THE INDEPENDENCE OF A REGULATORY AGENCY IN TELECOMMUNICATION LIBERATION: THE ROLE OF THE NATIONAL COMMUNICATION AUTHORITY (NCA)

Introduction

Telecommunication is a commercial service but one which is somewhat different from other services in the sense that service supply has social concerns and as such issues of consumer rights, universal service/access, interoperability, standardisation of infrastructure, anti-competitive trading practices, dispute resolution, transparency, information sharing, fair competition, charges and quality of services of telecommunication providers calls for a sector-specific regulatory body or agency to enforce any general related or specific legal provisions.

In the past, telecommunication operations have been owned by governments with government officials responsible for policy formulation, regulation by way of policy implementation and the actual operations of the telephone services. With the liberalisation of telecommunication there has been the need to re-organise the structure by separating policy, regulatory and operational functions of telecommunication and the National Communication Authority’s (NCA’s) role is therefore most crucial in this regard. I have no doubt of the capability of the NCA in regulating the industry in terms of its legal powers conferred upon it by the NCA Act 2008 (Act 769), my concern is with  its effectiveness in bringing objectivity and transparency (real or perceived) for increased investments when it comes to its independence.

In my opinion, the officers of the agency should not have any personal interests (business or political) in the development of the industry. This is to create to a large extent impartiality (real or perceived) in the decisions and procedures of the agency, which is critical for confidence building.

Funding for the agency in my opinion, should not be from the Government but from the operators in the telecommunication industry and this must be enshrined in the legal framework regulating the industry to insulate the agency from political interference which would affect its ability to enforce key decisions. If the regulator’s budget is funded by the government, it is possible for the government to control the regulator.

In China for example, the Ministry of Information Industry (MII) is responsible, among other duties, for elaborating regulations, allocating resources, granting licenses, supervising competition and service quality as well as developing tariff rates. Unfortunately there is a close relation between the MII and the state-owned Chinese telecom companies where most senior executives have links to the MII, the Government or the Party. This in my opinion does not create an enabling atmosphere for independence.

Regulators should have the power to take decisions that may not necessarily be popular with the government to the extent of imposing criminal liability on directors of service operators who commit offences and still be in office. The term of office and conditions of service of its executive officers should as much as possible be enshrined in a sector specific legislation and not government manipulated. As a check on abuse of power their decisions should be subject to judicial review by both consumers and operators if any party wishes to appeal against a decision taken by the regulatory agency.

Even with the judicial review, there is the school of thought that it is best to limit it to “process” and not “content”  since the courts are not required to have that level of technical expertise on content required of the officers of the agency.

My intention with this article is to provoke in my opinion, why the present legal framework does not give the NCA the needed independence it requires and put on the table another model. I intend to particularly look at the governance and funding arrangements of the NCA to determine the extent of its independence.

  

NCA 2008 (Act 769) and Powers of the Regulator

Act 769 established the regulatory body, known as the National Communication Authority (NCA) that will licence and regulate communication activities and services. It details the role, responsibilities, functions, powers, funding and related governance issues of the body. By virtue of Act 769, the NCA has the powers to amongst others levy fees, protect consumer interest, attract private investments, grant licenses, oversee technical standards, monitor service quality, promote Interconnectivity and administer the Numbering Plan. These powers and functions on paper are in no doubt more than adequate to make the NCA effective in its role as a regulator.

In Tunisia the regulatory agency cannot impose financial sanctions; in Algeria the Regulatory Authority for Post and Telecommunication has no power to sanction; in Morocco the National Agency For Telecommunication Agency has very limited power to sanction.

Comparing the powers of the NCA with other North African countries it can be said that the regulator in Ghana is in a much better position to “bite” because it has the legal “teeth” to do so but with the present seemingly quasi-government structure can it do so without interference?

  NCA 2008 (Act 769) and Independence of the Regulator

Let us however look at whether the NCA is capable of being independent from the same provisions of the Act:

·         Appointment of Governing body of the Authority

Under the Act (Section 6), the governing board of 9 members is spread amongst various stakeholder groups and expertise which is good. The President however has been given the power to appoint these members. Is it likely a change of government will bring about a new set of members? If yes, how does it affect policy direction? Is it likely to bring about planning in a 4 year horizon in line with the constitutional term of office of the President?

May be there is nothing wrong with such arrangement but as I stated earlier this sector is a different kind of sector (like the financial services sector) being a strategic enabler for all other sectors and needs the stability and independence to cross political regimes. For independence, in my opinion, selected stakeholder groups such as the Telecommunication Operators, Consumer Protection Group, Ghana Bar Association, Government and any other identifiable closely linked stakeholder should have permanent membership on the Board whose representatives must be appointed by the stakeholder groups. The selection of other members for their expertise or professional backgrounds should then be recommended by these permanent members for approval by a Sector Committee of Parliament. Of course, there can be some manipulations if the permanent stakeholder groups decide to play “ball” with government but at least the process will be seen and perceived as more objective than appointment by the President.

·         Term of Office of Governing body of the Authority

Under the Act, except for the Director-General who has a five year term, all other members are to hold office for a period not exceeding four years and eligible for re-appointment. This I see as being framed around the term of governments with the Director-General given the chance to hang on for another year may be for handing over duties. Is it that all the political parties are comfortable with the present provisions because at one point it will benefit them to bring their own people? Is this the best arrangement for the country?

I would recommend an eight year term subject to renewal and approval by a Sector Committee of Parliament for the members of the Board to be only removed as a result of incapacity or misbehaviour or Board rules or if they decide to resign, with other executives and staff taking up appointments as with any form of employment contract.  The eight year term will make it clear that the regulatory body is not tied to political regimes. If not, I wonder if the requisite experts of non-political professionals who would want to bring their expertise to bear in running the NCA would want to do so, more so, in our present environment where once you take up an appointed during the tenure of a particular government for your expertise you are branded a member of that party and may have no job when a new party takes over government.    

Of course as stated earlier,  there should be a place for one member appointed by the ruling government at each point in time who can lobby for the government on the Board and can be removed/replaced by the President as deem fit. 

·            Allowances of Governing body of the Authority

Under the Act, the Board must comply (my emphasis in bold) with written directives of the Sector Minister who in consultation with the Finance Minister is responsible for the allowances to be paid.

With the present arrangements I wonder how independent the NCA can be since it seems to be the situation of “whoever pays the piper calls the tune”. In my opinion, the NCA should be able to determine its own reward and remuneration systems for its staff as well as the termination of appointments whilst getting approval from a select committee of Parliament responsible for the sector through the sector Minister. This is to make sure it is Parliament and not a single political party that is “running the show” in this all important sector for a non-partisan national agenda.

·            Funding and Expenses of the Authority

Aside income from fees, charges, investible funds, grants, donations, parliament and gifts, funding is also from government as approved by the Finance Minister. Under the Act, excess funds after expenses are to be transferred to the Consolidated Fund unless otherwise determined by the Finance Minister.

Under the present arrangement, it seems the government has a lot of control on the funding of the NCA and this does not give independence to the NCA. In my opinion, the telecommunication providers by a special levy enshrined in law should fund the administrative expenses of the NCA to provide the independent watch dog and developmental role. This is aside the fees, fines and other developmental levies they may have to pay as service providers which should be used to further develop the sector to create a digital balance between the rural and urban consumers to avoid what Jessie Jackson called  a “digital apartheid”. The NCA after all is a regulatory body specific for the Telecommunication sector and I see no reason for government to determine and fund the administrative expenses. The sector should be able to self finance itself with government revenue coming from corporate tax from the providers and a percentage of the licensing fees and renewals. The NCA should then be accountable for the usage of funds in line with a national telecommunication strategy to a sector Parliamentary Committee through the sector Minister at any point in time.   

Conclusion

I have to admit that if the politicians see the NCA as one of the agencies of government then the present structure as enshrined in law is the way to go but I am advocating for a model of total independence which needs a re-think of the governance structure. Independence to implement national telecommunication policy devoid of unnecessary interference from politicians in my opinion is a non-negotiable attribute for the NCA to inspire market confidence

Telecommunication infrastructure has huge capital outlays and investors should not be subjected to the 4 year of winner takes all syndrome that seems to be creeping into our national politics. For independence of the NCA, what we need in my opinion, is a national telecommunication strategic document put together by all stakeholders and approved by Parliament as the way we as a nation need to go with milestones and timelines. The NCA is to be made the implementation body with the ministry of communication giving the needed technical and administrative support. Funding for administrative expenses should be by the service providers with governments, through the sector Minister, only facilitating funding for projects within their term of office or influencing what they think are priority areas they wish to see pursued in that document during their 4 year term. The sector Minister must then play a monitoring and evaluation role for the aspects of the national plan during the term of office of that political party. The government’s performance in this sector would therefore be determined by how it supported and facilitated the implementation process. The key performance indicators will be so clear and identifiable.

The officers of the NCA should be independent enough, as professional administrators and technical experts, to outlive change in governments. Government should by all means be able to lobby the NCA in any particular direction it may want the industry to go but final decision must rest with the professional administrators and technical experts of the NCA who must be convinced and solely responsible for facilitating the implementation of that direction. Public concerns would therefore need not be directed to government but to the NCA because they should have done an independent analysis of any government proposal and hence taken an independent decision to believe in any policy implementation direction. That way governments may come and go but the NCA in my opinion will be insulated and resilient to unnecessary political interference with the prime aim of creating the needed enabling environment of attracting investments, building capacity whilst protecting the consumer.