How Has The Telecommunications Industry Evolved Commerce Essay

Introduction

Human existences need communication, and from clip immemorial assorted ways have been used to pass on from one point to the other. Communication trades by and large with the airing of information which has been found to be one of the most, if non the most of import elements for the efficient growing of any economic system and “ Telecommunication ” in this epoch has proven to play a critical function in information direction and development of any state ‘s economic system.[ 1 ]

Technology has played an of import function in the development of telecommunication and as the telecommunication market evolved, so warranted the demand for a strong effectual regulative government. Bringing about a new moving ridge of regulative reforms in the telecommunications service sector, concentrating on eliminating the already bing monopoly markets to full competition and besides guarantee services are delivered to the terminal users expeditiously and reasonably. The cardinal component of regulative success to accomplishing all these is the being of an independent and separate regulative bureau outside the influence of both authorities policies and the private-sector involvement.

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The intent of this essay is to analyze regulative independency in telecommunication, its cardinal facets and constraints/limitations where necessary, to a regulator ‘s independency in the telecommunication sector. In the class of this work the researcher shall do mention to the United Kingdom ‘s Regulatory Agencies and that of Nigeria severally.

1.1 The Development of Telecommunication

Electronic communicating began in the nineteenth century and “ Telecommunication has evolved enormously from its get downing to the present. ”[ 2 ]But looking back at the old telecoms industry the “ conventional wisdom ” so was that telecoms is a good illustration of natural monopoly and services rendered in the sector could merely be provided expeditiously by a monopoly supplier.[ 3 ]

In most states of the universe telecoms services were provided under province controlled monopoly or by private companies in some cases ( all under monopoly conditions ) . For case in the United States of America the monopoly conferred on Bell by the patent

granted ensured that Bell Telephone Corporation developed its web without competition. The consequence this had was, even after the termination of the patent, Bell ‘s telephone company ‘s laterality was still in being and non “ until landmark antimonopoly actions in the 1970 ‘s sought to interrupt the market ” .[ 4 ]

In the United Kingdom electronic communications was in public ownership ( note, with the exclusion of services in Kingston upon Hull ) controlled by the Post Office recently by British Telecommunications.[ 5 ]Then the station office decided what can and could non be connected to its web and decided who gets telephone services[ 6 ]thereby doing telephone services to users more of a privilege than a right that should be available to all.

Not until the passage of the British Telecommunication Act, 1981 did British Telecom ‘s terrible its links with the Postal Office. The Act besides established an independent process to put criterions and O.K. betterment for connexion of web and besides it was at this clip that first stairss were being taken in the United Kingdom to present competition into the telecommunication industry.[ 7 ]For case this procedure led to license being granted to Mercury to supply telecoms services, making a competition with a so privatised British Telecom ( this denationalization was provided for by so new 1984 telecommunication Act ) .[ 8 ]

United Kingdom in the 1980 ‘s with the passage of the 1981 and later the 1984 telecommunication Act opened up the market for competition and besides developed regulative mechanisms ( Director General of Communication office known as Office of Telecommunication ( OFTEL ) . This was designed to guarantee that officeholder operators could non utilize their place to drive new operators out of the market.[ 9 ]

In Nigeria telecommunication was a entire monopoly by NITEL ( NITEL came to being in 1985 as a consequence of a amalgamation between Post & A ; Telegraph Department and Nigerian External Telecommunication Ltd ) “ entirely owned and controlled by the authorities. ”[ 10 ]During this

period there was no competition in the proviso of telecommunication service and at that place existed a free unregulated market in the sector.

In 1992 the Federal Military Government made a Decree ( Decree No. 75 of 1992 ( as amended ) making the Nigerian Communication Commission ( NCC ) with the primary purpose of advancing and modulating competition in the service proviso. The NCC at this period was non effectual has it been under the control of the authorities and there was small or no alteration in the telecom sector, with NITEL about running aground.[ 11 ]

Not until the outgrowth of Civilian Government in 1999 were programs announced for the denationalization of NITEL and assignment of extra bearers and besides non until the beginning of the twenty-first century was there an independent regulative bureau for the sector.[ 12 ]This marked the beginning of the liberalization of the communicating industry in Nigeria with the licensing of several Digital Mobile Operators and Service Providers and besides the passage of the Communications Act 2003.

In the twentieth century the telecommunications industry of most states was being run by province authorities or its bureaus.[ 13 ]But with the liberalization of the communicating industry from that of a monopoly to a more competitory market, denationalization of the sector and the licensing of several operators and service suppliers, coupled with technological development.[ 14 ]Led to the transmutation and development of the telecommunication industry into the Information and Communication Technology ( ICT ) sector, these created new legal issues and challenges conveying about the demand for an “ Independent Regulator. ”

Need FOR AN INDEPENDENT REGULATOR IN TELECOMMUNICATION

In the last three decennaries at that place have been radical alterations in engineering and the market forces driving communications. With the addition in corporatization and denationalization, the liberalisation of assorted market sections conveying about competition and the alteration in services offered by telecommunication operators, the demand for a regulator to function as an independent referee becomes necessary.[ 15 ]

Regulation is besides required because even after denationalization the position of the national bearer ( which is normally the officeholder ) remains and new operators are required to complect if

they are non to endure undue market disadvantage created by the officeholder. Therefore an Independent Regulator is needed to take expressed barriers to entry “ ( for illustration the inability to complect with the officeholder operator ) , and level inexplicit barriers ( such as the possible influence of the incumbent telecommunication operator over the regulator ) . ”[ 16 ]

Therefore in making an Independent Regulator for the sector certain regulative reform must be in topographic point and it must endeavor towards accomplishing the followers ;

To make independent entities to supervise the debut of competition in the market and set up regulative mechanisms for issues such as interconnectedness, licensing and duty rebalancing.

Fixing the officeholder operator to face competition, including timetables puting deadlines for expiration of market exclusivity.

Allocating and pull offing scarce resources such as Numberss and spectrum resources in a non-discriminatory manner within the liberalized market.

Expanding and heightening entree to telecommunication and ICT webs and services.

Promoting and protecting consumer involvement, including cosmopolitan service and privateness.[ 17 ]

Focus of the regulator therefore is to guarantee a flat playing field for the operators and guarantee that there is no maltreatment of dominant market place. In order for the regulator to accomplish all these, “ it is critical that the regulator establishes and maintains effectual relationships with the three nucleus groups most affected by its maps: the users, operators and authorities. ”[ 18 ]

2.1 Regulative Independence In Telecommunication

With the coming of the liberalization era the United Kingdom took one of the first enterprises in making an Independent Regulatory Body ( OFTEL now known as OFCOM ( Office of Communication ) . Several other states followed suit after the ( particularly the underdeveloped states ) World Trade Organisation ( WTO ) General Agreement on Trade and Services ( GATS ) and the Agreement on Basic Telecommunications ) annexed to it, presented a

Reference Paper which came into consequence on the 1st of January 1998.[ 19 ]The Reference Paper sets out six cardinal rules by which the market for basic telecommunication services should be governed. This essay is focused on one of these six key rules ; there must be an Independent Regulator in the telecommunication sector.[ 20 ]

The Independent Regulatory organic structure must be separate and non accountable to any provider of basic telecommunication services. Decision reached by the regulator and processs used in making those determinations shall be impartial with regard to all market participant.[ 21 ]

The term “ independency ” as used in the telecoms sector should non be misconstrued. The term does non connote independency from authorities policy or assuming the power to do such policy, but the independency to implement policy without undue intervention from the authorities or industry lobbyist.[ 22 ]

Former United States Chairman of the Federal Communication Commission Michael K. Powell stated that, “ to be independent, non merely should a regulator be physical and operationally separated from those it regulates, but besides be empowered to transport out policy by doing nonsubjective well-reasoned, written determinations arrived through transparent procedures and based on a complete populace record. ”[ 23 ]

The European Union Guarantees the independency of its national regulative governments by guaranting that ;

“ member provinces shall vouch the independency of national regulative authorization by guaranting that they are lawfully distinguishable from and functionally independent of all administrations supplying electronic communications web equipment or services. Member States that retain ownership or control of projects supplying electronic communicating webs and/ or services shall guarantee effectual structural separation of the regulative map from the activities associated with ownership or control. ”[ 24 ]

The Directive besides stipulates that regulative governments of member provinces should exert their powers “ impartially and transparently. ”[ 25 ]

In the United Kingdom the present independent regulative organic structure is known as Office of Communication ( OFCOM ) .[ 26 ]OFCOM subsequently received its full authorization from Communication Act 2003[ 27 ]besides inheriting the responsibilities that had antecedently been the duties of five regulative organic structures ( OFTEL inclusive ) doing it a converged independent regulative authorization. OFCOM is independent of any governmental/operators intercession or influence in transporting out its organizational objectives/functions and besides meting out its duties. Although the Secretary of State replies inquiries in Parliament about OFCOM and OFCOM is besides accountable to Parliament through assorted parliamentary commissions and national audit office, this can be seen as agencies of guaranting transparence and answerability by the organic structure and non under authorities control.[ 28 ]

In 1996, African Leaders endorsed an ITU sponsored African Green Paper which called for major reform in the telecommunications sector in Africa.[ 29 ]Nigeria put this into consequence by ordaining the Communication Act 2003 which established “ a regulative model for the Nigerian Communication industry and for this intent to make an effectual, impartial and independent regulative authorization. ”[ 30 ]This piece of statute law has reformed the regulative authorization in Nigeria doing it an independent National Regulatory Authority. The NCC has henceforth been responsible for making an enabling environment for competition among operators “ every bit good as guaranting the proviso of qualitative and efficient telecommunication services throughout the state. ”[ 31 ]

In pattern the grade of independency of a national regulative authorization depends on several factors differing from state to state. A true independent regulative authorization will convey about assurance in operators, consumers and investors that the telecoms market will be regulated transparently and objectively. This can merely take to increased investing in the sector and huge growing and benefit to the economic system[ 32 ]( an illustration of this is Nigeria, the positive impact the telecoms sector has had on the economic system ) .

3.0 REGULATORY INDEPENDENCE AND ITS KEY ASPECTS

An independent regulative authorization is an of import factor in the success of any state ‘s attempt to present competition, to privatise and liberalise the telecommunication sector. It is imperative on every state to set up an impartial and independent referee in the signifier of a regulator to make the regulations and procedures by which the telecommunication industry is to be regulated and service to the populace will be provided. In accomplishing this, certain cardinal

elements must be present in any state ‘s national regulative authorization and these are ; Structural Independence, Financial Independence and Functional/Operational Independence.[ 33 ]

3.1 Structural Independence

National Regulatory Authorities ( NRA ) has been created in many signifiers depending on the state where it is being created. Some states have regulative section within authorities ministry, some are separate from the ministry but are accountable to the ministry while others have regulative bureaus that are separate from, and non accountable to authorities or its ministries. Whatever construction NRA takes it should be one with a distinguishable legal authorization capable of prosecuting and retaining qualified forces able to understand, measure technological and industry tendencies and implementing proficient demands with up-to-date technological tools.[ 34 ]Structural independent besides reduces the “ possibility of political or industrial gaining control ”[ 35 ]of the regulative authorization. Making a clear division between a regulator and the government/operators and increasing the grade to which the actions of the regulator are perceived to be impersonal and crystalline thereby hiking market assurance in the sector. A regulator non tied to the being of any authorities is besides immune from the consequence of short-run political expedience doing the sector a more attractive chance for long term in-ward investing.[ 36 ]

Any NRA good structured and efficaciously independent from external influence are advantageous to the telecommunication sector in the undermentioned ways ;

It meets the cardinal demand of the World Trade Organisation ‘s Reference Paper on Regulation that the NRA should be structurally separate from any provider of basic telecommunication services ;

It facilitates the transparent and non-discriminatory execution and application of policy even where the authorities may still retain ownership rights to one or more of the principal operators ;

It facilitates greater nonpartisanship of determination devising, both when implementing policy and in urging to policymakers suited classs for the future action.[ 37 ]

For case in Nigeria the legislative act making the NCC and its maps creates a structural base for its independency. Chapter II of the Nigerian Communication Act 2003 establishes the

NCC as a organic structure corporate with ageless sequence, dressing it has a legal individual capable of actioning and being sued in its corporate name.[ 38 ]A Governing Board ( referred to as “ the Board ” ) is created to see to the disposal of the committee.[ 39 ]It besides provides for the committee to be structured into sections by the Board for the intent of effectual discharge of its maps.[ 40 ]It should be noted that though assignment of commissioners to the board is done by the President of the state[ 41 ]this does non in any manner make the NCC a section of the executive arm of authorities.

In the UK OFCOM has a Board consisting of a Chairman and both executive and non executive members.[ 42 ]The executive arm of the Board is responsible for the running of the administration and studies back to the Board.[ 43 ]To farther guarantee OFCOM ‘s structural independency, the Communication Act 2003 provides that the chief responsibility of OFCOM is to transport out its maps[ 44 ]and this is enshrined in OFCOM and no other governmental bureau. The Board members of OFCOM are appointed by the Secretary of State[ 45 ]and he shall hold such powers as to put the upper limit or minimal figure for the executive members[ 46 ]but this power does non widen to the manner the Board run the personal businesss of the regulative bureau.

In most states, it is inevitable that NRA will necessitate to work closely with other functionary and even non governmental organic structures in other to carry through its aims. That is why “ … individuals appointed to these places must hold personal qualities to defy improper force per unit areas and incentives. They must exert their authorization with accomplishment to win the regard of stakeholders, heighten the legitimacy of their function and determinations and construct a constituency for their independency. ”[ 47 ]

3.2 Fiscal Independence

An effectual ordinance can non be accomplished without equal support. The beginning of any NRA financess and agencies by which such financess are received and becomes portion of the bureau ‘s budget is critical as it can find the grade of a regulator ‘s liberty and competency when transporting out its maps. Support is critical in guaranting a regulator ‘s effectivity. While a

regulator ‘s budget may come from authorities ( in signifier of authorities appropriation ) or from the sector it regulates through licensing fees, mulcts and other administrative and service charges etc. The cardinal portion of these is that funding should be free from any political and private involvement.[ 48 ]

In a figure of states NRA has been allowed to retain grosss derived from other means other than authorities appropriation. This is because trust on multiple beginnings of funding other than budgetary allotment by the authorities allows regulators to be more financially independent and less capable to outside influence ( an independent beginning of gross, hence, can efficaciously safeguard a regulators independency ) .[ 49 ]

For case in Nigeria the regulative authorization have diverse beginning of support which provide some degree of fiscal freedom from the authorities. The Nigerian Communication Act 2003 requires that the NCC “ shall set up and keep a fund from which all outgos incurred by the committee shall be defrayed. ”[ 50 ]Further goes on to province that this fund shall non be limited to financess generated from more than one beginning such as authorities appropriation, licensing fees, spectrum fees, grants, loans, AIDSs.[ 51 ]

In United Kingdom the regulative organic structure ( OFCOM ) besides generates its financess from more than one beginning. One of such agencies is the devising of grants available or the promotions of financess to OFCOM from the Secretary of State.[ 52 ]It besides generates financess from the issue of administrative charges imposed on suppliers,[ 53 ]punishments in signifier of mulcts,[ 54 ]and even parts by service operators.[ 55 ]

The handiness of diverse beginning of support to any NRA provides a degree of fiscal independency and besides unties the regulative bureau from the apron of the authorities. Therefore fiscal independency, coupled with a NRA ‘s ability to pull off and administrate its ain financess gives it more regulative certainty to asseverate more independency in modulating the telecommunication sector.[ 56 ]

3.3 Functional/Operational Independence

The constitution of the regulative model of an independent regulator is the responsibility of the authorities, but the execution and disposal of this regulative model is the responsibility of the independent regulator. Therefore for a regulator to transport out its maps and act as a competent watch-dog for the sector it is of import that sufficient regulative power is given to the independent regulator. Not merely by the legal model making its being but besides by the authorities in implementing their policies.

It should be noted that there is no definite features for finding the functionality of a regulator ; instead it is comprised of elements which allow a regulator carry out its maps efficaciously as a going-concern and thereby set up its credibleness.[ 57 ]Therefore for a regulators guaranteed independency in transporting out its maps, its responsibilities and powers must be set out in clear footings in the legislative act making it. To make effectivity and certainty, regulators power to pull off the sector should include the undermentioned ;

the ability to give sentiment on bill of exchange Torahs relevant to the telecommunication sector ;

the ability to do determinations and carry out steps in conformity with the commissariats of the jurisprudence, the rules of a good regulative determination devising procedure must dwell of transparence, objectiveness, professionalism and independency ;

the regulator should be responsible for the issue of licences in telecommunication activities, the supervising of their execution, their monitoring, amendment and enforcement and, if required, their suspension and annulment in conformity with the enabling jurisprudence ;

the constitution of interconnectedness regulations and reappraisal of interconnectedness contracts ;

the creative activity of proficient criterions for operators and regulations guaranting conformity ;

the constitution and direction of the National Numbering Plan ;

the supervising of duties of service suppliers deemed to exert Significant Market Power ;

the finding and aggregation of duties and fees ;

the enforcement of the jurisprudence within the bounds of the powers granted the regulator ;

the constitution of regulations and ordinances emanating from the jurisprudence, including the constitution of the standards and processs for the hearing and adjudication of ailments, behavior probes and other claims that may originate with the ability to enforce appropriate punishments and countenances without external influence ;

moving as a go-between and arbiter to settle struggles between licensees ;

the ability to advance competition in the sector and the bar of anti-competitive behavior by the operators and besides guaranting market transparence ;

back uping educational and wellness establishments in transporting out their programmes through telecommunications and facilitate entree telecommunication services for the physically disadvantaged and the protection of clients right by the operators ;

to implement all these the staffing of the regulative organic structure must dwell of “ proficient, legal, regulative, fiscal and industrial expertness ” with the caput of the regulative organic structure holding the liberty to enroll staff, and wage different from that of normal civil retainers.[ 58 ]

In Nigeria the Communication Act 2003 in Chapter II, Part I ( Establishment and Functions of Commission ) provides for the maps of the NCC.[ 59 ]These maps are purely within the powers of the NCC to transport out, and these has led to vouching the independency of the committee, attract investors to the sector and development to the Nigerian economic system.

In United Kingdom the responsibilities and maps of OFCOM is guaranteed under the Office of Communication Act 2002 and the Communication Act 2003.[ 60 ]These duties are the responsibilities imposed and to be implemented by the regulative organic structure.

“ Without functional effectivity, it is hard if non impossible, for a regulator to achieve the necessary credibleness among participants in the sector and possible investors. ”[ 61 ]Its one thing for a regulator to hold an independent structural base and a fiscal construction for financess that guarantees independency. But where the setup for transporting out its maps are connected to external factors outside the organic structure, so a regulative organic structure can non run efficaciously.

4.0 NECESSARY LIMITATIONS ON A REGULATOR ‘S FREEDOM OF ACTION

Independence connotes freedom, but this does non vouch the regulative organic structure ‘s freedom from authorities policies, but instead has independency to implement its ordinance and policies without intercession from the authorities or the operators. There must be a procedure guaranting sufficient cheques and balances on the activities of the regulator, to guarantee the regulator does non roll from its authorization, engage in corrupt patterns or go grossly deficient. In accomplishing this several states have tend to strike a balance between

regulator ‘s independency and the answerability of their maps, by making the undermentioned steps ;

Supplying Effective Agreements for Appealing Against Decisions- By making an effectual appellate system the actions of a regulator are capable to appeal by consumers or operators and entreaty can lie to a organic structure specifically appointed for this intent ( pre-designated courts or arbitration mechanisms ) or by judicial reappraisal in the jurisprudence tribunals.[ 62 ]The EU in its Framework Directive requires that:

“ Member states shall guarantee that effectual mechanisms exist at national degree under which any user or set abouting supplying electronic communications webs and/or services who is affected by a determination of national regulative authorization has a right to appeal against the determination to an entreaty organic structure that is independent of the parties… ”[ 63 ]

The intent of this is the entreaty organic structure can invalidate, uphold or enforce a new determination on the regulative organic structure within the scopes of the jurisprudence. The UK implemented this demand in its Communication Act ( 2003 ) . By supplying that entreaties against the determinations of OFCOM shall lie to the Competition Appeals Tribunal and farther appeal shall lie to Court of Appeal or Court of Session, but purely on issues of jurisprudence.[ 64 ]For case in the instance of Freeserve.com PLC V Director General of Telecommunication[ 65 ], “ the court found that the Director General had given unequal grounds for rejecting one of the evidences of Freeserve ‘s ailments about BT ‘s actions. The Tribunal set aside this facet of the manager ‘s determination ( associating to allegations of marauding pricing ) … ”[ 66 ]

In Nigeria nevertheless the Federal High Court is empowered with the “ legal power over all affairs, suits and instances howsoever originating out of or pursuant to or consequent upon this Act or its subordinate statute law… ”[ 67 ]and subdivision 88 farther provinces that “ an aggrieved individual may appeal to the Court for a judicial reappraisal of the Commission ‘s determination or other action. ”

Procedure of Appointment and Removal from Office of the Regulator in instances of Misconduct and Incapacity- This is implemented largely by authorities ( ministry, president or parliament ) outside the scopes of the regulative organic structure. In the UK this power is implemented by the Secretary of State,[ 68 ]while in Nigeria the president exercises this power over the NCC.[ 69 ]

The Subjecting of the Regulator ‘s Conduct and Efficiency to Scrutiny by External Auditors or Other Public Watchdog- This is when the regulator is required to supply audited statements and one-year studies to the ministry or to the parliament, to supply the extent to which they have fulfilled their authorization.[ 70 ]

Being of Adequate Scrutiny for Agency ‘s Budget- Instances the regulator has to give up grosss to the authorities and holding its budget approved by the authorities creates a signifier of cheques and balances that can forestall against foolhardy disbursement and over charging of the sector.[ 71 ]

Mandating a Compulsory System of Transparency- Regulators must be made to hold and implement an unfastened determination devising policy, publications of such determinations and other relevant information and grounds for doing those determinations. This is to further against any fondness on any of the operators or even the consumers.[ 72 ]

Forbiding against Conflict of Interest- The regulator is precluded from holding any direct or indirect fiscal involvement or investing in the sector it regulates.[ 73 ]

5.0 Decision

The description by ITU on regulative independency being a “ complex and widely misunderstood construct ” can be traced to the manner different states implement their regulative system and how much of independency is really given to these regulators. The point to be noted his regulative answerability is in kernel the other side of the coin of regulative independency. An appropriate degree of independency therefore has to be balanced by an appropriate grade answerability ; to make an effectual, dependable and believable regulator.[ 74 ]

Henceforth, it is of import to bear in head that the ultimate aim behind a regulator ‘s independency is non to hold a regulative organic structure with absolute freedom. But an effectual regulative model which enables the market to go competitory, stimulate technological diffusion and enhance efficiency while guaranting that consumer benefit.

BIBLOGRAPHY

Books

Professor Ian Lloyds and Professor David Mellor: Telecommunications Law ( Butterworths 2003 )

Telecommunication Regulation Handbook: Edited by Hank Intven and McCarthy Tetrault ( InfoDev 2000 )

The Telecommunication Handbook- Kornel Terplan and Patricia Morreale ( CRC PRESS 2000 )

Principles of Telecommunications Regulation Second Edition – Interconnect Communicationss

John Buckley: Telecommunications Regulation ( IET 2003 )

Websites & A ; Online Journals ( URL Citations up to day of the month as of 29th 0f May 2009 )

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Development of Telecommunication- Musee des Telecommunication LaSalle, Quebec hypertext transfer protocol: //www.virtualmuseum.ca/pm_v2.php? id=exhibit_home & A ; fl=0 & A ; lg=English & A ; ex=00000267

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Telecommunication in Nigeria Legal Framework

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ICT Regulation Toolkit- Why Regulate- Regulation in Transition to Competitive Market. hypertext transfer protocol: //www.ictregulationtoolkit.org/en/Section.1686.html

hypertext transfer protocol: //www.ictregulationtoolkit.org/en/Section.1686.html

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The Independence and Accountability of Africa ‘s Infrastructure Regulators: Prof Anton Eberhard

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Fintan Healy: The Effect of Regulatory Obligations on the Incumbent Operator ( Interconnect Communication )

WTO Principles and Telecommunications in Developing States: Challenges and Consequences. Telecommunication Policy Volume 29, Issues 2-3 April 2005

Warrick Smith: Ict Regulation Toolkit ; Public Policy for the Private Sector. Utility Regulators- The Independence Debate. Note No.127 Oct 1997

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British Telecommunications Act 1981

British Telecommunications Act 1984

United Kingdom Office of Communication Act 2002

United Kingdom Communication Act 2003

Nigerian Communication Act 2003

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Cases

Freeserve.com PLC V Director General of Telecommunication ( 2003 ) CAT 5

Vodafone Ltd V Office of Communication ( 2008 ) CAT 22 2008 WL 3996443