Integrating telecommunications, media and broadcasting in Singapore

May 2016  |  EXPERT BRIEFING  |  SECTOR ANALYSIS

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The second half of 2016 presents myriad possibilities for Singapore’s telecommunications, media and broadcasting sectors.

For over a decade now, Singapore’s telecommunications sector has been regulated independently from its media and broadcasting sectors – helmed by a different regulator and governed under a different set of legislation and regulations.

Come the second half of 2016, though, the Info-communications Development Authority of Singapore (IDA), which has been Singapore’s telecommunications regulator since the late 1990s, and the Media Development Authority of Singapore (MDA), which has been regulating Singapore’s media and broadcasting sectors since the early 2000s, will undergo a restructuring exercise. This was announced by the Ministry of Communications and Information in January 2016 and will result in two new bodies, the Info-communications Media Development Authority of Singapore (which will include the Personal Data Protection Commission) and the Government Technology Organisation.

Details of how this restructuring will be implemented, and in particular, the consequential legislative and regulatory amendments that will be made, have not yet been publicly released. This article will discuss the opportunities that this restructuring presents, and potential difficulties and issues which may arise.

Opportunities

There are a multitude of issues which are common to both the telecommunications sector and the media and broadcasting sectors. Examples include the regulation of competition among service providers (and the issue of mergers and acquisitions) and the protection of end users (and the issue of data protection). Broadly speaking, the way such issues are presently dealt with in the legislation and regulations for each of these sectors are not dissimilar; however, there are inconsistencies in the specifics.

Regulation of competition

Both telecommunication and broadcasting licensees in Singapore are subject to shareholding restrictions under their respective legislative and regulatory frameworks. There are, however, significant differences in the applicable thresholds.

For example, under the Broadcasting Act (BA), approval of the Minister of Communications and Information is required for a person to become a substantial shareholder (in essence, a holder of not less than 5 percent of the total voting shares) of a company holding a broadcasting licence, or the holding company of such a company. In contrast, under the Telecommunications Act (TA), a telecommunication licensee is only required to notify the IDA if any person holds 5 percent or more – but less than 12 percent – of its voting shares. In addition, the shareholding restrictions under the TA are generally applicable only to the telecommunication licensee itself, and do not extend to its holding company. The BA also imposes restrictions on management composition and foreign-sourced funding, which do not exist in the TA.

These differences greatly increase the regulatory burden on stakeholders where a merger or acquisition involves an entity which is subject to both regimes. It will be interesting to see how these differences will be reconciled (if at all) following the restructuring.

Protection of end users

The Telecom Competition Code 2012 (Telco Code) and the Code of Practice for Market Conduct (Media Code) impose similar requirements on service providers to ensure that they provide their customers with certain minimum standards of service, such as quality service and requirements for accurate and timely bills. However, the Telco Code goes a step further in prescribing provisions which must be included in agreements with end users. The treatment of customer information under the Telco Code and the Media Code are also slightly different. While there is a general prohibition of unauthorised use of such information, the grounds under which service providers may use such information without further reference to the customer differ.

Such disparity can have a practical effect on service providers who operate in the converging world of telecommunications, media and broadcasting. The use of a unified contract can present concerns of non-compliance or over-compliance, whereas the use of separate legal documentation for different services may not be consumer friendly or operationally efficient. From a consumer’s perspective, such discrepancies can be confusing and potentially incomprehensible.

Streamlining processes

Presently, in order to carry out certain activities in Singapore, operators need to obtain licences from both regulators. For example, a provider of satellite uplinks services will need to obtain licences from both the IDA (for the provision of such services and to establish and operate a satellite communication station in Singapore) and the MDA (to provide broadcasting services transmitted via satellite from Singapore).

The restructuring presents an opportunity to greatly reduce the regulatory burden on potential licensees by allowing them to apply to a single regulator for a single licence, and to ensure compliance with a single set of licence conditions. The significance of this cannot be overstated, particularly in light of the increasingly blurred lines between the telecommunications sector and the media and broadcasting sectors, and the influx of service offerings which cut across both sectors.

Potential difficulties and issues

It should not be forgotten that, as Dee Hock noted, “an organisation, no matter how well designed, is only as good as the people who live and work in it”. The restructuring will entail the redeployment of manpower across both regulators to form the two new entities. The individuals in each of the two regulators will have spent the better part of the past decade or so being trained and developed in different environments, and it may not be a simple snap of the fingers for such individuals to be able to work together when housed in the two new entities following the restructuring.

In addition, the change of mindset required to deal with and consider telecommunications, media and broadcasting issues collectively (while bearing in mind potentially divergent concerns and interests) may not be easily or quickly acquired.

Some time would probably be needed following the completion of the restructuring before the ideals of the restructuring will be achieved.

Impact on existing licensees

Depending on the extent of the changes which will be made to the legislation and regulations, existing licensees may need to substantively reassess and rework their current internal processes to ensure that they remain compliant with their regulatory obligations. The practical effect on existing licensees, and also future licensees, will need to be taken into account when seeking to streamline the legislation and regulations.

Care should be taken to implement changes pursuant to such streamlining process in a commercially friendly manner. Not all licensees will have dedicated compliance personnel, and even in large organisations with the luxury of such resources, ensuring compliance can be very much a matter of procedures entrenched within the organisation’s workflow.

Given the potential consequences of a licensee’s failure to comply with its regulatory obligations, licensees must be given sufficient time to manage their resources. It would be unfortunate indeed if barriers to entry (and to remaining in the industry in Singapore) are created as a result. The importance of public, or at a minimum, industry, consultations before any changes are implemented cannot be emphasised enough.

Conclusion

It remains to be seen exactly how the restructuring will take effect, and the results it will have on the telecommunications, media and broadcasting landscapes in Singapore. All eyes are definitely on this exciting development.

 

Tan Wee Meng is a partner and Lynette Lim is a senior associate at Allen & Gledhill LLP. Mr Tan can be contacted on +65 6890 7518 or by email: tan.weemeng@allenandgledhill.com. Ms Lim can be contacted on +65 6890 7518 or by email: lynette.lim@allenandgledhill.com.

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BY

Tan Wee Meng and Lynette Lim

Allen & Gledhill LLP


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