of convergence. The goal of the 2.2 Geography
report is to provide best practice guidelines that
may be used by regulators and policy makers in Singapore has a land area of only 660 square
other countries to achieve their own objectives. kilometers (about 255 square miles) and consists
of a group of islands, dominated by a main
island, on which is located the city of Singapore,
2 Singapore: the nations major metropolitan agglomeration
and capital. The country is located just off the
Country Background southern tip of the Malay Peninsula and is linked
to Malaysia, its northern neighbor, by a bridge
2.1 Overview across the Johore Strait. The closest island
grouping of its southern neighbor, Indonesia is
located just across the Singapore Strait.
Singapores strategic position, coupled with its
relatively small size, has throughout its history
given its population a heightened sense of the
unique nature of the city state, as well as its
isolation and vulnerability. Singapore is a
trading and business hub reliant on good rela-
tions with its neighbors and trading partners for
its economic success and political stability.
2.3 Demography
Singapores population is 4.018 million, of
which 2.97 million are citizens, 290,000 are
permanent, resident non-nationals and over
754,000 are impermanent, non-resident aliens.3
Singapores population added 1 million people
during the 1990s, an influx driven largely by
incoming resident and non-resident aliens.
Situated at a strategically and economically Average annual population growth from 1990-
important point astride the shipping lanes of the 2000 was 2.8%. The number of native Singapore
Singapore Strait, the Republic of Singapore has citizens increased by only 1.3% during the
a long and proud tradition as a trading nation. 1990s.
Initially as a British colony and, since indepen- _______________
dence in 1965, Singapore has attracted a diverse,
3 Source: Singapore Department of Statistics Singapore
highly motivated and skilled workforce and
Census of 2000 and Household Registration Database.
population, resulting in an outward-looking and http://www.singstat.gov.sg
2
Effective regulation Case study: Singapore
Singapore has a rich heritage of ethnic and eighth in the world, at USD 24,210.6 Services
cultural diversity.4 A core precept of govern- constituted 66% of the economy in 1999, with
ment policy is equal treatment and acknowledg- manufacturing accounting for 26% and con-
ment of all cultural and ethnic backgrounds. struction 8%. Total GDP was SGD 159 billion
Chinese (Mandarin), Malay, Tamil, and English (approximately USD 88 billion) in 2000.7
are recognized as official languages, with
English serving as the predominant idiom in In contrast to many other Asian countries,
business and government.5 There are, however, Singapores economy continued to grow (if only
some 20 other languages in use in Singapore slowly) during the Asian currency crisis of
an astounding diversity in a country consisting 1997-98.8 In the economic slow-down that
largely of an island barely 60 kilometers across occurred in early 2001, the government lowered
at its widest point. its predictions of growth for the year to between
3.5% and 5.5% annual growth for 2001, down
from its earlier estimate of between 5 and 7%.
Still, Singapores GDP grew 4% during the first
quarter of 2001, led by service sectors, which
grew 5.2%.9
Singapores government has an active role in
planning and coordinating major aspects of
economic life in the country. Government-linked
companies accounted directly for 13% of
GDP.10 The governments active role has had a
profound effect on the economy and on the
society in general. Singapore is, in a sense, a
corporatist city-state, with the government pro-
actively working to ensure a favorable climate
for business and technology development,
through many and varied programs that touch
nearly every aspect of life in the Republic. The
willingness of the government to take direct
equity stakes in companies, and to provide direct
financial subsidies, is seen by Singaporeans as
vital to provide an initial spark for industries
Source: IDA. that, due to the size of the countrys domestic
market, may not otherwise develop.
_______________
2.4 Economy 6 Nevertheless, according to the United Nations
Development Programme (UNDP) World Human Deve-
With a small domestic market, few natural re- lopment Report (1999), Singapore is classified as a develo-
ping country.
sources, and a strategic location in Southeast
Asia, the development of Singapores character 7 SGD 159 billion based on current market prices.
as a trading nation was perhaps inevitable. It Statistics from Singapore Department of Statistics, Latest
Annual Indicators (last updated 7 April 2001) at
leads Southeast Asia in exports and import, per http://www.singstat.gov.sg/FACT/KEYIND/keyind.html
capita. It has a service-oriented economy and its
8 GDP growth slipped from 7.8% in 1997 to 0.3% in
gross domestic product (GDP) per capita ranks
1998, only to rebound to 5.4% in the following year. U.S.
_______________ State Department, Bureau of East Asian and Pacific
Affairs, Background Notes: Singapore, August 1999,
4 About 77% of the country is of Chinese descent, the http://www.state.gov/www/background_notes/singapore_
result of several waves of immigration. The Malay 0899_bgn.html
population makes up about 14% of the country. Another 9 Ministry of Trade and Industry, Press Release on
8% is composed of descendants of immigrants from the
Advance GDP Estimates for First Quarter 2001 and
Indian subcontinent, many of them Tamils from southern Revised 2001 Growth Forecast, released April 10, 2001.
India.
10 Singapore Department of Statistics, notice of
5 Singapore Census of 2000, Literacy and Language, publication, Contribution of Government-Linked Compa-
page 2. nies to Gross Domestic Product, March 2001.
3
Effective regulation Case study: Singapore
Judicial power is vested in the High Court and The government of Singapore has taken an
the Court of Appeal. The High Court has active role in the development of the nations
original jurisdiction in serious criminal and civil ICT market. This active role includes the design
cases, as well as appellate authority over cases
from subordinate, local courts. The Court of _______________
Appeal hears cases on appeal from the High
Court. 12 See http://www.undp.org/hdr2001/
2.6 Human Development 13 Statistics Singapore data is slightly different, citing 93%
literacy rate.
While Singapore enjoys the eighth-highest per http://www.singstat.gov.sg/FACT/KEYIND/keyind.html
capita GDP in the world, it ranks only twenty-
sixth on the United Nations Development 14 Singapore Department of Statistics, Census of Popula-
_______________ tion 2000, Changing Education Profile, page 1.
11 U.S. Department of State, Bureau of East Asian and
Pacific Affairs, Background Notes, Singapore, August 15 Singapore Department of Statistics, Census of Popula-
1999. See http://www.state.gov/www/background_notes/ tion 2000, Household Income Growth and Distribution,
singapore_0899_bgn.html page 1.
4
Effective regulation Case study: Singapore
and implementation of a visionary and compre- this sector.17 Major pillars of the plan include
hensive policy aimed at securing Singapores implementing and fostering competition in
place as a regional ICT hub. In addition, the go- Singapores telecommunications services mar-
vernment holds indirect equity stakes in major ket, developing information technology training
ICT market players and provides grants and and educational competencies, and making the
subsidies to companies engaging in telecommu- Internet an integral part of the nations industry
nication innovation or pioneering new technolo- and society.
gies or services.
The structural components (mostly working
units within IDA) that have been put in place to
pursue the governments goals are discussed in
3.1 Singapores Vision of Info- more detail in Section 7, although a full discus-
Communications sion of programs related to InfoComm 21 is
beyond the scope of this case study. What is
The government of Singapore has adopted the important to note about the initiative is that it
term info-communications to convey the concept illustrates several hallmarks of the governments
of computers, content, and transmission as a approach to ICT issues:
converging whole. Info-communications is the Government can and should act as a catalyst
banner under which Singapore plans to build the of market change and growth;
countrys digital future.
Private sector and public sector forces can
work in tandem to achieve goals;
The Singaporean government is not content
merely to foster development of the info-com- Singapore must attempt to be competitive in
munications market. Rather, it wants Singapore most, if not all ICT industries;
to be a regional hub for a variety of interrelated
and complementary info-communications indus- Industry regulation is just one tool, among
tries, believing that taking a leadership role in several, that government can use to esta-
this sector will serve as a multiplier for the eco- blish market conditions conducive to
nomy as a whole. In an effort to attract foreign growth and competitiveness.
investment, Singapore recognizes that multina-
tional corporations will gravitate to locations
where they can benefit from sophisticated com- 3.2 The Hub Concept: From Traffic
munications technologies and a trained labor Transmission to Content and
force to support them. It believes that local busi- Software
nesses will also benefit from an integrated pack-
age that enables them to find, generate, process, Ultimately, the government aims to turn
and send information in an efficient and seam- Singapore into an info-communications hub
less way. for the Asia-Pacific region. The term hub is used
partly in a traditional sense establishing a
competitive market for international services
Singapore is now implementing its InfoComm that results in investments to build and operate
21 Masterplan, a government policy initiative international transmission facilities between
that is designed to transform the country into a Singapore and all major markets in the region.
thriving and prosperous Internet economy by
2010.16 The initiative much of which will be But the hub concept also includes building links
coordinated and implemented by IDA is some- with other countries to foster economic growth
thing of a conceptual umbrella for Singapores
planned approach to industrial development in _______________
17 IDAs website defines InfoComm 21 as: IDA's
_______________ blueprint for harnessing information communication
technologies for national competitiveness and
improving our quality of life. The blueprint
16 Mr Yeo Cheow Tong, Minister for Communications articulates the vision, goal and strategies that would
and Information Technology, Strategies To Develop facilitate the development of our infocomm industry
Singapore into an InfoComm Hub, speech delivered April over the next five years, and move Singapore into the
5, 2000, at the opening of COMDEX Asia 2000. ranks of 'first world economies' of the Net age.
5
Effective regulation Case study: Singapore
up and down the communications network real estate, and communications. Altogether, the
value chain. Singapore wants to provide the government, through Temasek, holds some SGD
high-value inputs, such as software design and 70 billion in assets.18
multimedia content, that will go into products
and services to be delivered around the region.
Through equity stakes and control of most of
For example, Singapore plans to take advantage
Singapores major communications-related
of its ethnic and commercial ties to China and conglomerates Media Corp., Singapore Tech-
India by providing content translated and digi-
nologies, SembCorp., and Keppel Group
tized in multilingual Singapore for delivery Temasek Holdings retains significant, often con-
over the Internet and IP-based networks in those
trolling, equity stakes in each of Singapores
large potential markets.
major domestic telecommunications operators
(see Figure 3.1). Temasek owns more than 75%
Singapore recognizes that not all info-communi- of incumbent operator Singapore Telecommuni-
cations industries will be present in Singapore cations (SingTel) directly. Through Media Corp.
itself indeed, the market may determine that and Singapore Technologies, it controls more
manufacturing of items like handsets can be than 70% of exclusive cable television operator
done more cost-effectively in markets with Singapore Cable Vision (SCV) and, through
lower labor and real estate costs but Singapore Singapore Technologies, it also controls
seeks to be the nerve center, the center for StarHub Communications, the countrys second
management expertise, technological develop- fixed-line and third mobile operator.19 Through
ment, and intellectual property. SembCorp. and Media Corp., it owns more than
50% of Pacific Internet, a dial-up ISP, and
through Keppel, it owns 35% of Mobile One
(M1), Singapores first competitive mobile
3.3 Singapore, Inc: network operator.
Government Investments
The governments stated aim is to invest
These latest initiatives to build and promote
strategically, but to not hold equity beyond the
Singapores industry are in keeping with past
point when the enterprise becomes self-sustain-
government policy. Since the founding of the
ing. The goal of strategic disengagement has not
country in the early 1960s, the government has
always been easy to achieve. The governments
continued to provide the catalyst of initial
continuing investment in SingTel, for example,
capital investment to spark and nourish critical
has raised questions in foreign markets concern-
industries. This policy, which has earned the go-
ing investments by the incumbent operator.
vernment the moniker of Singapore, Inc., is
based on the concern that the relatively small
size of Singapores domestic market might not In addition to these government holdings, IDA,
provide sufficient market-based incentives for as explored below, has a budget of roughly SGD
growth of healthy industries. 600 million from Parliament to fund various
grant and incentive programs to the private
The government provides direct financial sector. Perhaps the best example of how
support, predominantly through two methods: Singapores government has supported info-
the holding of indirect equity stakes often communications is found in the creation of
amounting to controlling interests in domestic Singapore ONE (One Network for Everyone).
operators; and the provision of grants and Singapore ONE was born during the late 1990s
subsidies for companies engaging in telecom as part of the National Computer Board (NCB)
innovation or pioneering new technologies or IT2000 master plan for enhancing Singapores
services. Since 1974, the government has util- information technology and broadband infra-
ized a holding company to channel its capital
_______________
investments into the Singapore economy.
Temasek Holdings Ltd., which is wholly owned
18 see http://www.temasekholdings.com.sg/group.html.
by the government, has substantial holdings in
most economic sectors, including transportation,
energy, banking, shipping, diversified energy, 19 At the time this case study was being prepared, SCV
and StarHub had announced plans to merge. See Box 4.3.
6
Effective regulation Case study: Singapore
80%
41% 26% 35%
42% 14%
Singapore Singapore 35% Pacific
StarHub M1
Telecom CableVision Internet
32%
18%
20% 13%* 27% 22% 44% 15% 15%
Singapore PCCW
NTT BT C&W
Public Press Public (Hongkong
(Japan) (UK) (UK)
Holdings SAR)
35%
* Management shares
Source: ITU/BDT The e-City: Singapore Internet Case Study, April 2001, compiled from company reports.
_______________
20 IT2000 was a conceptual forerunner of the Infocomm21 21 TAS (later IDA) was one of the initial members of the
initiative, which concerned information technology appli- consortium, 1-Net Singapore Pte Ltd, which owned the
cations. network. IDA held its equity interest through a wholly
owned subsidiary, Singapore Communications Investments
Pte Ltd., which initially owned 40% of 1-Net. SingTel and
SCV split the remaining 60%. Subsequently, the IDA
subsidiary divested 30% of 1-Nets equity to Pacific Internet
and CyberWay (later purchased by StarHub). On September
27, 2000, moreover, IDA announced the sale of 1-Net to
Media Corp., the nations largest broadcaster (and itself a
government-linked company). IDA is now out of the
broadband infrastructure market.
7
Effective regulation Case study: Singapore
_______________ _______________
22 See Box 4.1 for a more detailed discussion of the 23 There were continuing informal, but significant,
history of TAS. professional and personal links between executives at
SingTel and officials at TAS following 1992. It took about
two years for TAS to achieve operational independence
from SingTel; as newer staff members joined the govern-
ment agency, ties with the operator became increasingly
attenuated and less important in regulatory decision-making.
8
Effective regulation Case study: Singapore
During the early to mid 1990s, SingTel was op- competition by licensing up to two additional
erating under a license that included exclusive fixed-line licensees.
rights to provide public basic domestic and in-
ternational telecom services until 31 March
In 1998, however, the government issued just
2007. SingTel was also authorized to provide
one additional fixed-line license, opting to
mobile cellular services. Although SingTel en-
implement a fixed-line duopoly during the
joyed a monopoly in fixed-line services, by the
period from April 2000 through April 2002. It
end of the initial phase of sector reform, the go-
awarded the second fixed-line license and a
vernment had acted to introduce competition in
third cellular service license to a new market
the mobile cellular sector. In May 1995, Mobile
entrant, StarHub Communications. StarHub was
One (M1) was granted the countrys second mo-
authorized to begin both services effective
bile license although M1 did not actually
1 April 2000.25
launch its service until two years later, in
April 1997.
Before StarHub could even enter the market,
As the pace of liberalization in global tele- however, Singapore had already and
communications markets accelerated during the somewhat unexpectedly embarked on the third
mid-to-late 1990s, however, Singapore felt pres- and current phase of liberalization. In January
sure to keep pace with other East Asian states. In 2000, Singapores government abruptly changed
April 1996, the government kicked off a second course away from its duopoly policy,
phase of liberalization, announcing that it would accelerating the date for full competition from
accelerate the start of full competition in the 1 April 2002 to 1 April 2000. On that date,
telecommunications sector to April 2002. Singapore allowed competition in all tele-
Meanwhile, Singapore would cut short communications markets. For example, the
SingTels exclusivity period by seven years, to countrys exclusive cable operator, Singapore
1 April 2000, allowing a measure of limited Cable Vision, was now free to offer voice
_______________ _______________
24 By the late 1990s, Singapores government had 25 Although the government had also planned to award a
realized that the country would need an additional 35,000 third cellular mobile service license to a group dubbed P2P,
IT professionals to keep up with labor demands. the government backed away from this plan when it ruled
Australian National Office for the Information Economy, that P2P had failed to form a consortium as it had outlined
International IT&T Skills Situation and Government in its tender and thus failed to meet the licensing
Responses Background Paper, April 29, 1999. qualifications.
http://www.noie.gov.au/projects/ecommerce/skills/paper
internat_backgrnd_99.htm#SINGAPORE.
9
Effective regulation Case study: Singapore
services. The government also lifted limits on United States to evaluate the U.S. market and
direct and indirect foreign equity investment in determine whether a U.S.-based model of open
Singaporean carriers. Up until that time, the go- competition would work in Singapore. Less than
vernment had limited foreign ownership to 49% two months later, the decision had been made to
direct ownership, or a combination of up to 74% proceed with full liberalization in the short term.
direct and indirect ownership.
Both SingTel and StarHub were compensated At the same time that the government was
for the loss of their exclusive and duopoly moving to open its markets, a number of
guarantees in their service licenses. StarHub was different government agencies including TAS,
compensated SGD 1.082 billion. SingTel was NCB, the Economic Development Board and
compensated SD 1.5 billion in 1997 and SGD even, occasionally, the Singapore Broadcasting
859 million in 2000.26 Authority developed overlapping responsibili-
ties with regard to information and telecommu-
It is clear that one impetus for accelerating nications regulation, promotion and develop-
liberalization was the perception that Singapore ment, resulting in the duplication of resources
risked falling behind its rivals, such as Hong and effort. As a result of a Parliamentary
Kong, that already had moved forward with full proposal, legislation was therefore tabled to
liberalization. In its effort to become the regio- create a single, focused agency that would
nal info-communications hub, Singapore was combine all government promotional and regu-
reluctant to be seen as protecting its telecommu- latory efforts involving the converging commu-
nications market while other countries proceed- nications industries. It was at this time that the
ed to open theirs. In November 1999, officials in government introduced the term info-communi-
what was soon to become the IDA joined with cations into the official vocabulary.
representatives of Singapores Economic Deve-
lopment Board on a fact-finding mission to the
First phase: 1992-1994 Second phase: 1995-1998 Third phase: 1999- 2001
Restructuring Limited competition Acceleration of liberalization
_______________
26 A portion of the first payment is currently in
contention. See Section 10.2.2 below.
10
Effective regulation Case study: Singapore
11
Effective regulation Case study: Singapore
categories. The latter included international Although many new operators have been
simple resale (ISR) operators (56 total), public licensed following the introduction of full com-
Internet access service providers (40) and petition, Singapores telecommunications mar-
Internet-based voice and/or data services ket remains dominated by SingTel, StarHub, M1
providers (81). and SCV, each of which is controlled by a go-
Many of the SBOs appeared to be no more than vernment holding company.31 These four are
hotels or other institutions authorized to resell soon to be whittled down to three; StarHub and
the services of actual carriers. However, the SCV have agreed to merge, following the ap-
listings of both SBOs and FBOs included subsi- proval by IDA, the SBA and the companies
diaries of many foreign international carriers. shareholders.32
_______________ _______________
31 See Section 3.3. 34 BT has been widely reported in the Asian trade press as
seeking a buyer for its stake in StarHub, as well as for its
32 See SCV Press Release 14 June 2001 at
stakes in other Asian properties; BT has not commented
http://www.scv.com.sg/news/view_news.asp?serial_no_= publicly on these reports.
101&sub=Press and Box 4.3.
35 See IDA Media Release 14 June 2001 at
33 See http://www.singtel.com www.ida.gov.sg
12
Effective regulation Case study: Singapore
In addition to these major Singaporean market others. Some of these foreign carriers have
players, the market has attracted several interna- concentrated on the market for international
tional operators, such as AT&T Corp., transmission while some are rolling out
Belgacom, Concert, Deutsche Telekom AG, domestic infrastructure to provide voice and data
FLAG Telecom, MCI WorldCom, Nippon services to the business market.
Telegraph and Telephone Corp. (NTT) and
Licensed Prior to 1 April 2000 and Continuing Licensed or Expanded Scope of Operations with
with their Existing Scope of Operations effect from 1 April 2000
1. Asia Broadcast Centre Pte Ltd 1. 360pacific (Singapore) Networks Pte Ltd
2. Digital Network Access Communications Pte 2. Belgacom Asia Pte Ltd
Ltd 3. Concert Global Networks (S) Pte Ltd
3. MediaCorp T & T Pte Ltd 4. Davnet Singapore Pte Ltd
4. Rediffusion (Singapore) Pte Ltd 5. East Asia Crossing Singapore Pte Ltd
5. Singapore Telecom Paging Pte Ltd 6. Edge Communications Pte Ltd
6. Singapore Telecommunications Ltd N.A. 7. Flag Telecom Limited
7. ST Mobile Data Pte Ltd 8. Global One Communications Pte Ltd
8. StarHub Mobile Pte Ltd N.A. 9. Harmony Telecommunications Pte Ltd
9. StarHub Pte Ltd 10. MCI WorldCom Asia Pte Ltd
11. MobileOne (Asia) Pte Ltd
12. Nava Networks Singapore Pte Ltd
13. Pacific Internet Limited
14. QALA Singapore Pte Ltd
15. Singapore Cable Vision Ltd
16. Singapore Telecom Mobile Pte Ltd
17. SMRT International Pte Ltd
18. SP Telecommunications Pte Ltd
19. ST Sunpage Pte Ltd
20. ST Teleport Pte Ltd
Source: IDA:
13
Effective regulation Case study: Singapore
Source: IDA.
3,500 80%
3,000 70%
Subscribers (000s)
2,500 60%
50%
Penetration
2,000
40%
1,500
30%
1,000 20%
500 10%
0 0%
Mar.98 Mar.99 Mar.00 May.01
Fixed lines 1,685 1,778 1,877 1,951
Mobile subscribers 849 1,095 1,631 2,900
Fixed penetration 54.3% 56.2% 58.3% 48.6%
Mobile penetration 27.3% 34.6% 50.7% 72.2%
_______________
36 IDA, InfoComm Facts and Figures, Statistics for
Telecom Services, http://www.ida.gov.sg.
14
Effective regulation Case study: Singapore
IDA estimates that in February 2001, the user groups were to be liberalized at the outset,
number of international telephone call minutes as were resale based cellular telephony and
reached 191.85 million a clear increase over paging. Singapore agreed to issue new licenses
the 147.20 million minutes recorded during the for cellular networks as of April 2000. For all of
same month of 2000.37 the facilities-based services covered by its
commitments, Singapore agreed to allow up to
The Internet access market, liberalized in 74% foreign investment, based upon 49% direct
October 1998, had reached a service penetration investment and 25% indirect investment; there
rate of about 50% by early 2001, according to were no investment limits included for resale
IDA. It registered the number of dial-up Internet services. In addition, Singapore adhered in full
subscribers at 1.98 million by February 2001, to the Reference Paper on regulatory principles.
with the number of leased circuit access
subscribers at 3,300. StarHub began offering
free Internet access in December 1999 (custo- Since making these commitments, Singapore has
mers still had to pay per-minute telephone proceeded well beyond them in terms of market
charges), followed by SingTels SingNet subsi- reform. For example, it no longer maintains any
diary. In an attempt to boost consumer take-up limits on the number of licensees except due to
of its Internet service, SingNet even went so far limited spectrum or foreign equity participa-
as to establish an Internet access account for tion levels.
every one of SingTels telephone service custo-
mers in Singapore. SingNet also pioneered a
flat-fee phone link for Internet access service 4.5 Regulating Broadcasting:
customers that agreed to buy a monthly The Singapore Broadcasting
package.38 Authority
As of February 2001, however, the number of
subscribers to mobile data services remained The Singapore Broadcasting Authority (SBA)
minuscule, at 12,000. That Figure had remained was formed following the corporatisation of
largely stagnant during the two previous years Singapores broadcasting industry.39 The Singa-
that IDA had kept tabs on that data. pore Broadcasting Corporation (SBC), the for-
mer national broadcaster, was corporatised on
1 October 1994, with the passing of the
4.4 WTO Commitments Singapore Broadcasting Act. This Act also
provided for the formation of a new statutory
Singapore was an active player in the board SBA under the Ministry of Infor-
Negotiations on Basic Telecommunications con- mation and the Arts, to regulate and promote the
ducted by the World Trade Organization broadcasting industry in Singapore.
(WTO), and it joined in the Fourth Protocol to
the General Agreement on Trade in Services
(GATS), also known commonly as the WTO The corporatised successor companies are
Basic Telecommunications Agreement. Singa- Media Corp. TV, Media Corp. Radio, Media
pores commitments, submitted in April 1997, Corp. Transmission and Technology (MTT) and
reflected the market conditions and expectations TV12, all of which come under a holding com-
for further liberalization of the time. It agreed to pany Media Corporation of Singapore Pte Ltd
license two additional basic telecommunication (MediaCorp), which also holds a stake in
operators to begin service in April 2000. Singapore CableVision. MediaCorp News,
MediaCorp Press, Media Corp Publishing,
In addition, Singapore committed to license MediaCorp Studios, and MediaCorp Interactive
additional operators after that date, and were added to the MediaCorp group subse-
provision on a resale basis of public switched quently. MTT operates terrestrial transmission
offerings and leased circuit services to closed and delivery services for broadcasters, both
_______________ within and outside the Media Corp Group, as
well as satellite uplink/downlink services.
37 id.
15
Effective regulation Case study: Singapore
The objective of corporatisation was to make the clear, through SBA, that it will not be a base for
successor companies of SBC stronger in the face production of content and website hosting for
of foreign competition. As private broadcasters, material that violates its core precepts and
the successor companies have more operational societal norms. Therefore, SBA prohibits local
flexibility, especially in maintaining their posi- content involving pornography, violence, and
tions in the marketplace. This provides an impe- racially or religiously motivated hate speech.
tus for the companies to be more efficient in
delivering better programmes and to hold
Despite Singapores reputation for firm control
audiences with good local programming.
over its citizens morality and behavior, SBA
Ultimately, the government believes these officials state that they generally pursue a light
companies will have to stake a place for touch policy on Internet content. SBA does not
themselves in the international and regional attempt to monitor or regulate what individual
broadcasting markets as those markets become residents view on personal computers in their
borderless. In the spring of 2001, SBA issued homes or businesses. Rather, the Internet policy
Singapores second nationwide free-to-air framework consists of three approaches: (1)
television service license to SPH Media Works public education to promote awareness of the
Ltd, as part of a graduated, phased approach to positive as well as harmful aspects of the Inter-
broadcasting liberalization, similar to the net; (2) encouraging industry to take the initia-
approach adopted by TAS for telecommunica- tive to self-regulate and set their own standards
tions liberalization prior to 2000. Under the through the implementation of Acceptable Use
license, SPH Media Works Ltd will operate two Policies, industry codes of practice and provi-
mass interest TV channels known as Channel ding users with information on content manage-
U, a mass Mandarin channel, and TV Works, ment software; and (3) instituting a light-touch
a mass English channel from May 2001. With Class License Scheme and applying the Internet
the launch of Channel U and TV Works, TV Code of Practice, which sets minimum standards
viewers in Singapore receive a total of eight for the healthy growth of the Internet. The Class
local free-to-air TV channels. These channels License Scheme does not apply to e-mail or
are the six MediaCorp channels, Channel 5, Internet Relay Chat applications, nor is it
Channel 8, Central, Suria, Channel News Asia applicable to IP-based corporate data networks.
(CAN) and City TV and the two SPH Media
works Ltd channels, Channel U and TV Works. Officials of SBA and IDA state that the
demarcation point between the two organiza-
4.5.1 SBA and the Internet tions regulatory authority is the difference
between transmission technology and content.
Although the merger that created IDA did not That is, IDA oversees all of the network plant
include SBA, the two statutory boards work used to provide multimedia services, as well as
closely with each other in areas of multimedia those companies that develop, install, and ope-
services, where their mandates most nearly rate that technology. SBA is concerned only
overlap. Specifically, while IDA regulates and with the nature of the content delivered over that
promotes the development of broadband infrastructure. In practice, however, the division
networks and oversees Internet access services, of responsibility may be difficult to ascertain in
SBAs job is to regulate the content that is some circumstances. Companies may provide
delivered, via streaming and downloading, over packages of access services and proprietary
those networks and from the Internet. content, making them, in some sense, both tele-
communications service providers and broad-
SBA can only be said to regulate the Internet
casters.
to the extent that it applies to content codes and
regulations to websites hosted within Singapore.
The agency does not attempt to shut down To launch their businesses, ISPs must obtain a
access to offshore websites, although it main- license from IDA to offer Internet access
tains a ban on roughly 100 mass impact services. Once they are licensed by IDA, they
pornographic websites a prohibition that is are automatically class licensed by SBA and
largely symbolic. While technologies exist to must register with the Authority. Under the
enforce the prohibition, these technologies are Class License Scheme, ISPs must ensure that the
not employed. Nevertheless, Singapore makes content provided over their services comply with
16
Effective regulation Case study: Singapore
the Internet Code of Practice. They are not standing of SBAs mandate, and SBA is not
required to monitor the Internet or its users. interested in setting up unnecessary barriers to
They will also not be held liable for content for any companys roll-out of innovative products
which they have no editorial control. However, or services.
they are required to remove prohibited content
when asked to do so by SBA.
5 IDAs Role within Singapores
In terms of services, the new media field in
Singapore is fraught with murky areas in terms Government
of jurisdiction. Policy-makers at both agencies
and MCIT concede that these issues have not 5.1 Policy Goals for the Creation of
been sorted out and remain under study. IDA
4.5.2 Chances of Future Consolidation A discussion of Singapores policy goals in
creating IDA is essential to understanding the
Given the ongoing overlap between the agencies agencys role within the government. IDA was
regarding Internet and multimedia services, the created in late 1999 to perform three distinct
question of combining SBA and IDA into a functions that the government views as comple-
further converged agency thus completing the mentary and compatible:
consolidation laid out in the vision of info-
1 Regulatory and policy-making functions;40
communications remains a live one. Officials
at IDA and MCIT recognize that depending on 2 Promotional, industry development and
market developments, Singapore may re- public outreach tasks;41 and
examine whether a further merger uniting SBA 3 Logistical/technical support, as the manager
and IDA may occur. of IT and network systems for all of
SBAs authority over content continues to be Singapores government ministries, inde-
seen as a separate function from IDAs mission pendent agencies, and other offices.42
to promote and regulate the hardware and soft- Each of these functions is seen as vital to
ware engaged in information transmission and Singapores development as an info-communi-
processing. One SBA official suggested that cations hub. During its first year of operation,
combining the agencies could even compromise IDA has acted under the belief that the agency
the governments ability to uphold community will progressively move away from micro-ma-
content standards, reasoning that the promotio- nagement of the industry as and when competi-
nal thrust of IDA could overwhelm content tion takes root, and focus on putting in place and
controls. Faced with a choice of cracking down enforcing regulatory frameworks to ensure a le-
on a company for content standards lapses or vel playing field in the industry. IDA plans to
helping it gain a stronger foothold in the market, move toward a more strategic role in planning
a combined IDA/SBA might feel pressure to and steering Singapore into the leadership of
back off from the former, in favor of the latter, info-communications industries and activities as
the official speculated. a whole. At the same time that it works to sta-
As separate agencies, SBA and IDA currently bilize the regulatory framework, IDA is actively
have a close working relationship, with staff working to promote and develop the market.
members serving together on interagency Indeed, IDAs promotional and developmental
committees put together to explore convergence functions have been given slightly greater
issues. There are regular meetings between the resources in terms of staffing than those devoted
two regulatory communities, at the level of the to its regulatory functions. (See Figure 5.1)
statutory boards and at the ministerial level, as _______________
well. In addition, the level of informal access is 40 See Section 7.2 below.
high, with officials of the two agencies and their
ministries feeling no restriction on their ability 41 See Section 7.3 below.
to call each other for meetings or telephone
42 See Section 7.4 below.
consultations. IDA officials have a good under-
17
Effective regulation Case study: Singapore
The efforts of Singapores government to engage in long-term planning because their bud-
provide a good environment for the flourishing gets were directly dependent on Parliament and
of information technologies and communica- could change yearly. In addition, the staffs of the
tions are not unique. Many national govern- ministries were composed of civil servants, who
ments are proactively involved in developing were subject to being rotated regularly into
and organizing programs to foster industrial positions in various different ministries.
development and many of those programs are
pervasive in scope. In many countries, however, To overcome some of these difficulties,
the task of regulating the nations telecommuni- Singapore began creating statutory boards to
cations industries is divorced from the task of focus on each particular area of governance or
creating and implementing programs to foster economic life. Where the ministries have
and encourage industrial innovation and deve- permanent secretaries and political appointees,
lopment. Where other governments have chosen statutory boards have chairmen and vest their
to place promotional tasks within a government daily operating authority in chief executive of-
ministry or general economic promotion board ficers and directors general. Unlike government
separate from the regulatory agency Singapore ministries, the boards operating budgets are not
has made a conscious decision to give both tasks set by Parliament on an annual basis. Instead,
to its sector-specific agency. Thus, IDA cannot statutory boards have the power to raise their
be seen as a regulatory agency in the classic own funds, maintain strategic reserves, to invest
mold. Rather, it is the institutional manifestation in other companies or in debt and equity
of the high priority and collective, single- instruments. They can own or lease land on their
minded focus that Singapores government has own authority. And because the staffs of
decided to bring to bear on what it perceives to statutory boards are not civil servants (they are
be a crucial and strategic collection of industries designated as public servants or government
that are themselves converging and changing employees, but are not part of the civil service
rapidly. personnel system), the boards have full authority
over hiring and firing practices and decisions,
and they can design salary and benefit programs
5.2 The Role of the Statutory Board to compete with the benefits packages offered in
in Singapore the private sector. In short, they are meant to op-
erate more like enterprises than like traditional
IDA was created as a statutory board and is political institutions.
governed by the provisions of a Parliamentary
act, the Info-Communications Development Au- Statutory boards do not, however, operate
thority Act of 1999, which is the legal found- without direct, often active, oversight by the go-
ation and underpinning for IDAs operations. vernment. Each board reports to a government
Understanding the role statutory boards play is ministry, which monitors the boards activities
also vital to understanding IDAs role within the and may exercise effective control over its
government. decision-making, to varying degrees. Officially,
the relationship between the board and its
Traditionally, laws and policies adopted by Par- oversight ministry is spelled out in the
liament were implemented and enforced through legislation that creates each board. In practical
various departments of Singapores government terms, however, the degree of ministry involve-
ministries. Ministry departments could not ment in a boards decision-making appears to
18
Effective regulation Case study: Singapore
vary as the permanent secretaries and other staff communications Act of 1999, parties aggrieved
members in each ministry are routinely trans- by IDAs decisions may appeal to the Minister
ferred to other departments in other ministries or the court. (See Figure 5.2).
on a cycle that can be as short as three years.
As with many statutory boards, IDA has control
Ministries and their related statutory boards over its own budget, and the ability to buy, own,
generally enjoy a cooperative and collegial and dispose of property, invest in equity stakes
relationship, rather than a confrontational or of start-up companies, and to sue and be sued in
arms-length relationship. Power is seen to be Singapores courts. Also like other statutory
flowing from the ministries to the boards, boards, IDA is under the oversight of a govern-
through statutory-based delegation. The over- ment ministry, the Ministry of Communications
sight ministries make broad policy decisions and Information Technology (MCIT).
while more routine decisions and activities are
often left to the board to carry out on its own. 5.3 Seat of IDAs Authority
In keeping within this model, MCIT and IDA The IDAs authority is statutorily vested in the
share a collegial relationship that is often office of a chairman and members of the Au-
manifested in a consultative approach in deci- thority, which can range in number from two to
sion-making and policy formation. However, 16, according to the judgment of the Minister of
MCIT and IDA do not make all decisions Communications and Information Technology
collectively. MCIT sets the broad strategic and (the Minister). In implementation, these
policy direction, while IDA undertakes opera- members have become members of a
tional and regulatory functions. Thus, IDA, in 14-member board of directors, composed of a
formulating the Infocomm21 Strategic Plan to mix of high-technology company executives,
establish Singapore as a leading info-communi- trade groups, and government officials (see Fig-
cations hub in Asia, would seek the MCITs ure 5.3, members of IDA board).43 According to
views because this initiative would have wide the IDA Act, the Minister appoints the Chairman
impact on industry and the public. While IDA and the members, and the members can include
would be responsible for the plans implementa- the chairmen of both IDA and the SBA. The Mi-
tion through its various programmes and nister also appoints a Deputy Chairman of IDA.
initiatives, the Minister is accountable to Parlia- Board members serve for terms of three years,
ment for the results. MCIT and IDA also ende- and they may be reappointed, at the discretion of
avor to maintain independence in their decision- the Minister. The board is obliged to meet, at the
making processes to ensure that MCIT functions discretion of the Chairman, and decisions are to
effectively as an oversight body. Under the Tele- be made by a simple majority of votes.
_______________
43 The latter group includes the CEO of IDA and the
Chairman of SBA.
19
Effective regulation Case study: Singapore
The IDA Act also creates a post within the Moreover, the Minister names the Chairman of
agency for a Chief Executive, to be approved by IDA and must approve the selection of the Chief
the Minister. In fact, the Chief Executive of Executive of the agency, who cannot be
IDA, Yong Ying-I, is also the Deputy Secretary removed from office without the Ministers per-
of MCIT. The Chief Executive is responsible to mission. Collectively, these provisions appear to
the Chairman for daily administration of IDA. give the Minister clear control over the choice
The IDA Act also empowers IDA to appoint and even length of service of the top officials of
someone to act in the place of the Chief IDA. This fact is representative of the extent to
Executive during any period of absence by the which the Ministry retains control over the
Chief Executive. Keng Thai Leong, who also agency, as will be explored in further detail in
serves as the Director General of Telecommuni- Section 5.5 below.
cations, has been appointed as the Deputy Chief
Executive. IDA also has full rights to hire or fire
The Chairman and the Board have wide latitude
any other full-time staff members, as it sees fit.
to delegate any or all of their powers, functions,
These employees have personal immunity from
or duties to parties within the agency.45 Authori-
liability for their acts in carrying out the Autho-
ty might be delegated to the Chief Executive, the
ritys lawful mandate.
staff, a management committee, or in the case
The Minister has the power to remove from of the Board any other person to whom the
office any member of the Authority (in authority wishes. In effect, this allows the Board
practical terms, any board member) at any point and Chairman to grant extensive power and
in time that the Minister feels removal is in the operating independence to the top executives
public interest or is necessary to ensure and staff of the agency, and even to permanent
effective and economical performance of and ad hoc committees established within IDA,
IDAs functions.44 This assures that IDAs both of which, in fact, the Board has done.
board serves at the pleasure of the Minister.
_______________
_______________
44 See IDA Act, First Schedule. 45 Id.
20
Effective regulation Case study: Singapore
5.4 Role of the IDA Board of will (1) have a major strategic or policy impact,
Directors (2) have a major political impact, (3) have a
major financial impact (which has been included
The role of the IDA Board of Directors is a non- in a rule requiring MCIT to approve any deci-
executive one. The Board does not have a role in sion involving investment of monies in excess of
day-to-day decision-making within the agency. SGD10 million), or (4) affect a large percentage
Rather, it operates in an advisory or strategic of Singapores population.
role, providing an important industry viewpoint
in setting the overall agenda and determining the
general direction of the agency. In other words, Thus the Ministry has had a role at some
the Board gives Singapores business communi- juncture in formulating the final decisions on
ty an opportunity to provide its views and virtually every important action taken in the
perspectives to the management of IDA. In turn, telecommunications arena, both before and after
the Board constitutes a sounding board for the the creation of IDA. The Ministry represents the
management to gain private sector input. ultimate political direction of the elected
leadership of Singapore and works collabora-
The Board meets quarterly and does vote not on tively with the management of IDA on major
regulatory matters or decisions. While the Board telecommunications policy decisions.
does have the power to vote, as a matter of
practice, the Board adopts decisions by con-
sensus. It decides annually on a strategic work Depending on how high the stakes are, political
plan that embodies the major goals of the input may come through the Ministry from the
organization, but the bulk of its powers have Deputy Prime Minister or the Prime Minister.
been delegated to the Chief Executive and the IDA consults with MCIT on regulatory deci-
staff of IDA. sions with policy implications, such as the Code
of Practice for Competition (See Sections 6.2
In the context of Singapores government and 6.3). On the other hand, if a decision is seen
structure, which favors corporate-style statutory as routine, without precedent-setting repercus-
boards, IDAs board does not take votes on re- sions, it may be made by a unit-level manager
gulatory orders or decisions, nor are its meetings within IDA, perhaps after some consultation
open to the public. From the perspective of the with the IDA Director General (Telecom).
telecommunications operators in Singapore, the
Boards activities are largely opaque and appear
Staff members of MCIT (there are only 10
to have no bearing or effect on their daily opera-
devoted to communications issues) routinely
tions or strategic plans within Singapore, al-
attend meetings at IDA or sit on committees
though the Board is comprised mostly of mem-
involving IDA and other, allied agencies. In
bers of the private sector. As such, the Board is
researching and drafting policy reports and cost-
itself a representation of the views of the private
benefit analyses, MCIT can draw on IDA staff
sector.
resources and statistics. As a result of the close
working relationship between MCIT and IDA,
5.5 The Ongoing Role of MCIT decisions are not necessarily always referred to
the Ministry on an official, formal basis; rather,
IDAs oversight ministry, the Ministry of the Ministrys guidance may be provided infor-
Communications and Information Technology mally through individual contacts and meetings
(MCIT), monitors four other statutory boards between the organizations.
including the Civil Aviation Authority, the
Maritime and Port Authority, the Land Trans-
port Authority and the Public Transport Authori- At this stage in IDAs existence, many of its
ty. With most of its executive authority devolved decisions have been deemed to involve broader
into the statutory boards, MCIT has a staff of policy implications. Thus, decisions like the
only about 70 individuals (including clerical IDA Code of Practice for Competition were
workers), making it, essentially, the professional made with significant input from MCIT. The
staff of the Minister. Minister was given a detailed briefing on the
Code and was integrally involved in finalizing
In Singapores political system, the Minister and approving it. The Code was treated as
must have the final decision on any action that subsidiary legislation, meaning the Minister was
21
Effective regulation Case study: Singapore
required to publish it in the governments Moreover, while MCIT has had involvement in
official gazette. Moreover, the approval of the major IDA decisions and actions, this has not
Code was too important a decision for the affected IDAs effectiveness. As will be seen in
Minister not to be involved. On the other hand, the discussions that follow, the Authoritys
IDA approved SingTels Reference Interconnec- initial key decisions including the Code and
tion Offer (RIO) without input from MCIT. RIO have been lauded by market players and
analysts alike as models of fair and impartial
The difference in the way these two decisions regulation designed to serve as a blueprint for
were undertaken may be explained by the fact effective competition. (See Figure 5.4)
that a decision like the Code, which sets the
framework for competition in Singapore, is by
its very nature part policy and part regulation. In
order to facilitate full competition, the nation 6 Regulatory Functions of IDA
had to establish both a competitive framework The Telecommunications Act of 1999 (The
and the rules for implementing that framework. Telecoms Act), passed by Parliament in tandem
Among other things, the Code provides for tech- with the IDA Act, provides much of the legal
nologically neutral and asymmetric regulation basis for IDAs actions as the market regulator.
(decisions that are more policy-oriented) as well (See Figure 6.1)
as setting rules for interconnection and licensing
(decisions that are more regulation-oriented). As
competition begins to take hold in Singapore, 6.1 Licensing
IDAs decisions may evolve from focusing on
policy to targeting implementation, allowing the The Telecoms Act endows IDA with the right to
Authority greater autonomy in its decision- provide all telecommunications services within
making. Singapore and gives it authority to transfer that
right to operators through its power to issue li-
In the meanwhile, industry has indicated that it censes and to designate certain licensees as
is often unsure whether IDA decisions have Public Telecommunications Licensees or
been taken by IDA alone, or in consultation with PTLs. PTL designation usually entails an in-
or under direction from MCIT regardless of frastructure build-out obligation but also allows
whether they involve policy or regulation. While the licensee to take full advantage of the proper-
the statutory board framework does not call for ty-access rights and other privileges granted in
the creation of a commission that makes deci- the Telecommunications Act. In essence, be-
sions in a public fashion, IDA is moving toward coming a PTL entails taking on the full rights
greater transparency in its decision-making role. and responsibilities of being a public utility.
22
Effective regulation Case study: Singapore
IDA also may attach conditions to licenses, and that in other countries would be considered
it can modify those conditions. Before altering a value-added or enhanced service providers)
license, the agency must notify the licensee, in must be licensed in Singapore.
writing, of its intent, and it must give the
licensee no fewer than 28 days to respond to the Depending on the scope of their operations,
proposed modification. Licensees can appeal FBO licensees can apply to be designated as
any IDA decision to alter their licenses, but they PTLs. Other FBOs, by contrast, may enjoy more
must do so within 14 days of IDAs decision. freedom to select where they do or dont extend
their networks or provide services.
In general, there are two categories of licenses
for the provision of telecommunication services FBO licenses are required, in general, for any
in Singapore: (1) Facilities-Based Operator kind of network infrastructure build-out and
(FBO) licenses and (2) Services-Based Operator operation. This includes international and
(SBO) permits. The FBO license is always an domestic fixed wire transmission or switching
individual license, while the SBO may be an facilities such as international gateways or
individual license, or for some services, a class undersea cable landing facilities. It also includes
license.46 Class licensees may include any kind public cellular mobile networks, paging net-
of establishment, such as a hotel, store or even a works, public mobile data and trunked radio
restaurant, that resells the telecommunications services, as well as local multipoint distribution
services of another operator. All providers of systems (LMDS). Wireless services are
telecommunications services (including those generally licensed separately, as a function of
_______________
46 An individual license is awarded to a company
based on a specific application filed by the company
and approved by IDA. Such a license may contain
conditions particular to that company and may be
modified by the regulator or through an application by
the company. Class licenses, however, are broad
authorizations that apply to any company offering a
particular service or set of services. Companies do not
need to apply for class licenses in order to offer those
services. The rules and conditions that apply to each
class license are gazetted (published in the official
government gazette) and any company that begins to
provide that service is presumed to have read,
understood and complied with those rules.
23
Effective regulation Case study: Singapore
spectrum management policies. Other than for reasoned and non-preferential decision-making.
spectrum scarcity reasons, there is no limit on In particular, the Act provided the legal basis for
the number of licenses that can be issued for the Code of Practice for Competition in the
services in Singapore.47 Whenever spectrum Provision of Telecommunications Services (the
limits are an issue, licenses may be distributed Competition Code or the Code). The Competi-
through a selection or auction process. tion Code was drafted as the blueprint for IDAs
regulation of the competitive telecommunica-
Certain SBO licenses are distributed on an tions industry in Singapore. It is augmented by
individual basis. Those may be international other codes of practices, including a code for
simple resale (ISR), resale of leased circuits, building access issues, but it remains by far the
virtual private network (VPN) services, ma- most influential and far-reaching document,
naged data network services, Internet access, having introduced asymmetrical regulation and a
Internet exchange services, store and forward range of consumer-protection provisions not
value-added network services, mobile virtual previously in place. The Code also lays the
networks (MVNOs), and live audiotex services. foundation for interconnection policies, includ-
Other services provided over the public switched ing the preparation by SingTel of a Reference
telephone network and the Internet are subject to Interconnection Offer (RIO), which was
a class license. These would include simple finalized in January 2001. As a result of the
resale of public switched telephony, interna- Telecoms Act, the Code, and the RIO, there is a
tional callback services, Internet-based voice or much larger and more detailed canon of regu-
data services (Internet telephony), or interna- lations for telecommunications than has ever
tional calling card services. Class licensees are before been in effect in Singapore.
able to offer their services without obtaining a The text of the Code was prepared with the
specific authorization, but they are subject to all major involvement of outside consultants from
relevant codes of practice and service quality the United States, which provided legal and
standards. other expertise deemed to be lacking in
Singapore.48 The process of finalizing the Code
involved several rounds of public consultation,
6.2 Rulemaking: Codes Of Practice initiated by IDA on 17 April 2000.49
The Telecommunications Act gives IDA three IDA held a public forum, attended by
general options through which it can implement 130 persons, on 15 May 2000, at which it
regulations. IDA can issue: presented an overview of the proposed Code.
1 Codes of practice and standards of Several industry representatives also gave
performance that apply to all licensees presentations on the proposals. IDA accepted
offering services; comments on the proposed Code until 5 June
2 Directions to specific licensees, instruc- 2000 (extended from 22 May 2000). It then
ting them to alter their behavior and giving incorporated those comments in a second draft
them a time limit for compliance; and and repeated the consultation process during the
summer of 2000. The results of the second
3 Advisory guidelines involving any aspect round of consultation were incorporated into
of telecommunications. further changes to the text, which ultimately was
IDA has exhibited a growing reliance on finalized and published on 15 September 2000.
published and written codes as the basis for
_______________ _______________
47 Because of spectrum issues, there are only three licensed 48 Although IDA prefers not to publicize the names and
mobile operators in Singapore. contact details of the consultants it uses, this information
can be provided by IDA directly to interested parties
49 IDA issued two documents at that time: the Competition
Code, and a document outlining proposed interconnection
policies, titled Interconnection/Access in a Fully Liberalised
and Convergent Environment.
24
Effective regulation Case study: Singapore
comments
Source: Adapted from IDA (http://www.ida.gov.sg) and Squire, Sanders & Dempsey.
The Code is designed to embody several but also messages that have been subjected to
principles that will serve as guiding lights to rearrangement, computation, or other pro-
IDA and the industry. First, IDA believes that cesses. This definition takes in services that in
where competition exists in the market, it need other jurisdictions would be regarded as value-
only apply a light regulatory hand and should added or enhanced services and would be
allow market forces to dictate operator behavior. regulated under a different framework or
Therefore, the code is built around the principle standard.
of asymmetrical regulation, applying more
Third, the provisions of the Code, in particular,
rigorous rules to carriers deemed to be
seek to balance encouraging short-term market
dominant within the market, and leaving
entry and long-term investment. Thus, while the
nondominant carriers more freedom to operate
Code calls for network unbundling, Singapores
without extensive oversight. As competition
PTLs are often given strict network build-out
takes hold in more and more markets, IDA is
goals and benchmarks, which cannot be met by
supposed to increasingly step away from
simply reselling or incorporating elements of
dominant-carrier regulation, concentrating on
another PTLs network. Similarly, in setting
enforcement of consumer-protection rules and
wholesale rates for dark fiber, IDA sought to
encouraging the industry to police itself through
lower prices for domestic fiberand international
mutually agreed private-sector codes of practice.
private line circuits. At the same time, however,
they also tried to preserve a price floor that
Second, pursuant to the logic behind IDAs very would not obliterate all financial incentives for
existence, the Telecommunications Act and the additional carriers to build their facilities in the
Code seek to embody the principle of technolo- market. (See Figure 6.3) he chapter that follows
gy neutrality. Operators of networks are, at least provides more detail on implementation of the
in theory, subject to the same rules and Code, bearing in mind that it had been finalized
obligations, regardless of what platform those for less than one year at the time of the writing
operators use whether its a traditional tele- this case study. It is therefore premature to reach
phone network, a cable TV system or a broad- any long-term conclusions on whether any or all
band, IP-based fiber network. The very language of the principles embodied in the Code will be
defining telecommunications service in the Tele- borne out through its implementation and market
communications Act is broad and includes the behavior. Such an analysis will have to be
transmission not only of simple voice messages conducted over the months and years ahead.
25
Effective regulation Case study: Singapore
Figure 6.3 Code of practice for competition in the provision of telecommunications services
The Code of Practice for Competition in the Provision of Telecommunication Services (Code) serves as a
blueprint for IDAs regulation of competition in Singapores telecommunications industry. The main elements
of the Code are:
Embodiment of the principle of asymmetric regulation
- classifying all licensees as either dominant or non-dominant
- placing a greater regulatory burden on dominant than non-dominant licensees
- SingTel and SCV classified as the only dominant licensees
- SCV (temporarily) exempted from certain obligations such as unbundling requirements
Embodiment of the principle of light regulation where competition exists
- reducing IDAs involvement in disputes between non-dominant licensees
Embodiment of the principle of technological neutrality
Regulatory guidelines on interconnection regulation
- Setting guidelines for all interconnection agreements
- Requiring SingTel to prepare and adhere to a Reference Interconnection Offer (RIO)
Fostering short-term market entry and long-term investment
Sunset clauses in the form of mandatory and optional review, allowing IDA to modify the Code to adapt
to market and technological developments
6.3 Elements of the Code of Practice barrier to rapid and successful entry by an
for Competition efficient competitor or
2 The licensee has the ability to restrict
6.3.1 Dominant And Non-Dominant output or raise prices above competitive
Licensees levels for telecommunication services pro-
vided to end users over those facilities.50
The advent of full competition meant a
theoretical reassessment of the need for IDA to Operators designated as dominant have the right
continue closely regulating non-dominant car- to petition IDA for reclassification, provided the
riers in a market that would be increasingly operator is able to offer information proving that
governed by market forces. The Code makes it meets none of the two criteria. Likewise,
clear that, in terms of full-scale economic regu- operators may seek an exemption from some or
lation, a greater burden will fall on operators all of the requirements imposed on dominant
considered to retain market power. carriers.
To implement the principle of asymmetric Based on the Codes definition, IDA classified
regulation, the Code recognizes two classes of two operators as dominant: SingTel and
licensees: dominant and non-dominant licensees, Singapore Cable Vision. These two operators
each with a different set of rights and obliga- the latter predominantly a cable TV system
tions. According to the Code, an FBO will be operator constitute the only companies with
classified as dominant if it controls facilities that wireline networks reaching nearly every end
provide a direct connection to end users in user in Singapore. While SingTel bore the full
Singapore and meets one of the following two brunt of dominant carrier regulation, IDA exem-
criteria: pted SCV from many of the dominant carrier
provisions, including the unbundling mandate,
1 The facilities are sufficiently costly or dif- _______________
ficult to replicate that requiring new
entrants to do so would create a significant 50 See Section 2.2.1 of the Competition Code.
26
Effective regulation Case study: Singapore
which would have forced the cable operator to Nevertheless, it also recognizes that because
allow access to its cable modem service for convergence is in its early stages, with different
competing Internet access providers.51 SCV was platforms subject to differing degrees of
required, however, to file tariffs for its services competition, different regulatory obligations
with IDA and was otherwise prohibited from may initially be imposed on licensees using dif-
abusing its dominant position by engaging in ferent platforms.53 In an effort to address this
predatory pricing, cross-subsidization of compe- issue, the Code also includes a triennial built-in
titive services through revenues obtained from review mechanism. Following a period of public
tariffed services, and discrimination against comment, IDA can modify or eliminate
other operators. provisions of the Code that are no longer
deemed necessary following the growth and
SCV opposed IDAs designation of it as a development of competition.54 IDA may also
dominant operator, particularly disputing any modify the Code on its own initiative at any
contention that it had the ability to set or time.55
influence prices for Internet access. SCV
maintained that it had no market power for In essence, these provisions mean that IDA is
broadband Internet access, but it failed to empowered to impose unbundling requirements
convince IDA that it did not qualify for (or other dominant-operator provisions) on SCV
dominant classification based on the other terms whenever market conditions and technology
of the Codes definition. SCV did succeed, develop accordingly. Senior IDA officials
however, in securing a broad exemption from indicated that this is an option they intend to
the rules that otherwise would apply to it under invoke at the appropriate time.
the Code. IDA agreed with SCV that requiring
the unbundled access to its cable modem service
would be technologically difficult, if not 6.3.3 Consumer Protection and Service
unfeasible entirely, and that such unbundling Quality
would be premature in a rapidly changing broad-
band market. The Code imposes certain obligations on all
licensees, whether they are dominant or
In practical terms, the new regulatory
nondominant. Among these are obligations
framework means that IDA will expend more of
designed to provide a uniform blanket of
its regulatory resources monitoring SingTel and,
protection for consumers from unfair market
to a lesser extent, SCV. Overall, non-dominant
practices or inferior service. All licensees are
operators believe that IDA is fair, nonbiased,
required to disclose to their end users, in
credible and effective. But there is concern that
advance, all prices and terms of service, in some
perhaps IDA has been too optimistic about the
form, and dominant carriers must file such
role market forces or industry self-regulation
information in tariffs with IDA. In addition,
would play in Singapores telecommunications
operators must provide customers with timely
market, at least at this relatively immature and
and clearly worded bills.
developing stage. In an era of asymmetric
regulation, the non-dominant operators are
looking for some assurance that IDA will res- The Code contains provisions designed to
pond adequately to their issues, even as IDA prevent operators from unilaterally switching
continues to monitor SingTel.52 end users over to their services without prior
approval of those customers. This practice,
which is tantamount to stealing customers from
6.3.2 Mandatory and Optional Review
other operators, has been a serious consumer
The Code was drafted as a regulatory response problem in countries where telephone service
to the phenomenon of convergence and the _______________
erosion of historic differences among platforms
such as wireline, wireless, cable and satellite. 53 See Section 1.5.4 of the Code of Practice for
_______________ Competition.
51 A service known in some countries as cable open
54 Id, Section 1.5.5.1.
access .
52 See in particular the interconnection discussion at 6.3.4. 55 Id, Section 1.6.2.
27
Effective regulation Case study: Singapore
markets have been liberalized.56 The Code bans obtains about or from a customer in the process
switching an end user from one operators of providing services or equipment. This may
service to another without prior consent of that include calling patterns, credit history, the per-
end user. If a customer is switched without son the customer may have called, the duration
permission, the customer is not liable to pay any of calls, and the customers address and phone
charges to the carrier that conducted the impro- number. An operator may use such information
per transfer, and the wrongdoer is required to only for purposes of planning, providing, or
pay all costs for switching the customer back to billing for the telecommunications services it
his or her original, chosen carrier. provides to that customer. It may also use some
information to facilitate interconnection with
Customers also are not required to pay for any another carrier or to provide assistance to law
services or telecommunications equipment they enforcement agencies. Unless the customer
have not ordered. This prevents unscrupulous gives prior authorization, the operator cannot
operators (or those without sufficient billing use EUSI to market additional goods or services,
procedures) from simply tacking on line items in or sell that information to third parties or
bills that customers never wanted or never affiliates.
received. In all billing disputes, the end user
must be given the right to challenge the To protect and maintain a basic foundation for
operators calculations; the operator must high service quality, the Code calls for IDA to
respond to such a challenge within 30 days. IDA issue minimum standards of quality. Operators
may assist in resolving the dispute, or the parties must publish, each year, data indicating its track
can resort to court action (including Small record in meeting those standards. IDA requires
Claims Tribunal cases) to obtain relief. the operators to report how long it takes to
provide an ordered service, how long to respond
Operators are obliged to protect and restrict their to repair requests, how long it takes to respond
use of End User Service Information (EUSI), to billing inquiries, and other elements of service
which is defined as any information an operator quality. (See Figure 6.4).
_______________
56 In the United States, the practice of switching an end
users presubscribed carrier without knowledge or
permission of the end user is known as slamming. When
operators improperly bill customers for services they have
never ordered or received, that practice has been dubbed
cramming.
28
Effective regulation Case study: Singapore
# refers to cases where the service cannot be provided within the normal 5 days due to unavailability of outside plant facilities such as lack of
spare local pair at the serving or alternative distribution point.
Source: IDA
29
Effective regulation Case study: Singapore
In addition to the previous consumer protection SingTel RIO, which has been approved by IDA.
provisions, which apply to all licensees, the If a competitive operator accepts the RIO, it
Code mandates that dominant carriers (1) pro- does not have to negotiate with SingTel at all.
vide telecommunications services to any end Moreover, the Code requires SingTels offer to
user, upon reasonable request; (2) provide ser- be modular a competitor can purchase only
vices at just and reasonable prices, terms, and the elements of interconnection it needs or
conditions; (3) not discriminate for affiliates or wants. The five basic elements of interconnec-
against non-affiliates in terms of price and tion service are:
quality of service being provided; (4) provide Physical interconnection;
service pursuant to tariffs filed with IDA; and
(5) give competitors unbundled access to their Origination/transit/termination services;
network infrastructure (See Section 6.3.4, Essential Support Facilities;
below). Unbundled Network Elements;
Unbundled Network Services.
6.3.4 Interconnection
SingTels RIO was developed and finalized
Under the Code, all FBOs and SBOs that use through a public consultation process similar to
switching or routing equipment have a duty to that used to finalize the Code. Under the Code,
interconnect with other licensees, either directly SingTel was required to prepare a draft RIO for
or indirectly through transit arrangements with approval by IDA. IDA published SingTels
third parties. If the two interconnecting carriers proposed RIO on its website on 30 October 2000
are both nondominant, IDA generally will not and invited licensees, potential entrants, other
get involved in interconnection negotiations, al- regulatory authorities, users and any other inter-
though it requires that all concluded agreements ested parties to submit written comments on the
be filed with the agency. As part of the principle proposed RIO. IDA published all comments on
of light regulation, IDA will conciliate its website, noting that it would not entertain any
between two nondominant operators but only private meetings regarding the RIO. After
if both operators seek IDAs help. Otherwise, in- reviewing all public comments, IDA approved
terconnection agreements are viewed as private the RIO on 31 January 2001, making it effective
contracts between commercial entities. the same date and publishing it on its website.57
All interconnecting carriers must agree on terms Pursuant to the Code and the RIO, SingTel is
of compensation for originating, transiting, and barred from any discrimination in favor of its
terminating traffic. They cannot discriminate affiliates, and it must provide interconnection at
among interconnecting carriers in terms of qua- any technically feasible point or location on its
lity of the technical interconnection, and both network. Prices for interconnection must be
must do nothing to cause harm to each others based on incremental forward-looking economic
network. The receiving carrier must protect any costs. SingTel (and any other dominant carrier)
information of a proprietary or confidential must allow other FBOs to purchase certain desi-
nature that is provided by the other carrier to gnated services at wholesale rates, allowing
another in the course of interconnection. other operators to obtain them as inputs to their
own services. IDA has designated dark fiber and
With its emphasis on asymmetrical regulation,
international private leased circuits as services
the Code sets a different framework for inter-
that must be priced at wholesale (retail-minus)
connection with dominant carriers essentially,
rates.
SingTel. There are three options for obtaining
interconnection with SingTel: (1) negotiating a _______________
new, individualized interconnection agreement 57 In fact, the proposed RIO, all comments, the revisions
with SingTel, (2) adopting an agreement Sing- IDA required and the final RIO were all available on IDAs
Tel has negotiated with another similarly situ- website at the time this case study was published. See:
http://www.ida.gov.sg under Policy & Regulation/Papers/
ated licensee following the effective date of the Consultation Papers/Proposed Reference Interconnection
Code, or (3) interconnecting by accepting the Offer.
30
Effective regulation Case study: Singapore
31
Effective regulation Case study: Singapore
Essential support facilities are defined as gement on the operators during the initial phase.
passive support structures, for which no If no voluntary agreement can be negotiated, an
practical or viable alternatives exist, that enable operator can petition IDA directly to issue a
the deployment of telecommunication infrastruc- ruling to force sharing.
ture.59 In addition to collocation space, such
facilities include manholes, cable chambers,
trenches, ducts, and conduits, which SingTel 6.3.4.1 Interconnection Regulation
must offer to lease to competitive operators so Implementation
that they can place their own cables or fiber
plant. SingTel must also give FBOs space within Before the drafting of SingTels RIO, StarHub
cable risers in commercial and residential multi- and SingTel spent the better part of 1999
tenant buildings, where the majority of attempting to negotiate an interconnection
Singapores population work and live. Finally, agreement that would have governed what was
competitors have the right to obtain space on to be their duopoly relationship in the basic
SingTels towers and poles for the location of services market. Negotiations were detailed and,
radiocommunications transmission equipment. at times difficult, with StarHub complaining that
Access prices must be cost-based and non- SingTel was forcing it to sign myriad separate
discriminatory. and side agreements that resulted in fractured
and confusing interconnection arrangements for
Pursuant to the Telecommunications Act, IDA various types of traffic. Eventually, IDA and the
may find under the Code that certain infrastruc- Ministry were forced to mediate between the
ture owned or controlled by a licensee should be parties.
shared with other licensees. IDA may designate
infrastructure to be shared if it determines that The quick decision to go beyond the duopoly
the facility constitutes critical support infra- market structure in January 2000 forced an
structure or that sharing is in the public interest. immediate rethinking of the entire competitive
Facilities subject to sharing, at cost-based prices, picture in Singapore. StarHub temporarily
may include masts, poles, towers, in-building shelved its efforts to build its network out to
cables, leaky feeder cables,60 lead-in ducts and residential subscribers until a financial package
associated manholes. As the Code states: could be worked out with IDA and the Ministry
For example, if one licensee controls a to compensate it for the loss of its guaranteed
particular leaky feeder cable for provision duopoly competitor status. StarHubs concentra-
of radio coverage in the Mass Rapid Transit tion on the central business district meant that its
and road tunnels, and if IDA determines interconnection needs would, at least tempora-
that the leaky feeder cable is subject to rily, be less extensive.
sharing, the licensee would be required to
allow other licensees to jointly use that in- Then, Singapore entered an interconnection
frastructure at a cost-based price.61 holding pattern as SingTel developed and
presented its RIO for review by IDA. Competi-
If an operator wants to share infrastructure, it
tive operators report that during the period when
must first submit a request to the owner of the
the RIO was pending, they could make little or
facility to negotiate an agreement. The licensees
no progress in negotiating interconnection ag-
can mutually ask IDA to assist in negotiations,
reements with the incumbent, which appeared to
but IDA will not impose any specific arran-
be resisting signing separate agreements with
_______________ individual operators until it could be sure what
59 Code of Practice for Competition, Appendix Two, the government would require it to offer in the
Section 4.1. RIO. With the RIO finalized in January 2001,
60 A leaky feeder cable is specialized cable plant that the newly licensed competitors began the task of
emits wireless signals that allow underground access quickly and intensively examining the detailed
to mobile phone networks or other wireless systems. document to ascertain what was in it for them.
Usually installed in a tunnel or subway system, it is
analogous to a garden hose with holes punctured at
certain points to allow water to stream though. The By the end of April 2001, many of the FBOs had
cable emits radio signals to provide wireless access signed the RIO, after determining that, while the
inside the tunnels. document did not offer everything on their wish
61 See Code of Practice for Competition, Section 6.2. list, it would provide them with what they
32
Effective regulation Case study: Singapore
needed to enter the market and pursue their clude predatory pricing to force competitors out
business plans. Certainly, most operators signing of the market, price squeezes that inflate the
the RIO appeared to feel that going along with costs for nonaffiliated operators that purchase
the document, at least in the short term, would inputs from the dominant carrier, and cross-
be preferable to engaging in a long, drawn out subsidization. SingTel must follow rules that
negotiation process, with uncertain results. So it call for accounting separation and correct alloca-
appeared that the RIO, intended as a lowest- tion of costs among different lines of business to
common-denominator guarantee of baseline prevent the use of revenues from noncompetitive
terms and conditions, might become a ceiling, as businesses to subsidize competitive operations.
well as a floor, for what competitive operators A dominant carrier cannot provide its affiliates
could obtain from SingTel. By late April 2001, with access to its network facilities at preferen-
only two companies, New Call Communications tial prices, terms and conditions not offered to
Pte Ltd and Access Asia Telecom Pte. Ltd had nonaffiliated companies. Nor can a dominant
negotiated individualized interconnection agree- carrier unreasonably alter the physical or soft-
ments with SingTel. ware interfaces to its network in such a way as
to impose costs or harm another network, with-
The widespread adoption of the RIO did not out a legitimate business or technical reason.
mean, however, that new operators in Singapore
were confident that interconnection would
proceed smoothly. While largely endorsing the
RIO as a fair and equitable blueprint for inter- 6.4 Equipment Approval, Property
connection, operators were anxious to see how Access, Police and Other
SingTel would perform in the implementation Functions
stage. The true success of IDAs work to
develop an interconnection framework which
was extraordinarily rapid and efficient by global In addition to licensing authority, the Telecom-
standards would depend on SingTels compli- munications Act gives IDA the following autho-
ance in provisioning interconnection. The real rity:
test of the RIO experiment, then, was whether
IDA could hold SingTel to a high standard for
delivery of services. Only time would tell to approve the use of telecommunications
whether SingTel and IDA could meet that test, equipment and plant;
operators said.
to provide any residual services not being
In addition, some non-dominant competitors
providing by private operators in the
have complained that IDAs refusal to intervene
market;
in interconnection negotiations between non-
dominant operators (unless both operators agree)
suggests that IDA may have abandoned pre- to enforce PTLs rights to enter state and
maturely its active involvement in issues that private land for the purpose of installation,
confront them, but which may not involve provisioning, and maintenance of services
SingTel. At least some competitors believe that or plant;
IDA should be more proactive even in the case
of non-dominant operators. Falling back upon
the Code, IDA has taken the view that it would to allow PTLs to make any changes in a
be inappropriate for it to dictate interconnection site, including cutting of trees (in certain
terms. That has left non-dominant carriers, at cases, with compensation to the property
times, unable to secure interconnection and un- owner) necessary to protect its installations;
able to force their negotiating partners to come
to terms. to allow PTLs to work with property owners
to ameliorate any interference to wireless
6.3.4 Preventing Unfair Competition transmission facilities;
Under the Code, IDA can initiate an enforce-
ment action to halt anti-competitive practices by To direct licensees to share needed tele-
dominant operators. Those practices might in- communications infrastructure;
33
Effective regulation Case study: Singapore
to require all parties to warn operators and license fee that is based on a percentage of their
take precautionary measures before perfor- annual revenues (See Section 9 below).
ming any digging or earthworks in the vi-
cinity of buried telecommunications plant.62
Singapore has been careful to avoid flooding the
to represent Singapore in any international market with spectrum for cellular mobile servi-
business dealings, including international ces, allowing existing licensees to build market
traffic agreements and diplomatic accords share. With the three cellular licensees (SingTel
(the Minister also may delegate authority Mobile, M1, and StarHub Mobile) having now
for IDA to represent the country in interna- achieved a mobile service penetration rate of
tional organizations and relations).63 more than 70%, they badly needed additional
spectrum to add capacity to their networks. The
The Telecommunications Act also sets criteria three mobile operators submitted their require-
for enforcement, giving IDA and Singapores ments for additional 2G spectrum which have
police agencies powers to prevent or shut down been approved by IDA. The licensees are now
any operations by licensees that violate the Act preparing 2.5G data services, such as General
or other regulations. The agency and policy also Packet Radio Service (GPRS) offerings, to
may take action to prevent or stop other parties ramp up to full-fledged 3G services.
from interfering with lawfully licensed telecom-
munications operations. Among other things, the
powers granted to IDA include the powers of The domestic mobile service market in
search and seizure and the power to obtain docu- Singapore is flourishing, but with only 4 million
ments and other information from licensees. residents, it remains a small geographic market
relative to other Asian countries. Analysts cited
that fact during the second week of April 2001,
6.5 Resource Management when IDA was forced to drastically alter its 3G
licensing strategy. The agency had planned to
6.5.1 Spectrum Allocations hold an auction for four 3G licenses. But at the
last minute, the only outside bidder, Sunday
IDA has the authority to allocate radiocommuni- Communications Ltd of Hong Kong, withdrew
cations spectrum for both public sector and from the auction, having failed to submit the
private sector uses. IDA collaborates with SBA required bank financing guarantee. That left
for the latter to assign frequencies from the only three bidders the incumbent Singaporean
broadcast spectrum to broadcasters after IDA 2G licensees as contenders for the three
has decided on the national spectrum allocation licenses, negating any need for an auction. As a
for broadcasting service and cleared the tech- result, IDA announced on 11 April, 2001, that it
nical operation for broadcast transmitters. There would simply allow the incumbents to receive
is a coordination committee for defense agency the 3G licenses, in return for a payment of SGD
use that allows the defense forces to have a role 100 million (roughly USD 55 million).
in determining spectrum policy, but IDA retains
control over national spectrum allocation.
The relatively low license fee coupled with a
Commercial spectrum is regarded as a valuable, fairly limited geographic area will result in
finite resource. Where spectrum is a constraint, lower capital costs for 3G network build-outs in
IDA can utilize either an administrative evalua- Singapore, particularly when compared to capit-
tion process or an auction to determine which al costs that major wireless operators are facing
companies receive spectrum rights to use the in Europe and potentially elsewhere in East
frequencies. Mobile service licensees pay fees to Asia. All of the 3G licensees plan to roll out
obtain spectrum and, like other facility-based networks employing the Wideband-CDMA (W-
licensees, they are then subject to an annual CDMA) protocol, according to the operators.
IDAs allocation for 3G spectrum will require
_______________
M1 to migrate its current 2G CDMA network
62 IDA is empowered to license cable detection workers users out of the current spectrum block it is
that will locate and mark buried lines for a fee, thus using for CDMA service, and to shut down
avoiding accidental severing of cables and disruption of Singapores only CDMA network. M1 sought
service from excavation work.
financial compensation for this forced realloc-
63 See Section 7.2.3 below. ation but succeeded only in obtaining new
34
Effective regulation Case study: Singapore
spectrum to preserve its overall capacity. IDA technical and financial roadblocks whenever
persisted with its plan to close the book on 2G they can.
CDMA in Singapore.
Singapore is unlike many countries in that its Licensing policy is designed to be technology-
small size essentially negates the need for an neutral, and IDAs entire reason for being lies in
inter-city or national numbering plan. Calls are the perception that convergence is a fact of life
either local or they are international. There is a and the wave of the future in the info-communi-
thriving and competitive international direct dial cations industry. However, IDA continues to
(IDD) market, which allows callers to dial a regulate traditional circuit-switched telephony
short prefix to gain access, on a per-call basis, to differently from packet-switched data or
their carrier of choice (the operators sign up broadband services. For example, while there is
callers as subscribers, even though they must a detailed framework for telephone network in-
dial the prefix each time they make an interna- terconnection, IDA does not mandate peering or
tional call). Local calls are made through a regulate either transit payments among ISPs or
seven-digit dialing plan. In March 2002, IDA the commercial relations of ISPs at Internet ex-
will introduce eight-digit dialing, to make way change points, although the Authority has facili-
for the plethora of new mobile phones, faxes, tated discussions among operators to bring about
and other devices now being added to the peering arrangements.64 Moreover, as previously
network. For existing numbers, callers will noted, while SingTel must unbundle its local
simply have to add one digit (6) before dialing network, SCV has been explicitly exempted at
the number. least for the meanwhile from any requirement
to give rival ISPs access to its cable modem
6.5.3 Building Access platform. Finally, while telephony is subject to a
single, unitary regulatory regime administered
One of the most difficult barriers facing some by IDA, Internet services remain subject to a
nondominant FBOs has been the difficulty in bifurcated system of review and registration by
obtaining prompt access to distribution points both IDA and, for content issues, SBA.
and riser space in office buildings and multi-
tenant residential buildings. In Singapore, where Full regulatory convergence, then, is a mission
the vast majority of commercial and even resi- that has not yet been completed. In this sense,
dential customers are to be found in multi-story the picture in Singapore resembles that in many,
edifices, building access is crucial to most if not most, other countries, where regulatory
business plans. Such access is governed by a and legal frameworks have not been converged
separate code of practice, but operators and even either in part or in whole.
IDA staffers have reported that many landlords
remain either ignorant or defiant of the law that The difference may be that in Singapore there is
requires them to provide access to licensed tele- a tool in place to respond to growing conver-
communications providers. gence: a technology-neutral Competition Code
with a built-in review mechanism. For example,
At least one operator reported problems with IDA has indicated that it expects to modify its
landlords that appeared to be trying to extort implementation of the Code to require SCV to
inflated payments or fees from the operators in provide access to its cable modem platform at
return for building access. There are suspicions the appropriate time.65
that some landlords are putting up barriers to
access because they intend to set up their own _______________
telecommunications companies to take advan-
tage of the relationships and access they have to 64 There is no law or prohibition in Singapore against the
customers living and working in their buildings. provision of IP-based telephony over packet-switched
networks.
IDA has issued several directives informing
building owners of their legal responsibilities. 65 This has become even more likely given the planned
But one operator said compliance remains slow, merger of SCV and StarHub, given StarHubs network
and some building owners continue to erect buildout requirements.
35
Effective regulation Case study: Singapore
Singapore also has developed a clear policy ob- company with mobile service, corporate tele-
jective to re-align policy to accommodate con- phony, cable TV, and broadband Internet access
vergence, and the issue remains under study on offerings. A merged company, analysts noted,
several fronts. The result may well be conver- would be able to compete more effectively
gence legislation, according to MCIT. It is across all service markets with SingTel, which
important to note that the result may not be just was active in all of those markets, except cable
the extension of existing telephony regulatory TV.
models to cover packet-switched networks.
Rather, the intent may be the reverse: to reduce On 14 June 2001, IDA agreed that the
regulation, over time, on all network technolo- consolidation would satisfy the network build-
gies, allowing competition and the search for out requirements imposed on StarHub, which
efficiency to speed the migration toward must extend its network throughout residential
broadband, packet-switched networks that can and commercial areas, beyond the central busi-
be used to offer all services and applications. ness district where it now operates.66 At the time
of the writing of this case study, IDA had not yet
Meanwhile, some operators feel that IDA has ruled on the issue of whether a StarHub merger
not done enough, or moved rapidly enough, to with SCV would concentrate too much market
force down wholesale tariffs that SingTel power in too few domestic network operators.
charges for dark fiber or international private
line circuits. While they praise the decision to
force SingTel to offer wholesale rates at all a
decision bitterly opposed by the incumbent
7 Internal Organization and
they suggest that the rates are still too high and Operations
may not be competitive with rates available in
other markets around the region and globally.
7.1 The Organizational Chart
Several operators were planning to land addi-
tional international facilities during the summer IDAs organizational chart (See Figure 7.1)
and fall of 2001, however, and the resulting somewhat resembles that of a corporation, with
competition could force rates down below a centralized top management structure and
current levels. several operating units. There is a Management
Committee, which meets regularly and includes
6.7 Antitrust Concerns and Merger the Chief Executive Officer, the Deputy Chief
Reviews Executive, and six other executives, who super-
vise one or more of the operating units within
In many countries, telecommunication regula- IDA. The senior management team reports to the
tory agencies often work closely with Chairman and the Board, which constitute the
competition (antitrust) authorities to ensure that statutory authority under the IDA Act. However,
business combinations in their sector do not as discussed in Chapter 5, the Chairman and the
reduce or eliminate fair market competition. Board have delegated the responsibility for all
Singapore, however, does not have a govern- day-to-day operations and regulatory decisions
ment office or statutory board devoted solely to to the management team.
antitrust reviews and enforcement. Therefore,
within the info-communications sector of the It should be noted that the organizational chart
economy, IDA is the front-line agency charged of IDA has not been a static structure. The
with reviewing proposed mergers and acquisi- agency has continually revised the chart in an
tions to ensure that they proceed on pro- effort to clarify roles and update the structure to
competitive terms. IDA has the right to attach reflect its ongoing evolution and consolidation.
conditions to the license of any new operator For example, IDA posted a new organizational
formed through such a merger. chart on its website to reflect changes made as
of April 16, 2001; the previous chart had been in
At the time of writing, IDA was preparing for place only since January 1, 2001.
the biggest test of its merger review authority to
_______________
date. In late April 2001, SCV and StarHub
announced that they were discussing terms for a 66 See IDA Media Release 14 June 2001 at
merger, which would create a consolidated www.ida.gov.sg
36
Effective regulation Case study: Singapore
IDA
IDA Board
Chm LamCL
DyChm PeterH
CEO Office
CEO YongYI
DCE LeongKT
Essentially, however, IDAs internal organiza- The roles and functions of each of the major
tion is broken down into operating units headed operating units is described below.
by a Director General or Assistant Chief Exe-
cutive. These groups can be categorized accor-
ding to their roles in pursuing IDAs three basic 7.2 Policy and Regulation
missions. Those are:
The primary responsibilities for generating regu-
1 Regulating the info-communications indus- latory policies and implementing them belong to
tries. the Policy and Regulation Group, which current-
2 Promoting and fostering the development of ly is headed by Director General (Telecoms)
info-communications industries and markets Leong Keng Thai, who also is the IDAs Deputy
in Singapore. CEO. Through Mr Leong, the policy and regula-
tory functions of the agency maintain a crucial
3 Operating the computer systems and net- and important role in the agency. (See
works of Singapores government entities. Figure 7.2)
In addition, there is a Central Business Services The Policy and Regulation Group is divided into
unit that provides administrative support for all three divisions: (1) the Regulatory Division, (2)
other units and contains, for example, the public the Policy Division, and (3) a small Legal Divi-
relations office and press office of the agency. sion. At the time this case study was being pre-
The Central Business Services unit is charged pared, the Groups three divisions reported to a
with studying and forecasting trends in the single manager, Andrew Haire, the Senior
industry and coming up with plans for IDA to Director of the Regulatory Division. Senior
meet those challenges and manage those trends. Director Lee Mei Poh had just been appointed
There also is a small Corporate Development Senior Director for Policy and Chief Legal
office and a CEOs office that provide Counsel. The Legal Division was expected to
operations support for the senior management remain a small office, reflecting the overall lack
and attempt to coordinate efforts to improve the of emphasis on litigation at IDA (and indeed,
agencys overall operations and effectiveness. throughout Singapore See Section 8.1).
37
Effective regulation Case study: Singapore
38
Effective regulation Case study: Singapore
allocation (e.g., spectrum allocations and usage contains IDAs statistics office, which keeps
and numbering) and building access issues. The tabs on all of the vital signs that point to the
Regulatory Division, the largest within the health and growth of Singapores info-commu-
Policy and Regulation, constitutes the front nications industries and companies.
lines of regulatory practice in Singapore. It
works closely with the Policy Division, with the The International Division represents IDA (and
two roughly serving as right and left arms of re- therefore Singapore) at international confer-
gulatory policy formation and implementation ences, in bilateral negotiations and relations with
for IDA. other countries, and within international organi-
zations such as the ITU and ASEAN (the
The Legal Division serves to advise the other Association of South East Asian Nations). The
two divisions concerning the conformance of division promotes Singapores interests in the
policies and actions to info-communications- development of telecommunications policy in-
related legislation and the codes of practice. It is ternationally. For example, it was instrumental
expected to remain the smallest of the three in stating and supporting Singapores interest in
divisions within the Policy and Regulation developing more global parity in the charging
Group. structure for Internet backbone facilities. In this
sense, the division has a diplomatic role, repre-
7.2.3 Strategic Planning and Interna- senting Singapores telecommunications expert
tional Units agency and coordinating its international profile
and activities.
In addition to the Policy and Regulatory Group,
there are other units that are vitally involved in
IDAs development of policies particularly 7.3 Promotional Groups
long-range policies and goals. Although techni- Another major mission of IDA is to promote the
cally within the Central Business Services development of info-communications within
Group, these units are essential actors in the Singapore. IDA does this, in part, through orga-
agencys overall regulatory and policy activities. nized and well-funded programs to proactively
They are headed by a single Director, William subsidize and sponsor technologies and even in-
Hioe, who reports directly to the Director dividual companies. Promotional activities cover
General of the Policy and Regulation Group, the gamut, from technology fairs and expo-
Leong Keng Thai. sitions to providing seed money for a companys
The Strategic Planning Division is charged with research and development efforts. In general, the
the task of studying the emerging trends within promotional efforts can be grouped into three
the info-communications industries. It tries to categories: (1) Outreach to residents and compa-
spot and track technologies and market develop- nies to promote their extensive and efficient use
ments that may be as much as five years away of information and networking technologies; (2)
from having a direct, daily impact on those promotion and development of Singapores info-
industries. In effect, then, the division is some- communications industry itself; and (3) outreach
thing like an in-house think tank for IDA and beyond Singapores borders to stimulate
must contain the most forward-thinking theoreti- investment and provide an outlet for exports.
cal minds the agency can find. The division also (See Figure 7.3)
39
Effective regulation Case study: Singapore
7.3.1 The Online Development Group production capabilities. The prime directive is to
transform Singapore into a communications hub
This groups job comprises the first prong of in Southeast Asia, through direct and targeted
Singapores promotional strategy, turning programs to spur innovation and industrial
Singapore into a knowledge-based economy. competitiveness. The Group focuses on three
The group specializes in fostering the take up, areas of the sector: telecommunications, soft-
by residents and companies alike, of the best and ware and information technologies, and broad-
most efficient computing and networking tech- band networks and content.
nologies and applications. This may include pro-
moting e-commerce applications, promoting the For example, in looking at the future of the
culture of cyberspace throughout society, in- wireless industry, the Group performed a study
creasing usage of Singapore ONE applications, on what would be the killer applications for
and generally coordinating the use of infor- mobile data offerings in Singapore, looking at
mation technologies as a tool to leverage overall location-based advertising or services, m-com-
economic growth. merce (electronic commerce in a mobile envi-
ronment), and others. In addition, the Group will
This group also includes the Manpower Deve- sponsor a co-funding program for mobile data
lopment Division, which pursues programs de- technologies, identifying companies with inno-
signed to bolster the ability of Singapore to pro- vative ideas and providing money to help
duce workers with info-communications techno- incubate and research those ideas until they are
logy skills. The Division has pioneered close ready to be introduced into the market.
working relationships with universities and tech-
nical schools, as well as partnership programs In the area of broadband development, the
with industry to develop talents and skills for Group provided funding support and played a
jobs and occupations targeting industrys needs. leadership role (inherited from NCB and TAS)
in IDAs stewardship and co-ownership of
The E-Lifestyle Marketing Division seeks to Singapore ONEs 1Net network. When IDAs
make info-communications technology an stake in 1Net was sold, the proceeds were
integral part of the lives of Singaporeans. The returned to IDAs reserves for use in further pro-
chief application of this goal appears to be in motional operations.67
programs for mass training of residents to use
information technologies. The unit also holds The Group has also developed a one-stop shop
road shows and sets up permanent exhibits in for foreign market entrants attempting to nego-
Singapore to show people how to incorporate tiate the various national and local application
new technologies into their lives to improve and approval processes for building international
their quality of life. gateway and cable landing facilities. This effort
stemmed from discussions with international
operators designed to smooth the way for their
7.3.2 The InfoComm Industry entry itself a natural progression from IDAs
Programme Development Group international marketing efforts to stimulate
This group focuses more narrowly, on the investment.
information technology and telecommunications Finally, the Group was instrumental in the fact-
industries themselves. It is responsible for deve finding visit to the United States in 1999 that led
loping the nations info-communications sector, to the decision to accelerate the advent of full
including its network infrastructure and content competition by two years.68
_______________
67 See Section 3.3 above.
40
Effective regulation Case study: Singapore
7.3.3 The Local Enterprise Interna- corps of IT professionals that are dispersed to
tionalization and International work in support of general governmental
Operations Group functions. (See Figure 7.4)
This group handles IDAs efforts to work Separate from the Government Systems Group
beyond the borders of the country to help is the Technology Group, which is staffed by
develop Singapore as an international hub or engineers and specialists in technical protocols
center of information technology development. and equipment development. This groups task
The group seeks to take advantage of Singa- is to ensure that Singapores government, insti-
pores historic linguistic and ethnic ties to China tutions and industry remain on the cutting edge
and India, which are perceived to be tremendous of communications technologies. It plays an
markets for high-value exports of technology important strategic role in analyzing and
and products developed in Singapore. In monitoring the trends and development of info-
addition, the Group maintains outreach offices communications technologies, as well as pro-
in Bangalore, India, and in the Silicon Valley mulgating and encouraging the adoption of info-
area of Northern California, the center of the communications standards in Singapore. It also
U.S. software industry. provides technology support and consulting ser-
vices to various initiatives and programs
managed by IDA.
7.4 Government Systems and Tech-
nology Groups Finally, the Technology Group plays an active
role in monitoring network security and ensuring
In addition to regulating and promoting the a robust national infrastructure for Singapore.
industry, IDA runs the governments computer The latter function involves a small but dedi-
systems. Over half of all employees in the cated group of government hackers, whose job is
agency work for the Government Systems to attempt to defeat the security systems
Group. This unit is primarily composed of a maintained by Singapores government
legion of IT and computing specialists and tech- agencies, including those related to national
nicians who are assigned to work on-site in the security. The team attempts to find holes and
various government offices. Thus, this Group lapses in security mechanisms, encryption, and
functions less as an integrated unit than as a firewalls before anybody else does.
41
Effective regulation Case study: Singapore
42
Effective regulation Case study: Singapore
(including a lingering equity tie), the regulatory represented at the director, deputy director and
agency could, indeed, face political resistance in assistant director level.73 Moreover, in keeping
attempting to impose a strict regulatory structure with the cutting-edge nature of the industries
on that incumbent. IDA regulates, the staff is predominantly young;
one senior official estimated the average age as
well under 30.
8 Staffing and Personnel
The large majority of IDAs professional staff
have backgrounds and training in either engi-
8.1 Staffing and Allocation of Staff neering or information technology. Fully 35% of
Out of 934 total IDA employees only 110 are the staff consists of engineers, and another 35%
assigned regulatory and policy duties, with an have IT backgrounds. A further 20% of IDAs
additional 28 from the Central Business Services staff is classified as having a business back-
devoted to strategic planning and representing ground, and 9.99% are classified as economists.
IDA and Singapore in international telecommu-
Surprisingly, there are very few attorneys
nications organizations such as the ITU. Another
working at IDA. In fact, the agency reports that
138 employees work in units devoted to industry
attorneys constitute just 0.002% of its profes-
promotion and market development, including
sional staff. This is the case, despite the fact that
the InfoComm Industry Programme Develop-
IDAs regulators must routinely interpret and
ment Unit (67)69 and Online Development70 and
apply the legal documents including the Tele-
Local Enterprise Internationalisation and Inter-
communications Act and the codes of conduct
national Operations Unit (71).71 In terms of the
that underpin all regulatory activity. Again,
two main functions of regulating and promoting
while IDA recently appointed a Senior Director
the info-communications industry, the balance
for Policy and Chief Legal Counsel, the staff of
at least in terms of staffing is tipped slightly in
attorneys working in the Policy and Regulation
favor of the latter.
Group was not expected to grow beyond a small
Five hundred and four employees are assigned handful.
to various government agencies and offices,
where they work as IT managers and technicians Asked why there were so few attorneys, IDA
to various government agencies and offices as officials cited the growth of competition (which
part of the Government Systems unit.72 Another IDA expects to obviate the need for strict
49 work in the Technology Unit, monitoring regulation in a few years), the desire to maintain
trends and network security and working to flexibility and avoid overly legalistic responses
promulgate info-communications standards. to market issues, and the overall lack of em-
phasis on litigation in Singapore. Indeed, the
In addition, 23 work in corporate communica- paucity of lawyers at IDA appeared to be
tions; 58 provide administration, human resour- reflected in the staffs of the operators regula-
ces and real estate while the Corporate Develop- tory offices, which also contained few lawyers.
ment unit, providing operations support, has a
staff of 24. The remaining complement of staff
works in the CEOs office. 8.2 Staff Compensation
Fifty three percent of the total IDA staff is As a statutory board, IDA is free from the
women, and women comprise 48.6% of the constraints on hiring, firing and benefits policies
professional staff. A woman holds the most that affect the civil servants employed by MCIT
senior position in the organization, that of the and other line ministries of the Singapore go-
Chief Executive Officer. Although only one of vernment. This freedom allows IDA to establish
the senior directors is a woman, women are well compensation packages that are commensurate
_______________ with what its employees would receive if they
69 See Section 7.3.2. went to work in the private sector. In addition,
70 See Section 7.3.1 _______________
71 See Section 7.3.3. 73 For example, IDA is frequently represented at major
ITU conferences by Valerie dCosta, Director, International
72 See Section 7.4 Affairs.
43
Effective regulation Case study: Singapore
the agency provides two kinds of bonus measures that ease the process whereby foreign
programs for its employees. One program allows workers obtain permits to live and work in
workers to receive pay that is adjusted slightly to Singapore. To avoid a situation in which foreign
account for increases in the cost of living (a key workers simply go to Singapore to obtain the
concern in Singapore, particularly regarding training they need, and then depart, taking their
housing and automobile costs). The second training home with them, Singapore offers
provides much larger, incentive bonuses paid at highly qualified professionals the carrot of
the end of the year, for staff members who shortening the time needed to qualify for
perform well during the year. Eighty percent of permanent resident status.
staff members benefit from such bonuses. As an
additional component of their bonus package, IDA officials indicate they are able to find and
IDA staff members also receive an amount recruit qualified regulatory personnel, based on
pegged the performance of the info-communica- a number of factors including a good working
tions sector in Singapore. environment, service in the public sector and a
compensation package that is sufficient to attract
Despite having a competitive remuneration qualified regulatory personnel. In addition, the
system, IDA acknowledges losing more than a agency provides funds for staff members to take
fifth of its trained workforce annually. This courses in order to bolster their training and
significant rate of churn appears to be a problem educational levels.
affecting many government agencies and
ministries, as officials outside IDA confirmed.
As more and more operators and IT-related 8.4 Outsourcing
companies enter the market (resulting from
IDAs own policies and efforts), the agency
expects to have to continue to work hard to Still, IDAs regulatory staff seeks outside
retain its staff and attract new workers to replace expertise in certain key areas, including legal
those that are wooed away by the industry. services. IDA has secured the services of outside
consultants, particularly from the United States,
for several major regulatory tasks, including the
8.3 Recruitment and Training drafting of Singapores code of practice for
competition and the evaluation of costing me-
IDAs efforts to recruit and retain qualified staff thodologies for interconnection. Because of the
members should be understood in the context of lack of legal expertise within IDA, the agency
Singapores overall effort to fuel the acute and was reliant on outside attorneys to advise it on
growing demand for trained workers and how to draft the core legal instruments that the
professionals in the info-communications sector. IDA staff will use to regulate operators in a
Singapore has a full-time Manpower Ministry, competitive environment. In addition, IDA seeks
which seeks to coordinate and promote recruit- data from outside the country, including rate
ment and training efforts to meet that demand. levels for certain services, to use as benchmarks
IDA works with that Ministry, as well as the for its own regulatory actions, although it does
Economic Development Board, to assess and not publish this information itself.
address the countrys ongoing IT labor needs.
IDA and MCIT estimate that as a result of tele-
communications liberalization, some 4,000 to 8.4.1 Intra and Inter-Agency
5,000 new jobs have been created in Singapore. Committees and Virtual Teams
With demand increasing, Singapore is likely to Between and among these agency operating
see a shortfall of 2,000 to 3,000 info-communi- units and in fact, between IDA and other go-
cations workers each year for the near future, vernment agencies there are an array of both
even with its efforts to focus on training and formal consultation groups and informal
education. The countrys poly-technical schools working groups. Within IDA, the Management
and universities simply will not be able to Committee, composed of the eight top exec-
generate enough new graduates in the field to utives meets each week, and on a middle-
keep up with labor needs, under current es- management level, there is a Directors meeting,
timates. In response, Singapore has tried to involving heads of units and divisions across
bolster its domestic manpower programs with IDA, that meets twice a week.
44
Effective regulation Case study: Singapore
In addition, there is a fairly frequent utilization 8.5 Staffing Issues Arising From The
of virtual teams or task forces, which are Merger of TAS and NCB
formed to pursue resolution of a single issue or
set of issues that may require input from When IDA was created in December 1999, it
specialists in various operating groups. Usually, became an agency with more than 800 staff
these groups will meet once or twice, initially, to members. Initially, the staff members were
frame the issues and decide how they will divided between the former offices of TAS and
allocate and pursue various tasks. After that the NCB. During 2000, the merged agency moved
group may meet only through strings of into combined offices at a single location.
emails or tele-conferences, making use of the
various technologies IDA is charged with The goal was to combine two organizational
regulating and promoting. cultures, one embodying a regulatory approach,
and the other involving a marketing and promo-
tional one. The top-level IDA managers hoped
In some cases, when groups within IDA (most to cultivate a single ethos, in which regulation
often the promotional groups) wish to seek and promotion were viewed as two paths to a
outside input, they will put together a board or single objective: providing a catalyst for private
committee composed of academics, industry industry to build a vibrant, competitive, and con-
executives, or professionals, to serve as an verged info-communications market.
advisory or consultation body on a particular set
of issues. The board, which may be international Even before the official merger, the two agen-
in scope, will have no decision-making power cies began consolidating their leadership, hol-
but will provide input seen as crucial for shaping ding joint training sessions, off-site planning
the eventual policy outcome. International advi- retreats and, in some cases, working jointly as
sory panels are perceived as particularly members of a single team in an effort to
important to solicit professional or theoretical integrate the two agencies following the announ-
expertise in areas where domestic expertise is cement in March 1999 of the likely merger of
seen to be lacking (such as specialized legal or NCB and TAS by Finance Minister Dr Richard
technical expertise). These panels may also Hu. This work was all done with the backing
serve to build-in consensus of industry or inter- and supervision of the government.
national players that may be instrumental to the
After a little more than a year in existence, IDA
success of efforts to implement the eventual
is still working to integrate its staff and develop
policy solution.
the common ethos it seeks. Top officials note
that much progress has been made in that regard.
There are several multi-agency committees, both Integration has been most successful and is es-
standing and ad hoc, that bring together sentially complete among the previously sepa-
representatives of allied ministries and statutory rate units that undertook promotional functions
boards to oversee government-wide initiatives within TAS and NCB. The overlap between the
and tasks. One example is the spectrum coordi- two agencies in the promotional field has been
nation council that exists to prevent or resolve eliminated. Both the government and the indus-
frequency interference. A legacy of British try now can look to a single agency as a source
colonial rule, the council also includes govern- of funding and help on all communications tech-
ment representatives from Malaysia and Brunei. nology issues.
45
Effective regulation Case study: Singapore
Regulatory and policy-making operations raise money through borrowing, if it needs to.
are completely funded through regulatory For example, the current offices, in eight floors
fees for licensing, spectrum and numbering; within Tower Three of the citys well-known,
The operating budget of the promotional high-rise Suntec Centre, are secured by a four-
groups is funded through a government year lease. IDA also invests in its own capacity
grant; in strategic industries in order to assist the deve-
lopment goals of IDA. The goal of the invest-
Government Systems operations are funded ments is not to generate income. In the current
through contracts with the individual agen- investment climate, however, IDA has scaled
cies where the units employees work. back its investments in securities, although it
continues to obtain interest from cash deposits.
In practice, the total amount of regulatory fee
revenue usually exceeds the budgetary needs of
the regulatory and policy-making units. In that
case, the excess funding is transferred to help 9.4 Regulatory Fees
fund the operations of the promotional groups.
Notwithstanding IDAs drive toward technology
In fiscal year 2000, IDAs operating budget
neutrality, the fees that operators and service
totaled approximately SGD 130 million
providers pay in Singapore may vary depending
(approximately USD 71 million). Of that
on what kind of license the operator has, or even
amount, about 40% of the total revenues, came
what kind of service the company provides. In
from contracts to cover Government Systems
2000, IDA sought to clarify the fee structure by
operations. Forty-seven percent came from
adopting a new policy of requiring FBOs and
license fees. And there was a government grant
SBOs with individual licenses to pay a yearly
of about SGD 20 million for the operation of
fee calculated at one percent of gross turnover.
promotional programs. However, because the
direct costs for regulatory operations were only
SGD18 million to 20 million, a large share of However, the one percent did not apply to
incoming monies from license fees were allo- cellular, mobile broadband multimedia, and
cated to help fund promotional and develop- fixed wireless broadband multimedia licen-
mental activities, which amounted to about SGD sees, which utilize radio spectrum and are
30 million in direct costs. The remaining budget- therefore considered a scarce public resource.
ary allocations were used to cover other Fees for licenses that employ radio spectrum
operational costs. comprise three components: service license fees
for either FBOs or SBOs, radio-frequency fees
While IDA is able to cover its own costs, it is and radio-station fees. The fees for the latter two
not generating a budget surplus. This situation is components are detailed in the Second Schedule
likely to continue since IDA recently reduced to the Telecommunications (Radiocommuni-
the annual license fee levied on most licensees cations) Regulations 2001. In addition, during
from 3% of annual turnover to 1%. the spring of 2001, the mobile service incum-
bents were required to pay SGD 100 million
9.2 Grant Money for Promotions each for their 3G licenses.
In addition to the operating budget, IDA can While there is a consistent yearly fee of one
allocate in excess of SGD 500 million in funds percent of annual turnover for most other FBOs
that have accumulated from government grants and individually licensed SBOs, IDA has set
for promotional and strategic investment pro- various minimum fee thresholds. FBOs designa-
grams. These funds are kept separate from ted as PTLs, for example, must pay at least
IDAs operating budget. SGD 250,000, regardless of actual turnover,
while other FBOs must pay a minimum of
9.3 Assets SGD 100,000. The minimums imposed on other
operators are far lower. For example, SBO in-
IDA has the authority within the IDA Act to dividual licensees must pay at least SGD 10,000
own property and manage and make annually, while SBO class licensees pay just
investments, although it has taken steps in recent SGD 200 every three years, when they renew
years to minimize any such activity. It can also their service registrations.
46
Effective regulation Case study: Singapore
10 Transparency and Fairness IDA itself. Nevertheless, IDA has not opened its
decision-making meetings to the public and it is
Transparency is a means of ensuring fairness in often difficult to tell where the real responsibili-
the regulatory process. The principle of ty for decision-making lies. This may make it
transparency translates into the practice of difficult for companies within the regulated in-
making regulatory decisions in an open, object- dustries to determine how to present their views,
ive manner that allows regulators to explain the to whom their views should be presented, or,
reasoning behind their decisions and to be held indeed, whether their views will be taken into
accountable for their actions. Transparency not account.
only helps the public and the regulated industry,
it can help the regulators as well. Transparency 10.1.1 Public Meetings
allows regulators to gain information and
consult all stakeholders, thus building some The IDA Act requires the Board to meet but
political consensus for their decisions. It also allows the Chairman to determine how frequent-
allows regulators to justify their actions by ly such meetings should occur.74 The Board
citing the facts provided to them and by making renders decisions through consensus building
cogent arguments that those actions will serve and discussion. Board meetings are closed to the
the public interest. Transparency may inoculate public, and several operators indicated they have
regulators from charges that they have rendered no information about what the Board does or
arbitrary decisions, behind closed doors, for how its decisions may affect them, although
reasons of personal gain or to benefit a certain several Board members are from the private
company. sector.
Transparency is growing in Singapore as the
However, since the Chairman and the Board
info-communications market becomes more
have in practice delegated most major regulatory
complex and as the countrys regulatory frame-
and operational authority to the Chief Executive
work becomes increasingly codified. There is a
Officer,75 those decisions routinely are made by
growing recognition, at high levels within IDA,
IDAs executive management committee or by
of the value of transparent processes, parti-
individual executives. Regulatory decisions may
cularly in the realm of public consultation. This
not be subject to votes. They certainly are not
has arisen, despite a political and cultural
decided through votes at public meetings.
tradition in Singapore that calls for cooperative
dispute and conflict resolution outside the public Thus in contrast with regulatory agencies that
eye. Yet, while operators view IDA as a are headed by elected or appointed commis-
credible, fair decision-making body, they do not sions, which may be required to vote publicly on
always know how, or by whom, decisions are decisions, IDA generally takes actions without
made. public meetings or public votes. And IDAs
management system more closely resembles a
10.1 Regulatory Due Process corporate model than a government bureaucracy.
Moreover, because of the close relationship of
IDA is not subject to a comprehensive code that MCIT to IDA, market players often are not
governs all aspects of decision-making, aware where decisions are taken or by whom.
including lobbying, public consultation, ex parte While IDA has begun conducting public con-
contacts, the publishing of decisions, and public sultations on decisions in which it solicits
appeals processes. Nevertheless, IDAs ope- comments from members of the public, its
rations increasingly feature elements of open- decision-making meetings are not open to the
ness and transparency. IDA decisions, particu- public. Moreover, the role of the Ministry is not
larly on major policy and regulatory issues, are open to public scrutiny, nor does the Ministry
widely regarded as well reasoned and fair. vote on any decisions that it may make in
Moreover, IDA has demonstrated an ability to conjunction with IDA.
incorporate a certain level of transparency in
such major policy and regulatory issues without _______________
sacrificing its ability to render decisions quickly. 74 In practice, they occur quarterly.
The swiftness of IDAs decision-making is often 75 In fact, the Board serves largely an advisory or strategic
praised by operators and highly valued within role. See Section 5.4 above.
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Effective regulation Case study: Singapore
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Effective regulation Case study: Singapore
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Effective regulation Case study: Singapore
compensation award would be taxable. policy and regulatory issues, IDA has noted that
Therefore, it added approximately SGD 388 mil- it will not allow private meetings on the issue
lion to the package above and beyond its under consultation, instead preferring that all
calculation of the actual losses to cover information be provided through filing formal,
SingTels tax liability. written comments which are then posted on
IDAs website (with the exception of redacted
The tax authorities later determined, however, confidential information).
that the compensation payment was a tax-
exempt capital gain. Since SingTel did not have There is no set of regulations governing how or
to pay tax on the award, the government now when regulatory affairs specialists may contact
believes it has over-compensated SingTel by IDA personnel or seek to influence a pending re-
SGD 388 million. IDA has sought a refund of gulatory decision. It is common for IDA to meet
that amount. with representatives of companies and other go-
vernment agencies. There is no requirement,
If the issue were to be decided by the courts, it however, for a record of the dates, times, and
would be first major litigation pitting an content of such meetings or correspondence to
operator against the government ever to reach be included in a public docket or public re-
the judicial level. And even then, officials noted, cord.79 A company may find out that IDA has
the issue is more one of taxation, not tele- met with a rival or competitor on an issue of
communications policy, per se. Nevertheless, as mutual interest, but there is no requirement that
the number of operators grows, it may be it be notified officially that such a meeting
inevitable that more intractable disputes among occurred or to be informed about what was
operators or between a single market player discussed. Companies are simply assumed to be
and the government will arise, straining the active on their own behalf, thus providing other
ability of IDA and MCIT to bridge differences companies with an incentive not to be left out of
in Singapores traditional manner of quiet the dialogue. That dialogue, however, is not
diplomacy. public, unless IDA decides (as it now frequently
does) to launch a public consultation.
10.3 Openness and Access Despite the lack of formalized rules governing
One way to analyze transparency is to examine access, operators in Singapore report that they
the degree to which individuals within have no problem gaining access to key
companies, including operators, industry groups, regulators to present their viewpoints and
or the public can access the staff of a regulatory requests. IDA is generally receptive to their
agency to present their views and requests. views, although it does not always rule in
exactly the way any given operator would like
In Singapore, the process of gaining access to nor would the operators expect it to, in all cases.
regulatory staff members of IDA is extremely
open and very informal. In general, executives at
10.4 Ethics Rules
top operators and IT companies may simply pick
up their telephones and call IDA staff members To maintain credibility as a fair and impartial
and executives and ask questions or seek meet- regulator, an agency must be governed by rules
ings. The operators employ regulatory special- and standards that rule out the possibility for
ists whose job it is to represent their companies ethical lapses, or even the appearance of
in relations with the regulator. They are well questionable behavior. This is singularly impor-
acquainted with IDAs operating structure and tant in Singapore, where there are high standards
know whom to call when their companies seek of personal and professional behavior. IDA has
information or a decision from the regulator. taken steps to ensure that it preserves the
Conversely, IDA staff members may well call
_______________
the companies regulatory specialists when they
want to seek input or gather information on an 79 In the United States, for example, the rules of the
issue. Federal Communications Commission may either ban ex
parte contacts or presentations that might occur outside
However, IDAs open access practices are the standard public comment rounds, or it may require that
any such ex parte meetings be publicly disclosed, allowing
beginning to change. As part of some of its other interested parties to be aware that their rivals are
recent calls for public consultation on major engaged in efforts to sway the Commissions opinion.
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Effective regulation Case study: Singapore
integrity of its ethical reputation. These include practices and ongoing challenges. The Section
the following: below discusses both best practices and
Top regulatory officials must report their continuing challenges facing IDA.
financial interests before hiring, and may be
asked to divest or place in trust holdings 11.1 Best Practices
any financial interests that would give rise
to the appearance of conflicts of interest in
11.1.1 Speed and Efficiency
their roles as regulators.
Officials may be asked to recuse themselves At the time this case study was being prepared,
from any discussion of issues that may have only a little more than a year had elapsed since
an impact on a company or other entity to Singapores government had authorized full
which they have current or past ties and telecommunication service competition. When
relationships. For example, the Chairman that decision was made, in January 2000, it
and CEO have asked certain Board mem- marked the acceleration of previous plans, and
bers to recuse themselves from discussions much work needed to be done by the govern-
of matters that ultimately could affect their ment and operators alike to prepare for and
companies. In addition, a current staff mem- foster market entry by new players.
ber, who came to IDA from one of Singa-
pores domestic operators, was instructed Many operators and outside observers give IDA
that she would have no involvement in a and MCIT excellent grades for the speed in
dispute involving her former company, in which they accomplished these tasks. It should
order to avoid any grounds for challenge by be noted that IDA had been in existence less
the parties to the dispute. than two months when it learned that it would
have to take on the task of introducing full com-
There is a strict limit on the value of gifts petition, and that it had less than three months to
that regulators are allowed to receive. The design a plan to carry out that task. In effect,
limit is set at a nominal level, roughly IDA had to lay the groundwork for a radical
USD 16. shift in the countrys entire regulatory regime, at
Whenever IDA distributes money as part of the time it was still coping with the turmoil and
one of its promotional co-funding schemes, flux that occasioned its own creation.
it is careful to set objective criteria for
awarding the funds, and the employees who IDA has succeeded in laying the foundation for
make grant decisions are not the same as competition and market growth by setting
those who make regulatory decisions. stringent limits on the amount of time it takes to
resolve pressing regulatory issues. Where public
Despite the lack of formal mechanisms ensuring consultation occurs which it increasingly does
transparency, it appears that companies with there are crisp deadlines to file comments, and
businesses regulated or otherwise addressed by IDA staff members respond with rapid action
IDA do have sufficient and even ready access to once they have received industry and public
the people they need to reach at IDA. Moreover, viewpoints. As a result, the process of establish-
IDAs regulatory staff is reported to be receptive ing guidelines and regulations has not been
to their views, and fair and equitable in characterized by the delays that have plagued
incorporating those views into ultimate deci- regulators in other countries.
sions. Overall, operators say they view IDA as a
fair (if not always entirely transparent) and 11.1.2 Orientation toward Results
credible regulator.
In tandem with IDAs focus on speed and
efficiency, there is a belief that regulation does
11 Assessment not exist for its own sake but rather as a tool to
achieve Singapores goals of fostering competi-
As with any newly minted regulatory agency tion, stimulating the growth of vital info-com-
even one so firmly grounded in regulatory past munications industries, and improving the qua-
practice and structural reform as IDA an lity of life. Even at this early stage, IDA
assessment of its actions and operations inevita- executives and MCIT policy-makers can point to
bly will result in the identification of both best certain data that indicates their over all efforts,
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Effective regulation Case study: Singapore
including in the regulatory sphere, have been 11.1.3 Independence and Credibility
successful:
IDA appears to be sufficiently independent from
Mobile service penetration has reached individual operators and companies that it
70%, with vibrant competition for both pre- regulates, and from the industry collectively. It
paid and contract customers. is able to rapidly consider and adopt decisions,
without undue influence by any single company.
There are now more than 10 competitors Indeed, while showing a sensitivity to compa-
offering IDD services, and IDD rates for nies positions, and a willingness to listen to
consumers have dropped an average of their views, IDA regularly makes hard decisions
60%. Rates on some routes have dropped with far-reaching impact on the operators it
80%. regulates. Those operators may not always like
or agree with those decisions, but they generally
As much as SGD 3 billion in new network respect and adhere to them.
investment has been committed for the
period of 2000-2003 as competition gets IDA can increasingly rely on objective regula-
started. As the market matures, IDA is tory criteria, such as the Competition Code, for
looking for further investments, resulting in its decision-making. This means that it can avoid
more competition and, hopefully, accelera- any appearance of arbitrary decision-making; its
ted savings for customers. rulings are grounded in regulations that are
clearly spelled out in documents that have the
Finally, government officials estimate that force of law, and which can be used as a
some 4,000-5,000 new jobs have been reference by operators and the public. The more
created. IDA adheres to the Telecommunications Act and
the Code, the more institutional strength it can
bring to bear on violators. It is revealing that
IDA executives and their colleagues in the
both dominant and nondominant carriers
Ministry caution and acknowledge that Singa-
perceive that IDA is regulating them differently.
pores competitive market remains immature
The fact that regulation falls more heavily on
and in a state of development. But they are
dominant carriers is entirely consistent with the
encouraged that their efforts to date appear to be
dictates of the competition code, which relies
bearing fruit. It is important to state that IDAs
heavily on the ethos of asymmetric regulation.
regulatory activities are not designed to maintain
a status quo or to preserve a market structure A further element of independence should be
that already exists, but to establish competitive considered with regard to IDA the indepen-
conditions and regulatory certainty. dence of regulatory operations from promotional
operations and goals. After absorption of NCB,
IDAs result-oriented philosophy and talent for which was wholly focused on promotion of the
speed and efficiency is no more apparent than in industry, there is a powerful and substantial con-
the passage of the Competition Code and RIO. centration within IDA on developing and pro-
Again, although it had only been in existence for moting the industry, in general, and on
a matter of months, the Authority quickly moved subsidizing particular, deserving companies. At
to finalize the Code, setting the framework for this juncture, however, the regulatory mandate
competition based on technological neutrality, appears to remain a vital, core part of IDAs
asymmetric regulation and built-in review mission and its regulatory objectivity and neu-
periods to adapt to changes in market conditions trality do not appear compromised by the
and technology and the rules for implementing elements within the institution that are focused
that framework. It followed that exercise with on promoting and developing Singapores info-
completion of the RIO to enable any licensed communications markets.
new market entrants to interconnect with the
incumbent without having to engage in the kind 11.1.4 Transparency
of lengthy negotiations that have stalled
competition in other market. Both the Code and IDA has made strides towards greater transpa-
RIO have won the praises of industry and rency, and it now seeks public comments on
analysts alike. Clearly, IDA is serious about most, if not all, major policy and regulatory
setting key goals and achieving them. initiatives. In addition, the agency maintains a
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Effective regulation Case study: Singapore
high degree of openness in providing access to plete and unpredictable process, and they are
staff members for questions and input, and continually looking at ways to study the process
through various mechanisms (e.g., membership as it affects all communications industries.
on the Board and the establishment of advisory IDAs focus on convergence involves an
committees), it appears eager to seek industry ongoing commitment to proactively study it and
input. Moreover, IDA maintains a substantial discover how the market is evolving.
Internet presence through its website
(http://www.ida.gov.sg), on which it posts many
regulatory documents, fact sheets, press releases 11.2 Challenges
and other public information materials. These
steps all indicate that IDA values transparency
11.2.1 Separation from Political Power
and is aiming to increase public participation in
the regulatory process.
As stated in Section 11.1.3, IDA appears to have
established itself as independent of control or
11.1.5 Convergence And Technological
undue influence by the former monopoly tele-
Neutrality communications provider, SingTel, or by any
The government of Singapore has invested very other single operator. Backed by the Code for
heavily in the idea of convergence, both as a competition, IDA is operating as a strong, inde-
global industry trend and as a concept to or- pendent, credible regulator, without any
ganize its regulatory and promotional activities. appearance of undue bias in its decision-making.
To date, the concept has taken root most deeply
with the promotional units and operations of IDA does not, however, have full independence
IDA. United by a common vision and similar from its oversight ministry, MCIT. The Ministry
functions, the promotional wings of the formerly is the final arbiter of many decisions, including
separate TAS and NCB have melded into a those with significant monetary, political,
seamless, integrated function within IDA. economic, and social implications for Singa-
porean society. While IDA does have powers
Looking solely at regulatory frameworks and established by statute, that legislation gives the
practices, there currently remain significant dif- Ministry a clear, ongoing role in supervising the
ferences in how traditional circuit-switched agencys activities. It is often difficult for
networks are regulated and how packet-switched outsiders to ascertain exactly where along the
networks and operators are regulated. Moreover, chain of authority between MCIT and IDA any
there are still questions about how to integrate given decision may be made.
multimedia and interactive broadcasting services
not to mention mobile broadband data applica- The risk inherent in maintaining such a
tions into the converged regulatory frame- symbiotic relationship between a ministry and
work. In this respect, IDA is little different from an independent agency is twofold: (1) that
other regulatory agencies around the world, changes in government or the political fortunes
many of which are struggling to find a workable of one group or party will short-circuit regula-
approach that will account for convergence. tory polices and erode regulatory certainty, or
(2) any given regulatory decision may be based,
What IDA and MCIT have accomplished,
in part or in whole, more on larger political
however, is to look forward and build into
considerations than the merits or facts at issue in
Singapores laws and regulations as much
that particular case. In the case of Singapore,
platform neutrality as possible, in effect clearing
any such danger if it exists would likely not
the way for equal treatment of all network
be of the first type. Given the predominant
platforms as digital technologies and services
power of the ruling party, precipitous changes in
evolve. In addition, the mandatory and optional
power or policy are not likely to occur. But in
review periods built into the Code will allow
order to ensure there are no allegations of
IDA to adapt to changes in market condition and
political interference, IDA and the Ministry
technology. Moreover, IDAs neutral approach
should continue to be scrupulous in justifying
is designed to prevent regulation from holding
their decisions based on the merits and/or
back the development of new industries and
arguments of the parties involved or upon
products. The countrys top ICT policy-makers
concrete public interest rationales.
realize, however, that convergence is an incom-
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Effective regulation Case study: Singapore
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Effective regulation Case study: Singapore
simply beyond the control or reach of the recognition, embodied in the term info-
Singapores planners. communications, that computing, tele-
communications, and broadcasting sectors
The government has shown a willingness to alter are converging on packet-switched digital
course, even radically, when it decides a new networks;
policy and regulatory approach is needed. The
best example of that is the decision to accelerate the recognition that a fair, effective, and
full telecommunications competition in 2000. pro-competitive regulatory agency is a
Since IDAs creation, an ability to cope with life strategic asset in attracting foreign invest-
on the cutting edge of technological and market ment and industrial growth;
change has become part of the institutional the coupling of regulation and promotional
credo of IDA. Both the agency and MCIT will activity as two complementary prongs of a
need to continue to be light-footed enough at single industrial development policy;
all levels of bureaucracy and staffing to fine- the proactive effort by the government to
tune or even overhaul their approach to regula- act as a catalyst to market growth, with
tion, while continuing to establish regulatory eventual reliance on market forces;
certainty for new market entrants. This balanc-
ing act is one that is familiar to experienced the sheer breadth of the governments ICT
regulators, including those in Singapore. It has planning efforts, which touch nearly every
become a veritable high-wire routine in the face aspect of economic and social life in the
of a global marketplace that remains stubbornly country;
frenetic, mercurial, and unpredictable. The the creation of a single focus agency
challenge for IDA (and all regulators) is not to (statutory board) to implement policy in a
become entrenched or overwhelmed in response streamlined and efficient manner
to the sheer pace and volume of change. the integration of regulation into an overall
scheme of industrial and network develop-
11.3 Conclusion ment;
Ultimately, the Singaporean government will the emphasis on speed and efficiency in
itself be the final judge of whether IDAs rendering regulatory decisions;
structure and operations are sufficient to enable the adoption of technological neutrality go-
the country to attain its core goals for the ICT verning, at least in principle, the regulation
sector. For the purposes of this study, however, of the info-communications sector;
it is clear that there are several key ingredients the adoption of asymmetric regulation of
of the governments approach, embodied in dominant and non-dominant operators;
IDA, that can serve as models or best-practice
standards for the establishment of independent, the adoption of an interconnection mecha-
ICT-related agencies in other jurisdictions. nism the RIO that speeds new market
Among the important principles of the Singapo- entrants access.
rean approach are the following:
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Effective regulation Case study: Singapore
List of Interviewees
56