The
British Colonial government introduced telecommunications services in Nigeria in
1886 to aid colonial administration in the country. These services linked Lagos
by sub-marine cable to other British colonial territories in West Africa, such
as Ghana, Sierra Leone, and The Gambia, and then to Britain. However, after the
completion of Lagos-Ibadan telephone trunk line in 1929, a telephone exchange
was installed at Abeokuta and in other parts of the country, including Aba,
Port Harcourt and Bukuru. By 1934 Nigeria had 21 telephone exchanges; this
number was increased to 40 in 1940, and then to 59 in 1945.
At
independence in 1960, there were 121 telephone exchanges with installed
capacity of 18,724 telephone lines for an estimated population of about 40
million. Later, in 1985, the capacity was increased to 200,000 telephone lines.
In 1992, seven years after NITEL (Plc.) was established, new technologies,
including electro-magnetic digital, satellite fibre optic, Integrated Services
Digital Network (ISDN), were introduced into the national networks. About the
same time, Nigeria also embarked on liberalisation of the telecommunications
industry, allowing private investors and operators to obtain license to operate
the Global System for mobile communication. This liberalisation resulted in exponential
growth and improvement in the Nigerian telecommunication industry. For example,
as of the end of February 2012 there were more than 129 million cell phone
subscriptions, and 2.3 million lines of fixed-wired and wireless Internet
access subscribers in the entire country.
Although
historically the telecommunications sector was concerned with technical
matters, rather than content, this is now changing with convergence and the
fact that increasingly content is being transported through telecommunication
lines. So, with advance in technology, telecommunications network platforms around
the world are merging with other platforms such as computer
and digital media equipment. Today, there is a wide and fast-growing range of what
is called ‘telematics’ (transmission of
computerized information) networks and services. This
continuing dynamic nature of the telecommunications sector within the global
economy, nonetheless, raises a number of legal issues such as the regulation and
licensing of telecommunications services.
3.2
RATIONALE FOR REGULATION OF
TELECOMMUNICATIONS SERVICES
Traditionally
the world, telecommunications services were provided in each country by one
monopoly carrier. Such carriers were almost always owned by the government and
operators as state agencies, often as part of the postal service. Beginning in the
1980s and continuing into the 1990s, the telecommunications industry in almost
all countries around the world started to experience privatization, thereby
exposing the newly privatized companies to market forces and forcing them to
become more efficient and competitive. Even so, it was recognised that without
efficient entry and growth of new rivals, competitive disciplines on the newly
privatized incumbent telecommunications firms would not be exerted and hence
these firms would continue to exploit their dominant position at the expense of
consumers, as well as engage in strategic games to deter new entrants.
The
effect of this has been to create an increasing international element to telecommunications
law and policy. This is best demonstrated by the conspicuous role afforded to
the telecommunications sector within the World Trade Organisation (WTO) and the
increasingly prominent work of the International Telecommunications Union (ITU).
In Nigeria, for example, prior to the liberalization of the telecommunications
sector by the federal government in 1992, the sector had been completely
dominated by publicly owned Nigerian
Telecommunications, Ltd. (NITEL) with 100 per
cent share of the market at the time of privatization and thus 100 per cent
control of customers, and yet the service had been grossly inadequate.
Nowadays, private telecoms carriers in the country include: MTN Nigeria
Communications (brand name: MTN); Globacom (brand name: Glo Mobile); Bharti
Airtel (brand name: Airtel Nigeria); EMTS Limited (brand name Etisalat); Multilinks
(brand name: Multilinks); Starcomms, Ltd. (brand name: Starcomms).
So
it was partly because of the recognition to maintain competitive disciplines on
the newly privatized incumbent firms and the need to prevent exploitation of
dominant position at the expense of consumers, that global economic regulation
of the newly privatised firms was considered essential and implemented. By so
doing, regulation could thus prevent monopolistic abuse and anti-competitive
behaviour.
3.3
LEGISLATIVE FRAMEWORK FOR THE
OPERATION OF TELECOMMUNICTIONS INDUSTRY
The
Nigerian Communications Commission Act No. 19 of July, 2003
is the primary legislation regulating the telecommunications industry in the
country. The Act repealed the Nigerian Communications
Commission Act No. 75, 1992; the Nigerian Communications Commissions (Amendment)
Act No. 30, 1998 and the Nigerian Telecommunications and Postal Offences Act
No. 21 of 1995 as amended.
Up
to 1992, Wireless Telegraphy Act 1990 was the principal legislation for the
operation of telecommunications services in Nigeria which was then, as noted
above, only available from the monopoly operator, NITEL. However, the 2003 Act
opened competition in the telecommunications markets throughout the
country and mandated changes on the rights and responsibilities of all portions
of the telecommunications industry, including licensing,
spectrum, interconnection, the assignment and usage of frequencies, tariffs,
access to facilities and consumer issues. Other Government bodies recognised by
the Act are the Ministry of Information & Communications and the National
Frequency Management Council charged with the .management of frequency spectrum
allocation.
Indeed, the Act re-affirmed
the regulatory role of Nigeria Communications Commission
(NCC), thereby strengthening its capacity to properly carry out its
regulatory activities as an independent regulatory body for the
telecommunications sector. Moreover, the Act provides
for the establishment of consumer
affair bureau/parliament to deal with consumers’
complaints, as well as the use of alternative dispute resolution processes for
the resolution of the complaints or disputes brought to the attention of the
Commission. The Act also makes provision for the establishment of Universal
Service Provision Fund (USPF) to provide telecommunications and
ICT services to unserved, underserved and deprived groups and communities in
the country. In this respect, about 474 schools spread across the six
geopolitical zones of the country, have so far benefitted from complete set of
Internet tools and facilities provided by the USPF.
3.4
REGULATION OF TELECOMMUNICATIONS
The
Nigeria Communications Commission (NCC), established under
section 3 of the Nigerian Communications Commission Act 2003, is an independent
national regulatory authority that regulates the telecommunications industry. The
main functions of the NCC include:
· issuing
licences to telecommunications operators;
· assigning
frequencies, facilitating private sector participation and investment in the
telecommunications sector;
· establishing
and enforcing technical and operational standards and practices;
· ensuring
that the interest of consumers are protected through enforcing service standards
and pricing regulations;
· designing
and maintaining a national numbering plan;
· arbitrating
between operators, carriers and consumers; and,
· generally
regulating all telecommunications licensees and service providers.
Exclusive
jurisdiction over all matters, suits and cases arising out of or pursuant to or
consequent upon the 2003 Act is vested in Federal High Court. Under the 2003
Act, the Minister of Communication Technology is responsible for making policy
and issuing policy directions to the NCC and for making key regulatory
decisions regarding licensing and spectrum. However, like the Nigeria
Broadcasting Code of the NBC which, as noted in Module 2, sets out the broad and
more specific requirements that all broadcasters need to comply with, the Spectrum Frequency Management Policy of
the NCC similarly provides detailed guidelines on how to control and encourage
the use of spectrum, promote competition in the assignment of frequency, achieve
optimum pricing of spectrum, generate moderate revenue for government, and
ensure equitable and fair allocation of spectrum to benefit the maximum number
of users.
The
reality of convergence, as in broadcasting industry, has driven fundamental
changes in telecoms regulation. To the extent that the term
‘telecommunications’ is gradually being replaced by ‘communications’ which is considered wide enough to cover
telecoms, broadcasting and IT. In fact, under European Union (EU) law,
telecommunications as a legal and regulatory term has disappeared, to be
replaced by 'communications', embracing all forms of infrastructure, services,
and equipment supplied for the transmission of data and information, whether
traditionally viewed as broadcasting or voice telephony.
3.5
LICENSING
Licence
is required to install or operate telecommunications networks or provide
services over them in Nigeria. Section 31 of the 2003 Act requires any
application for licences to provide and operate telecommunication services to
be addressed to the NCC. Thus, all existing or prospective telecommunications
service operators are required to apply to the NCC for licences for the renewal
of their licences not later than 6 months before their expiry date with payment
of renewal fee. And, in considering an application for a licence, the applicant
must produce relevant evidence or information showing its capacity to operate
the service to enable the Commission to take a decision on the application
within 90 days (s. 41(1). Of course, individual and class licences are subject to
payment of processing fees and registration fee respectively to the Nigerian
Communications Commission (ss. 39(4); 50(2).
The
NCC also has broad discretionary powers to impose any kind of limitation on any
licence granted on the occurrence of any public emergency or in the interest of
public safety. In addition to NCC approval, section 135 of the 2003 Act
requires licensees to seek approvals of the State Government, Local Government
or other relevant authority for installation, placing, laying or maintenance of
any network facilities in any place in the country. Licences or other
authorisations may be transferred but with the prior written approval of the
Commission. The Commission issues licences for periods ranging from five years
to 20 years. The process of licensing takes place in the form auction, ‘first
come first served,’ ‘beauty context,’ and administrative procedure.
3.6
INTERNATIONAL REGULATORY REGIMES
Nigeria is a member of the World
Trade Organisation (WTO) since 1 January 1995, and
also a
member of International Telecommunication Union (ITU) since 4 November 1961.
The WTO is an international
organisation that opens trade for the benefits of its member, by providing a
forum for negotiating agreements, reducing obstacles to international trade and
ensuring a level playing field for all, thereby contributing to economic growth
and development of member nations. The ITU is, however, a United Nations specialised
agency for information and communication technologies charged with allocation
of global radio spectrum and satellite orbits, development of the technical
standards that ensure networks and technologies seamlessly interconnect, and
striving to improve access to ICTs to underserved communities worldwide.
The
1997 WTO’s Basic Agreement for Telecommunications Services secured commitments
from countries to reform their industries. That is, to move from monopoly to
liberalisation (privatisation) and competitive market. The WTO’s
'Agreement is seen as a definitive moment in the international community's commitment
to the structural evolution of the sector from a monopolistic to competitive
marketplace. In Nigerian context, the country, as noted earlier, initiated partial
liberalization reforms
in 1992 with
the promulgation of NCC decree 75 and the establishment of the NCC in order to
open up the telecom market segment to competition.
Subsequently in 2003, Nigeria made
commitments under the terms of the Fourth Protocol on Basic Telecommunications
to open up other telecom market segments, and to establish an appropriate
regulatory environment. In this respect, the country enacted the Nigerian
Communications Commission Act No. 19 of
2003 which,
amongst other things, re-established an independent NCC with increased
regulatory powers; developed new Spectrum Plan for Nigeria and transferred
Commercial Spectrum Management to the NCC; ushered in landmark resolution of
interconnect disputes and settlement of interconnection rates; provided for the
development of other regulations and guidelines e.g. Consumer Protection,
Universal Access and Services; Dispute resolutions etc. However, the national
telecom carrier, NITEL, is yet to be privatised despite repeated attempts to do
so. Also, Nigeria is committed to ITU agreement to migrate from analogue to
digital transmission of signals by June 2015, yet this commitment has not been
met as November 2013.
3.7
CASE LAW ON
TELECOMMUNCATIONS MATTERS
As noted above, the
proper Court to entertain matters arising out of the Nigerian Communications
Act, 2003 is the Federal High Court. However, like any recovery claim, majority
of cases involving telecom companies involve the recoveries of interconnection
debts. These cases include the following:
·
Nigerian
Communications Commission v. Motophone Limited & anr Suit No: CA/A/189/05 (Motophone Case) –
Challenged withdrawal of 2G licence in the wake of 2G auction of 2001.
·
Blue-chip Communications
Company v. Nigerian Communications Commission Suit No: CA/A/108/04 – Suit was
instituted in the lower Court challenging NCC’s refusal to grant the Plaintiff
a 3G License during the 5 year exclusivity period granted the four DML
operators.
·
Registered Trustees of
ALTON & Ors v LASG & Ors [FHC/L/CS/517/2006] Action brought to challenge the
Lagos State Infrastructure Maintenance and Regulatory Law of 2004 which
provides for the erecting/installation/maintenance of telecoms masts/equipment.
·
NCC V. MTN Appeal No. CA/A/25/ 2004 – Action to review
of the Interconnect Rate determination carried out by the NCC.
·
Econet Wireless Nigeria limited v. NCC
Appeal No. CA/A/83/ 2004 – Action brought to challenge
the interconnect rate determination carried out by the NCC in
December 2004.
·
Celtel & MTN V. NCC Suit No. FHC/L/CS/909 – Application
for an interlocutory injunction restraining NCC from adopting a proposed parameter
to determine compensations payable by subscribers for poor quality of service.
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