Telecommunications Licensing Regime: A New Method of State Control After Privatisation of Telecommunications.

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TOGIN

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-i,-,rl

9,

No

1

QAU)

Table

of

Contents

Articles

intellectual

Propertv Protection

for

Video Games

-

A View

from the

Eurooean

Union

F.

Wiltem Grosheide,

Herwin

Roerdink,

Karianne

Thomas

,tarriase

of Convenience

:

Bank

-Customer

Relationshio

;n

the

Aqe

of

the Internet :

A South African

Persoective

Mpa

kwana Annastacia Mthembu

Telecommunications Licensinq,Regime; A

N-ew

Melhod

of

State

Co nt ro I Afte-r P riva ti sa t-i _On-gLTe I ecg-m m _{u n} i ca tis n s

Atip

Latipulhayat

Evaluatino

the

Reoulation of

Access

to

Online Content

in

Turkev in

the

Context

of

Freedom

of

Speeeh

Batu Kinikoglu

Communicational Aporoach

to

Coovriqht

OlliVilanka

tsook

Review: Telecommunication

Laws

in

Europe

Sophie

Sta I la - Bou rd i I

lon

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riamza, Academy

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llenrik

Edlund, Director of

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NeL,

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:= -iard

Steqnnot,

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.7,,/,/2. ry,%,,},.b,'

Vol.

9,

No.l(20I4)

Telecommunications

Licensing

Regime:

A

New

Method

of State

Control

After Privatisation

of

Telecommunications

Atip Latipulhayat

Senior Lecturer in Telecommunications Larv and International Lau'

Facul ty of Lau,, Padj adj aran fJni versi t1,, B andung-Indonesi a

luil pil,l lLl'!! gn;lii l .cl;.n

Abstract: Telecommunications is one sector historically subject to state monopolies

in both der.'eloped and developing countries

for manl

reasons. The Indonesian legislation stipulates that the telecommunications sector is of national strategic importance and must therefore be controlled by the state. Not surprisin-el1, the Indonesian government has tended

to read the terrn "state control" as state or government orvnership. Since the late 1980s,

there has been a radical policy reversal ivherebl' governments hal'e progressively reduced

their orvnership and inr"olvement

in

this sector by increasing pril'ate sector participation.

One of the most important consequences of this is that privatization has led governments no

longer being able

to

pla1' traditional tripartite roles

of

owner. operator and regulator of telecommunications. More specificalll,

it

raises a critical question: in t,hat r.,,ays might the

government maintain its control over the sector rvhen privatization reduces state otvnership

in

SOEs? This paper :rr-ques that licensing is a le-eal

tool

to maintain state control after prir,atization

of

telecommunications.

It

can be used as

a tool

to

implement important national priorities,

bc

it

opening the markets

for

eqr.ripment. services, and networks to immediate or gradual competition, or to preserve a monopoly

for

the time being so as to permit investors to recoup their cxpenditllres

or

to continue a source

of

revenue

for

the

government.

1. Introduction

\

relecommunications license authorises an entity

to

provide telecommunications services

or

operate

.:,ccommunications facilities. Licenses

do

not have the same importance

in all

countries.

In

a

ferv

:--untries r'vhere monopoly telecommunications operators have lor-rg been privately o*,ned, notably

,. ,,nada and the

llS,

there have traditionally not been telecommunications licenses. Instead, regulatory

.::rrs

and

conditions rvere imposed through decisions, orders

or

traltic-approval processes

of

a

:..\ernment regulatory authoritl

.In

some other countries, including Latin American countries, privately :erated telecommunications carriers rvere traditionally granted concessions or a franchise.

This paper examines the concept

of

the license particularly

its

relevance u,ith state control after ::rvatisation. The paper begins by providing a brief discussion on the privatisation of telecommunications

,:rrJ more specifically'on the rnethods of state control af-ter privatisation. Subsequently, the paper reviervs

.1.

concept

of

a license including its objectir.es and type

of

licensing regime.

To

obtain an empirical -.lderstanding, the application

of

the licensing system

in

Malaysia and the

fJK

are sub.ject

to

special

:.-rutin\'. Finally, the paper examines the present Indonesian licensing regime and this is follor,ved by an

,:lalrsis of the relation betrveen a license and state control, and also suggestions are considered for the ..:ure Indonesian licenri ng regi me.

2.

Privatisation of Telecommunications

Privatisation and telecommunications industrl' have been interacting since the 1980s and state control in

,le

sense of government involvement in the sector has been a central issue . Telecommunications is one

.ector historically subject

to

state monopolies

in

both developed and developing countries

for

many

:easons. The Indonesian legislation stipr.rlates that the telecommunications sector is of national strategic