Q&A with Takorn Tantasith
Q1: This Commission's term ends in 2017. What do you hope will be seen as the three key changes that you have made for the sectors you regulate?
Q2: What sorts of challenges do you think a new Commission will face?
After the term ends in 2017, we expect to see a number of regulatory challenges. Some of them have been ongoing, while some may occur in the future. The main three challenges originate from spectrum management, regulatory convergence, and consumer protection.
First, it is the spectrum management that needs our careful attention. At the moment, we have released in total 420 MHz of spectrum for telecommunication services. Within the next 10 years, our target is to have at least 865 MHz in the market to cope with rising demand for spectrumhungry services such as mobile broadband and Internet of things (IoT) applications.
The challenge is that most of the spectrum belongs to the government or state-owned enterprises that claim the rights of possession. In the case of public-private concession, according to the current NBTC law, when the concession contract ends, the amount of spectrum specified in the contract will be re-assigned by means of auction. In the past, we followed the interpretation of the law by conducting auctions for the expired amount of spectrum after its expiry. In order to provide smooth delivery of spectrum, we need to assign the freed-up spectrum before the expiry date. Indeed, we have to ensure that the advance re-assignment of the expired spectrum occurs on a timely basis, namely not too early, not too late, and with the appropriate measure to maintain competition. On the other hand, some of the state enterprises have been granted the rights to use a certain amount of spectrum band. There is an issue over the claim of continuous spectrum use that we need to overcome. Consequently, most attempts to re-assign spectrum lead to the need for court resolution. We anticipate that the new NBTC law which will tentatively be effective in September 2016, will endorse us to provide monetary compensation for the entities holding the required amount of spectrum. After that our interesting task is to come up with the appropriate compensation amount that is not too high to create excess returns to one entity and not too low to destroy incentives of returning the spectrum.
Second, there is a challenge of regulatory convergence for the broadcasting and telecommunications services. Like many countries, we are experiencing cross-platform services, namely broadcast contents can be delivered through the Internet. Nowadays, we regulate the broadcasting and telecommunications industries separately. Broadcasters are required to apply for broadcasting licences as well as telecommunications operators are obliged to possess telecommunications licences to operate.
It is a regulatory challenge in the coming age of digital economy that over-the-top (OTT) services, especially Social Networking Services (SNSs), which are gaining popularity in Thailand, can deliver video-on-demand and free TV contents along with VoIP telephony services. In fact, we are number two in the world for the number of Line accounts with the figure of 33 million accounts together with around 30 million Facebook and 26 million Youtube accounts. Generally speaking, around half of the Thai population are consuming online contents at the moment. Thai people watch on-demand movies and series, live streaming of free TV channels as well as send or receive messages and calls through SNSs and VoIP-enabled applications. We should accommodate the convergence transition and adjust our regulatory requirements accordingly. For instance, there should be a convergent licence that does not separate broadcasting from telecommunications business. Whether or not we can reduce redundant service and resources consumption is another issue to be considered. If we have a certain degree of regulatory convergence, the deployment of Internet or free TV services may be accelerated by using any type of transport backbone. Indeed, the free TV services may be delivered via Internet to customers of a fibre company, so there is no need to establish the traditional broadcasting network in the area. Likewise, Internet access may be made available in remote areas using existing broadcasting network such as satellite or cables. This will create efficiency and eliminate the sunk cost of redundant investment in both broadcasting and telecommunications network.
Third, the last and vital challenge for us is the consumer protection. We have succeeded in previous auctions for both digital TV channels and telecommunications licences in the sense that they generated a large amount of government revenue. For the digital TV channel auction, there were 24 licences sold during a two-day auction in December 2013 with the final auction amount of around 50 billion Baht or 1.45 billion USD. For the telecommunications spectrum auction, there were 3 auctions for 2.1GHz 1800MHz and 900MHz band from 2012 to 2016. The auction revenue was around 274 billion Baht or 8 billion USD in total or about 22 Baht or 64 US cent per MHz per population, which was indeed higher than many countries that used auctions as means of spectrum allocation. All the auction revenue deducted related expenses are reallocated to the government revenue.
The concern is raised whether the high cost of acquiring the spectrum will be passed on to the consumers, especially in the case of telecommunications retail prices. To protect the consumers, we have a price regulation that applies to all auction licensees. The regulation includes the setting of maximum reference retail prices on average at less than 0.69 Baht or 2 US cent per minute for voice service and less than 0.26 Baht or 0.8 US cent per MB for data communications. This condition is applied to all telecommunication services provided on the 1800MHz and 900MHz spectrum. The regulated rates exist to protect the consumers and to prevent the operators from raising the prices too high. Moreover, there are also regulations to ensure telecommunications access to physically-impaired customers such as Braille inscription on mobile service invoices and cheaper package prices. The challenging task is to ensure that the licensees comply with the regulations. In fact, we need to make sure that the existing pricing structure tied with existing packages can be modified to follow the regulation and at the same time to prevent the deprivation of consumer benefits and the breach of contractual agreement between the consumer and operators.
For broadcasting side, the auction was done on 24 free TV channels so there is no concern over the price. However, we do have a regulation for the content to protect viewers against hate speeches, sensitive and violent presentation, for example. In addition, we also regulate the maximum duration of advertisement and commercial activities to be not more than 10 minutes per hour per day on average. This is to generate a balance between the delivery of main contents and revenue-seeking activities as well as prevent viewer aggravation.
Q3: Many meetings, both international and regional, are held in Thailand. What is the NBTC's role on the Asian stage? Are there great disparities between countries or are there more similarities than differences? Can you expand on this please?
There are a number of international conferences that receive partial financial support from the office of NBTC. In doing so, we believe in the need to be internationally-connected not only by name but also by action. We take into account regional integration as it is very important for us to grow together. The focus is at ASEAN stage in which we are actively involved. As a regulator, we provide contributions in the ASEAN Telecommunication Regulators' Council (ATRC) meetings on a regular basis. Our role is mainly to push forward for ASEAN economies to collaboratively connect and collectively generate benefits in terms of telecommunications policy harmonization. We push forward the harmonization in international mobile roaming (IMR) services, international gateways including submarine cables, and spectrum management.
For the IMR services, we highly encourage and facilitate business negotiations among ASEAN mobile carriers so that the consumers will benefit in terms of reasonable prices and variety of service packages. In addition, we endorse the use of light touch regulation in the sense that it provides transparency in the IMR market. Indeed, the subscribed roaming package information should be delivered to customers via effective means, namely SMS or email, with the possibility to limit usage expenses as well as change the package to prevent bill shock. For the international gateways and submarine cables, we encourage the use of appropriate charges so that ASEAN economies can be connected to the world at a reasonable cost. This will create efficiency and lift the region's competitive advantage in the online world. Lastly, we put our effort in spectrum management such that our spectrum policy is in line with regional and global practices. We primarily identify which spectrum band is being used for what type of services then allocate accordingly. For example, our 2.1GHz 1800MHz 900MHz spectrum was released to the Thai mobile industry since they are currently being used for mobile broadband in many countries; hence, many compatible devices. Likewise, the 700MHz band will also be allocated to telecommunications industry according to international recommendations against the current use in broadcasting industry.
On a regional scale, there are some remaining issues in ASEAN countries. For instance, although we are in the same region, we witness a great deal of geographical difference. Some countries share borders with one another on the mainland, some comprise of small islands, and some island is a country itself. Besides, we also have different regulatory schemes with a similar aim of becoming regionally integrated. Some countries endorse market mechanisms and competitive industries, while some provide government subsidies and intervene claiming national interests in telecommunications and media industry. The role of NBTC will gear us towards the aim of recognizing the difference in regulatory regimes among ASEAN countries. We seek possibilities to provide compatible communications over the air, underground, and under the sea in order to make sure that globally-harmonized telecommunications and broadcasting services can be consumed within the region.
Q4: The NBTC will host the forthcoming IIC international Regulators Forum (IRF), and I know that the Commission has been a long-time supporter of the Institute. What do you hope the IRF will achieve?
As a secretary general of the NBTC, I am proud to have an opportunity to be the host for IRF this year. One of our main policies is to collaborate with international community. IRF is a prestigious platform that will allow us to learn and share regulatory knowledge and experiences. Since our telecommunications industry brings people all over the world closer together, I believe it is important for our organization to work in tandem with other countries on the regulatory issues as well.
IRF can become an event where heads of regulators across the globe have a chance to share lessons and experiences with one another and increase our networking bonds. Our connections will surely enhance our capabilities to tackle issues in the industry which cannot be defined or contained by international borders. Furthermore, it will be easier when we can talk and understand each other's needs before we create our own laws and regulations. From the IRF 2016, I highly anticipate that we will reach an achievement of having a set of compatible regulatory packages and policies across countries which results in internationally-complied regulations and policy implementation in the field of telecommunications and broadcasting.