Virtual roundtable discussion explores innovating competition policy in the African and Arab regions

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How should regulators address competition policy in a rapidly changing digital applications environment, especially when markets are two-sided or even multi-sided?

This question underpinned the third and final regional regulatory roundtable held within the framework of the 20th Global Symposium for Regulators (GSR-20). Conducted virtually on 20 August 2020, the online event enjoyed a strong participation of over 150 attendees from around the world.

Key considerations and vectors of regulatory action

Setting the scene for the main event, Stephen Bereaux, Deputy to the Director of the Telecommunication Development Bureau, highlighted key considerations for regulation to remain an enabling factor for universal connectivity, within and beyond the African and Arab regions. These include the maintenance of an environment that promotes innovation, investment and collaboration, updating regulatory rules and processes, and analyzing competition policies to ensure positive impact.

Echoing these insights, GSR-20 Chair Dan Sjöblom noted how COVID-19 crisis is really a window of opportunity that the regulatory community cannot afford to miss. He also stressed the importance of adaptability when it comes to local circumstances, acknowledging “there is never going to be a one-size-fits-all” when it comes to ICT regulation.

However, this does not mean best practices cannot be exchanged and learned from. This notion was showcased in the GSR-20 Best Practice Guidelines presented by Sofie Maddens, Head of the Regulatory and Market Environment Division at ITU, who emphasized the key vectors of regulatory actions: inclusiveness, agility, and resilience. The GSR-20 Guidelines are to be adopted on 1st September during the Heads of Regulators executive roundtable.

Dealing with dominant digital platforms and closing the gap

The first session was kicked off with a keynote presentation on the evolution of competition policy and regulation in the context of digital markets by ITU expert David Rogerson. The keynote grounded the discussion in the current state of play, characterized by critical regulatory challenges posed by dominant digital platforms.

“Defining markets, determining dominance and identifying anti-competitive behaviours are all made significantly more difficult with digital platforms,” said Mr. Rogerson. While platforms have substantially decreased transaction costs, they have also created market concentrations, he said. Yet despite this market dominance, “we are seeing digital platforms eating into the market of traditional telecoms, yet not necessarily making a proportionate contribution to the funding of the infrastructure on which they rely,” he noted.

Next came a panel discussing the evolution of competition policy and regulation in the context of the digital markets moderated by Adel Darwish, Regional Director of the ITU Regional Office for Arab States. The conversation featured both global and regional perspectives, including an analysis of global and digital players in Arab and African regions with an emphasis on national-level implications.

A comment to Mr. Rogerson’s keynote came from Facebook’s Africa Director of Public Policy Kojo Boakye, who highlighted the symbiotic relationship between network operators and over-the-top (OTT) media services by pointing out how Facebook’s investments in the Arab and African regions have been made in partnership with mobile operators.

Another important challenge was raised by Marie Amandine Bhika, Assistant General Counsel at Intelsat, who stressed the viability of satellites in closing the digital gap. The digital divide is a significant problem in Sub-Saharan Africa where large swaths of the population have yet to benefit from broadband services. Regulatory constraints, import taxes, and spectrum fees are impeding the establishment of satellite networks in African countries, she said.

Director General of the Uganda Communications Commission (UCC) Irene Kaggwa Sewankambo noted that in Africa, while locally developed applications exist, most digital apps are foreign. “As you look at competition, you want to make sure you are not blocking the new innovators,” she said. “How do you create the space for them, level playing the field to help them get into the market and have a fair chance to compete without being too protectionist?” One way might be to collaborate not within the country but beyond in terms of the African region, she proposed.

Taking a more global perspective, Mani Manimohan, Head of Digital Infrastructure Policy and Regulation at GSMA raised two options to “reset” the competition policy market: apply existing tools more vigorously or seek a possible ex-ante regime to complement existing ex-post enforcement, as experts have been exploring both in the United States and the United Kingdom.

From ex-ante to ex-post: Are we there yet?

To kick off the second half of the event, ITU expert Simon Molloy gave an insightful presentation on why telecom companies have been regulated differently from big tech platforms, and why this needs to change. While telecommunication operators were originally owned by governments and market structures were well understood, this was not the case for digital platforms – and nobody wanted to get in the way of innovation, explained Mr. Molloy, suggesting the complex structure of two-sided and multi-sided markets led to a hands-off regulatory approach. Size and scale are an issue, he suggested, “because with that sort of scale comes enormous economic and political power.”

Moderated by Andrew Rugege, Regional Director of the ITU Regional Office for Africa, the ensuing panel posed the important question of the status of regulation between ex-ante and ex-post, delving into progress made in different African and Arab countries so far.

Bridget Linzie, Head of Electronic Communications at the Communication Regulator of Southern Africa (CRASA) shared research that identified major bottlenecks that are proving to be competitive constraints: increase in IP interconnections, consumer lock-in in Internet of Things (IoT), and the development of OTTs and their impact on competition policy.

Director General of the Rwanda Utilities and Regulatory Authority (RURA) Patrick Nyirishema shared his country’s pragmatic and “less prescriptive” regulatory approach, in which RURA has separate departments for the telecommunications industry and that of emerging technologies, including digital platforms. Rwanda has instead focused on building a “vibrant local innovation ecosystem,” he said.

Ali Alhadji, Permanent Secretary of the Assembly of Telecommunication Regulators of Central Africa (ARTAC), highlighted the need for regulators to catch up with rapidly developing technologies such as mobile money networks, to which many Africans are now connected. He explained how ARTAC, in its efforts to “harmonize regulation”, continues to benefit from the support of the African Union as well as the investment of the United Nations in the sub-regions.

From Bahrain, and representing the Gulf Cooperation Council (GCC), Saeed Ahmed Mashkoor explained why his country decided to remove the exact regulations for two markets: competitive pressure from OTTs. The emergence of digital applications has elicited “one of the key changes in consumer behaviour and competition landscape,” he said.

Laminou Elhadji Maman, Secretary General of the West Africa Telecommunications Regulators Assembly (WATRA), stressed the need to “look for a new way to regulate,” citing the lack of regulatory control in the digital applications space in Africa and beyond. “If we cannot have a global regulatory body, maybe we can develop closer collaboration to learn from others,” he suggested.

Towards bold, collaborative, and innovative regulation

We have tended to consider competition policy and digital apps separately, so it’s exciting to consider them together and learn more, said CRASA Executive Secretary Antony Chigaazira during his opening remarks. After all, “digital transformation is not an option,” he insisted. “It is a matter of urgency.” That’s why, as Mr. Molloy highlighted, “regulators need to be bold… [and face the] enormous pent-up demand of regulatory innovation.”

Acting regionally in a collaborative manner as exemplified in the regional roundtable is therefore necessary, and the potential for learning should not be underestimated. To borrow the closing words of Mr. Rogerson following his keynote:

“The regulation of digital platforms will certainly be needed, but it will have to be conducted at a national level and involve the kind of collaborations that were discussed in this session, both regionally and globally. And in that there is a key role for the ITU, there is a key role for regional regulatory associations, represented in this forum today. And there is a chance for developing countries to learn from the work that is being conducted elsewhere - to sit on the shoulders of others, as it were.”