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© Malaysian Communications and Multimedia Commission, 2002
MALAYSIAN COMMUNICATIONS
AND MULTIMEDIA COMMISSION
- A Malaysian Experience in USP
17 March 2003
2© Malaysian Communications and Multimedia Commission, 2002
AGENDA
1. The Malaysian initiative on convergence
2. The Commission and Licensing Framework
3. Universal Service Provision
© Malaysian Communications and Multimedia Commission, 2002
Malaysian Initiative
onConvergence
4© Malaysian Communications and Multimedia Commission, 2002
Institutional changes to facilitate convergence
1 Apr 991 Apr 99
Redefinition ofthe Ministry’sfunctions and
formation of CMC
Ministry of Energy,Telecommunications & Post
1 Nov 981 Nov 98
Ministry of Energy,Communications & Multimedia
Malaysian Communications and Multimedia Commission formed
Replacementof sectoral
regulators by aconvergence
regulator
JTM
MOI (Licensing Division)
MalaysianCommunicationsand Multimedia
Commission
Replacementof sectoral Acts
by a convergenceAct
Telecommunications Act 1950
Broadcasting Act 1988
MalaysianCommunicationsand Multimedia
Act 1998
© Malaysian Communications and Multimedia Commission, 2002
The Commissionand
Licensing Framework
6© Malaysian Communications and Multimedia Commission, 2002
The Commission has a dual role in the C&M sector
Regulatory(Conformance)
Managing for conformance
Developmental(Performance)
Planning for Performance
In fulfilling its role, the Commission is guided by the 10 National Policy objectives for communications and multimedia
7© Malaysian Communications and Multimedia Commission, 2002
10 National Policy Objectives for the Communications & Multimedia sector
1. Creating a global hub: To establish Malaysia as a major global centre and hub for communications and multimedia information and content services;
2. Building a civil society: To promote a civil society where information-based services will provide the basis of continuing enhancements to quality of work and life;
3. Nurturing local content and culture: To grow and nurture local information resources and cultural representation that facilitate the national identity and global diversity;
4. Ensuring long-term benefits for end-users: To regulate for the long-term benefit of the end user;
5. Nurturing user confidence: To promote a high level of consumer confidence in service delivery from the industry;
6. Promoting access and equity: To ensure an equitable provision of affordable services over ubiquitous national infrastructure;
7. Creating a robust applications environment: To create a robust applications environment for end users;
8. Facilitating efficient allocation of resources: To facilitate the efficient allocation of resources such as skilled labour, capital, knowledge and national assets;
9. Developing industry capabilities: To promote the development of capabilities and skills within Malaysia’s convergence industries, and
10. Promoting secure and safe networking: To ensure information security and network reliability and integrity.
Source: Section 3(2) of the Communications and Multimedia Act 1998 (Act 588)
8© Malaysian Communications and Multimedia Commission, 2002
Licensing for convergenceTele
com
muni c
ati
on
l icence
Bro
ad
cast
ing
licence
ISP lic
ence
VA
N lic
ence
Network FacilitiesNetwork Facilities
Network ServicesNetwork Services
Applications ServicesApplications Services
Content ServicesContent Services
The old licenses that were issued were based on specific
technologies, and specific services
Licenses issued under CMA 98 are technology-
neutral and service-neutral
The new licensing framework promotes vertical separation between facilities,
network, applications, and content
Under the old licensing framework all activities
related to the provision of a particular service are
vertically integrated for the provision of that service
9© Malaysian Communications and Multimedia Commission, 2002
Industry Participants under CMA
Network Facilities Provider (NFP)
Owners of facilities such as satellite earth stations, broadband fibre optic cables, telecommunications lines and exchanges, radio communications transmission equipment, mobile communications base stations, and broadcasting transmission towers and equipment
Network Service Providers (NSP)
Provides the basic connectivity and bandwidth to support a variety of applications
Applications Service Providers (ASP)
Provides particular functions such as voice services, data services, content-based services, electronic commerce and other transmission services
Content Application Service Providers (CASP)
A special subset of applications service providers including traditional broadcast services and newer services such as online publishing and information services
© Malaysian Communications and Multimedia Commission, 2002
Universal Service Provision (USP)
11© Malaysian Communications and Multimedia Commission, 2002
Household penetration rates of various services
Television sets 95%
Mobile phones 54%
22%
Fixed lines 75%
59%
PC 24%
9%Urban households
Rural households
Total households
12© Malaysian Communications and Multimedia Commission, 2002
The two prong strategy for bridging the digital divide
Multimedia servicesBroadband accessCompetitive rates
Basic servicesBasic access
Affordable rates
Provide
Catch-up to reduce the digital divide within the country
% P
STN
penetr
ati
on
GDP per capita
Ramp up to capture the digital opportunities
13© Malaysian Communications and Multimedia Commission, 2002
The Overall objectives for Universal Service Provision
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
14© Malaysian Communications and Multimedia Commission, 2002
Definition of “underserved”
• “Underserved area” means an area where the penetration rate for PSTN is 20% below the national penetration rate
• “Underserved group within the community” means a group of people linked by similar characteristics from a socio-cultural or economic perspective, within a served area, who do not have collective or individual access
15© Malaysian Communications and Multimedia Commission, 2002
System of USP set in the CMA
Public Inquiry
Ministerial Direction
Commission Determination
Communications and Multimedia (Universal Service Provision) Regulations 2002
Latest Regulation
16© Malaysian Communications and Multimedia Commission, 2002
System of USP in the CMA
• Section 202(1) - The Minister may direct the Commission to determine a system 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 for network services and/or application services in underserved groups within the
community • Section 203(1) – A determination by the Commission
under subsection 202(1) shall include definitions of “underserved areas” and “underserved groups within the community
• Section 204(1) - For the purposes of this Act, a fund to be known as the “Universal Service Provision Fund” (“USP Fund”) is established and it shall be controlled and operated by the Commission
• Section 204(2) – The Minister may make regulations regarding contributions by licensees, under this Act, to the USP Fund and any other matters related to or incidental to the establishment and operation of the USP Fund
17© Malaysian Communications and Multimedia Commission, 2002
• USP Objectives• Notification of universal service targets• Universal Service Plan and Designation of Universal Service Provider• Implementation of the Universal Service Plan• Costing of USP• USP Fund
Communications and Multimedia (Universal
Service Provision) Regulations 2002
18© Malaysian Communications and Multimedia Commission, 2002
Graphical representation of the Four USP objectives
Objective 1:Collective access
to basic telephony and public payphone
services
Objective 3:Collective access
to Internet access services
Objective 2:Individual access to
basic telephonyservices
Objective 4:Individual access to
Internet access services
Collective access
Individual access
Basic telephony The Internet
SERVICES
TYPE
OF
AC
CE
SS
19© Malaysian Communications and Multimedia Commission, 2002
C&M (USP) Regulations - Graphical Points
Notification of universal service targets
USP Fund
Progress Report
Designation of the universal service provider
Draft universal service plan
Costing USP
Claims
Compliance with QOS standards
Licensees
Implementation of universal service plan
Underserved Connected
20© Malaysian Communications and Multimedia Commission, 2002
• Universal Service Plan and Designation of Universal Service Provider
Request licensee to submit draft of universal service plan in respect of universal service target identified Licensee draft universal service plan contain
• Location details within the universal service target• Network facilities to be installed• Technology deployed• Timetable for provision of application services• Capital cost for installation• Estimates of operating costs
Approval of Plan & designation of Universal Service Provider
Selected Highlights
• Implementation of the Universal Service Plan
Progress report – first report not later than 3 months from notification of approval of Plan and thereafter once every 2 months
21© Malaysian Communications and Multimedia Commission, 2002
• Costing of universal service provision Commission shall pay the designated universal service provider from the USP Fund the cost incurred in implementing the approved universal service plan in a universal service targetThe net cost in implementing the approved universal service plan is computed as:
Net USP cost = avoidable cost - revenue forgone
Selected Highlights
• USP FundContribution - By licensee of 6% of its weighted net revenue. Only by those whose net revenue > RM500,000.Commission shall maintain proper accounts of the USP Fund - Annual report and statement of accounts
22© Malaysian Communications and Multimedia Commission, 2002
• Register of USP(a) non-confidential summaries of the
approved universal service plans(b) designated universal service providers(c) universal service target(d) a list of licensees contributing to the USP
Fund
• General Penalty Any person who commits an offence under
these Regulations shall on conviction be liable to a fine not exceeding RM300,000 or to imprisonment for a term not exceeding 3 years or to both
Selected Highlights
23© Malaysian Communications and Multimedia Commission, 2002
• Digital Divide recognition measurement
• Implementation monitoring review
• Service Providers Cooperation
Key Issuesand
Resolution for Way Forward
24© Malaysian Communications and Multimedia Commission, 2002
THANK YOUMain Office:
Malaysian Communications and Multimedia Commission
Level 11, Menara Dato’ Onn,
Putra World Trade Centre,
45 Jalan Tun Ismail,
50480 Kuala Lumpur,
MALAYSIA
Tel: +603 4047 7000
Fax: +603 2693 4881
Website: www.cmc.gov.my