Table of contents
Part 1
What are ICT and internet policies?
Part 2
The internet, markets and access
Part 3
National ICT and internet policy and regulation
Part 4
Specific issues in internet policy and regulation
Part 5
Organisations active in ICT

 10. A short history of telecommunications reform

The year of 1984 was the starting date for the modern history of telecommunications. It saw the introduction of competition into the US market and privatisation in the UK with the divestiture by AT&T of seven regional Bell operating companies (the Baby Bells), the privatisation of British Telecom as a public limited company and the establishment of the British Regulator, Oftel.1

The same year also saw the publication of the report of the ITU’s Maitland Commission (“The Missing Link”), which firmly established for the first time the link between access to telecommunications and development, and drew attention to the benefits networks could deliver to emergency operations, social services, administration and commerce.

Thus began two decades of parallel and sometimes intersecting work on telecommunications reform and communications for development programmes, culminating in December 2003 with the World Summit on the Information Society2
held in Geneva. WSIS is a test of whether the telecommunications revolution can meet the twin demands of liberalisation and public service and reconcile the interests of big business, governments and civil society.

Reforms in the telecom sector that emerged in the 1980s responded to the prevailing pro-market climate in many OECD countries. They had a number of negative consequences, including the laying off of workers and inflated returns on investment that led eventually to the burst of the telecom bubble in 2000. They were nevertheless progressively transferred to the developing world through the policy prescriptions formulated by the international development agencies – with the World Bank and WTO in the lead. More and more telecommunications operators came onto the market – the old monopolies, now at least partly in private hands, invested heavily in incumbent operators in developing countries. In an effort to level the playing field for new competitors, new regulatory rules were applied to encourage competition. As competition was introduced into the long distance and international markets the subsidies that had traditionally been transferred from highly priced long distance services to local calls to support universal service were put in question. Regulators introduced new pricing mechanisms to encourage efficient operations and promote competition. Countries were encouraged to build a firewall between governments and regulators.

By early in the third millennium more than 106 telecom operators had been privatised and 110 regulators had been established. The pace of international debate on telecommunications and development had speeded up as well. The collapse of the telecommunications markets in the early years of the new century has not seriously called into question the liberal agenda. In fact the scarcity of investment funds has probably increased the pressure to reform the sector.

  The intersection of telecommunications and development – 1984 - 2003





Breakup of AT&T and birth of regional services; privatization of British Telecom and introduction of price cap regulation for the first time; creation of Oftel – the UK regulator

Publication of the Missing Link – report of the Maitland Commission highlighting link between telecom and development


1 million cellular subscribers in US and ISDN trials begin


First transatlantic fibre optic cable completed


Price cap regulation set for AT&T


Telmex (Mexico) and Telecom New Zealand privatized

APC was founded


ISOC created


Europe sets 1998 as date for full liberalization of its telecom market


ITU Buenos Aires World Telecom Development Conference


25 million cell subscribers in US; 30 million Internet users worldwide

G7 Summit Information Society Conference convened in Brussels – pilot projects initiated


Second major AT&T divestiture results in creation of Lucent Technologies; US cell subscribers reach 40 million; Deutsche Telekom is privatized; US Telecom Act, which opens competition to all markets provided that the companies met certain pro-competition requirements

Information Society and Development Conference convened by EU and South Africa in Johannesburg


Global Knowledge for Development Conference convened in Toronto by consortium of development organizations


WTO Agreement on Trade in Basic Telecom Services

ICANN created


Y2K passes without disaster; mergers abound; Clinton calls for increase in universal service fund to accommodate native American reservations and their technology needs; the telecom market begins to weaken

Second Global Knowledge for Development Conference convened in Kuala Lumpur; G8 Okinawa Declaration calls for action to exploit development potential of ICTs; for the first time the UN puts the information society high on its agenda through discussions at ECOSOC its high level economic and social council; UN Millennium Assembly calls for partnership to promote ICT for development


Markets continue to fall – corporate governance called into question; cell phones in Africa (25,352.900) outnumber fixed line phones4

The UN ICT Task Force created to advise the Secretary General – experts from all sectors – APC represented


More than 106 incumbent telecom operators have been privatized; 110 regulators have been established5; cell phones in Asia (440,260,100) outnumber fixed line phones


Regional and global meetings convened to prepare for World Summit on Information Society

Source: ITU, Asia Pacific Telecommunication Indicators, 2002.

5 Effective Regulation: Trends in Telecommunications Reform 2002, ITU, ISBN 92-61-09641-7, p 21



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