FACILITATING CONVERGENCE :
Licensing - The Malaysian Experience
ITU Regional Regulatory Seminar
Dalian, China, 5 – 8 August 2002
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© Malaysian Communications and Multimedia Commission
EI/July 2002
AGENDA
1.
2.
3.
New ‘convergence’ based Licensing Regime
Implementation – Migration of Licensees
Licensing Environment under the Communications
and Multimedia Act 1998 (CMA 1998)
A.
4.
MCMC as a convergence regulator
A.
B.
5.
Universal Service Provision
Digital Signatures Act 1998
Postal Services Act 1991
Conclusion
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New ‘convergence’ based Licensing
Regime
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Internet Services
Value-added services
Cellular services
Telecommunication
services
Free to air Radio
Free to air TV services
The sector used to have
many different categories of licenses
Licenses issued under the old regulatory framework were service-specific
and technology-specific.
These restricted competition into narrow markets and did not allow
licensees to move freely into related and adjacent activities.
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The Communications and Multimedia Act 1998
has organized
the sector under four markets
Licenses issued under the new
regulatory framework are
service-neutral and technologyneutral.
Licensees compete in four
economic markets, i.e.
Facilities, Connectivity,
Applications, and Content
Applications.
Content Services
Applications Services
Network Services
Network Facilities
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The New Licenses allow for greater business
flexibility
Range of business options
New
Horizontal
Licenses
Confined to
service(s)
and
technology
defined in
old license
New licensees may enter
market
Old Vertical
license
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Determination of Licensable Activities
What is the activity?
Ownership or
operation of
network facilities
Network
Facilities
Provider
Provision
of basic
connectivity &
bandwidth
to enable
transport of
communications
between
points
Network
Services
Provider
Provision of a
particular
function or
capability to
end user(s)
Applications
Services
Provider
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Provision of
content
services
Content
Applications
Services
Provider
EI/July 2002
Licence Categories
Individual Licenses
Class Licenses (Current)
• Content applications service
provider
• Applications service provider
• Network service provider
• Network facilities provider
• Applications service provider
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Licensing Category
Individual
Class (Current)
Content Application Service Provider
Satellite Broadcasting
Subscription Broadcasting
Terrestrial free to air TV
Terrestrial radio broadcasting
-
Application Service Provider
PSTN Telephony
Public cellular telephony services
IP telephony
Public payphone service
Public switched data service
Audiotext hosting services provided
on an opt-in basis
Directory services
Internet access services
Messaging services
Private payphone service
Telegram services
Network Service Provider
Bandwidth services
Broadcasting distribution services
Cellular mobile services
Customer access services
Mobile satellite services
-
Network Facility Provider
Earth stations
Fixed links and cables
Public payphone facilities
Radiocommunications transmitters and
links
Satellite hubs
Towers, poles, ducts and pits used in
conjunction with other network facilities
-
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Migration to the New Licensing Regime
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Transition Options for Licensees
Intention to
migrate to
new license
Licensee indicates intent to
migrate or remain on existing
license
Register existing
license
Intention to
retain existing
license
Register existing
license
Apply for new
license
Old license
continues
New license
granted / refused
Existing licensees have certain
transitional obligations.
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© Malaysian Communications and Multimedia Commission
EI/July 2002
The Steps to Convergence
1 Apr 99
1 Apr 00
New
applications
Licenses
issued by
Dept of
Telecommunications
Licenses
issued by
Ministry of Information
Register license
with MCMC and
indicate intent
to migrate to
Minister
Phased
MCMC issues
transitional
licenses for licensees
opting to migrate
and to new applicants
Old licenses not migrated
continues until expiry
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© Malaysian Communications and Multimedia Commission
Licenses for
convergent activities
Licenses for
convergent
activities
EI/July 2002
Categories of Licences
Less regulation
Within the four markets,
activities may fall into any of
three categories for licensing
purposes.
Only activities with
significant economic or
social impact are individually
licensed.
The long term objective is to
move into less regulation.
Individual
Class
Licensed
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Exempt
Unlicensed
EI/July 2002
Licensing Migration
map onto
New technology-neutral
and service-neutral
licenses
VAN license
Content Services
ISP license
Telecommunication
license
Broadcasting
license
The old licenses that were issued
based on specific technologies, and
specific services
Applications Services
Network Services
Network Facilities
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© Malaysian Communications and Multimedia Commission
EI/July 2002
Licensing Migration Scenarios
INTERIM RESTRICTIONS
Some restrictions may apply in the
interim. The reasons for these include
the following:
• To ensure the orderly growth of the
convergent sector
• To take into account commitments
already made to some existing licensees;
significant investments have been made
on the basis of these commitments.
Licensee
A
Licensee
B
Licensee
C
Licensee
D
Existing operators may require more
than one license. But service-specific
licenses such as licenses for
broadcasting and ISP will no longer be
issued. This, however, does not restrict
the licensee from describing itself as a
broadcaster or a telecommunications
service provider. These are commercial
decisions.
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© Malaysian Communications and Multimedia Commission
EI/July 2002
Licensing Environment under
the CMA 1998
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EI/July 2002
Registration For Class Licence
APPLICANT
Submits
Form D
Payment
Registration
Copy of licence
Notified
COMMISSION
MINISTER
Issues
notification
Issues
Class licence
Acknowledge;
Check for
completeness
Process
Qualifies for
registration
Does not
qualify
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© Malaysian Communications and Multimedia Commission
EI/July 2002
Process For Individual Licence
APPLICANT
Submit
application
Licence
granted
COMMISSION
Acknowledge;
Check for
completeness
Process
and
Recommend
Register
and
Inform
MINISTER
Decision
Issue
licence
s.30(3)
Informed
of reasons
for rejection
Not
granted
s.30(6) – s.30(8)
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Fees Payable & Licence Tenure
Application fee
RM10,000
Registration fee
RM2,500
Processing fee
RM50,000
Annual registration
RM2,500
Annual licence
fee
0.50% or 0.15% of
Gross Annual
Turnover (minimum
RM50,000)
Renewal fee
Tenure
RM25,000
CLASS LICENSEES
INDIVIDUAL LICENSEES
5 or 10 years
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Individual Licence
Licence
Category
Network
Facility
Provider
Individual
Licence
(NFP)
Network
Service
Provider
Individual
Licence
(NSP)
Application
Service
Provider
Individual
Licence
(ASP)
Content
Application
Service
Provider
Individual
Licence
(CASP)
No. of
licences
issued
22
23
59
19
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Licensing Environment
Generic provisions of Act apply to all relevant activities
Standard license conditions common
to Individual and Class licences
Standard Licence
Conditions common
to Individual Licences
Special
conditions
Undertakings
Individual
Class
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Exempt
EI/July 2002
Standard Conditions For Class Licence
1.
2.
3.
4.
Permitted activities
Sole licence
Compliance with the law
Compliance with the
numbering plan, the
electronic addressing plan,
and Consumer Codes
1.
2.
3.
4.
5.
Safety measures
Charging mechanism
Indemnity
Fees
Change of particulars of the
registration notice
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© Malaysian Communications and Multimedia Commission
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Standard Conditions For Individual Licence
1.
Corporate
A.
B.
C.
D.
2.
3.
1.
Incorporation
Share holding, JV
Sole licence for activity
Compliance with CMA
Indemnity
Change in licence
condition
Operations
A.
B.
C.
D.
E.
F.
Numbering plan, electronic
addressing, spectrum plan
Consumer code
Rates
Safety measures
Charge mechanism
Licence fees
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Special Licence Conditions (Examples)
1. Obligation to provide Universal
Service And/Or To Contribute To
Universal Service Fund
- The licensee shall comply with any
determination made by the
Commission on universal service
provision.
- CONTRIBUTION TO USP FUND:
- All licensees except Content
Application Service Provider
(CASP)
- Licensees whose annual total
revenue derived from
designated services exceeds
RM500,000
- Contribution is determined at
6% of the total weighted net
revenue from designated
services
2.
For all individual licensees
[Reg. 18]
A.
Notify the Minister of any
restructuring or rationalization
of the individual’s corporate
structure
3.
Additional for CASP(I) [Reg.
22(2)]
A.
Provide local content
programmes and those that
promote Malaysian culture and
national identity
B.
Carry public announcements for
the purposes of the government
or for public or national interest.
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USP Overall Objectives
STATEMENT OF OBJECTIVE
WHAT
FOR
WHICH
SERVICES
WHERE
HOW
FOR WHOM
To promote the widespread
availability and usage of
network services and/or
applications services
throughout Malaysia
by encouraging
the installation of network facilities
and the provision of
network services and/or
applications services
in underserved areas
or
for underserved groups
within the community.
OPERATIONALISING THE OBJECTIVE
To set targets and timelines.
Basic communications services,
initially focusing on public
payphones, basic telephony and
internet access services.
USP funding to be provided to
incumbents in brown field areas
and successful bidders in green
field areas.
Through collective access (e.g.
payphones) or individual access
(e.g. residential phones).
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UNIVERSAL SERVICE OBJECTIVES
Penetration
Rate
Highly Served Area
22% (Current National
Penetration Rate)
17.6% (20% below National
Penetration Rate)
100 %
20 %
80 %
Underserved Area
Underserved Area is defined as an area where the penetration
rate for basic telephony is 20% below the national penetration rate
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UNIVERSAL SERVICE PROVISION :
UPDATES
1.
Ministerial Direction Universal Service Provision
1/2000, 1/2001
•
2.
Commission Determination on Universal Service
Provision 2/2001
•
3.
4.
5.
Direction from Minister to determine a system of the USP
Outlines the mechanism of USP in the country
Underserved areas identified throughout the
country
Areas for roll-out in 2002 identified and bid
documents issued
Project implementation by 4th Quarter 2002
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MCMC as a Convergence Regulator
for the entire communications and
multimedia industry
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© Malaysian Communications and Multimedia Commission
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MCMC as a Convergence Regulator
1.
Apart from implementing the
Communications and Multimedia
Act 1998, MCMC is also has
jurisdiction over the following
Acts:
A.
B.
Digital Signatures Act 1997
Postal Services Act 1991
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Postal Regulatory : Role & Functions
1. To exercise regulatory functions including the determination of
performance standards and standards of facilities and services
and the enforcement thereof;
2. To ensure the licensees comply with their license terms and
conditions;
3. To promote competition in providing for postal services;
4. To promote the interests of users such as the prices to be
charged, the continuity of postal services and the quality of the
postal services;
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Postal Regulatory : Role & Functions
5. To secure all reasonable demands for postal services are
satisfied;
6. To promote and encourage the expansion of postal services
with a view to the economic development of Malaysia;
7. To regulate the fixing of rates to be charged in respect of
postal article;
8. To regulate the fees and commissions on postal financial
services; and
9. To regulate the issuance of postage stamps.
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Postal Licensing Regime in Malaysia
1.
The Postal Services Act (PSA) 1991 governs the
postal services industry in Malaysia. Regulations
based on the Postal Act:
I.
II.
2.
Postage Rate Rules; and
Post Office Rules
The PSA (Amendment) 2001 came into effect on I
November 2001. This Amendment Act empowers
the Commission to regulate the postal services
industry in Malaysia.
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© Malaysian Communications and Multimedia Commission
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The Digital Signature Act 1997
1.
2.
3.
4.
5.
DSA 1997 came into effect on 1st October 1998.
It requires mandatory licensing whereby a
company that Wishes to operate as a Certification
Authority (CA) must be licensed first.
The Regulator of the DSA is the MCMC – Controller
of Certification Authority.
The DSA 1997 enforces legal recognition to digital
signatures and gives the same force of law as
hand-written signatures.
The DSA 1997 also outlines the main standards
and minimum requirements of operating as a CA.
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Regulator’s responsibility…
1.
2.
3.
4.
Oversee and regulate the operations of CA s,
Repositories and Date/Time Stamping Service in
Malaysia;
Ensure that licensed CA s, recognized Repositories
and recognized Date/Time Stamping services
maintain a high level of integrity and quality in
rendering their services;
Determine and coordinate CA trust model in
Malaysia; and
Determine cross-certification policies with foreign
CA s.
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© Malaysian Communications and Multimedia Commission
EI/July 2002
Digital Signature : Licensing Framework
Controller
Controller
Certificate of
recognition
License
Certification
Authority
Repository
Digicert Sdn Bhd
• MSCtrustgate .com Sdn Bhd
• Bank Negara (Restricted)
•
Certificate of
recognition
Date/Time Stamp
Services
Digicert Sdn Bhd
• MSCtrustgate .com Sdn Bhd
• Bank Negara (Restricted)
•
• Digicert Sdn Bhd
1. Two stages for CA license and recognition of
repository/ date/ time stamp service:
A. The establishment stage; and
B. The operation stage.
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© Malaysian Communications and Multimedia Commission
EI/July 2002
Conclusion
1.
2.
3.
4.
The communications and multimedia sector in Malaysia now
operates under a converged Act and a single convergent
regulator.
The new licensing structure, which is technology and service
neutral, makes it easy for license holders to provide new
services as and when technological development enable
these services to be provided.
Licensing framework reflects the principles of promoting the
national interest, transparency, less rather than more
regulation and flexibility to foster industry’s dynamism.
MCMC is a convergent regulator overseeing the entire
communications and multimedia industry, including the
postal services and digital signatures.
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© Malaysian Communications and Multimedia Commission
EI/July 2002
Thank you
Malaysian Communications and Multimedia Commission
Level 11, Menara Dato’ Onn
Putra World Trade Centre
45 Jalan Tun Ismail
50480 Kuala Lumpur
MALAYSIA
Tel : +60 3 4047-7000
Fax : +60 3 4042-3337/+60 3 2694-1803
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© Malaysian Communications and Multimedia Commission
EI/July 2002