Revisiting Regulation in Singapore

I've written to the ST Forum again about IDA's weak regulations in response to another reported "ISP incident". I did so earlier this year, raising the example of the $5,000 penalty (per month) for violating Quality of Service requirements. IDA neatly sidestepped the issue with a non-sequitur. (See: An earlier post titled "Regulation of Industry")

While I call for more stringent regulations, I am not an uninformed Luddite whose crazed propositions would tear down the economy. I understand that Singapore's survival is predicated on a strong economy. Today, we have a decent to good economy, with business-friendly regulations and business-friendly labour policy.

However, in recent years consumers have suffered. The minibond saga is emblematic of this, with Hong Kong investors getting relief while Singapore investors lost most of their principal to (what I believe to be) deceptive marketing practices (and a touch of greed fogging their vision). Telecommunications too is a much complained about industry.

To be a great economy, corporations and consumers in Singapore will have to work in partnership. This can only happen with equality in the said partnership. When corporations have too much power, they use that power in an easy route to gaining economic benefits as opposed to the tougher route of innovating and developing ever better goods and services. Thus, government regulations have a role to play in this: creating a healthy business environment for both firms and consumers.

Good regulations are necessary for us to go from Good to Great.

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Addenda:
Now, allow me to attach my letter to the forum, which I've just sent off. (So I'm unsure if they'll publish it.)

I refer to the letter "Poor show by SingTel after broadband disruption" (Jun 7, 2011) by Garrick Woi, who, in late April this year, suffered a 16 hour long disruption to his broadband access along with others in "limited residential areas". He reports the lack of communication on the part of his ISP and difficulty getting information on the outage.

I believe that a blase attitude has been encouraged by the weak penalties specified by IDA's regulations, which are not stringent enough to shape good behavior on the part of ISPs. For example, Quality of Service violations, which are necessarily severe, warrant a fine of $5,000 a month. When preventing an impending outage or swiftly remediating an outage would cost significantly more than $5,000, ISPs are encouraged to take no special remedial action, especially in view of the fact that customers are locked in to long term contracts. The "sense of responsibility", that might nudge them in the opposite direction, should be bolstered by a strong set of regulations.

I've written to the ST Forum ("Slow broadband: IDA's rules are not effective enough", Mar 28, 2011; "IDA yet to address crux of issue"; Apr 11, 2011) and to IDA on the weakness of existing regulations, but their reply neatly side-stepped the issue ("Broadband speed not part of service quality standards", 2nd Apr 2011).

In the 16-hour outage affected home businesses would have lost revenue and reputation, and probably will not be compensated due to difficulty in reigorously quantifying the losses. Similarly, it is unlikely any answer to Mr Woi's question "Can affected customers claim compensation for the service disruption?" will be to his satisfaction.

I invite IDA to answer, directly, whether it thinks a mere $5,000 penalty is justifiable for a violation that could lead to losses orders of magnitude above it. This is a matter of national econmic interest. I hope IDA will review it's internet regulations and establish a comprehensive set of rules and penalties that are fair to ISPs and customers.

Internet regulations are a side-show in the grand scheme of Singapore's economy. There has to be a change of mindset on the part of regulators, bearing in mind that regulations should make it easy to conduct business responsibly. Allow me reiterate my conclusion: Good regulations are necessary to take Singapore's economy from Good to Great.