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MALAYSIAN COMMUNICATIONS AND MULTIMEDIA COMMISSION - A Malaysian Experience in USP

MALAYSIAN COMMUNICATIONS AND MULTIMEDIA COMMISSION - A Malaysian Experience in USP. 17 March 2003. AGENDA. The Malaysian initiative on convergence The Commission and Licensing Framework Universal Service Provision. Malaysian Initiative on Convergence. 1 Nov 98. 1 Apr 99.

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MALAYSIAN COMMUNICATIONS AND MULTIMEDIA COMMISSION - A Malaysian Experience in USP

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  1. MALAYSIAN COMMUNICATIONS AND MULTIMEDIA COMMISSION- A Malaysian Experience in USP 17 March 2003

  2. AGENDA • The Malaysian initiative on convergence • The Commission and Licensing Framework • Universal Service Provision

  3. Malaysian Initiative on Convergence

  4. 1 Nov 98 1 Apr 99 Redefinition of the Ministry’s functions and formation of CMC Ministry of Energy, Telecommunications & Post Ministry of Energy, Communications & Multimedia Malaysian Communications and Multimedia Commission formed Replacement of sectoral Acts by a convergence Act Telecommunications Act 1950 Malaysian Communications and Multimedia Act 1998 Broadcasting Act 1988 Replacement of sectoral regulators by a convergence regulator JTM Malaysian Communications and Multimedia Commission MOI (Licensing Division) Institutional changes to facilitate convergence

  5. The Commission and Licensing Framework

  6. The Commission has a dual role in the C&M sector Regulatory (Conformance) Developmental (Performance) Managing for conformance Planning for Performance In fulfilling its role, the Commission is guided by the 10 National Policy objectives for communications and multimedia

  7. 10 National Policy Objectives for the Communications & Multimedia sector • Promoting access and equity: To ensure an equitable provision of affordable services over ubiquitous national infrastructure; • Creating a robust applications environment: To create a robust applications environment for end users; • Facilitating efficient allocation of resources: To facilitate the efficient allocation of resources such as skilled labour, capital, knowledge and national assets; • Developing industry capabilities: To promote the development of capabilities and skills within Malaysia’s convergence industries, and • Promoting secure and safe networking: To ensure information security and network reliability and integrity. • Creating a global hub: To establish Malaysia as a major global centre and hub for communications and multimedia information and content services; • 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; • Nurturing local content and culture: To grow and nurture local information resources and cultural representation that facilitate the national identity and global diversity; • Ensuring long-term benefits for end-users: To regulate for the long-term benefit of the end user; • Nurturing user confidence: To promote a high level of consumer confidence in service delivery from the industry; Source: Section 3(2) of the Communications and Multimedia Act 1998 (Act 588)

  8. Licensing for convergence 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 Content Services Applications Services Broadcasting licence Telecommunication licence ISP licence VAN licence Network Services Network Facilities 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. Industry Participants under CMA

  10. Universal Service Provision (USP)

  11. Household penetration rates of various services Television sets 95% Fixed lines 75% 59% Mobile phones 54% 22% Total households PC 24% Urban households 9% Rural households

  12. The two prong strategy for bridging the digital divide Ramp up to capture the digital opportunities Multimedia services Broadband access Competitive rates % PSTN penetration Provide Catch-up to reduce the digital divide within the country Basic services Basic access Affordable rates GDP per capita

  13. 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. 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. Communications and Multimedia (Universal Service Provision) Regulations 2002 Latest Regulation Public Inquiry Commission Determination Ministerial Direction System of USP set in the CMA

  16. 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. Communications and Multimedia (Universal Service Provision) Regulations 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

  18. Graphical representation of the Four USP objectives SERVICES Basic telephony The Internet Objective 1: Collective access to basic telephony and public payphone services Objective 3: Collective access to Internet access services Collective access TYPE OF ACCESS Objective 2: Individual access to basic telephony services Objective 4: Individual access to Internet access services Individual access

  19. C&M (USP) Regulations - Graphical Points Underserved Connected Implementation of universal service plan Progress Report Compliance with QOS standards Licensees Designation of the universal service provider Costing USP Claims USP Fund Draft universal service plan Notification of universal service targets

  20. Selected Highlights • 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 • 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. Selected Highlights • 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 target • The net cost in implementing the approved universal service plan is computed as: Net USP cost = avoidable cost - revenue forgone • USP Fund • Contribution - 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. Selected Highlights • Register of USP • non-confidential summaries of the approved universal service plans • designated universal service providers • universal service target • 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

  23. Key Issues and Resolution for Way Forward • Digital Divide • recognition • measurement • Implementation • monitoring • review • Service Providers Cooperation

  24. THANK YOU Main 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

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