GSR best practices guidelines on the gold standard for digital regulation (2020) and to fast forward digital connectivity (2019)30.11.2020
Regulators participating in the 19th and 20th edition of the Global Symposium for Regulators adopted the following best practice guidelines to set the gold standard for digital regulation and to fast forward digital connectivity.
Regulatory best practice guidelines to set the gold standard for digital regulation
1 Demonstrating regulatory thought leadership for digital transformation
While recognizing that digital regulation will be led by the core policy design principles outlined in the GSR-19 Best Practice Guidelines to fast forward digital connectivity for all, we identified the following fundamentals for sound, future-proof regulatory frameworks to respond to the challenges of digital transformation in the aftermath of global crises and beyond.
- Regulatory strategies for digital: Regulators should articulate a clear rationale for how and why decisions are made, their goals, time-bound targets and monitoring mechanisms for effective implementation. Strategic priorities should address short-to-medium term outlooks of national and global markets, with long-term strategies which takes account of appropriate government policy and a coordinated approach among all stakeholders while advancing regional development strategies where appropriate.
- Integrating sustainability into regulatory frameworks: The policy approach to technology needs to be revisited and its scope expanded to cover the full cycle of digital technologies and services, from ideation to dissemination to recycling of digital products. Environmental aspects should be taken into account at every stage of an integrated, consistent regulatory framework covering issues from the carbon footprint of cloud to e-waste management to digitization of economic sectors’ operations. Regulatory collaboration with regulators of other economic sectors should therefore become the norm.
- Maximizing benefits while minimizing harms of digital technologies: policy makers and regulators should design regulatory frameworks to enable innovation while controlling harms, use data and digital technologies to improve the efficiency and effectiveness of government services, work together to develop and promote regional and global standards that enable greater use of technologies.
- Open, inclusive and transparent regulatory process: we assert that digital regulation needs to be oriented towards enhancing transparency, ethics and trust throughout the regulatory process. Regulatory decision-making processes should encourage broad participation of stakeholders, including those from industry, civil society and local governments, through formal and informal channels. Throughout the process, the regulated entities and the regulator should share responsibility for the development, monitoring and implementation of rules and guidelines.
- Multiple formats and modes of regulation: Formal regulation should leave sufficient space for self-regulation, hybrid and collaborative regulatory models and oversight mechanisms for law enforcement. From incentives and rewards through forbearance to targeted obligations, the range of tools and remedies at hand for regulators to explore is wide. New issues call for novel approaches and the regulatory canvas has expanded to cover regulatory sandboxes, ethical frameworks, technology roadmaps, regulatory impact assessment, multi-varied research and big data simulation in exploring the most balanced, proportionate and fair regulatory response. Artificial intelligence, Internet of Things, and online disinformation are some of the complex issues waiting to be addressed.
- Good governance and effective institutions with appropriate mechanisms in place for collaborative regulatory approaches: Institutional design is key and regulatory authorities should hold appropriate powers and strong independence from market players as well as from national decision-makers and political influences. They should act with integrity and be able to make objective, future-proof decisions and to collaborate across sectors to foster digital transformation. This will pave the way for principled engagement of all market stakeholders and for collaboration across the sectors. Effective institutions need to have appropriate mandates, be adequately funded and well capacitated in terms of staff. Staff competences should be continuously upgraded while being in adherence with good governance principles including accountability and transparency.
- Evidence-based approach: evidence and data inform regulatory decisions and help identify emerging regulatory issues. Data and analysis also allow regulators to determine if specific regulatory interventions and decisions are justified by market failures and guide them in defining the desired regulatory outcomes as well as the public policy options to achieve them. Strengthening the monitoring and evaluation function of regulators and integrating in collaboration with other competent agencies can facilitate effort towards improving regulation and ensuring that the regulation achieves its objectives in the most effective and efficient manner, in particular network resilience and enhancing both the capacity and coverage of networks without imposing disproportionate, redundant or overlapping burden on the market.
- No rule is set in stone: Regulatory frameworks should be regularly reviewed to ensure they remain fit for purpose. Regulatory frameworks may need to adapt to ensure they are continuing to meet public policy objectives in an evolving digital environment. Revoking the rules that are no longer justified is just as important as adopting forward-looking ones.
2 Vectors of regulatory action: Inclusiveness, agility, and resilience
The increasing reliance on digital infrastructure by national economies and citizens combined with the probability of new global emergencies means regulators will need to switch focus beyond regulating within traditional sectoral frameworks to regulatory frameworks which are adaptive, collaborative, outcomes-based and technology neutral.
We recommend that digital regulation be rooted in the following vectors so the digital transformation can unfold its full potential.
- Consumers are citizens, patients, students and our families: consumer interest and fairness are central to digital regulation and all regulatory decisions should be taken with consumers in mind, from incremental interventions to providing smooth online experience to effective channels for redress, including through consumer advocacy bodies, to consumer education to legal reform.
- Focus on business: digital regulation should be used as a lever for the development of business opportunities geared toward the digital economy for all kinds and sizes of market players, including small and medium-sized enterprises (SMEs). The policy approaches need to integrate digital technology at the center of the local, national and, whenever possible, regional development strategies to stimulate the economy, do business and create value in high-potential sectors while fostering cross-sectoral synergies as well as connectivity and digitalization of SMEs.
- Regulation is only needed where there is a public policy justification for regulating a service, whether through an expansion of existing rules and regulatory regimes or the development of new ones. In the absence of a public policy rationale, regulators and policymakers should allow competition to proceed unfettered.
- Data shielding: Clear, strong and enforceable rules related to data governance can provide adequate shield for digital consumer protection while creating a predictable, structured framework for doing digital business. State-of-the-art regulatory protocols and mechanisms can go a long way towards enhancing trust in the digital ecosystem, such as the commitment to comply with requirements related to the access to non-personal data retained by digital platforms, transparency of certain essential algorithms used by digital services, portability of essential data of structuring platforms, interoperability and maintenance of APIs (application programming interfaces).
- Resetting market definitions: regulators may identify new governance challenges and objectives, given that services provided on a global scale are also provided locally. The emergence of global digital platforms can lead to extending the scope of markets beyond the electronic communications sector. New models of ex-ante regulation for such platforms can be designed to preserve the open internet at all levels, from access to services to user devices to content generation. In doing so, due attention should be given to only use regulation where and when needed, and prefer preventive measures, to the extent possible.
- Meaningful connectivity for all: targeted and innovative strategies to increase universal broadband access and lower the costs of communication will narrow national market gaps, while also addressing trust, security and safety of infrastructure and services. Regulatory initiatives can contribute to realizing SDGs by bridging digital divides more quickly, not only in terms of inequality of access to infrastructure but also digital literacy and meaningful content and opportunities. Meaningful digital connectivity is an equalizer that bridges social and economic divides, such as in education, health, finance, but only if it is recognized as a universal right.
- As good as gold: Mechanisms for making markets easier to navigate and the simplification of regulatory rules and standards increase the trust in regulatory governance and facilitate the entry of fresh investment flows and new players across industries and borders and the buildout of sufficient, resilient and open infrastructure. General authorization regimes, efficient and effective market mechanisms for spectrum management, infrastructure sharing, and general competition laws have proved as catalysts of digital transformation and remain the basis for future regulations.
In the aftermath of the COVID-19 global crisis, public and social policy realignment and regulatory repatterning may need to take place.
We believe that digital regulation can boost the readiness of digital markets to face unexpected events and emergencies and deliver up to the expectations despite the odds, notably through the following targeted reforms.
- Agile framework for competition in digital markets: to ensure competition, innovation and consumers’ freedom of choice for global digital platforms services, a new agile regulatory approach can be based on the real-time monitoring of activity as well as targeted, proportionate, ex-ante and timely remedies, as appropriate. Regulators should support innovation and new business and licensing models that facilitate affordable access to and investment in health, enterprise, and educational services over digital platforms, especially as the world adapts to, and recovers from, the current health pandemic.
- Codes of conduct (voluntary or enforceable): in important areas such as online content moderation over digital platforms, addressing misinformation and online news quality, and child online protection, digital platforms are encouraged to adopt an outcomes-based approach and regulators should guide and support them throughout the process of creating the codes, their implementation and enforcement. Media and digital literacy and awareness efforts should likewise be central to navigating the challenges around services that are enabled by the digital transformation.
- Upgrading national emergency plans: Creation and implementation of effective emergency plans provides for better preparedness for and decision-making during crises. Such plans are key to anticipating future unexpected events and their negative impacts and should focus on both urban and rural areas through a multi-technology approach. Bilateral, regional and international cooperation is required to ensure business and public service continuity and underpin national recovery efforts. Policymakers should ensure that these plans, if they do not already do so, address health emergencies as well as physical disasters.
- Spectrum reform: spectrum managers need to be able to respond timely, making spectrum available for wireless applications when and where it is needed as easily as possible, giving spectrum users and innovators flexibility to provide services that will deliver the greatest benefits. An agile and flexible authorization framework, using technology- and service-neutral approaches may enable spectrum users to deploy equipment quickly and smoothly and evolve their networks. Ensuring sufficient unlicensed spectrum is available drives innovation and investment in a range of technologies that can complement and support networks and expand broadband access at low cost. While regulatory reform for the purpose of bringing new radio systems and services to market is a laudable objective, spectrum reform should also be focused on ensuring that access to broadband service is provided affordably to those areas and populations that have been traditionally unserved or underserved.
3. Collaboration across sectors, cooperation across borders, and engagement across the board
Increasing globalization of markets and blurring of traditional sectoral boundaries will mean that international and inter-governmental cooperation and collaboration are integral in ensuring our regulatory frameworks can adapt and respond to new and emerging regulatory challenges.
Public policies have started to change focus from a single sector to the economy and society, underpinned by digital transformation. ICT regulators and policy-makers are under increasing pressure to connect with peers and players across all economic sectors to leverage digital transformation as an engine for sustainable development and achieving SDGs.
5th generation collaborative regulation underpinned by solid regulatory principles will promote certainty which is key if regulation is to continue to attract investment and foster the innovation that has hitherto defined the digital economy.
We therefore consider the following areas essential to the success of regulatory collaboration and response.
- Legal capacity for joint action – The outcomes resulting from collaborative regulation are likely to be meaningful, effective and well considered with fewer unintended negative consequences when they are based on sound legal processes and institutional frameworks and mandates. Memoranda of Understanding or similar binding acts are particularly useful in formalizing the grounds for collaboration, defining roles, mechanisms, and outcomes of collaboration. These frameworks could address not only domestic collaboration between sectors, but regional and international collaboration to more effectively address cross-border issues.
- Uniting fragmented efforts around a common cause, aligning actions and multiplying consumer and business outcomes: the ICT regulator has a central role in facilitating access to resources for emergencies (such as frequency spectrum, Internet bandwidth, equipment deployment and sharing of infrastructure) but also in the continuing coordination with sectors such as health, government, education and finance to take charge of the needs of citizens and support whole-of-government approaches to digital transformation.
- Incorporating modern methods for diagnosing the regulatory and institutional capacities of agencies will enable them to refine their objectives in a flexible and agile manner to respond both to predictable instances of technological change and new services as well as to extraordinary emergency situations such as a pandemic. Risk management, planning, monitoring the implementation of regulations as well as reviewing and assessing the impact of those regulations on digital markets and the economy and on how public policy is carried out must form an institutional mechanism that goes beyond short-term political considerations, so that regulatory frameworks enjoy predictability and sustainability over time as well as a solid base from which to consolidate and better use public resources.
- Creating platforms for dialogue on key topics: while designing viable regulatory support frameworks for industry-led technological solutions, regulators need to engage in information sharing across the industry and between the industry and government agencies as well as others such as data protection and consumer protection agencies. Strategic coordination along with domestic and international engagement between regulators and law enforcement agencies would lead to improved regulatory enforcement and increase consumer benefits.
- The new roles of regulatory associations (RAs) should leverage their capacity to boost the development of digital markets at the national and regional level while building scenarios for future emergency response of all kinds. The collaboration, information sharing and cross-fertilization among regulators as well as among RAs should be further enhanced and geared towards regional harmonization and coordination, including in the area of spectrum management, international mobile roaming and digital platform regulation.
- International cooperation: Effective international dialogue is essential to enable cross-country learning as well as to explore common policy solutions at both regional and global levels. International organizations must redouble their efforts to meet their commitment to rendering equitable service to an international community with differing yet interdependent interests and realities. Instruments for international cooperation must be employed transparently and efficiently and become levelers that enable national digital markets to thrive.
Best practice guidelines to fast forward digital connectivity for all
Core design principles for collaborative regulation
Policy design principles are at hand for regulators to help develop an understanding of new technology paradigms and guide them towards appropriate regulation. Led by these principles, regulators can fine-tune their regulatory response, ensuring optimal impact on the market.
We therefore identified seven design principles to respond to new technology paradigms and business models stemming from collaborative regulation:
- To achieve digital transformation, policy and regulation should be more holistic. Cross-sectoral collaboration along with revisited regulatory approaches such as co-regulation and self-regulation, can lead to new forms of collaborative regulation based on common goals such as social and economic good, and innovation.
- Policy and regulation should be consultation and collaboration based. In the same way digital cuts across economic sectors, markets and geographies, regulatory decision making should include the expectations, ideas and expertise of all market stakeholders, market players, academia, civil society, consumer associations, data scientists, end-users , and relevant government agencies from different sectors.
- Policy and regulation should be evidence-based: Evidence matters for creating a sound understanding of the issues at stake and identifying the options going forward, as well as their impact. Appropriate authoritative benchmarks and metrics can guide regulators in rule-making and enforcement, enhancing the quality of regulatory decisions.
- Policy and regulation should be outcome-based: Regulators need to address the most pressing issues, for example market barriers and enabling synergies. The rationale for any regulatory response to new technologies should be grounded in the impact on consumers, societies, market players and investment flows as well as on national development as a whole.
- Policy and regulation should be incentive-based: Collaborative regulation is driven by leadership, incentive and reward. Regulators should keep a wide array of investment incentives at hand to provide impetus for markets to innovate and transform while maximizing benefits to consumers.
- Policy and regulation should be adaptive, balanced and fit for purpose: Regulation-making is about flexibility – continually improving, refining, and adjusting regulatory practices. The balance in regulatory treatment of new services is more delicate than ever. A close, continuous link to markets and consumers is important to get digital on the right glide path to achieving social and economic goals.
- Policy and regulation should focus on building trust and engagement: Collaborative regulation provides the space for co-creating win-win propositions, working towards regulatory objectives while increasing the engagement of industry. Trust becomes the foundation of the regulatory process, underpinning the growth of digital.
Benchmarks for regulatory excellence and market performance
Substantial research and evidence suggest that best-practice regulation does matter and both the design and the effective enforcement of regulatory frameworks are essential for digital markets to thrive. The digital transformation brings about challenges to regulators and grounding regulatory decisions in robust, multifaceted and thoughtfully interpreted evidence can prove instrumental in generating positive market dynamics in the short and long term. From informing consumer choices to inducing market efficiency to improving return on investment, evidence-based decision-making can serve a myriad of regulatory goals and amplify the regulators’ capacity to lead markets.
We recommend five main clusters of benchmarks for regulators:
- Connectivity mapping: Tracking the deployment of the various kinds of digital infrastructure can inform the regulatory process and allow regulators to identify market gaps and market stakeholders – to turn them into opportunities for investment and growth.
- Metrics for market performance: Metrics allow regulators to assess the performance of market segments for digital services against social and economic goals and identify priority action areas for policy and regulation.
- Measuring regulatory maturity and levels of collaborative regulation: Regulatory benchmarks pinpoint the status of advancement of policy and regulatory frameworks for digital markets. They help track progress and identify trends and gaps in regulatory frameworks, making the case for further regulatory reform towards achieving vibrant and inclusive digital industries.
- Impact assessment: A combination of quantitative and qualitative econometric studies based on reliable data can enable regulators to explore, understand and quantify how digital technologies, market players or regulation can contribute economically to growing the larger digital ecosystem and making it more inclusive.
- Regulatory roadmaps based on established authoritative metrics can guide regulators towards achieving digital connectivity objectives in a faster and targeted way.
In order to leverage on these evidence-based instruments, the volume and quality of data accessible to regulators need to be increased, and their sources diversified.
These instruments can also enable market players to reflect on their performance and impact on the economy and development, and engage in self-regulation.
What regulatory tools and approaches are at hand for enabling digital experimentation?
Regulatory upheaval from new technologies and new business models has given rise to collaborative regulation. To fast forward development towards SDGs, countries need to embrace the next level of regulation, with a new attitude and a new toolbox. The dual role of regulators as guarantors of inclusion and consumer protection, on one hand, and stewards of future-proof digital markets, on the other hand, cannot be overemphasized.
We recognize that, among the many tools that can improve digital market outcome, the following form the core of collaborative regulation best practice:
– Space for digital experimentation: From temporary licences to new technologies’ pilots to regulatory sandboxes, a range of tools and techniques can be used to create a dynamic regulatory environment in which digital market failures and opportunities have space and flexibility to address present and future challenges. Such methodologies can also be employed to design strategies to enhance digital applications and skills.
– A Pro-competition frameworks for the digital transformation should consider longer value chains, more diverse market players, services and devices, stakeholder partnerships and digital infrastructure layers, and ultimately, their impact on markets and consumers and Internet neutrality. Nonetheless, excessive and unwieldy regulation must be avoided.
– Regulatory incentives can create a positive market dynamic and improve market outcomes with less regulatory effort.
– Stakeholder engagement vehicles, such as public hearings, high-level roundtables and expert workshops, hackathons, can allow pooling resources and expertise to inform major regulatory decisions.
– Robust and enforceable mechanisms for consumer protection including a set of rules on data protection, privacy and data portability as well as accessible mechanisms for consumer redress are essential to support the digital transformation in economic sectors across the board and ensure consumers’ interests are safeguarded.
– Market-based and dynamic mechanisms for spectrum management can allow for flexible, simplified and transparent use of scarce radio frequencies, also promoting technology neutrality.
– Regulatory Impact Assessment (RIA): Enhanced with new benchmarks and data analysis, RIA allow for better decision making and should be introduced as a regular practice before major regulatory decisions are made as well as throughout the lifecycle of regulation.
– Agile data-driven monitoring solutions, based on standards for the interoperability of data systems and tools among regulators and market players, can facilitate market oversight in areas such as quality of service and experience, and regulatory compliance.
– Diversified mechanisms for consumer engagement and feedback multiply the regulatory inputs and allow for fine-tuning regulatory policies and their implementation.
– Effective channels for dynamic collaboration among regulatory authorities, such as the ICT, financial and competition authorities as well law enforcement agencies and the judiciary, are necessary to ensure coherent and reasonable regulations across economic sectors. Regulatory sandboxes involving multiple regulators can incubate key cross-sector regulations, such as for digital financial inclusion.
– Regional and international cooperation in defining regulatory rules on cross-border issues can ensure consistency, predictability and fluidity of digital markets and will catalyze the deployment of region-wide and global digital infrastructure, from fiber backbones to submarine cables to mobile networks and satellite connectivity.
– Regulatory expertise needs to be developed continuously to integrate new technologies, competencies and skills and allow for data and evidence-based decision-making.
We commit to start putting in practice and building upon these guidelines now and believe they will lead us towards achieving SDGs in our societies by 2030.