Malaysia tweaks Net market structure

New licensing requirements have been designed to promote competition in the market through minimizing market-entry requirements.

New licensing requirements have been designed to promote competition in the market through minimizing market-entry requirements.

KUALA LUMPUR, 26 Jul 2000 (Asia Pulse) - The government has announced new positions on the Internet market structure and Internet-based telephony, a move aimed at promoting wider industry participation in the provision of Internet access and to stimulate the growth of Internet service in Malaysia.


Changes at a glance
  • PC to PC Internet telephony will not be subject to licensing since it does not involve the Public Switched Telephone Network (PSTN).
  • Voice Over Internet Protocol (VOIP) will be subjected to normal regulations.
  • Internet Access Service Providers (IASP) need to pay US$658 for registration as a Class License holder.
  • Network service providers can also provide Internet access if they register as a Class License holders.

According to a statement by the Ministry of Energy, Communications and Multimedia, the public is free to use personal computer to personal computer-based (PC to PC) Internet telephony which does not involve the Public Switched Telephone Network (PSTN). Since it does not involve the PSTN, the provision of this facility will not be subject to licensing, it added. However, Voice Over Internet Protocol (VOIP) will be subject to the normal regulations since this facility involves the PSTN which is a regulated service.

The ministry said effective April 1 this year, companies intending to provide VOIP services were required under the Communications and Multimedia Act 1998 to have an Applications Service Individual License. To encourage greater participation among industry players in the Internet market, provider of Internet access service had been redefined.

The ministry said that all companies and operators that provide access to the Internet through existing infrastructure, whether it is their own or provided by other operators, will, from now be known as Internet Access Service Providers (IASPs). These IASPs provide basic Internet access services which will include other standard services and all of them need to register with the Communications and Multimedia Commission as a Class License holder for the Applications Service with the annual registration fee of RM2,500 (US$658).

It said Network Service Providers or companies which provided bandwidth requirements to support the connectivity of the various IASPs can also provide Internet access on condition that they register as Applications Service Class License holder in addition to the individual network service license to provide connectivity services.

Provision of Internet access is also given to Network Facilities Providers which has been defined as parties owning and operating the necessary infrastructure like leased lines and other facilities to support network services. In addition to Individual License to provide either each or both Network Facilities and Services, they are required to register as an Applications Service Class License holder to provide Internet access.

The ministry said that companies which provide other standard services through existing Internet access such as e-mail, Internet content, mailing addresses, transaction and portal services are exempted from licensing. It explained that the policy change was expected to provide a clearer definition of the roles and activities of the various industry participants in the Internet market.

In addition to being consistent with the position that has been adopted by most markets, the new licensing requirements are also intended to promote competition in the market through minimizing market-entry requirements. Under the new environment, the government hopes that the number of IASPs in the country will increase in tandem with the growing demand for Internet access.

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