After almost three years of having entirely
opened up the Austrian telecommunications markets dramatic changes have taken
place. A huge number of interesting telecommunications services have been
introduced, mobile communications and the internet market are booming. New
services like WAP or the issue of broadband access to the internet have raised
widespread public attention. UMTS/IMT 2000 frequencies have been allocated, new
access technologies in the fixed network such as WLL , powerline and the more
efficient use of the subscriber line will turn the access market into a more
competitive field providing a variety of choice for the customer.
Almost nobody doubts anymore that the ambitious
program of the European Union to liberalise the telecommunications markets has
turned into a great success. With respect to this Telekom Control (Ltd), the
Austrian Telecommunications Regulatory Authority is pleased to present some
insights and experience from a managerial viewpoint on how an independent
regulator for telecommunications operates.
To understand the Austrian case it is necessary
to give a short introduction beforehand of the players in the field of
telecommunications regulation, what their responsibilities are and how they
co-operate.
The major players in the field of
telecommunications regulation in Austria
Telekom-Control-Kommission (TKK),
Telecom-Control-Commission:
The responsibilities of the TKK are listed in
§ 111 TKG (Austrian Telecommunications Act). Among other things its
most important tasks are:
§
Granting
and revocation of licenses
§
Defining
operators having significant market power
§
Approval
of business conditions and tariffs
§
Deciding
on the conditions of network interconnection in the event of disputes (i.e.
interconnection tariffs)
Telekom-Control GmbH (TKC), Telecom Control
(Ltd.)
TKC is a private limited not for profit
company, wholly owned by the Republic of Austria with its shares being
administered by the Federal Ministry for Transport, Innovation and Technology.
The nominal capital of TKC is ATS 50 m (= EUR 3,63). The General Manager of TKC
is Professor Heinrich Otruba, who leads a company of 60 employees with a
turnover of approx. ATS 100 m (= EUR 7,27 mio). According to § 109 TKG
TKC holds a so-called general competence in all matters concerning
telecommunications regulation in Austria within the scope of the
Telecommunications Act except those issues covered by the TKK and the OFB.
Among other things its most important tasks are:
§
Supervision
(monitoring) of the Austrian telecommunications market
§
Providing
expertise for the decisions of the Telekom-Control-Commission
§
Management
of the Telekom-Control-Commission´s business
§
Proceedings
in cases of violations of the Open Network Provision
§
Administration
and allocation of telephone number blocks according to the Austrian numbering
scheme
§
Decisions
in cases of arbitration (consumer bills)
Bundesministerium für Transport, Innovation und
Technologie (bmvit) Federal Ministry for Transport, Innovation and Technology
Generally speaking the Ministry is in charge of
formulating and implementing the telecommunications policy in Austria. All
responsibilities derived from that are borne by the so-called Oberste
Fernmeldebehörde (OFB), Highest Telecommunications Authority, a section within
the Ministry for Transport, Innovation and Technology. Among other things its
most important tasks are:
§
Supervision
of all “public sector players“ except the Telekom-Control-Commission
§
Drafting
suggestions concerning amendments to the Telecommunications Act
§
Drafting
and issuing of ordinances according to the Telecommunications Act
§
Frequency
Management
How TKK and TKC collaborate
The TKK is the decision making body in all
aspects touching property rights of legal entities. Its managerial body is
Telecom Control (TKC). TKC prepares the proceedings, drafts the documents and
manages the daily business of the Commission. TKC is the “think tank“ empowered
and controlled by the TKK in its proceedings. In addition TKC is also the
managerial body for the supervision of electronic signatures with the TKK being
again the decision making body.
The flowchart below may help to understand how
collaboration between the different players - with a focus on the key issues
handled by the TKK - works.
Figure 1: The collaboration between TKK and TKC
I
The
Dimensions of Independence
According to the intentions of the
telecommunications regulatory framework of the European Union the national
regulatory authorities are to be established as independent bodies carrying out
the respective European stipulations as transposed into national law. They are
not only administrative bodies having a close look on whether or not the
operators and especially the former incumbent act within the rules as laid down
in their respective Telecommunication Acts; moreover they are supposed to play
an active role in promoting and fostering competition on the relevant markets
irrespective of interests articulated more or less accurately by operators and
owners of operators. Telecom Control (Ltd) identifies three dimensions that
define the level of independence a regulatory authority benefits from and
respectively is able to achieve:
a) Independence from interests articulated by the owner(s) of the former
incumbent operator,
b) Independence in terms of human resources and
c) Independence in financial terms.
Figure 2: The Independence Triangle
Independence from the federal government in its
role as administrator of the shares of the former incumbent
It is crucial for the success of an independent
regulator to have no subordination in terms of regulatory work to any member of
the federal government, especially to that ministry in charge of administrating
the rights derived from holding a significant stake in the former incumbent if
that is still the case. In Austria this is clear cut and has been laid down in
the Telecommunications Act. The sole way to exercise preasure on the regulatory
body by the government, i.e. the federal minister in charge of telecommunications
policy is to give directives in writing that have to be published. This right
is restricted to administrative issues only and cannot be extended to any
regulatory matter.
Independence in terms of human resources
If the regulatory authority fails to build up
an unbiased expertise it may fail to make a clear point in case of criticism.
If substantial know-how is derived from experts with an enduring working
relationship in their past with the former incumbent the rumours of unbalanced
perspectives may be hard to overcome. TelecomControl (Ltd) therefore was keen
to gather human resources from other areas than the former incumbent operator.
Preferred fields of recruitment have been universities, research institutions
(e.g. Academy of Sciences), telecommunications equipment vendors, civil
service, etc. All employees hold exclusively contracts of employment with
Telecom Control (Ltd). TKC searched for young, excellent, it-prone experts with
a high affinity towards “growing“ and good social skills (project teams, task
forces, process driven thinking).
Independence in financial terms
According to § 17 (2)
Telecommunications Act, TKC is mainly funded through a financial contributions
system based on the turnovers generated by operators offering license-based services
in Austria. The basis of the funding system is TKC´s annual budget that has to
be approved by Telecom Control (Ltd)´s supervisory board. Operators offering
license-based services have to notify their planned turnover for the respective
year. Their funding shares are computed based on these pieces of information
and the individual funding requirements are then issued as decisions and
delivered to the license holding companies. The licensees are requested to pay
their funding contributions quarterly. At the end of the year the actual
expenses of TKC and the actual turnovers generated from „licensed services“ of
all operating licensees are matched and the actual funding requirements are
closed mostly leading to refunds transferred to the operators. This funding
system was accepted well by the operators and has been employed successfully
from the first budget in 1998 until now. In addition to these funding sources
(accounting for more than 90% of TKC´s budget) another source of revenue is
upfront license fees for granting fixed line voice telephony and leased line
services covering the expenses derived from the proceedings of license
granting.
II
The
Company Organisation Structure of TKC
Telecommunications
regulation is a transdisciplinarian task. Technical, cost accounting, economics
and legal know-how have to be brought together in order to find good solutions
to problems arising when network industries are forced into competition.
Telekom Control (Ltd) was established with the idea of creating a regulatory authority
that relies on modern principles of management and leadership. It was intended
to build up a lean organisation with as few levels of hierarchy as possible. At
present there are just two levels with the General Manager and his division
heads. The division heads are top telecom experts in their respective
disciplines expected to lead their analysts as their division´s knowledge
managers. The heads are in charge of procuring the skills, knowledge and
experience necessary to deliver excellent regulatory expertise. The Management
Division has to preserve the working environment for the specialists of the
regulatory divisions. The staff units´ main task is to support the General
Manager in his daily work and leadership responsibilities comprising international
relations, public relations and accountability management. At present the
organisation chart of TKC looks as follows:
Figure 3:
Organisation Chart
III
The
Structuring of Operations at Telecom Control (Ltd)
As
mentioned above Telekom Control (Ltd) was established with the idea of creating
a regulatory authority that relies on „modern“ principles of management and
leadership. That does not only apply to the way the organisation was designed
but also to how the organisation works. Quite deliberately there was no
intention of establishing highly specialised departments capable of delivering
focused – or to be less polite, narrow minded – expertise but perform
inefficiently when it gets down to answering general questions such as
forecasted impacts of regulatory measures. In case of highly specialised
departments one gets precise answers to precise questions. The overall picture
often remains unclear and foggy. Hence it appeared to be necessary to create
knowledge pools (the divisions) that serve as platforms for flexible and
transdivisionally formed project teams or task forces that deal simultaneously
with regulatory problems. E.g., for allocating a fourth national DCS-1800
license in mid 1999, TKC established a project team consisting of analysts from
all four regulatory divisions that produced all the documents necessary for the
proceedings led by the Telecom-Control-Commission. The same approach is applied
in the case of task forces on regulatory issues requiring fewer resources than
projects. The project organisation at TKC may be illustrated schematically as
follows:
Figure 4: Project organisation
at Telecom Control (Ltd)
Besides
task forces and projects a substantial work load of repeatedly occurring
regulatory or administrative matters are dealt with through processes. These
processes are characterised as being eligible for (a certain degree) of
standardisation and cross-functional lines of communication irrespective of
divisional borders or gaps. The process of granting a license may serve as an
example, schematically presented in figure 5:
Figure 5: Process orientation
at Telecom Control (Ltd)
The key
factors for TKC´s success so far could be summarised as follows:
§
Workable
legal basis (Telecommunications Act and ordinances)
§
Appointment
of a truly independent Telekom-Control-Commission
§
Appointment
of a General Manager with an excellent reputation and standing on both sides,
politics and industry
§
Good
quality of regulatory decisions (formally and in respect of content)
§
Highly
motivated group of excellent employees keen on advancing
§
Adequate
principles of management and leadership (process- and team orientation)
§
Office
concept including architecture and IT infrastructure fitting and fostering
TKC´s corporate culture
