Tuesday, 28 July 2015

The challenge of regulating new digital services

A new report from the International Telecommunications Union (ITU) on global regulatory developments related to Information and Communication Technology (ICT) reveals a fast-evolving landscape. Sofie Maddens, Head of the Regulatory and Market Environment Division at the ITU, outlines the challenges for regulating these new digital services.

The ITU's new report reveals a world where devices and services proliferate, broadband connectivity becomes increasingly pervasive, and the hyper-connected world of the ‘Internet of Everything’ starts to become a reality. This year alone:  
  • The 'Internet of Everything’ will grow with more than one billion different kinds of wireless devices expected to be sold;
  • Sales of smartphones, particularly low cost units, will reach 1.4 billion, exceeding sales of PCs, TVs, tablets and games consoles combined;  
  • There will be 2.07 billion active social media accounts globally with active social media users spending an average of nearly 2 hours 25 minutes a day on social platforms.
Through rapid technological innovation, consumers are benefiting from the tremendous opportunities offered by ICTs; and are increasingly becoming more connected as digital social consumers, digital communicators and prime agents of change in a digital transformation.  

However this also means that they are being confronted on a daily basis with new issues. Cybersecurity, child online protection and privacy are all high on the list of priorities for national regulators, as well as international and regional bodies active in this field.

Finding the right regulatory solution

Contrary to other sectors such as: telecommunications, energy, postal, financial and audio-visual sectors; no single regulator or authority in one country or region is in charge of supervising or enforcing a set of binding rules on ICT operators. Often many operators in the online ecosystem are still unregulated. 

Although providers remain confident that the benefits of the online world outweigh the potential risks, from the perspective of regulators, the pace of growth and innovation raises major challenges. 

It is also important to ensure policy and regulations do not create unnecessary barriers to new companies entering the market and thus result in missed opportunities for consumers in terms of price reduction and service diversification. 

Sound, swift and flexible regulations are needed to ensure that consumers are protected online, whilst incentives for service and content providers are created. 

Having universal rules to govern online interactions is not always realistic because of the diversity of standards and norms – be they legal, cultural or social. However co- and self-regulation and consumer empowerment could allow for a healthy and respectful virtual space. 

Consumer empowerment

As consumers are the main drivers of the digital transformation, educating and empowering them is essential to improve the online world. 

Consumers can make or break businesses online – through their new powers to search, compare, rank, recommend or even negotiate preferential conditions. 

Consumers have powerful channels to make their voices heard, but regulators also play a role in protecting data and supporting the rule of law for consumers.

Finding a way forward

There are a number of useful guidelines and principles available to support good regulation. The need to create an enabling environment that protects consumers and suppliers was recognised by regulators at ITU's Global Symposium for Regulators (GSR - 15), the world's largest gathering of ICT regulators and policy specialists from the public and private sectors, which was held last month in the Gabonese capital, Libreville. 

In the 2015 Best Practice Guidelines, regulators specifically recognised the importance of:
  • Adopting cross-sectoral regulatory frameworks which address the specificities of mobile services and apps, and provide consumer protection, freedom of choice and the proper exercise of consumer rights;
  • Multi-stakeholder collaboration to ensure that the rights and interests of both consumers and suppliers are protected;
  • Educating and empowering consumers by providing platforms for user-friendly and up-to-date comparisons of service offers and tariffs;
  • Informing consumers about legal provisions and complaint/redress procedures and promoting a culture of cybersecurity; 
  • Ensuring consumers are not bound to a specific mobile service provider or app, and should retain their ability to choose and switch between providers.
Identifying pro-active policy and regulatory measures as well as co-regulatory and self-regulatory initiatives that educate and empower consumers is essential to protect the rights of all users in an open, transparent and inclusive digital world.

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