ICT Policy For Networked Society - Ericsson

hOw TO
REgULATE?
It is obvious from above that there is no one-size fits all
approach to regulate ICT but rather that a number of
different regulatory objectives and goals are important in
different situations, times and jurisdictions. Legitimizing
the interventions and their associated goals in a given
context requires a convincing justification. This aspect of
policy making is a complex and sometimes controversial
matter that will continue to consume policy makers’,
regulators’ and other stakeholders’ attention. Given
that this challenge has been adequately addressed, the
next obvious question is “how to regulate?” However
this challenge is to some degree more straightforward
and can be more objectively analyzed on the merits of
identifiable facts.
Much of the discussion on policy and regulation has
historically been concerned with the formulation phase
of policy and regulation, the why and what. However,
increasingly attention has been paid to implementation
of policy and regulation. [xxix] That is, making the choice
and design of regulatory instruments and the degree
of appropriate targeting of these instruments to the
regulatory objectives and ultimately about achieving
desired outcomes. The focus on implementation
and enforcement has also put more pressure on the
formulation phase to more clearly define the primary
objectives of a policy intervention.
It is important that the implementation phase includes
an economic analysis of all relevant implementation
options. This should not be limited to assessment of
administrative costs. Instead it should assess all of the
associated implementation costs that will be borne by
public administrations as well as the market; businesses
and/or consumers and/or society. Finally, the concept of
regulatory failure requires attention by policy makers and
regulators. The risk of a regulatory failure should be taken
every bit as seriously as a risk of a market failure. [xxx]
Most stakeholders accept that the method of
implementing regulation need not be confined to the
conventional top-down command and control type of
implementation strategy. Every single implementation
strategy and every single regulatory tool has its own
strengths and weaknesses and none of them is sufficiently
flexible and resilient to successfully address all relevant
issues in all possible contexts. Four types of regulation
implementation strategies have been identified offering
distinct routes to implement regulation. [xxvii]
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These routes are not mutually exclusive and provide
a regulatory choice. [xxxi] These are:
• Law/Hierarchy
• Social Norms/Community
• Market/Competition
• Architecture (or code)/Design
A famous example to illustrate these modes states:
…the government may want citizens to wear
seatbelts more often. It could pass a law to
require the wearing of seatbelts (law regulating the
behavior directly). Or it could fund public education
campaigns to create a stigma against those who do
not wear seatbelts (law regulating social norms as
a means to regulate behavior). Or it could subsidize
insurance companies to offer reduced rates to
seatbelt wearers (law regulating the market as a
way of regulating the behavior). Law could mandate
automatic seatbelts or ignition blocking systems
(changing the architecture or code of the automobile
as a means of regulating behavior). [xxxii]
Finally, the regulatory process needs to be considered as
a whole – formulation, implementation and enforcement.
The implementation strategies however face the
additional challenge associated with the separation of
regulatory process from regulatory content. Both process
and content will continue to be important. [xxxiii] In other
words, a perfect process cannot compensate for poor
quality of regulatory content. The challenges associated
with agency dilemma [xxxiv], institutional (dis)incentives
and the level of competence of a regulator still apply.
The OECD has been working over the last two decades
on providing advice on how to improve the quality of
a regulatory process and provides us with seven main
regulatory improvement tools: [xxxv]
• Regulatory impact assessment
• Consultation and transparency
• Reduction of administrative burdens and red tape
(i.e. regulatory simplification)
• Enforcement guidelines
• Alternatives to traditional top down implementation
strategies (self-regulation, market-based
instruments, standards, etc )
• Sunset provisions
• Regulatory policies and reviews