TELECOMMUNICATION AUTHORITY OF SINGAPORE (AMENDMENT) BILL

Order for Second Reading read.

The Minister of State for Communications (Dr John Chen Seow Phun): Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time."

Sir, the focus of the TAS Act, 1992, was on the separation of the regulatory function of TAS from the commercial and operational functions, and on the transfer of rights and liabilities of the reconstituted TAS to the privatised Singapore Telecom and Singapore Post. Since then, the telecommunication environment has greatly changed. From a single monopoly operator environment, we are now moving towards a multi-operator environment where there is aggressive competition between all players. Today, we already see competition in value-added network services, cellular mobile telephone services, radio paging services, and Internet-access services, to name a few.

Come Year 2000, there will be competition in the biggest piece of the pie, which is the domestic and international basic telecommunication services. The whole process of liberalisation aims to sharpen our competitive edge as a global business centre and bring maximum benefits to the consumers. This can only be realised if there is in place a strong and clear regulatory framework which supports a level playing field and ensures fair, effective and sustainable competition among all operators. In addition, the convergence of telecommunications, computing and broadcasting technologies is a worldwide trend giving rise to a new info-communications industry. We will have to encourage the introduction of new and innovative technologies in Singapore to ensure our services and infrastructure meet the increasingly sophisticated needs of businesses and consumers. The regulatory framework that we develop must therefore be able to address these rapid changes in both the market environment and technology advancements. In order to address these varying issues, the current TAS Act that was passed in April 1992 needs to be amended to:

(1) ensure that TAS has the necessary powers to carry out its functions and duties in a liberalised, multi-operator environment;

(2) bring the TAS Act up-to-date given changes in technology and new types of offences; and

(3) ensure that the penalties and enforcement measures specified in the TAS Act are adequate to regulate telecommunication and postal licensees.

Sir, I now come to the key provisions of the Bill. Clause 3 of the Bill provides for a new function and duty for TAS to create an economic framework for the operation and provision of telecommunication and postal systems and services. Such a framework would promote and safeguard competition and fair and efficient market conduct.

This is necessary if TAS is to regulate any conduct which may restrict competition in telecommunication services or in the telecommunication market. As part of the regulatory framework that TAS will establish, TAS proposes to issue codes of practice, which would apply to its licensees.

Clauses 4 and 7 of the Bill provide for additional conditions that TAS may impose on a telecommunication or a postal licensee. In particular, conditions requiring the licensee to enter into agreements or arrangements relating to interconnection, access and sharing of infrastructure, would be made express. The guiding principle is that where licensees are unable to agree on the terms and conditions for interconnection, access and sharing of infrastructure, these would be determined by TAS. These issues are critical issues in a multi-operator environment.

Interconnection and equitable access between and among operators are essential for end-to-end connectivity and ensure transparency to end users in a multi-operator environment. While TAS has set broad guidelines for operators to co-operate in this area, TAS would need to be empowered to determine these terms and conditions where licensees are unable to agree.

Clauses 4 and 7 of the Bill also require telecommunication and postal licensees to comply with TAS' codes of practice and standards of performance which TAS is empowered to issue under clause 27 of the Bill. TAS may also give directions with respect to standards of performance and procedures for compliance by licensees. Clauses 5 and 8 empower TAS to suspend specific services instead of the entire licence which may cover several services, depending on the circumstances.

Clause 6 makes it a requirement for TAS' prior approval to be sought for connection of equipment to a telecommunication system or equipment of any licensee, and not just a public telecommunication licensee. This is to protect the integrity of our networks.

Clause 15 of the Bill provides for further measures against telecommunication fraud. Two new offences in connection with dishonestly obtaining a telecommunication service are introduced. With changes in technology, there has been a shift in offences from the traditional telephony environment to mobile communications. Under the first offence, a person is guilty if he has in his custody or control, anything which he intends to use to obtain a service dishonestly or which he intends dishonestly, to allow others to use to obtain a service. Under the second offence, a person is guilty if he supplies or offers to supply anything, which is intended to be used to obtain a service dishonestly. These provisions would address those who possess cloned telecommunication equipment and use them to dishonestly obtain or use a telecommunication service. It is important to control the incidence of fraud, not just to safeguard the industry but also to ensure that the higher costs of operations do not ultimately translate to higher prices to legitimate end-users.

Sir, in light of the various cable cut incidents last year and early this year, we have put in place further measures to ensure that parties take due care against such incidents. Clause 18 increases the fine that may be imposed for an offence of damaging a cable of a telecommunication system to $1 million. Clause 19 introduces a new section which imposes a duty for persons who excavate any land to first ascertain the location of any main, cable, pipe, conduit, circuit or wire belonging to or under the control of a telecommunication system licensee.

Another significant new provision is introduced in clause 23 of the Bill. TAS is empowered to determine the space and access requirements by the developer or owner of the building who requires a telecommunication service to be provided in a building. This is important in a multi-operator environment. TAS, the regulator, is in the best position to ensure the optimally-efficient space requirements of all operators in a multi-operator environment. By doing so, TAS would ensure that consumers are not deprived of the choice of more than one service provider, for the provision of a telecommunication service.

Clause 24 expands section 103 to allow all telecommunication licensees, and not just a public telecommunication licensee, to enter any building for the purpose of eliminating interruptions or interference to a radio-communication system or service. This is necessary to maintain the quality of service to its customers.

Clause 25 introduces two new sections, sections 103A and 103B. Section 103A empowers TAS to give directions to a telecommunication licensee, and to a developer or an owner of a building, on the provision of access for the installation of facilities, necessary for the provision or enhancement of quality of a telecommunication service. Section 103B empowers TAS to direct a licensee to co-ordinate and cooperate with any other person in the use or sharing of any telecommunication installation, plant or system to minimise duplication or wastage of resources.

The remaining provisions of the Bill are housekeeping matters, such as the deletion of obsolete provisions, the enhancement of penalties under the existing Act as well as some minor amendments, such as removing the restriction on the number of Board members of TAS. This is to allow TAS to tap the expertise of members from various industries.

Sir, this Bill provides a framework which would equip TAS with the necessary powers and safeguards for a dynamic, multi-operator, telecommunications environment. The implementation of the proposed amendments to the Act would serve to better regulate the industry and protect the interest of the public as well as improve the standards of performance of the operators.

Sir, I beg to move.

Question proposed.

Mr Chay Wai Chuen (Tanjong Pagar): Mr Speaker, Sir, I wish to speak in support of the TAS (Amendment) Bill.

The amendments, as introduced by the Minister of State for Communications, are quite wide ranging, and these amendments make up to date the Telecommunication Authority of Singapore Act, in a field which is characterised by rapid change and rapidly changing technologies which have very definitive impact on competition, markets and market powers of the players. The TAS has a role to create the framework for a competitive telecommunication service system in a market that has the scale and scope of a natural monopoly. Further, telecommunication services have also the features of call and network externalities which are, in general, spillover gains to others arising from the consumption of that service by an individual.

These features of natural monopoly and externalities in the telecommunication services industry make the fair and efficient regulation of that market environment so difficult. By the character of a natural monopoly in scale and scope, it is entirely possible for a monopoly to supply the whole of the market demand cheaper than multiple firms. Yet, regulatory controls must be introduced for a rule-based competition, as competition is good for the consumer and raises the standard of services of the providers. Someone asked me, a few months ago, why the Government should regulate and control our single licence holder, SingTel, to give fair competition to all these new entrants, many of them from overseas, when our own operator may not be so fairly treated overseas in other markets. I do not know whether this is a valid complaint.

It is good for the consumers here that some regulation for universal service and interconnection access and the sharing of infrastructure are provided for in these amendments. This is done in a general environment for encouraging deregulation and allowing access for the new prospective entrants to the industry. Consumers in Singapore have gained from the limited competition we have recently seen in the mobile phone and paging markets. Prices have fallen substantially and service quality has generally risen. This augurs well for further areas of telecommunication services which may be deregulated.

The regulation for competition also gives our own major service operator the opportunity to get ship-shape and tip-top for its competition overseas in this very intense and technologically fast driven market. The most fundamental tenet in this deregulatory exercise must be to enable the industry and the players in it to be abreast of the latest technological developments and the facility they afford to discriminating consumers. Such technological developments have always expanded the scope for competition and the boundary limits of the market.

It seems paradoxical that a deregulatory environment with new entrants is also bringing with it new regulations. These regulatory controls which TAS will have to administer are more complex and will have to be more alive to the inter-relationships and the efficient networking of infrastructure with interconnection access. It is an everlasting play for profit, technologies and efficiency for the players, the TAS and the consumers. I hope the Minister will also assure the House that consumers' interest will be safeguarded.

In particular, clause 26 of the Bill amends two subsections of section 114 dealing with the errors and omissions for information transmitted through telecommunication. Under this, public telecommunication licensee's exclusion of liability is enabled provided these injuries or losses are beyond the public telecommunication licensee's control. The safeguarding of electronic snooping or security control are important features for public telecommunication licensees. In the US, people have sued common carriers for losses due to fraudulent messages or other economic losses due to delays or distortions in telecommunication messages. One particular concern is that service provider employees should not be allowed to read the contents of other people's messages without authorisation. Perhaps, we have not built up enough case experience in this field to pinpoint, as of now, how the lines of responsibility should be identified or drawn within the various ambits of responsibilities. Nonetheless, it is important to know that the Bill does not exclude entirely the public licensee's responsibility.

Dr John Chen Seow Phun: Mr Speaker, Sir, I wish to thank the GPC Chairman for his support of the Bill.

He touched on the safeguarding of the interest of consumers. Indeed, safeguarding the interest of consumers is one of the key objectives of TAS' function as a regulator. In order to ensure that consumers are able to realise the benefits of effective and sustainable competition in a multi-operator environment, a framework for fair competition has been established. TAS is mindful that there must be a level playing field for all operators. This would be done by establishing the relevant codes of practice and standards of performance for the operators to comply under the proposed revisions to the TAS Act. As mentioned by Mr Chay, consumers have been the main beneficiaries since competition was introduced in the telecommunication industry last April. With further liberalisation of the telecommunication industry, they can look forward to enjoying the wider range of new and innovative products and services offered at competitive prices and a high quality of service standards.

Mr Chay also commented on clause 26 which seeks to amend section 114. He has rightly pointed out that we have to look at the implication of this clause and I would like to assure the Member that where there is loss from error or omission in information transmitted through telecommunication, the public telecommunication licensee is not liable where it is due to the fault of another person or causes beyond the control of the public telecommunication licensee. We do this because, in order for e-commerce, for instance, to thrive, we need to have this protection so that the telecommunciation licensee will be able to provide good quality of service standards for transmission of electronic data, and so on. As for loss due to the fault of the telecommunication licensee, it is a commercial matter between the provider of the service and the consumer.

Sir, Mr Chay also raised a concern about giving new entrants the opportunity to compete with SingTel when SingTel itself is not given the same treatment overseas. I would like to say that Singapore's competitive edge hinges on our ability to continually respond to technological changes and provide an efficient and innovative info-communication services. Liberalisation of the telecommunication industry will help us maintain our competitive edge and entrench Singapore as a global business centre, besides encouraging SingTel to get ship-shape for its competition both here and overseas, as pointed out by Mr Chay. This is also in accordance with our commitment to WTO group of basic telecommunications to help achieve a liberalised global telecommunication market.

Question put, and agreed to.

Bill accordingly read a Second time and committed to a Committee of the whole House.

The House immediately resolved itself into a Committee on the Bill. [Dr John Chen Seow Phun].

Bill considered in Committee.

[Mr Speaker in the Chair]

Clause 1 ordered to stand part of the Bill.

Clause 2

Dr John Chen Seow Phun: Sir, there is a typographical error in line 7 of this clause. "section 115" should read "section 115A".

The Chairman: The typographical error will be corrected.

Clause 2 ordered to stand part of the Bill.

Clauses 3 to 6 inclusive ordered to stand part of the Bill.

Clause 7

Dr John Chen Seow Phun: Sir, I beg to move,

In page 4, line 18, to leave out "telecommunication" and insert "postal".

This is because clause 7 proposes to amend section 42(2) to impose additional conditions on a postal licensee, and not a telecommunication licensee.

Amendment agreed to.

Clause 7, as amended, ordered to stand part of the Bill.

Clauses 8 to 34 inclusive ordered to stand part of the Bill.

Bill reported with an amendment; read a Third time and passed.