1. Modernising Regulatory Frameworks
Veena Rawat, Senior Policy Advisor, GSMA

2. Mobile Is at the Heart of the Digital Experience
Messaging
Voice calling
Apps and services
E-government
Personal finance
Transportation
Gaming
Community
E-commerce

3. Characteristics of the Digital Ecosystem
Modularity
Network Effects
Dynamic Competition
The digital sector is a single, integrated ecosystem, not a collection of related-but- separate markets
Digital players engage each other in a variety of roles across the value chain
Competition is for the market, not in the market
Consumers benefit from the internet’s natural economies of scale and scope
Regulation should not obstruct scale and scope
Transformative innovation generates choice and value for consumers
Static ‘dominant’ positions are contestable
Regulation should not inhibit innovation and investment

4. Costs and Consequences of legacy regulation
Regulating well is always difficult …
… and more so in the digital ecosystem
Discriminatory, prescriptive regulations inhibit the growth of the digital ecosystem and reduce consumer welfare
Information gaps can lead to regulatory errors, distorting markets and competition
Market conditions and technologies can change in unpredictable ways
Regulations often create substantial compliance burdens
Regulation always benefits some interests over others
The complexity of digital markets increases regulatory error
Rapid change accelerates regulatory obsolescence
Innovation and entry are distorted by regulatory burdens and risks
Higher regulatory distortions raise returns to rent-seeking

5. Regulatory Discrimination Impedes Competition
Business innovation
Regulatory analysis
Filing with regulator
Regulatory approval
Implementation
Unregulated Competitor
Regulated Competitor
Longer time to market
Disclosure to competitors
Risk of rejection
Innovations discarded

6. Principles of a New Regulatory Framework
Pursue regulatory goals based on achieving regulatory objectives, not legacy structures based on industries or technologies
Functionality-based
Give preference to performance-based regulation through ex post enforcement over prescriptive, ex ante rules
Dynamic
Consider new approaches to regulation — including the need for regulation — in light of current market realities
Bottom-up
The new framework will reduce regulatory asymmetries, promote dynamic competition and innovation, and allow regulatory objectives to be achieved more effectively at lower cost

7. Conclusions
The spread of connectivity, and particularly mobile broadband, has enabled new services and products to come to market.
Changes to the digital ecosystem have been wide ranging and have benefited consumers and businesses.
Regulation has failed to keep pace with innovation and change.
Now is the time to put in place new, future-proof regulatory regimes that:
Ensure the right incentives are in place to continue to roll out and upgrade mobile networks
Apply rules consistently to all relevant players in the digital ecosystem

8. About the GSMA