NBTC to get early draft of new rules to protect market

The telecom committee of the National Broadcasting and Telecommunications Commission will submit the new draft of regulations to prevent foreign dominance of the local market to the NBTC board today.

After the board acknowledges receipt of the draft rules, the committee will revise them again in some points before resubmitting them for the board’s approval and putting them to a public hearing.

NBTC member Suthiphon Thaveechaiyagarn believes the new regulations will take effect before the auction of the 2.1-gigahertz licences in the third quarter.

He added that the telecom committee would reconsider two points of the draft – whether its details are strong enough to prevent foreign dominance, and whether to remove all 10 defining characteristics of foreign dominance from the appendix of the draft.

The telecom committee’s development of the new draft follows a public hearing by a subcommittee in December on the need for changes to anti-dominance rules issued by the now-defunct National Telecommunications Commission, which took effect last August.

Unlike the existing regulations, the new draft does not touch on the issue of national security or require the NBTC to consult with national-security agencies if it finds that a licence holder appears to have breached regulations.

The regulation revision subcommittee believes the watchdog should not issue regulations beyond the scope of the authority granted it under the Telecom Business Law. The regulations are aimed at curbing foreign dominance of local telecom operators, which the panel does not consider to be a national-security issue.

The new draft replaces the term “controlling power” in the existing law with the term “dominance”. “Dominance” would be determined based on a licence holder’s shareholding structure, particularly whether it controls a majority of votes at shareholders’ meetings and has the authority to appoint or remove directors. This is in line with the Securities and Exchange Act BE 2535.

In the existing regulations, the term “controlling power” is defined as direct or indirect control of and influence on devising company policy, management and appointment of top executives, or any practices that could impact the licence holder’s management. Foreign dominance is said to exist where foreign parties have at least half the controlling power in a licence holder or telecom concession holder.

Under the existing Foreign Business Act, a foreigner is defined as an individual holding non-Thai nationality, a juristic person registered overseas, or a Thailand-registered company in which at least half of the shares are owned by foreigners or overseas firms.

The new draft also removes the NBTC’s authority to consider exempting a licence holder from the regulations on a case-by-case basis at a licence holder’s request. This is designed to remove any subjective element from the watchdog’s judgements.

In the appendix, the existing regulations specify 10 characteristics of foreign dominance that are to be prevented.

The 10th characteristic is any kind of dominance that allows foreigners or their nominees to control a licence holder indirectly or directly. The new draft removes this provision.

Advanced Info Service has Singapore Telecom as its strategic partner, while Total Access Communication (DTAC) has Norway’s Telenor. True Corp is the only local telecom operator without a foreign strategic partner.

DTAC filed a complaint with the Central Administrative Court last November, claiming the foreign-dominance regulations were illegal and unconstitutional.

True Corp supports the existing regulations as a necessary tool to prevent foreign-owned entities competing against local telecom operators in bidding for key spectrum licences, citing national security. But some parties say the regulations should be revoked, as they might contradict Thailand’s commitments to global trade organisations.