INFO-COMMUNICATIONS DEVELOPMENT AUTHORITY OF SINGAPORE BILL

Order for Second Reading read.

The Minister for Communications and Information Technology (Mr Yeo Cheow Tong): Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time."

Sir, the Government first announced, in March this year, its intention to merge the National Computer Board, or NCB, with the Telecommunications Authority of Singapore, or TAS. The Bill seeks to effect that merger to form a new statutory board, the Info-communications Development Authority of Singapore, or IDA for short.

First, let me explain the reasons for the merger.

Information and communications technology, or ICT, will be of increasing relevance to Singapore as we move into a knowledge-based global economy. ICT-related industries will constitute a key growth sector in this knowledge-based economy. ICT will also be the enabling platform for building competitive strengths in other economic and industrial sectors of Singapore.

Prior to the merger, the promotion, development and regulation of the ICT sector were undertaken by various Ministries and statutory boards. The NCB, which was under MTI, was responsible for the development of the IT industry. The Singapore Broadcasting Authority, or SBA, under MITA, took charge of the broadcasting industry while TAS, under the then MINCOM, handled the regulation of the telecommunications industry.

While this arrangement has worked well in the past, the circumstances and imperatives have changed. Technology changes and business trends are leading to a convergence of the telecommunications, IT and broadcasting sectors. Transmission technologies have become increasingly substitutable. Consequently, the traditional industry-based regulatory boundaries are breaking down. Just a few years ago, telecommunications were related to telephones, telexes, fax machines, radio and handphones, while IT was basically computers used for scientific calculations, financial operations and word processing. And broadcasting was related to radio and television. Today, all three sectors are inter-related. You can send a fax through the computer, talk to friends overseas through internet-telephony or watch a television programme on the computer through the Singapore ONE broadband multimedia network. Equally importantly, we are finding that promotion and development of the info-communications sector can take place effectively only if there is an integrated perspective, one that includes the issue of regulation. It is therefore necessary to review the existing organisational structures to improve policy co-ordination and implementation in the face of rapid technological developments. This will enable us to foster the integrated development and application of ICT in Singapore. It is for this reason that Government has transformed MINCOM into the Ministry of Communications and Information Technology, and decided to merge TAS and NCB into the Info-communications Development Authority of Singapore.

Members may ask why not go one step further, and merge the SBA with IDA. After all, convergence also involves the broadcasting sector. We have, in fact, considered this. Up till now, the SBA has been responsible for content regulation across the various mediums, including both broadcasting and the Internet. This responsibility remains separate from the other aspects of ICT industry development, promotion and regulation. Traditional broadcasting can be regulated independently. Therefore, the Government decided that the principal responsibility for broadcasting and content regulation will remain with the SBA. However, the non-content aspects of broadcasting, which are convergent with IT and telecommunications, such as interconnection, the technical standards for cable infrastructure and the re-broadcast infrastructure in tunnels and within buildings, will be transferred to IDA. Both the IDA and SBA will work closely on such issues.

Sir, my Ministry will be taking a two-stage approach in establishing the regulatory framework for the info-communications industry. The merger of NCB and TAS is the first phase. Instead of two specific regulators, NCB and TAS will be merged into an integrated agency, the Info-communications Development Authority, to oversee the development and regulation of the ICT industry and infrastructure. The IDA Bill constitutes the new statutory board and lists its broad functions and duties. The Telecommunications and Postal Services Bills provide the detailed regulatory powers of IDA in the telecommunications and postal sectors respectively. The regulatory provisions are generally taken from the existing TAS Act, with some revisions and enhancements. These will be discussed in the second reading speeches for the respective Bills.

The second phase will be the introduction of separate legislation to deal with the legal and regulatory issues arising from the convergence of the telecommunications, IT and broadcasting industries. As convergence is a new phenomenon, we are studying the issues involved, as well as learning from the experience and legislation of other countries. I am targeting to finalise this new legislation next year after IDA has sorted out all the technical issues.

Mr Speaker, Sir, I shall now touch briefly on the main provisions in the IDA Bill.

Sir, this Bill provides for the formation of the IDA as a statutory board, with the transfer of staff, properties, rights and liabilities from NCB and TAS to the IDA.

Clauses 6 and 7, together with the Second Schedule, of the Bill spell out the functions and duties of the IDA. Broadly, the IDA will perform three key functions. First, it will promote and facilitate the growth and development of an efficient and internationally competitive ICT sector in Singapore. Second, it will carry out licensing and regulatory functions, and help maintain effective competition in the ICT sector. Third, it will promote an Information Society in which ICT is readily accessible and available to all Singaporeans.

Clause 18 provides for the transfer of properties, assets and liabilities of TAS and NCB to the new IDA.

Clause 19 provides for the transfer of employees of TAS and NCB to the service of IDA.

Sir, the technological advances and market developments in the ICT industry are driving the digital revolution. The merger of the NCB and the TAS to form IDA is an important step to better manage the convergence of IT and telecommunications technologies in Singapore. It will allow us to have an integrated and focused Statutory Board which can then work towards leveraging on the opportunities of the digital revolution. It will help develop Singapore into a progressive Information Society and position us as a dynamic and vibrant knowledge-based economy.

Sir, I beg to move.

Question proposed.

Mr Chay Wai Chuen (Tanjong Pagar): Mr Speaker, Sir, I rise to speak in support of the Bill in the name of the Minister for Communications and Information Technology.

This Bill seeks to merge the National Computer Board with the TAS to form this new IDA (Info-communications Development Authority of Singapore). One of the duties of this IDA is to promote the efficiency and international competitiveness of the information and communications industry in Singapore, as stipulated in clause 6(1)(a). I just want to seek a clarification from the Minister. The term "communications" here, I suppose, refers to telecommunications and not just communications, because in his Ministry, communications may also involve sea, land and air transport. Or does the Bill actually seek to cover these areas?

The second point I want to ask is whether the notion of efficiency and international competitiveness mentioned in clause 6(1)(a) refers to our information and communications industry in Singapore in providing efficient services in Singapore or for them to go overseas and compete in the big league internationally. I am not sure whether the first meaning to provide efficient services in Singapore necessarily implies the other. So perhaps a clarification from the Minister as to what extent the aim of this Info-communications Development Authority extends well beyond the shores of Singapore overseas, and, if such is the case, whether such policies that we apply home will also be the best kind of policies that will enable some of our own companies to go overseas.

While we would like our own service providers to give the best services and charge the lowest price for these services, does the Info-communications Development Authority necessarily see this issue of service providing as the sole issue for efficiency? Size, for example, is a very big competitive advantage in this sector. So to develop that kind of size for our own local enterprise, Singaporean enterprise, is it the same set of policies that is required for us to develop if we are only interested in providing efficient services at home? Strategic investment that is provided over a long term, for example, will not be undertaken by local service providers, because it may not be profitable over a given time frame. And if we do not do that in Singapore, then we may not have the experience, the know-how and the knowledge base to proceed overseas. So such investments that have to be made locally may be of strategic advantage to our country.

So it leads me to the question of whether IDA will be able to achieve its objective of promoting and maintaining fair and efficient market conduct and effective competition. Will the IDA not have its own favourite son? This is particularly so because in clause 6(1)(m), the IDA is supposed "to encourage, promote, facilitate, invest in and otherwise assist in the establishment, development and expansion of the information and communications industry in Singapore". I hope the Minister can clarify.

Assoc. Prof. Toh See Kiat: Mr Speaker, Sir, the Minister has said that IDA is an important step to better manage the convergence of IT and communications. I agree, Sir. Indeed, one of the concerns when I entered this House in 1997 was how we should perhaps restructure our Government and Ministries to cater to this problem. And it was reported in Hansard, 19th November 1997, in columns 1893 and 1894, when I asked the Prime Minister a question whether he would form a Ministry of Information Technology. Then the answer was simply no, that we had a National IT Committee to do that. I followed up on 12th March 1998 with a question in the Committee of Supply which was reported in column 1054 of Hansard dated 12th March 1998. The then Second Minister for Trade and Industry replied in column 1096, and again the answer was no, that it was unrealistic to have such a Ministry. I followed up again, 12th March 1999, reported in column 708, asking for this again. And I am very heartened, Sir, that today we see the culmination of efforts like that. We have now not only an IDA (Info-communications Development Authority of Singapore) but also a new Ministry of Communications and Information Technology. It does show that if we do try, in small persistent pushes, it can indeed, perhaps with faith too, move mountains.

Sir, I am very happy that we have this new Ministry and this new authority to better manage the convergence of IT. It is, you might say, the new "darling" of Singapore, and we hope that it would be able to live up to the high expectations.

The convergence of broadcast technology, computer technology and telecommunications technology, in fact, should lead us to that further consideration of merging even the SBA, as the Minister has mentioned in his speech, with perhaps IDA. The Minister's answer is that content regulation should be separate and it is still all right that traditional broadcasting can be regulated that way, and that the technical side of broadcasting will be brought under IDA. Half a loaf is better than nothing, Sir. But I would still say that we should actively consider merging even SBA with IDA because out in the industry, it is rather confusing for a broadcaster to say where this goes to - SBA or IDA. If we are concerned about separately regulating content, we can indeed have a separate agency to regulate content. Then, again, in this case, it will be across the board dealing with content not only on radio, TV, computers and Internet, but print media too. So I would indeed urge the Government to continue considering that.

Now, moving on to the technicalities, I look at clause 2 which states the definition of "TAS". I believe there is a little inelegance of drafting here. We are told that in clause 2, TAS is defined as "the Telecommunication Authority of Singapore reconstituted under the Telecommunication Authority of Singapore Act". This Act, we will know today, will be repealed. It is strange to me to see words telling me that an Authority would be reconstituted under an Act which will be repealed. I do believe that perhaps what the drafters intended to do was to mention that this new Authority, IDA, is an authority that will replace TAS which was formerly reconstituted under the TAS Act, which is now repealed. Perhaps some additional words would make that clear.

Moving on to clause 6(1)(e), there are certain powers mentioned which are given to the new IDA, ie, new powers, new functions and new roles. I am very supportive of those roles. Perhaps clause 6(1)(e) could be further expanded, not just to deal with the IDA representing Singapore in international fora, but also to be given the powers to separately and independently, if necessary, to forge this convergence of laws. Because as IT and telecommunications converge, the laws of the world will need to converge and harmonise. I hope that the power will be given to the IDA to work with international bodies, whether Government or non-government, whether public or private, in efforts to harmonise ICT law and policy and to create transnational and, if necessary, supranational solutions.

I move on to clause 6(1)(j), Sir. I would say that, prior to this, it is indeed heartening also to see that the Authority would be given the power to encourage, facilitate and promote the greatest practicable use of industry self-regulation by the information and communications industry in Singapore. I would like to know if the Minister would, in a policy statement perhaps, soon announce how this would be done and whether there will be any budget to do this. It is important for industry to self-regulate but it is also important to give them the right incentives so that they will do it.

With that, Sir, I support the Bill.

Mr Yeo Cheow Tong: First, let me thank the two MPs who have spoken in support of the Bill. Let me deal with the points brought up by Mr Chay. Sir, he has asked, since the term "communications" can be interpreted to cover a broad area which includes sea, land and air transport sectors, whether the Info-communications Development Authority will also be charged with the responsibility for the three transport sectors. Sir, if you were to refer to clause 2 of the Interpretation section, it defines "information and communications technology" or ICT as "any technology employed in collecting, storing, using or sending out information and includes that involving the use of computers or any telecommunication system". Sir, this is in fact a widely used term in the information technology and telecommunications industry and is a result of the rapid convergence of these two technologies. As such, the Info-communications Development Authority will only be responsible for the IT and electronic communications industry in Singapore and not the sea, land and air transport sectors.

Sir, he has also asked, when we talk about promoting competitiveness in Singapore, whether we mean to let the ICT industry to be competitive in Singapore only or do we intend to let them also compete abroad and, as he says, join in the big league overseas. Sir, the ICT industry is an extremely large sector. It includes the development and management of computer hardware and software, the telecommunications sector, the development and hosting of Internet content, the provision of data services, and so on. As most of these services and products are largely sold on the global market, the industry players must necessarily be competitive, not just locally but, more importantly, internationally. For example, HP's computer and computer peripheral business in Singapore sells the products, such as computers and printers, not just in the region but all over the world. Similarly, with Compaq, Seagate and many other companies. In the software sector, there are already companies in Singapore which are subsidiaries of MNCs, even local companies, whose software are products which are developed in Singapore and are now being used or sold worldwide.

Sir, at the same time, the cost of local telecommunication services can be a significant cost factor for companies and it can adversely impact on their international competitiveness. Therefore, we also need to ensure that the local telecommunication services are competitive and competitively priced. As a result of this, we are now seeing good results. For example, Singapore is one of Citibank's global data centre. Citibank has located this very important multi-million dollar facility here because we have the necessary IT expertise, an excellent supporting infrastructure and competitive telecommunications rates. The centre links up with the Citibank branches in over 55 countries worldwide. So IDA must therefore ensure that its policies lead to a more vibrant and internationally competitive local telecommunications sector to the benefit of the whole economy.

Mr Chay asked, since size is important, would the same set of policies be valid across the whole range of companies and, more importantly, in cases where strategic investments are required, especially such investments are marginally viable, how can we promote those investments. How do we ensure that those investments are being made for the long-term good of the economy? Sir, IDA's focus is to ensure that our telecommunications industry can respond to the needs of the economy in the range and quality of innovative services offered and also to ensure that these services are competitively priced and give good value for money. At the same time, competitive pricing may not necessarily imply the lowest price levels. I think this is what he is concerned about. If this really implies the lowest pricing, then in the same policy we apply across the board. So the aim is really to ensure that we give good value for money. One way to do that is to ensure that eventually when we move to a situation where market forces force the service providers to do so, ie, innovate, price their services competitively and, even though they are not the cheapest in the region because of the overall quality of service, their services are still very attractive.

Sir, with regard to investments that have a strategic national value but which are only marginally viable, we have mechanism to address this. For example, TAS has a development grant scheme and NCB has a cluster development fund which can be used to promote and co-fund strategic investment projects. I will give Members an example. TAS and NCB, together with other Government agencies, had worked with industry and co-funded SingaporeOne which is the world's first nation-wide broadband infrastructure for multimedia applications and services. So in that way, IDA will continue to work with the industry to ensure that there is continued upgrading and enhancement of our infrastructure and network. And we will also co-fund strategic investments when needed.

Mr Chay also talked about the danger of having a favourite son because of the duty of IDA to promote the development of this sector. Sir, like TAS and NCB before it, IDA will be a fair and impartial regulator and promoter of the industry. Mr Chay need not fear that IDA will have a favourite son because we will continue to treat all industry players as valued and favourite sons. So it is not just one, we will treat all of them as our favourite sons. As we further liberalise the telecommunications sector and as ICT sector continues to develop, we expect to see more players locating in Singapore. They will serve not just our local market but also the region and globally. The only way for us to attract them in is to ensure that our playing field is level and equally important is that the new and potential players perceive our playing field as being level. So he need not fear about IDA developing a favourite son.

Prof. Toh See Kiat has brought up a few points. First, I want to commend him on his persistence in raising this issue of centralising the responsibility for IT. Sir, it shows that the Government does listen to the suggestions of MPs and we do take their suggestions into consideration.

He asked why not merge SBA and IDA eventually because the industry players may have difficulty differentiating between what is under SBA and what is under IDA. Sir, the content element is very straightforward. The dividing line is very clear and the industry players know who to go to for which function. The SBA content also spans a large area. It is not just content on Internet, radio and TV, but also, as Prof. Toh has mentioned, also covers the print media. Therefore, it best resides within SBA and IDA as it now stands.

He also asked about the definition of TAS. Sir, I had asked about this earlier and I am told that the formulation of words here is correct. But since I am no legal drafter and in view of the point brought up by Prof. Toh, I will indeed seek another opinion.

Prof. Toh also asked whether IDA can, under clause 6(1)(e), in fact broaden its function to include being charged with working with international bodies on harmonising ICT law and policy. Sir, indeed, this is what we intend to do. It may not be under that particular section but we intend that in view of the fact that this is such a rapidly evolving section, and in fact many countries are still groping as to what to do, we need to share our experiences as well as learn from the experiences of other countries and where international standards are needed to be formulated, we want to be there right upfront, taking part in the formulation of those standards because they would impact on us as well. Sir, I can assure Prof. Toh that this indeed is what we intend to do.

Prof. Toh also talked about clause 6(1)(j) which deals with the intent of IDA to promote self-regulation. I will touch on that in my Second Reading speech for the next Bill which deals with the telecommunications issues.

Sir, as to whether a budget is needed, I would think that industry players would in fact be very happy to pay us to allow them to self-regulate because this gives them greater freedom. Sir, I do not think a budget would be needed for IDA to promote self-regulation.

Assoc. Prof. Toh See Kiat: Sir, a point of clarification. The Minister has said the industry's players would do it. Indeed, if the players feel that they should self-regulate, they would come together. But because there are so many players out there, sometimes it is important to have an organisation that gets them all together to do these things as a whole and I declare my interest here. I am the Chairman of CommerceNet Singapore which is trying to do that, but being a non-profit organisation, it may not be easy for us to persuade people to donate money. They would want us to do the work for them and we would be very grateful if Government could consider some sort of assistance where we can do this work.

Mr Yeo Cheow Tong: Sir, I would encourage him to contact my staff on his concerns. But I would think that if he is providing a useful service, surely useful services are saleable.

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. - [Mr Yeo Cheow Tong].

Bill considered in Committee; reported without amendment; read a Third time and passed.

Mr Speaker: Order. I suspend the Sitting and will take the Chair again at 3.25 pm.

Sitting accordingly suspended at 3.03 pm until 3.25 pm. Sitting resumed at 3.25 pm