Regulatory scholars and others have long maintained that industry rule-making that is ‘responsive’ to the ‘practices and norms’ of all interested parties is beneficial. They argue it permits the state to mobilise the talents and knowledge of stakeholders. It leads to regulation that is more efficient, flexible, timely and innovative. It results in rules that are better targeted to the specific industry concerned and rules that are more reasonable yet more comprehensive.
Moreover, better-targeted and more reasonable rules are believed to increase the probability that industry will comply with them. Most importantly, industry rule-making makes it more likely that any rules that are adopted at the end of the process will effect change. In other words, rule-making that is responsive increases the probability that the objectives of the regulatory system set by the state will be attained. However, there remains a lack of clarity about what responsiveness means (and hence requires) in a rule-making context; and we still know surprisingly little about the mechanisms that are needed as a matter of practice to activate and sustain responsive industry rule-making.
This paper addresses both issues. First, it sets forth a definition of responsiveness, arguing that responsiveness has subsumed the underlying concerns that underpin the four principles of procedural and institutional legitimacy in traditional rule-making in democratic countries – the principles of transparency, impartiality, accountability and deliberation. Secondly, the paper considers how responsive industry rule-making can be stimulated in the short term and maintained it in the longer term.
Drawing on three in-depth case studies of industry rule-making in the Australian telecommunications sector, it suggests that the responsiveness of industry rule-making turns on the complex interplay between numerous factors that can be grouped into four categories: the context of rule-making; rule-making participants and their characteristics; the rule-making framework; and the subject matter of rules.
Dr Karen Lee is a lecturer in the School of Law at the University of New England and a specialist in telecommunications regulation. Her PhD, for which she received the UNSW Faculty of Law’s PhD Research Excellence Award, involved an in-depth study of the development of three telecommunications consumer codes by working committees of the Communications Alliance. Her book The Legitimacy and Responsiveness of Industry Rule-making, which is based on her thesis, will be published by Hart Publishing later this year. She was also the runner up for the Giandomenico Majone Prize for Best Conference Paper Written and Presented by Early-Stage Researchers, awarded by the European Consortium of Political Research’s Standing Group on Regulatory Governance, in 2016. She has published in the Federal Law Review, the Media and Arts Law Review and the Australian Journal of Competition and Consumer Law; and is a contributor to Australian Telecommunications Regulation and Telecommunications Law and Regulation. Prior to becoming an academic, she worked in the TMT department of the London office of Denton Wilde Sapte (now Dentons). She was seconded to the UK Office of Telecommunications in 1998-1999 and to the UK Department of Trade and Industry in 2002. She is a qualified lawyer in NSW, Illinois and England and Wales.