Since the earliest days, the telecoms
and broadcasting industries were seen as entirely separates industries. As
such, the regulatory regimes that developed around them were based on specific
technology platforms, with different rules for each distinctly perceived
industry. This approach was widely followed around the world.

The current framework of regulation has
worked well for many years until. new developments in interactive digital
broadcasting and the roll out of high speed Internet infrastructure –  the
fast-changing environment has brought about convergence of both industries.
So what is “convergence”? The Webster
dictionary defines convergence as “act of moving towards uniformity or union”
or “the merging of distinct technologies, industries, or devices into a
unified whole” .If we apply this definition to the broadcast industry we can
see that the ongoing process of convergence between the broadcast and the
telecommunications industry. 
In order to identify some of the
regulatory issues related to convergence, we need to consider two existing
convergent systems and their implications –  VoIP and IPTV , which are
already deployed and in commercial use around the world. 
While VoIP allows a cable television operator
or ISP to enter the voice telephony market, which traditionally has been the
mainstay of telcos, IPTV allows telcos or ISPs to begin television-broadcasting
services. Convergence can thus enable the entry of telecom firms into
broadcasting or broadcasters into telecom service provision.
 In each case, the firm making the
entry will be subject to different regulations if they are regulated on the
basis of the service they intend to provide. For example, if a telco starts to
offer IPTV based television broadcasting, it might have to follow content
regulation guidelines that otherwise are usually absent in telecom services. On
the other hand, if a cable operator begins to offer VoIP based telephony, it
might have to offer emergency services connectivity (e.g. 911 service in the
United States). However, these rules are not entirely clarified for such new
entrants because these entrants do not fall squarely into the traditional
The development of convergent services
by telecommunications and broadcasting operators is principally fuelled by the
wish to maximize profit through the provision of a wide range of multimedia
products and services to the consumers, made possible through digital
technology revolution. 
As the process of convergence continues
it raises specific regulatory challenges given the merging of firms,
sub-sectors, and facilities between telecommunications and broadcasting affects
not only the carriers, but also regulatory authorities. The fundamental source
of this challenge is the need to reconcile different regulatory philosophies in
the sub-sectors of  both industries. On the one hand, broadcasting is
heavily regulated, and is less competitive, and often has a merged content
carriage setup. Telecom services, on the other hand, are regulated to a lesser
extent, with little to no control exerted over content, a greater emphasis on
carriage regulation, and with competition in most markets.
Hence, applying regulation based on
existing regulatory regimes to new emerging convergent services may not be
effective in being able to bring about desired regulatory results which makes
it appropriate to conduct a health-check of our regulation, to ensure that it
remains coherent, and that the current delineations remain appropriate, and to
guard against a range of possible risks.
So what have the challenges been or
what are the changes going to be for regulators and policy makers as we move
into a more converged environment?
Authorizations and licensing
In traditional regimes, authorization
and licensing of service providers could be based on the type of service
(voice, data, and video) or technology (cellular, fixed telephony, terrestrial
broadcasting). However, in a converged setting, it is difficult to maintain
these boundaries because of the overlaps that arise: broadcasters (e.g. cable
companies) are offering telecom services (Internet, voice), while telecom
services (e.g. phone companies) are offering broadcasting services (IPTV).
Further, cellular operators are providing mobile television services.
Competition (ownership)
Traditional broadcasting industry rules
about media ownership have restrictions on the monopoly of one owner on both
different media (known as concentration limits) and across different media
(cross-ownership limits). These limits are in place to enable diversity in the
content and ideas presented by the media. Some countries have regulations in
place that do not allow firms to have both telecommunication and broadcasting
operations. While in the US the efficacy of these line-of-business restrictions
is dependent on how services are defined in the context of multiple plays. For
example, regulators would need to decide if video provided to mobile terminals
is considered broadcasting or whether VoIP is a complete substitute for
analogue voice services.
Additionally, regulators must also
ensure that convergence in terms of mergers and acquisitions does not hamper
competition. As evident now, markets may have very intense consolidation
activity throughout the media industry, and in the near future, in the telecom
industry as well. As firms merge, it is important that convergence across
sectors, such as cable television and mobile telephony, or in one sector, such
as content production and distribution, does not result in a monopolistic
market structure. 
Market access
Convergence allows new entrants the
means to enter into protected markets. In provision of TV over IP, for example,
cable and terrestrial broadcasters will spar with telcos about whether their
heavily regulated and restricted sector should be opened up. Similarly, the
bundling of video, voice, and data in packages by cable companies will mean
another threat to telecoms providers who are used to a monopoly over voice, and
have had to deal with Internet telephony.
Such a shift changes the competitive
environment and radically alters existing revenue streams and sector economics.
For example, in the U.S.A. in 2005, the number of Verizon’s fixed telephone
subscribers declined the most in the New York metropolitan area, where it faces
the most competition from cable operators offering voice services. In a
shifting environment, it is essential that governments reduce regulatory risk
and the
possibility of discretion Convergence
opens up the possibility of greater competition that will benefit consumers
with aggressive pricing, increased availability, and competitive service

However, it also opens up closed or
restricted markets to new entrants. Market access has typically been heavily
regulated, with governments often charging high licensing fees or taxes to
traditional service providers. Hence, with increased competition, returns on
investments that were made with the assumption of restricted competition will
change. This adjustment is significant for the investors and requires a clear
and transparent introduction.
Privacy and law enforcement
If VoIP calls travel over public
Internet or other publicly accessible networks, it is possible that the privacy
of telephone calls, which is a legal guarantee in most countries, will be
compromised. On the other hand, VoIP might be a
security threat in case government or
law enforcement agencies want to survey voice conversations. Since these calls
do not travel over a circuit switched network, and do not have constant telephone
numbers associated with the caller or receiver, they might be able to escape
surveillance. Governments will thus have to balance privacy rights with law
enforcement or surveillance objectives.
Content regulation
With converged content delivery
mechanism, content formerly dedicated to specific networks now can be conveyed
on different infrastructures and delivery platforms. This poses a potential
conflict in regulation as governments usually apply different standards of
content regulation to telephony, sound and television broadcasting, print media
and the Internet. With convergence, policies may need to be changed to achieve
the common.
Some of the issues regulators face
regarding content regulation are:
·     Applicability
of public service provisions
·     Cultural
diversity, local content quotas and local production of content
·     Programming
standards associated with accuracy and impartiality in the reporting of new and
current affairs
·     Intellectual
property rights
·     Role and
means of supporting public broadcasting
·     Programming
standards associated with decency, censorship, and freedom of speech
·      jurisdictional
issue is the concept of data sovereignty, in other words that digital
information is subject to the laws and regulations of the country in which it
is stored.
Every government has to make decisions
about how to react to convergence. For many, the choice is between continuing
with the status quo and modifying their regulatory regimes to respond to
convergence. However, given the almost certain migration of networks towards
IP-based convergence in the next few years, the question becomes – how should
governments pace themselves to respond to convergence. Local
cultural,political, and economic realities play a role in the decision-making
process and timing of regulatory reform. 
To get some guidance on how  other
countries have responded to convergence lets look at these 3 countries :
Case studies
US case.
The main regulator in the ‘information
delivery’ market is the Federal Communications Commission (FCC). The FCC is in
itself not a ‘converged’ regulator, as it shares its competences at the federal
level with the Department of Justice (DoJ) and the Federal Trade Commission
(FTC), dealing with competition and consumer protection policy; and at the
state and local level with the state public utility commissions (PUCs).
Also with respect to convergence, there
is no grand strategy but more of a ‘muddling through’ approach. The US system
depends to a great extent on court rulings, and an active civil society
involvement. However, where the FCC intervened, its decisions had a major
impact on Multi sectorial approach convergence and market developments. The
intervention to ensure local market competition lead to a nation wide
telecommunication duopoly; deregulation of broadband access supported cable
operators, as telecommunication networks remained regulated; and the dilution
of media ownership rules have boosted the online presence of major broadcasters. 
The reactive nature of the US approach
provides for a very predictable, robust regulatory environment in which new
entrants can challenge existing practice. This has allowed breakthrough rulings
and keeps the FCC at the forefront of setting policies dealing with the effects
of convergence. However this comes at a high legal cost and allows incumbents
to delay or stop new players from entering. The US is one of a few countries
with strong inter-modal broadband competition between Digital Subscriber Lines
(DSL) and cable modem, and with a significant Fibre-to-theHome (FTTH)
development. However, the FCC has been less effective to ensure competition
over the networks, which is also reflected in the fierce debate over net
neutrality, which has not (so far) been much of a concern to European
regulators. All in all the US market and its regulators provide a lot of
interesting cases as it is here where the innovation is highest and regulatory
challenges come to the fore. The US is also an interesting market to observe as
it has pioneered with new policy instruments like selfregulation and
sophisticated spectrum auctions. A major difference between the US and many
other countries is the comparatively low level of content regulation in the US,
making it easier to accommodate convergence of content distribution. 
UK case.
The UK communications market is one of
the more competitive in Europe and is characterised by a complex industry
structure with a dominant telecom incumbent, a mix of good (uptake of digital
television, content diversity) and bad (broadband penetration, price and
quality) performance, a content industry strongly affected by a public sector
incumbent, the BBC and a converged regulator employing highly sophisticated
tools and closely engaged with industry, community and academic communities. 
The UK case stands out as having the
most ‘converged’ regulator, (office of communications) Ofcom, which was
deliberately formed out of a merger of five existing regulators to deal with
the new realities of integrated information delivery markets. However, Ofcom
does not serve as a comprehensive and independent regulator of all aspects of
the information delivery chain. It is more appropriate to think of it as a
central platform on which converging issues, tools and styles of analysis can
be integrated and through which the activities of key policy stakeholders can
be coordinated. Ofcom is independent and has significant policy setting,
supervisory and regulatory powers, which it applies with a strong inclination
towards liberalised markets and deregulation. Ofcom’s duties fall under
separate government departments and thus separate Commons Select Committees.
There is no single structured House of Lords system of oversight of Ofcom. The
UK case is interesting as Ofcom strives to lead the way in many areas; actively
procuring and conducting research, piloting new spectrum auction designs,
conducting wide scale consultations, engaging stakeholders and supporting self
regulatory solutions, especially in the internet domain and the area of
audiovisual content. It uses its position to  support innovation and
competitiveness whilst protecting the interests of consumer support innovation
and competitiveness whilst protecting the interests of consumers. 
South Korean case .
South Korea has a dynamic market
environment, high broadband penetration, and apparent leadership in the
development of converged services. Its market development is mostly dominated
by large telecommunications companies, less by bottom up innovation of new
entrants or content industry. The government has actively supported the roll
out and access to broadband (FTTH) and embraces ICT as the main driver of
competitiveness for the Korean economy. The convergence trend in South Korea
was lead by the market and the government was relatively slow to follow. After
2004 it has initiated a reform process of its market governance and regulation,
in response to convergence. 
The government sees convergence as a
positive development and a policy goal in itself, with high potential for
innovation and new service development. South Korea chose to adopt the single
regulator model by merging the telecommunications regulator MIC and the
Broadcast regulator KBC in the new KCC(Korean communications commission). KCC
has been given a broad remit involving a range of technical, economic, and
societal objectives. However, this converged approach is only partially
implemented, as its reporting structure continues to follow the segregation
between broadcast and telecommunication and there
remains a rift between the legacy
regulators as to the structure of a new ‘converged’ communication regulation.
Overall South Korea demonstrates the ability and drive to balance the
technological, economical and societal (TES) objectives. 

This balance is influenced by
regulatory legacy, with content policy being dominated by societal concerns and
telecommunication policy by the market and technology perspectives.
In the application of new policy
instruments South Korea is less advanced than the UK and the US. Spectrum
auctions have so far not been used as allocation mechanism. SK still relies
mostly on beauty contests and administrative pricing, with a very prescriptive
approach to usage and technologies to be applied. Much effort has gone into creating secondary spectrum markets and reuse of
abandoned spectrum, but without notable effect so far. South Korea has access
to significant private and public research capacities to support forward
looking policy making, but is slow to integrate scientific knowledge into
regulatory practice.
In conclusion these 3 case studies show
that is no ideal or perfect way of responding to the process of convergence but
 three cases share a number of important features. They all acknowledge
convergence as a relevant trend that has the potential for disrupting the
market and the existing governance structures and regulation. This awareness
has lead to regulatory adjustments in
the case of the US, and a total
overhaul of the regulatory landscape in the UK; with a more modest review in
Korea currently being implemented. These change processes were strenuous and
encountered a lot of internal resistance, which required political leadership
and perseverance to succeed.The impact of regulators on the market proves to be
strong. In all cases a degree of path dependency can be observed in the market
based on the legacy regulatory system. This tends to have a distorting effect
on the market, and often leads to incoherent policies across the information
delivery chain; e.g. biasing (large) telecom operators in South Korea; strengthening the duopoly, and
discriminating between (unregulated) cable and (regulated) telecommunication
infrastructure in the US; and strong ties between the regulator and the
incumbent telecommunications provider, and favouring economic over societal
objectives in the UK.
None of the cases have a fully
converged solution. In the UK Ofcom is not fully in charge of content and media
policy; whilst the FCC does not have powers over the internet. The South Korean
situation is still developing, but the current set up suggests that
communications and audiovisual content policy will retain certain of its
traditional characteristics. In all cases a general competition authority plays
a complementary role.
Typically all cases have chosen to
integrate spectrum policy in the mandate of the ‘information’ regulator; as it
is considered a key strategic ex ante policy tool with large impact on the
‘information’ market and society as a whole. The traditional technological
objectives have been replaced by a more strategic balancing of TES objectives,
which requires coherence and consistency in their application. The allocation
mechanism of choice is the increasingly
sophisticated spectrum auction. Differences occur in the views on the need to
ensure technological and service neutrality, and mechanisms on reuse, and
extending licenses.
How to respond to convergence will
depend on local political and technical factors, but this issue needs to be debated
and discussed by countries.
Thank You.
Being a paper delivered at the
COMMONWEALTH BROADCASTING SUMMIT 2016  held in lagos 11 – 13 May 2016
Yahaya Maikori – Partner Law Allianz
Ed’s Note – This article
was originally published here.