Conclusions: A dynamic and flexible approach

The convergence of “mobility” and the “Internet” will create “ubiquitous computing”, i.e. “anytime, anywhere” communications, with far-reaching implications for society and the economy. To cope with these technical and market trends, policy-makers will require the right mix of dynamism and flexibility. As this chapter has shown, policy-making cannot be independent from technical and market trends, but should reflect these and promote further developments in the interests of consumers. From this point of view, policies on the mobile Internet will need to expand in some areas: For instance, regulators should aim to ensure fair competition among operators and cheaper data transmission charges. The mobile Internet also creates various “sub-markets” such as content provision, bringing in newcomers to what was until recently a

“walled garden”. Regulators should also promote open mobile Internet platforms that enable market obstacles to be lowered. Furthermore, global roaming and global circulation of handsets will require greater levels of international cooperation. Finally, along with the advantages of the mobile Internet, including cheap and convenient Internet access, consumers are usually unfamiliar with the technology they are using, and unaware of their legal rights. Consumer protection is therefore another important issue for regulators.

The regulatory challenges mentioned in this chapter are perhaps merely the tip of the iceberg of the mobile Internet age. As mobile Internet technologies and markets evolve, the scope of policy will have to expand accordingly in the light of the social and economic impact of technological change. Just a few decades after the Internet was invented by a small elite in one corner of the globe, the mobile Internet could—quite literally—be in the pockets of a huge proportion of the world’s population. A fundamental implication of this is that policy-makers will need to take on board an increasingly broad range of social and economic issues.

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1 ITU World Telecommunication Development Report 2002: “Reinventing Telecoms”, March 2002, ITU.

2 ADSL stands for asynchronous digital subscriber line. ADSL is an evolving high-speed transmission technology, and is a form of digital subscriber line (DSL) service that provides greater bandwidth for so-called downstream (from provider to consumer) traffic at the expense of (quantatively lesser) upstream (from consumer to provider) bandwidth. ADSL is technically capable of up to 8 Mbit/s.

3 This particular forecast is from T Analysys forecasts it would reach 25 per cent by 2004. For a full discussion see ITU Internet Reports 2001: IP Telephony.

4 CATV stands for Cable Television or Community Antenna Television.

5 For the purpose of clarity, Hong Kong, China is hereinafter referred to as “Hong Kong”.

6 There are exceptions to this model: the Netherlands allocated a number of 3G licenses equal to existing 2G ones.

Hong Kong selected “n-2”.

7 “Towards the Full Roll-Out of Third Generation Mobile Communications”, 12 June 2002, European Commission, at http://europa.eu.int/information_society/topics/telecoms/radiospec/doc/word/3G_communication_2002/Acte_EN_fi nal.doc.

8 Workshop on the Licensing of Third-Generation Mobile: Chairman’s Report, September 2001, ITU. See:

http://www.itu.int/osg/spu/ni/3G/workshop/index.html.

9 Ibid.

10 “Comparative Assessment of the Licensing Regimes for 3G Mobile Communications in the European Union and their Impact on the Mobile Communications Sector”, 25 June 2002, European Commission Directorate-General Information Society.

11 Here the term “WLAN” refers to “nomadic” mobile wireless access using access points, as opposed to fixed wireless access (FWA) in or between buildings, that is an alternative to fixed wireline access.

12 In the 5.2GHz band, 5.15 to 5.35 GHz and 5.475 to 5.725 GHz are allocated for free licences in the EU; 5.15 to 5.35 GHz and 5.725 to 5.825 GHz in the United States, and 5.15-5.25GHz in Japan (in Japan, usage is limited to within buildings).

13 “Cable companies cracking down on Wi-Fi”, 9 July 2002, CNET News Com, at:

http://news.com.com/2100-1033-942323.html?tag=cd_mh.

14 “Telecommunications Regulation Handbook”, Module 5: Competition Policy; edited by Hank Intven of McCarthy Tétrault, InfoDev Program of the World Bank, and ITU.

15 “Working document on relevant product and service markets within the electronic communications sector susceptible to ex ante regulation”, Brussels, 17 June 2002, Commission of the European Communities, at:

http://europa.eu.int/information_society/topics/telecoms/regulatory/publiconsult/comments/text_en.htm. The report is undergoing public consultation and a public hearing process.

16 “Commission targets mobile operators”, 18 March 2002, Communications Week International, No.281.

17 In Article 13 of the EU Framework Directive, an SMP is defined thus: “an undertaking shall be deemed to have significant market power if, either individually or jointly with others, it enjoys a position of economic strength affording it the power to behave to an appreciable extent independently of competitors customers and ultimately consumers”.

18 “Directive of the European Council and of the Council on a Common Regulatory Framework for Electronic Communications Networks and Services”, Article 14, European Union.

19 “Directive of the European Council and of the Council on a Common Regulatory Framework for Electronic Communications Networks and Services”; EU Information Society Directorate-General, at:

http://europa.eu.int/comm./dgs/information_society/index_en.htm; Telecom Business Law, MPHPT, Japan at:

http://www.soumu.go.jp; Guidelines to implement Telecom Business Law, MIC, Republic of Korea at:

http://www.mic.go.kr/.

20 “Telecommunications Regulation Handbook”, Module 5: Competition Policy; edited by Hank Intven of McCarthy Tétrault, InfoDev Program of the World Bank, and ITU.

CHAPTER FOUR: REGULATORY AND POLICY ASPECTS 97 _____________

21 “Commission suspects KPN of abusing its dominant position for the termination of calls on its mobile network”, 27 March 2002, European Commission at:

http://europa.eu.int/rapid/start/cgi/guesten.ksh?p_action.gettxt=gt&doc=IP/02/483|0|RAPID&lg=EN&display=.

22 “Horizontal Merger Guidelines”, United States Department of Justice and the Federal Trade Commission,

Issued: April 2, 1992; Revised April 8, 1997, at: http://www.usdoj.gov/atr/public/guidelines/horiz_book/hmg1.html.

23 There are various different definitions of MVNOs. ITU defines an MVNO as an operator that offers mobile services but does not own its own radio frequency. Another definition of an MVNO (e.g. Pyramid Research) is that it is a company that provides mobile voice and data services to end-users through a subscription agreement, without having access to the spectrum. Through commercial agreements with licensed mobile network operators, an MVNO negotiates the purchase of excess capacity for re-sale to customers.

24 “Towards the Full Roll-Out of Third Generation Mobile Communications”, 12 June 2002, European Commission, at:

http://europa.eu.int/information_society/topics/telecoms/radiospec/doc/word/3G_communication_2002/Acte_EN_fi nal.doc.

25 “European Commission strives to promote network sharing”, 12 June 2002, 3G Mobile.

26 “Telecommunications Regulation Handbook”, Module 3: Interconnection; edited by Hank Intven of McCarthy Tétrault, InfoDev Program of the World Bank, and ITU.

27 “Report on business models for next generation mobile systems”, 26 June 2001, MPHPT, Japan.

28 Ibid.

29 “Report on Broadband competition policy in Telecommunication business field”, 6 June 2002, MPHPT, Japan.

30 “Mobile Commerce Standards –M-payments move a step closer”, 8 October 2002, Total Telecom at:

http://www.totaltele.com/.

31 “M-Commerce hampered by lack of a single payment platform”, 17 April 2002, 3G Mobile.

32 A USIM card authenticates the subscriber and subscriber terminal to the 3G network, while also authenticating the network to the 3G subscriber. Key attributes of USIM are: (1) It carries subscriber data as well as operator-specific data, (2) It carries cryptographic algorithms and public key infrastructure functionality, and (3) A USIM card can act as a phone book, storing hundreds of phone numbers, e-mail addresses and fax addresses. It can integrate this data with the communication capability of the mobile device. 3GPP has developed a number of specifications to facilitate the development of a standards-based USIM card. From: “3G Portal Study”, November 2001, UMTS Forum.

33 In Japan, KDDI will start a trial m-commerce service using its CDMA 2000 1x handsets with a “Next Generation UIM card” that has credit card applications, in autumn 2002.

34 China Unicom adopts R-UIM (Removable Universal Identity Module) supplied by Luxembourg-based smart card vendor Gemplus for its cdmaOne handsets. Source: “Gemplus to supply ‘SIM’ cards for Unicom CDMA network”, 4 January 2002, Total Telecom at: http://www.totaltele.com/.

35 In Korea, the initial subsidy of handsets by operators is banned. See: http://www.mic.go.kr/.

36 “Effective Competition Review: Mobile”, 26 September 2001, Office of Telecommunications (OFTEL), United Kingdom, at: http://www.oftel.gov.uk/publications/mobile/mmr0201.htm.

37 The status of number portability introduction in Europe is available on ETO’s website at:

http://www.eto.dk/numbering/NP-Impl.htm#ServiceProviderMobile.

38 “FCC extends wireless local number portability deadline by one year to November 24, 2003”, 16 July 2002, FCC, at: http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-224368A1.pdf.

39 “Report on Broadband competition policy in Telecommunication business field”, 6 June 2002, MPHPT, Japan.

40 For example, the Japanese cdmaOne operator, KDDI, offers an international roaming service to its users in eight regions/countries, such as the United States, China and the Republic of Korea.

41 “Working Document on the Initial Findings of the Sector Inquiry into Mobile Roaming Charges”, 13 December 2000, European Commission DG Competition at:

_____________

http://europa.eu.int/comm/competition/antitrust/others/sector_inquiries/roaming/working_document_on_initial_resu lts.pdf.

42 “GSM roaming prices”, November 1999, International Telecommunications User Group (INTUG), at:

http://www.intug.net/surveys/gsm/.

43 Official EU website on sector inquiry into roaming, at:

http://europa.eu.int/comm/competition/antitrust/others/sector_inquiries/roaming/.

44 See INTUG website at: http://www.intug.net/submissions/CITEL_XVI_roaming.html.

45 Global circulation is not related to the practice of placing terminals on local markets for sale, which is the subject of mutual recognition arrangements (MRA).

46 For further information about the work of Working Party 8F on IMT-2000 and systems beyond IMT-2000, see http://www.itu.int/ITU-R/study-groups/rsg8/rwp8f/index.asp.

47 The Istanbul Convention, which binds signatory countries to eliminating customs duties on personal effects and professional equipment carried by visitors, is one of the international agreements developed by the World Customs Organization (WCO), which are applicable to IMT-2000 terminals. See the WCO website at:

http://www.wcoomd.org/ie/index.html.

48 Draft New Recommendation ITU-R M.[IMT.RCIRC] recommends that IMT-2000 terminals should conform to IMT-2000 standards referred to in ITU-R M.1457-1, and comply with Draft New Recommendations ITU-R M.[IMT.UNWANT-BS] (Generic unwanted emission characteristics of base stations using the terrestrial radio interfaces of IMT-2000); and 2), ITU-R M.1343 (Essential technical requirements of mobile earth stations for global non-geostationary mobile-satellite service systems in the band 1-3 GHz) and ITU-R M.1480 (Essential technical requirements of mobile earth stations for GSO MSS systems in the band 1-3 GHz) for satellite interfaces of terminals.

49 “Safe harbor workbook”, Department of Commerce, United States, at:

http://www.export.gov/safeharbor/sh_workbook.html.

50 ITU held a workshop on “Creating Trust in Critical Network Infrastructures” in May 2002 to discuss some of the issues arising from, and the work being carried out on, network security worldwide. See:

http://www.itu.int/osg/spu/ni/security/index.html.

51 See 3GPP, TS33.120 V4.0.0 at: http://www.3gpp.org/tb/sa/sa3/specs.htm.

52 “Report on the safety and reliability of 3G mobile systems”, 12 December 2001, MPHPT, Japan.

53 Article 10 1(c ), Directive on electronic commerce 2000, European Union.

54 “Canned Spam”, 1 June 2002, Total Telecom. at: http://www.totaltele.com/.

55 A mobile phone is designed to operate at a maximum power level of 0.6 watts. By contrast, household microwave ovens use between 600 and 1’100 watts of power.

56 See the World Health Organization (WHO) website at: http://www.who.int/home-page/.

57 SAR is the widely accepted measurement of radiofrequency energy absorbed into the body in watts per kilogram (W/kg) averaged over some amount of tissue ranging from the entire body to one gram.

58 These rates can be found on the FCC homepage. See the FCC’s radio frequency safety page at:

http://www.fcc.gov/oet/rfsafety/.

59 See http://www.mmfai.org/.

60 “Research on radio effect toward medical equipment”, 2 July 2002, MPHPT, Japan.

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