RECORDER REPORT

ISLAMABAD: The Competition Commission of Pakistan (CCP) has issued a Policy Note to the federal government including Ministry of Information Technology & Telecom (MOITT), Ministry of Finance (MoF) and Cabinet Division recommending them to review the Telecom Policy, 2015 in relation to the Competition Rules for the telecom sector as it is the sole jurisdiction of CCP under the Competition Act, 2010.

According to the policy note issued by the CCP here on Thursday, the Clause 5.1 of the Telecom Policy 2015 formulated and issued by the Ministry of Information Technology and Telecom (MoIT) provides for the making of Competition Rules exclusively for regulation of ex-post competition issues in the telecommunication sector by the Pakistan Telecommunication Authority (PTA). The Rules will provide a process for remedying the anticompetitive behaviours (both ex-ante and ex-post) in the telecom industry.

In its policy note, the CCP has raised two major issues, i.e, whether the Rules being framed by the MoIT for the telecom sector create jurisdictional overlaps and conflicts between the legislative mandate of the Commission and PTA? Secondly, whether PTA can impose ex-post behavioral remedies for competition law violations, which are already being enforced by the Commission under the Competition Act?

The Competition Act being an Act of Parliament takes precedence over the Rules being framed by MoIT which is a subordinate legislation. Hence the Competition Act shall prevail in the event of any conflict or overlap between the CCP’s mandate and that of any other regulatory or public body in Pakistan to the extent of matters covered under the Competition Act.

The Act is a special law enacted by the Parliament (Majlis-e-Shoora) takes precedence over the competition-related provisions in any other legislation including Pakistan Telecommunication Re-Organization Act 1996 in matters pertaining to anti-competitive practices. More importantly, the Act takes precedence over any Rules (subordinate legislation) framed by MOITT. The purpose of the Act is the creation of a specialized and comprehensive regime across all sectors to be enforced by CCP since its inception in 2007, CCP said.

Empowering PTA to regulate competition related matters in the telecom sector will not only create redundant duplication of jurisdictions but also engender legal uncertainty for the telecom operators and consumers as well as wastage of state resources.

Through its Policy Note, CCP has made it clear that an overlapping and conflicting competition regulation regime will as is being envisioned by the MOITT cannot be used as an instrument to undermine the supreme intent of the Parliament (Majlis-e-Shoora). An attempt to empower PTA to regulate competition related matters in the telecom sector under the contemplated Competition Rules will result in duplication of jurisdiction and also create legal uncertainty for the telecom operators and consumers.

The Policy Note concluded that the development of the Rules by the MoIT will result in the negation of the exclusive mandate, enforcement powers and purpose on which the whole edifice of competition regime was built by the Parliament through the Competition Act and establishment of the Commission.

The CCP further said that it is also the general consensus that only in the absence of a national competition authority; a sector specific regulator may assume both objectives, i.e, the technical regulation necessary for the introduction of competition in the relevant industry and also the competition enforcement. That, however, is evidently not the case with Pakistan. Post privatization of a sector, it is not uncommon for the demarcation lines between competition policy and sector-specific regulation to become blurred, which at best are to be resolved by the sector regulators and competition authorities through a collaborative approach.

In the interest of the administration of justice, legal certainty and policy coherence, the Policy Note highlights it is of utmost importance that the Policy needs to be reviewed in its entirety, with particular attention to competition related matters, to avoid any actual or potential conflict between the explicit mandate of PTA and jurisdiction of CCP.

CCP maintained that the regulatory reforms envisaged under the Pakistan Telecommunication Reorganization Act 1996 (PTRA) principally provides benchmarks for assessing the quality of technical and economic regulation and to encourage an efficient market structure. On the other hand, vigorous enforcement of competition law coupled with competition advocacy by an independent authority, such as the Commission, is necessitated to prevent market abuse and cartelization from reversing the gains achieved through the regulatory reform envisaged under the PTRA.

Finally, the Policy Note recommends the adoption of collaborative through mutual consultation and cooperation between CCP and PTA on matters that may be potentially overlapping to avoid any conflicts in the future. The recommendation is based on international best practices prevalent across jurisdiction such as the European Union, the USA and others for smooth and efficient growth in the telecom industry and other related sectors.

CCP has recommended that the Telecom Policy 2015 be reviewed with particular attention to the competition matters, to avoid any actual or potential conflict between the explicit mandate of PTA and jurisdiction of the CCP. The Policy Note has also emphasised the need for collaboration between CCP and PTA to avoid any actual or potential conflicts in the future and to ensure a healthy competition culture and a higher growth rate in the telecom sector and the related markets in Pakistan.

The Policy Note is available on the CCP’s website www.cc.gov.pk, CCP added.