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ISBN: 978-92-61-31651-8 (Paper version) 978-92-61-31661-7 (Electronic version) 978-92-61-31671-6 (EPUB version) 978-92-61-31681-5 (Mobi version) Foreword Today’s digital technologies are transforming almost every sector of the economy by presenting new business models, introducing innovative products and services – and, ultimately, changing the way countries around the world harness socioeconomic development. Digital technologies, and the benefits that they bring, can connect citizens to services and opportunities, and help them build a better future. However, for markets to function effectively, they must be accompanied by an enabling policy and regulatory environment. The digital economy – comprising digital infrastructure, platforms, services, businesses and skills – has become an essential means of reducing poverty and improving the quality of the lives of the poor and vulnerable. Digital technologies and communication infrastructure are unlocking innovative solutions to complex challenges across a broad range of sectors including energy, health, education, transport, disaster risk management, and agriculture. The Internet and digital technologies have a profound impact on the way governments operate and interact with their citizens, creating increased transparency and more efficient service delivery, and in turn requiring greater cooperation across sectors and a collaborative approach to regulation. The ongoing wave of innovation has the potential to remove many of the barriers that stand between people and opportunity, especially for populations in poorer communities. While digital technologies continue to transform markets through convergence and reorganization of various sectors of the economy, serious market gaps and questions still remain that must be addressed, such as protecting citizens’ rights and individuals’ data online, and finding ways to provide ubiquitous high-speed broadband connectivity services at affordable prices, including to remote areas. The Digital Regulation Handbook, now in its third edition, serves as an essential guide to assist regulatory authorities and policy-makers in deciding on appropriate digital regulations, and evaluating the effectiveness of those regulations. The objective of this new edition of the Handbook is to provide online resources and analysis to assist ICT regulatory authorities worldwide to build capacity regarding topical regulatory issues and best practices related to the digital economy. The World Bank and the International Telecommunication Union are pleased to make available the Digital Regulation Handbook and a new online Digital Regulation Platform to update and revise the ICT Regulation Toolkit. These resources can be used as references and collaborative platforms to create both an environment in which the transformative power of digital technologies can reach its full potential, and as a powerful enabling tool for supporting innovation and achieving inclusive sustainable development. Boutheina Guermazi Doreen Bogdan-Martin Director, Digital Development, World Bank Director, Telecommunication Development Bureau, International Telecommunication Union iii Table of Contents Foreword .......................................................................................................................................... iii List of tables and figures ................................................................................................................ xi Introduction .................................................................................................................................... xiii Acknowledgements / About the authors .................................................................................. xvi Chapter 1. Regulatory governance and independence ...........................................1 1.1 Introduction ...................................................................................................................1 1.2 Policy and implementation ........................................................................................2 Evolution of regulation ................................................................................................2 Assessing the need to modernize and streamline ..................................................4 1.3 Role and institutional design of regulator ...............................................................5 Institutional structure of regulator .............................................................................5 Traditional areas of responsibilities ..........................................................................6 Shifting mandate/roles of regulators and policy-makers in the digital era .........6 Decision-making and rule-making in a multistakeholder environment ............10 1.4 Regulatory collaboration .........................................................................................13 Formalized and informal collaboration occurring across governments ............14 1.5 Building frameworks for digital regulation ............................................................17 Licensing frameworks for networks, services, and applications .........................17 Innovative approaches to sector regulation ..........................................................19 1.6 Key findings ................................................................................................................22 Development of national digital strategies and roadmaps .................................22 Institutional structure and role of regulator ............................................................22 Building frameworks for digital regulation .............................................................23 References ..............................................................................................................................24 Chapter 2. Competition and economics ...................................................................29 2.1 Introduction: Regulatory transformation in the digital economy ........................29 2.2 Regulation in the digital era .....................................................................................31