Objectives of the regulatory framework

The primary objective of the regulatory framework is the promotion of competition, particularly in service provision, in the industry. Telecommunications policy and regulation need to foster effective and efficient competition, while also recognising social policy goals of making the service universally available and affordable.³⁸⁵ Furthermore, the ultimate purpose of a good regulatory agency is to protect consumer rights and interests, as is the case in countries where there is open competition in telecommunications services. The NCC acknowledges that maintaining a transparent regulatory regime that protects the consumer is one of its key roles in the telecommunications industry.³⁸⁶ Opening up the telecommunications industry to keen competition is the pragmatic thing to do in the light of the economic imperatives. The high financial capital outlays required for deploying the latest, cutting-edge telecommunications technologies are simply not affordable by the Nigerian financial system without outside help.

The licensing of Globacom Limited as the second national operator accomplished one of the NTP‘s objectives of having at least two fixed-line service providers. NITEL, the dominant operator, cannot meet the needs of all prospective users. The NTP, along with the establishment of the NCC as the national regulatory agency, signalled

383 See n 313 at Ch 2.

384 The Act came into force in July 2003; the Nigerian Communications Commission had been set up by the Nigerian Communications Commission Act, 1992 (now repealed by the Communications Act, 2003).

385 See n 367.

386 Ndukwe NCC Policy and Strategic Thrust – 2005 and Beyond 19 [online].

115 Nigeria‘s transition from a monopoly regime to a competitive one.³⁸⁷ In order for this transition to be effective however, Grewlich cautions that:

As telecommunication migrates from monopoly to competition, govern-ment has the crucial role of being a neutral force in the economy that must ensure a minimum-interventionist pro-competitive regulatory framework with transparent rules and value to the user.³⁸⁸

Nevertheless, two major and interrelated regulatory issues that the government and the NCC have to deal with are interconnection and convergence.

5.2.2 Interconnection

The seamless interconnection of new and existing operators in the telecommuni-cations industry is vital to the successful implementation of a competitive telecommunication market. Without an effective interconnection regime and seamless communications between consumers on different networks, the value of the network to customers is very limited.³⁸⁹ The ability of newly licensed operators to interconnect with the dominant operator‘s network is a fundamental requirement which needs careful regulation in order to avoid distortions in the system. One of the complaints against NITEL, the former monopoly backbone operator, is its unwillingness or inability to effect interconnection of other operators to its network;

NITEL is however not the only operator blamed for constraining interconnection.³⁹⁰ The legislative framework for effecting interconnectivity is section 96 of the NCC Act.³⁹¹ The Act makes interconnection between network services or facilities mandatory and declares that the terms and conditions of interconnection agreements

387 See n 316.

388 Grewlich Governance in ‘Cyberspace’: Access and Public Interest in Global Communications 93.

389 Esselaar, Gillwald and Stork Towards an African e-Index 2007 41 [online].

390 Interconnection disputes continue to disrupt telecommunications services in Nigeria and NITEL is not the only culprit. In April 2004, the NCC imposed a fine of 34 million naira (Nigerian currency) on Globacom, the second national operator, for failure to interconnect smaller private telecommunications operators even after a direction to do so was given by the Commission. See NCC Headlines [online].

391 The NCC was initially established under the old Nigerian Communications Commission Decree No 75 of 1992 now repealed by the Nigerian Communications Act, 2003. S17 (1) of Decree No 75 granted a right to a licensee or authorised carrier to interconnect his network facilities to the network of another authorised carrier.

116 are primarily to be agreed upon by the operators. The Commission is empowered to intervene and make binding determinations at the request of either or both parties to interconnection negotiations.

The interconnection conflicts in the telecommunications industry have, in the past, been primarily between NITEL, the former dominant operator and the PTOs licenced by the NCC. The increased number of licenced operators further compounded the problem of connectivity as they all had to rely on NITEL, the only national carrier and provider of backbone services before Globacom was licenced as such. These conflicts with NITEL were mostly caused by the inability of the parties to agree on interconnection rates or failure to pay the interconnection fees demanded by NITEL.

In the period before 2003, the conflicts were moderated by the then Ministry of Communications which did not have the will or capacity to call NITEL to order. The NCC also did not at this time have the necessary statutory power to regulate NITEL.

Prior to 2003 when the Nigerian Communications Act was enacted and the NCC established as the main regulator of the industry, NITEL, the former monopoly telecommunications provider, was not under the regulatory control of the NCC. The NCC was essentially a department under the then Ministry of Communications just as NITEL was and could not exercise effective regulatory control over the government monopoly telecommunications company. The situation changed however when the Communications Act was enacted and NCC was given wide regulatory powers over all players in the industry.

In 2003, after NITEL came under the regulatory supervision of the NCC, the Commission intervened in the interconnection disputes by convening a meeting between all the players in the industry to resolve the conflict. The outcome of the meeting was the adoption of a revised interconnection rate agreement which most of the operators agreed to with the exception of Mobile Telecommunications Network (MTN), one of the GSM operators, which opted to challenge the competence of the Commission to impose the agreement on it in court.

117 The process of achieving interconnectivity differs from country to country.³⁹² While judicial action has been the major path of expansion in the US and EU, Nigeria has largely adopted a muted negotiation route which has often been held up by bureaucracy and the intransigence of the key operators.³⁹³ With the addition of more investors in the industry as a result of the successful auction of 4 2G GSM licenses in February 2001 and 4 3G licenses in 2007, it was expected that recourse to litigation to enforce interconnection rights would be a viable option in addition to NCC‘s regulatory intervention. In the case of litigation, the Federal High Court will be called upon to exercise jurisdiction in determining such disputes.³⁹⁴

Not much has happened by way of litigation in resolving interconnection disputes, but a news item in one of the local newspapers suggests that the operators are not averse to litigation for the settlement of their interconnection disputes.³⁹⁵ It is however the responsibility of the NCC to ensure that interconnection is available on a non-discriminatory and cost-oriented basis to all licensed operators by drawing up a transparent set of interconnection rules, which shall be published and made available to all operators in the industry.³⁹⁶

Although much credit has been given to the NCC for its management of the deregulation of the telecommunications industry in Nigeria in the last decade, the Commission‘s strategy of mixing deregulation with sometimes opaque intervention has not always met the needs of the industry. One area of such intervention is the vexed issue of interconnection between the operators. In a review of African trends in

392 In Nigeria, the process is mostly by negotiation between the two national operators with backbone capacity, NITEL and Globacom, and the new private telecommunications operators, supervised by the NCC. In the US, the process has been predominantly through private litigations against Telco giants like AT &T and MCI WorldCom; (US v AT&T 524 F Supp 1336 (DC C) 1981); MCI v AT&T 708 F 2d 1081 7^th Cir). The process of liberalisation in EU has been accomplished by careful implementation of the EU Treaty provisions for free movement of goods and services, through infringement actions such as Italy v Commission (1985) ECR 873; see Stahl 1994 (19) Yale J Int'l L 405.

393 Ibid.

394 S 138 Nigerian Communications Act, 2003.

395 Vanguard newspaper 14 January 2010 [online].

396 A telecommunications networks interconnection regulations document was released in May 2003 by the NCC pursuant to s 97(B) of the Nigerian Communications Act, 2003. See NCC Telecommunications Networks Interconnection Regulations 2003 [online].

118 investment and competition in the telecommunications industry in 16 African countries including Nigeria and South Africa, the report, while generally applauding Nigeria‘s good performance in other areas of the review, observed, in relation to interconnectivity, that ―[t]his vital area of competition is the one area where Nigeria scores negatively.‖³⁹⁷

According to the report, the negative perception in this area of NCC‘s regulation may have resulted from:

… the commitment in the guidelines by NCC, to limit the extent of the obligations of the dominant operators during the period of transition to full competition at the exact point when new entrants most require assistance and for favourable conditions to default in their favour.³⁹⁸

The failure of the Commission to name the dominant operators in the market ten years after deregulation is one reason why NCC-led negotiations on interconnection charges have always generated controversy and failed to either satisfy all the stakeholders in the industry or bring down telephone tariffs in Nigeria.³⁹⁹

5.2.3 Convergence

Convergence entails the coming together of content (from the audio-visual and publishing industries), infrastructures (such as those supporting telecommunications services or broadcast television) and the processing and storage capabilities of computers and consumer electronics servers and terminals.⁴⁰⁰ The impact of the new services resulting from convergence will be felt throughout the economy generally

397 See n 389 at 42.

398 Ibid n 389.

399 Ibid n 391. See also Abayomi 12th June 2010 Daily Independent.

400 The EU Commission, in its Green Paper on the Convergence of the Telecommunications, Media and Information Technology Sectors, and the Implications of Regulation - Towards an Information Society Approach ii, recognises that convergence, pertaining to telecommunications, information technology and broadcasting, is occurring at the technological level such that digital technology now allows both traditional and new communication services whether voice, data, sound or picture, to be provided over many different networks.

119 and in the respective sectors particularly.⁴⁰¹ There is growing awareness in the industry that the convergence of technologies presents new challenges to the national regulatory authority; for example, in a communiqué issued at the end of a two-day gathering of telecom stakeholders in Abuja, Nigeria, the participants noted that:

There is rapidly growing Technology Convergence which is blurring the traditional boundaries between telecom, datacom and Video/Broadcasting.

Convergence is therefore upon us - leading to unified data, voice, video and multimedia communications; and poses a new set of regulatory challenge such as the case with Voice over Internet Protocol (VoIP).⁴⁰²

One of the key challenges that the convergence of technologies presents to the regulatory authority is the protection of data that users send and receive across the converged technologies. The main focus of data protection is the regulation of data relating to the individual. Data protection is a major challenge because its absence will no doubt impact the way the public uses the telecommunications networks. If users of telecommunication facilities become doubtful of the privacy of their communications, they will refrain from further use of such facilities. The chilling effect this can have on the industry and indeed the whole economy makes it a regulatory matter the government should be involved with.

401 In 1998, the Wireless Telegraphy Amendment Decree No 31, 1998 amended the Act. The explanatory note to the Decree states that:

The Decree amends the Wireless Telegraphy Act to modify provisions, which inhibits competition in the communications sector. Accordingly, the Decree amongst other things defines the role of the Nigerian Communications Commission and the National Broadcasting Commission which under the Decree establishing them, are responsible for matters relating to telecommunications and broadcasting respectively, as contained in the Act.

As the law stands today, and in view of the global phenomena of convergence, there is room for conflict between the NCC and the Nigerian Broadcasting Commission, both of which are empowered to issue licenses for operators needing a piece of the Nigerian spectrum. There is need to streamline the regulatory framework for spectrum allocation so that while one statutory organ is responsible for allocation, the other can be in charge of maintaining standards as is the case in Singapore where the IDA Act (No 41 of 1999) provides for the formation of the Info-communications Development Authority of Singapore ("IDA"), which is a merger of the National Computer Board ("NCB") and the Telecommunication Authority of Singapore ("TAS"). The IDA Act sets out the powers, functions and duties of IDA as the regulator and promoter of information and communications technology; the Singapore Broadcasting Authority regulates broadcast and Internet content.

402 Ajakaye 16th Nov 2005 Thisday newspaper.

120 5.3 National policy on telecommunications

The National Policy on Telecommunications (NTP) recognises the global trend in telecommunication policies that integrate the advantages of rapid technological developments in telecommunications, broadcasting, and information and communication technologies (convergence). It therefore envisages that Nigerian communication laws will be reviewed and made more all-encompassing in line with the international best practices, towards convergence of technological and market forces in the communications and information technology.⁴⁰³

Because the Internet is essentially a communications technology much like the telephone and other such devices, the NTP recognises that access to the Internet falls under telecommunications services offered in Nigeria.⁴⁰⁴ However, the Communications Act does not prescribe any specific rules regarding access to and use of the Internet.⁴⁰⁵

At the core of the NTP and Communications Act, 2003, lies the need to attract investment to develop the national ICT infrastructure. This has resulted in policy and institutional reforms.⁴⁰⁶ Telecommunications being the backbone infrastructure of the emerging global information society, Nigeria‘s challenge is to rapidly expand its telecommunications and information technology base as a vehicle for sustainable economic development. It is recognised that without a solid telecommunications and information infrastructure, the country will not attract the right level of urgently needed local and foreign investment to build the economy.

403 Chp 3.2 National Policy on Telecommunications, 2000.

404 Id at chp 1.2.1(xix).

405 In April 2013, the Premium Times, a Nigerian newspaper, carried a report that the Nigerian government had entered into a secret agreement worth $40million, with an Israeli company to monitor computer and Internet communications by Nigerians. Although the report has been denied by government officials, it is very unlikely, given the extent of details disclosed in the newspaper report that, government‘s denial will persuade any careful observer of the deteriorating security situation in Nigeria and the pressures being exerted thereby on the government to take a firm control of the situation to the contrary. The implication of this report is that if true, Nigeria will join the ranks of nations such as China, Iran, etc, that monitor and restrict access to the Internet. See Ogala April 25, 2013 Premium Times.

406 Ndukwe Nigerian Telecommunications Environment [online].

121 5.4 The national regulatory agencies: failure to protect information

privacy