Remuneration for Leadership of Regulatory Authority
In most cases, the compensation of regulatory authority heads or collegial body members is lower than what could be earned in equivalent executive positions in the private sector. As noted below, this also presents a challenge regarding staff remuneration. However, particularly in the case of leadership positions, it is not uncommon for regulators to be composed of individuals who are less concerned about compensation than about some combination of public service along with the experience, public exposure and contacts that can be gleaned through a regulatory leadership position.
In several cases, the governing law or regulation specifies the manner of compensation for the head(s) of the regulators, with many reserving the right for the government or its appointed representative to adjust salaries as necessary. A typical formulation is found in Sudan’s National Telecommunications Council Act 1994 (as amended in 2001), which states that, “the members of the Board shall be paid such remuneration as may be specified by the Competent Minister and approved by the Minister.”1 Another common approach is for the salary of the regulatory authority head(s) to be determined in the decree or other instrument of appointment, as is the case in Jordan.2 Such arrangements provide a clear determination of who sets salaries, but provides the flexibility for salaries to be adjusted as necessary by the responsible party. For those regulators in which the board or commission members serve part-time, they are often paid a per-meeting fee, as well as reasonable expense reimbursement.
In some cases, however, the salaries for the head of the regulatory authority or the collegial body members are set by law, although not in explicit numerical terms. For example, the salary of the chairman of the collegial body of Hungary’s National Communications Authority is set at a level equal to that paid to permanent secretaries in the Hungarian Government, while the salaries of the remaining collegial body members and the Authority’s director-general, who heads the Authority staff, are set at a level equal to the salary paid to under-secretaries.3 Similarly, the collegial body members of Bulgaria’s CRC are paid salaries that are tied to the salaries paid to legislative representatives.4 Such arrangements serve the dual purpose of ensuring that the head of the regulator’s salaries are adjusted in concert with legislators or senior ministry officials, and imbuing the regulatory leadership positions with a level of status on par with such senior government officials. The latter can help to lend legitimacy to regulatory leaders, as well as to attract qualified candidates. Directives regarding remuneration may also be linked to civil service regulations, as is the case in the United States. By law, each member of the U.S. Federal Communication Commission’s (FCC) collegial body receives a salary at a particular level of the public employee pay scale.5
Remuneration for Staff
In countries where regulatory authority employee salaries are tied to government-wide public employee regulations, it is much more common for salaries to be lower than those offered in the private sector. In such cases, the ability of the regulator to attract qualified candidates can be stifled by the availability of higher-paying private sector opportunities. Further complicating the ability to attract qualified candidates, regulatory authority leaders may be required to obtain permission to pursue additional paid employment, as is the case in Australia (for full-time collegial body members),6 or simply prohibited from pursuing additional employment, as is the case in the United States.7 Such restrictions are intended to ensure that the individual devotes their full attention to their regulatory duties and to eliminate conflicts of interest, but can also prevent candidates from obtaining secondary employment that would help make up for the income forfeited when accepting a position at the regulatory authority.
In an attempt to circumvent the issues of low civil service salaries or restrictive civil service employment regulations, regulators have attempted to design creative and attractive compensation packages to attract experienced and qualified personnel. In a study of the Botswana Telecommunications Authority, the ITU noted that at the time of the study, the BTA offered an attractive set of fringe benefits and salaries that were likely higher than those available in private sector telecommunications jobs, as shown by the high number of private sector applicants for BTA positions.8 In the case of Botswana, these fringe benefits combined with the fact that civil service rules do not apply to the regulator, allowed the BTA to offer competitive salaries and benefits to attract the most qualified candidates. A similar arrangement is in effect in Singapore, where the IDA is not required to adhere to the hiring, firing, and benefits practices in place for most public employees, allowing the regulator more flexibility to offer compensation packages that are more competitive with the private sector.9
In some cases, the non-leadership staff compensation levels are based upon national public employee regulations when regulatory authority heads are empowered to hire staff as necessary, as long as they comply with applicable public employment laws and regulations. Such is the case in the United States where the majority of the employees of the FCC receive compensation based on a government-wide schedule of compensation in which there are several compensation “bands” and multiple levels within each band.10 In such cases, staff remuneration is adjusted in concert with other public employees across the majority of government agencies.
ENDNOTES
1 Sudan National Telecommunications Council Act 1994, as amended, Chap. III (13).
2 Jordan Telecommunications Law No. 13 of 1995, as amended, Article 11.
3 Act C of 2003, Article 19(2).
4 Bulgaria, Telecommunications Law 2003, Article 23.
5 47 U.S.C. 154 (d).
6 Australian Communications and Media Authority Act, 2005, Section 31.
7 47 U.S.C. 154 (B) (4).
8 ITU Effective Regulation Case Study: Botswana (2001), at 23.
9 International Telecommunication Union, Trends in Telecommunication Reform: Effective Regulation, 2002, at 130.
10 Under the Classification Act of 1949, the U.S. federal government established a graded pay system, referred to as the General Schedule (GS). Under the GS system jobs are ranked according to levels of responsibility. Each job is assigned a corresponding grade from GS-1 to GS-15, with a salary assigned within each grade. See The Classification Act of 1949 as amended (amended by section 1104 of the Act of October 23, 1949 as amended (63 Stat 972) on authority of Pub L. 89-554.