Regulation ripe for reform to unlock digital potential

This is the second in a six-part blog series discussing the key topics of GSMA Ministerial Programme 2016. This prestigious event, held alongside Mobile World Congress, provides a unique platform for the world’s most influential telecommunications leaders to unite and discuss the most pressing issues affecting the future of the mobile industry. This year the Ministerial Programme will be held from 22-25 February at Fira Gran Via, Barcelona.

Serafino Abate, Director of Competition Economics, GSMA Government and Regulatory Affairs

The collective growth in mobile broadband access, smartphones and internet technology has fostered new mobile and communication services, with the emergence of powerful internet players and digital platforms. This new competition has made some of today’s regulation redundant.

At the same time, while these new services compete directly with traditional communications services – including those offered by mobile operators – they are seldom subject to the same rules, including the collection and use of customer data.

Digitisation has also fundamentally altered the competitive dynamics, by blurring the traditional boundaries of markets and accelerating the pace of innovation. This poses regulatory challenges for policymakers in Europe and around the world. The failure to adapt to a changing digital environment is already distorting competition, which will inevitably slow down innovation and make consumers worse off in the long-term.

The GSMA believes that the best way to account for today’s dynamic, competitive markets is to move to a principle-based, flexible regulatory framework which promotes consumers long-term interests across all services and platforms through consistent consumer protection rules, while removing barriers to investment and innovation.

This is, in a nutshell, the core of the recommendations of a new paper published by the GSMA and developed by NERA Economic Consulting, entitled ‘A new regulatory framework for the digital ecosystem’.

The paper recommends that policymakers incorporate three key principles as they work to modernise regulatory frameworks. First, regulation should be based on functionality, not the type of company or technology that delivers them. Second, measurable, performance-based approaches should be favoured over prescriptive regulation, promoting market dynamism and focusing on delivering increasing benefits to consumers. Finally, policymakers should take a fresh look at legacy rules and discard those that are no longer relevant, applying a consistent set of criteria throughout the ecosystem.

A modernised regulatory framework based on these principles will provide more consistent protection to consumers, foster usage and adoption through increased trust, and promote investment and innovation, driving cost reductions through technological upgrades.

Today the debate on regulatory modernisation is well under way, with the likes of the EU and others reviewing their framework. There is a growing recognition that the time is right to put in place rules fit for today and tomorrow’s markets.

There is a long way to go in getting the right regulatory regime. We hope the ideas in this paper, suggesting a clear future-proof set of principles, will provide an important stimulus for moving the debate about regulatory modernisation forward no matter where it is being considered.

For more information on the Ministerial Programme, please visit http://www.ministerialprogramme.com/