‘A network is only as valuable as the people it connects’, the report states. ‘When additional end users gain access’, it says, ‘it increases the communications possibilities not only for that end-user, but for every other individual and business connected to the network’.
In an age that places increasing importance on any-to-any interconnection, that is, the ability of any network operator to establish connectivity with any other operator, one of the primary objectives of today’s telecommunication policies is to promote network build-out to support universal access to ICT's.
Regulators and market players from around the globe consider interconnection regulation to be the single most important issue in the development of a competitive marketplace for telecommunication services. With the advent of the convergence of telecommunications, broadcasting and information technology, the importance of interconnection has only grown.
The ultimate beneficiaries of well-designed interconnection policies are customers. Each time a new access line is added to the ICT network, it expands the range of destinations with which callers can communicate, ITU Telecommunication Development Bureau (BDT) Director Hamadoun I. Touré explains. Every time new networks interconnect, the value of a given network increases exponentially. This applies to stockbrokers electronically trading shares of Fortune 500 companies in New York City as well as to rural women lining up to use a village mobile phone in Bangladesh, Touré added.
Effective interconnection frameworks also provide benefits to a host of other key actors. Network operators benefit from increased demand. Workers benefit from increased employment. Economies expand, and governments benefit from increased tax revenues. Societies on the overall benefit from new applications for health, education, and democratic outreach.
Regulators and policy makers understand the importance of interconnection, but face many tough decisions in implementing interconnection regulations and policies.
Trends in Telecommunication Reform 2000-2001:
Interconnection Regulation is the third edition of the annual ITU report on sector restructuring. In addition to identifying the key issues raised by interconnection regulation, it includes best-practice examples of how regulators and policy makers from around the globe have tackled major interconnection challenges. In addition, it includes interconnection reference materials, such as interconnection guidelines published by several regional regulatory organizations and provides Web site links to other sources. It is a guide and reference document for this growing body of regulatory agencies as well as for policy-makers, operators, analysts and academics.
(From Aslib Online and Cd notes, Interconnection Regulation)
3.2 Anti-Monopoly Perspective
It is a fact that in a monopolistic setting almost all the power is in the hands of the incumbent. The incumbent may have an already established network where the new entrant may not reach, and being already versed in the market gives the incumbent excessive powers. This in itself makes the platform for survival for the new entrant on a stand-alone basis very difficult. The costs of building a network to the size of the incumbent may be as costly as it is a time consuming exercise too. As already established in other lessons there need be this interlinking of users for both the incumbent and the new entrant. This surely makes interconnection inevitable. This competition calls for an anti- monopoly rationale which in turn makes regulation between competitors necessary.
3.3 Case Study: MTN in Swaziland
Swaziland Post and Telecommunications (SPTC) was the sole telecommunications provider in Swaziland.
The present situation (2003) in Swaziland is that Swazi MTN is the sole cellular network provider and is trading in terms of a licence issued by the Government giving it ten years exclusivity. In terms of the licence, an Interconnection Agreement was to be concluded between Swazi MTN and Swaziland Posts and Telecommunication Corporation. This agreement was concluded and it defines the commercial and technical arrangements for the transfer of messages in either direction between SPTC and Swazi MTN or the payment of interconnection fees.
Currently plans are underway to put in place a telecommunications legislation that will take care of all regulatory and interconnection issues.
3.4 Regulators Role in Interconnection Negotiations
Regulators have a variety of tools available to expedite negotiations and to assist in the successful completion of interconnection agreements. Some proven regulatory approaches are listed below:
- Establishing guidelines in advance of negotiations
- Setting default interconnection arrangements in advance of negotiations
- Establish deadlines for various stages of the negotiations
- Establish Industry technical Committees
- Incentive to complete interconnection arrangements
- Appoint mediators or arbitrators
3.5 Dispute Resolution
In most countries, it is the regulator's role to resolve interconnection disputes. The WTO Regulation Reference Paper requires signatories to the Agreement on Basic Telecommunications to establish an independent dispute resolution mechanism. The paper requires recourse to an independent domestic body to resolve interconnection disputes within a reasonable time. This may be a regulator or another independent body
The degree of independence of regulators varies in different countries. In some countries, the regulator is a government ministry, or a government agency, that also has a responsibility for the operation of a state-owned incumbent. Many observers would not consider such a regulator independent for the purpose of resolving interconnection disputes. While such a regulator may technically be in a separate organization from the incumbent, it has similar interest. Both are a part of the government telecommunications bureaucracy. Both may consider the financial and operating interest of the incumbent as their prime concern.
In such a case, other independent dispute resolution bodies should be considered.
(H. Intven, J. Oliver and E. Sepu'lveda, Telecommunications Regulation Handbook, Module 3 – Interconnection (2000))
Table 3-3 suggests some other approaches, which may be used.
| Table 3-3: Approaches to Resolving Interconnection Disputes |
| Improving the information base for decision-making | - Require parties to clearly define areas of agreement and dispute
- Send written information requests to operators to clarify dispute issues and provide information for interconnection decisions
- Require written argument (with supporting facts and research, if necessary) to assist in clarifying the issues in dispute
- To increase transparency, consider making the arguments (but not confidential business data) available for comment by other interested parties and the public
- Consider inviting other interested parties (e.g. other interconnecting operators, service providers, or user groups) to comment on the issues
|
| Obtaining expert assistance | - Hire an experienced interconnection expert to assist in clarifying the issues, formulating information requests, and providing general advice to the decision-makers
- Consider appointing a mediator ( or, if the parties agree, an arbitrator)
- Use outside parties for informal mediation, arbitration information gathering or other participation in the negotiations. This approach is particularly useful in countries where direct regulatory involvement would "taint" the legality or politically prevent it from making an unbiased final decision.
|
Improving accuracy and credibility
| - Consult with other regulators on their experience in similar cases
- Review decisions and interconnection agreements approved by other regulators
- Consider circulating a draft of the decision to resolve the dispute to the disputing operators and other interested parties. Their comments and corrections can improve the accuracy of the final decision.
|
Figure 3-3 indicates the resulting effects of efficient regulation
| Figure 3-3: Benefits of Efficient Regulation |
 |
3.6 Learning Activity
Company X was the sole fixed line telecommunication provider in the country. In 1991 the change to democracy ushered in plural politics and an open market. A stand-in regulatory body was immediately put in place to attend to telecommunications regulatory issues. Company Y applied for a mobile communication license and was given 10MHz of operational bandwidth. Later, company Z came in and applied for a mobile communication license and requested a 10MHz bandwidth, which was given. When company Q made an application for a mobile license, the regulatory authority realized there was a shortage of bandwidth and that company Y and Z were only using 60% of their allocated bandwidth each. Company Z has however refused to relinquish their unused bandwidth.
1. Discuss what the regulatory board should do to rectify this anomaly.
2. What do you think would be the legal implications if the regulatory
body decided to revoke some of the bandwidth?
3. Can this issue be resolved and who should be involved and what
should be done?
