Education

1. © Malaysian Communications and Multimedia Commission, 2002
MALAYSIAN COMMUNICATIONS
AND
MULTIMEDIA COMMISSION
- A Malaysian Experience in USP
17 March 2003

2. © Malaysian Communications and Multimedia Commission, 2002 2
AGENDA
1. The Malaysian initiative on
convergence
2. The Commission and Licensing
Framework
3. Universal Service Provision

3. © Malaysian Communications and Multimedia Commission, 2002
Malaysian Initiative
on
Convergence

4. © Malaysian Communications and Multimedia Commission, 2002 4
Institutional changes to facilitate convergence
1 Apr 99
Redefinition of
the Ministry’s
functions and
formation of CMC
Ministry of Energy,
Telecommunications & Post
1 Nov 98
Ministry of Energy,
Communications & Multimedia
Malaysian Communications and
Multimedia Commission formed
Replacement
of sectoral
regulators by a
convergence
regulator
JTM
MOI (Licensing Division)
Malaysian
Communications
and Multimedia
Commission
Replacement
of sectoral Acts
by a convergence
Act
Telecommunications Act 1950
Broadcasting Act 1988
Malaysian
Communications
and Multimedia
Act 1998

5. © Malaysian Communications and Multimedia Commission, 2002
The Commission
and
Licensing Framework

6. © Malaysian Communications and Multimedia Commission, 2002 6
The Commission has a dual role in the C&M sector
Regulatory
(Conformance)
Managing for conformance
Developmental
(Performance)
Planning for Performance
In fulfilling its role, the Commission is guided by the
10 National Policy objectives for communications and
multimedia

7. © Malaysian Communications and Multimedia Commission, 2002 7
10 National Policy Objectives for the Communications & Multimedia sector
1. Creating a global hub: To establish
Malaysia as a major global centre and
hub for communications and multimedia
information and content services;
2. Building a civil society: To promote a
civil society where information-based
services will provide the basis of
continuing enhancements to quality of
work and life;
3. Nurturing local content and culture:
To grow and nurture local information
resources and cultural representation
that facilitate the national identity and
global diversity;
4. Ensuring long-term benefits for
end-users: To regulate for the long-
term benefit of the end user;
5. Nurturing user confidence: To
promote a high level of consumer
confidence in service delivery from the
industry;
6. Promoting access and equity: To
ensure an equitable provision of
affordable services over ubiquitous
national infrastructure;
7. Creating a robust applications
environment: To create a robust
applications environment for end users;
8. Facilitating efficient allocation of
resources: To facilitate the efficient
allocation of resources such as skilled
labour, capital, knowledge and national
assets;
9. Developing industry capabilities: To
promote the development of capabilities
and skills within Malaysia’s convergence
industries, and
10. Promoting secure and safe
networking: To ensure information
security and network reliability and
integrity.
Source: Section 3(2) of the Communications and
Multimedia Act 1998 (Act 588)

8. © Malaysian Communications and Multimedia Commission, 2002 8
Licensing for convergence
Broadcasting
licence
Network Facilities
Network Services
Applications Services
Content Services
The old licenses that were issued
were based on specific
technologies, and specific services
Licenses issued under CMA
98 are technology-neutral
and service-neutral
The new licensing
framework promotes
vertical separation
between facilities,
network, applications,
and content
Under the old licensing
framework all activities
related to the provision of a
particular service are
vertically integrated for the
provision of that service

9. © Malaysian Communications and Multimedia Commission, 2002 9
Industry Participants under CMA
Network Facilities
Provider (NFP)
Owners of facilities such as satellite earth
stations, broadband fibre optic cables,
telecommunications lines and exchanges,
radio communications transmission
equipment, mobile communications base
stations, and broadcasting transmission
towers and equipment
Network Service
Providers (NSP)
Provides the basic connectivity and
bandwidth to support a variety of
applications
Applications
Service Providers
(ASP)
Provides particular functions such as voice
services, data services, content-based
services, electronic commerce and other
transmission services
Content
Application
Service Providers
(CASP)
A special subset of applications service
providers including traditional broadcast
services and newer services such as online
publishing and information services

10. © Malaysian Communications and Multimedia Commission, 2002
Universal Service Provision
(USP)

11. © Malaysian Communications and Multimedia Commission, 2002 11
Household penetration rates of various services
Television sets 95%
Mobile phones 54%
22%
Fixed lines 75%
59%
PC 24%
9%
Urban households
Rural households
Total households

12. © Malaysian Communications and Multimedia Commission, 2002 12
The two prong strategy for bridging the digital divide
Multimedia services
Broadband access
Competitive rates
Basic services
Basic access
Affordable rates
Provide
Catch-up to
reduce the
digital divide
within the
country
%
PSTN
penetration
GDP per capita
Ramp up to
capture the
digital
opportunities

13. © Malaysian Communications and Multimedia Commission, 2002 13
The Overall objectives for
Universal Service Provision
To promote the widespread
availability and usage of
network services and/or
applications services throughout
Malaysia by encouraging the
installation of network facilities
and the provision of network
services and/or applications
services in underserved areas or
for underserved groups within
the community

14. © Malaysian Communications and Multimedia Commission, 2002 14
Definition of “underserved”
• “Underserved area” means an area where the
penetration rate for PSTN is 20% below the
national penetration rate
• “Underserved group within the community”
means a group of people linked by similar
characteristics from a socio-cultural or
economic perspective, within a served area,
who do not have collective or individual
access

15. © Malaysian Communications and Multimedia Commission, 2002 15
System of USP set in the CMA
Public Inquiry
Ministerial Direction
Commission Determination
Communications and Multimedia
(Universal Service Provision)
Regulations 2002
Latest
Regulation

16. © Malaysian Communications and Multimedia Commission, 2002 16
System of USP in the CMA
• Section 202(1) - The Minister may direct the Commission
to determine a system to promote the widespread availability
and usage of network services and/or applications services
throughout Malaysia by encouraging the installation of network
facilities and the provision for network services and/or
application services in underserved groups within the
community
• Section 203(1) – A determination by the Commission
under subsection 202(1) shall include definitions of
“underserved areas” and “underserved groups within the
community
• Section 204(1) - For the purposes of this Act, a fund to be
known as the “Universal Service Provision Fund” (“USP Fund”)
is established and it shall be controlled and operated by the
Commission
• Section 204(2) – The Minister may make regulations
regarding contributions by licensees, under this Act, to the USP
Fund and any other matters related to or incidental to the
establishment and operation of the USP Fund

17. © Malaysian Communications and Multimedia Commission, 2002 17
• USP Objectives
• Notification of universal service targets
• Universal Service Plan and Designation of
Universal Service Provider
• Implementation of the Universal Service
Plan
• Costing of USP
• USP Fund
Communications and Multimedia
(Universal Service Provision)
Regulations 2002

18. © Malaysian Communications and Multimedia Commission, 2002 18
Graphical representation of the Four USP objectives
Objective 1:
Collective access
to basic telephony
and public payphone
services
Objective 3:
Collective access
to Internet
access services
Objective 2:
Individual access to
basic telephony
services
Objective 4:
Individual access to
Internet
access services
Collective
access
Individual
access
Basic telephony The Internet
SERVICES
TYPE
OF
ACCESS

19. © Malaysian Communications and Multimedia Commission, 2002 19
C&M (USP) Regulations - Graphical Points
Notification of
universal
service targets
USP Fund
Progress Report
Designation of
the universal
service provider
Draft universal
service plan
Costing USP
Claims
Compliance with
QOS standards
Licensees
Implementation
of universal
service plan
Underserved  Connected

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• Universal Service Plan and Designation of Universal
Service Provider
 Request licensee to submit draft of universal service plan in
respect of universal service target identified
 Licensee draft universal service plan contain
• Location details within the universal service target
• Network facilities to be installed
• Technology deployed
• Timetable for provision of application services
• Capital cost for installation
• Estimates of operating costs
 Approval of Plan & designation of Universal Service Provider
Selected Highlights
• Implementation of the Universal Service Plan
 Progress report – first report not later than 3 months
from notification of approval of Plan and thereafter once
every 2 months

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• Costing of universal service provision
 Commission shall pay the designated universal service
provider from the USP Fund the cost incurred in
implementing the approved universal service plan in a
universal service target
The net cost in implementing the approved universal
service plan is computed as:
Net USP cost = avoidable cost - revenue forgone
Selected Highlights
• USP Fund
Contribution - By licensee of 6% of its weighted net
revenue. Only by those whose net revenue > RM500,000.
Commission shall maintain proper accounts of the USP
Fund - Annual report and statement of accounts

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• Register of USP
(a) non-confidential summaries of the approved
universal service plans
(b) designated universal service providers
(c) universal service target
(d) a list of licensees contributing to the USP Fund
• General Penalty
 Any person who commits an offence under these
Regulations shall on conviction be liable to a fine not
exceeding RM300,000 or to imprisonment for a term
not exceeding 3 years or to both
Selected Highlights

23. © Malaysian Communications and Multimedia Commission, 2002 23
• Digital Divide
 recognition
 measurement
• Implementation
 monitoring
 review
• Service Providers Cooperation
Key Issues
and
Resolution for Way Forward

24. © Malaysian Communications and Multimedia Commission, 2002 24
THANK YOU
Main Office:
Malaysian Communications and Multimedia Commission
Level 11, Menara Dato’ Onn,
Putra World Trade Centre,
45 Jalan Tun Ismail,
50480 Kuala Lumpur,
MALAYSIA
Tel: +603 4047 7000
Fax: +603 2693 4881
Website: www.cmc.gov.my