INTERCONNECT: Still Undecided

VoicenData Bureau
New Update

Will Bharti start its basic service in Haryana circle in November when the

interconnection agreement is still not finalized by the incumbent? When will the

TRAI formulate the model guidelines on interconnection? When will the

interconnect disputes between basic service provider and Bharat Sanchar Nigam

Limited (BSNL) come to an end on the access fee front? When will the

interconnect disputes between cellular service provider and BSNL come to an end?

Is there any time limit on dispute settlements? When will the new service

providers (both cellular and basic) sign their interconnect agreement?


All these above questions are unaswered till date so is the issue of

providing interconnect to new service providers in the country . This has

delayed the faster rollout of services by the basic service providers. The delay

in service is not good for the service providers whether incumbent or p-telcos,

as both are losing on the revenue front. It even delays the process of meeting

the objectives of NTP ’99.

In countries like Singapore where a service provider is mandated to lease

their ducts local loops to have colocation, line sharing for ADSL service, and

unbundling of local loops, in India, it is just the opposite. We presently, do

not have even the basic interconection model for connecting the Tandem exchange

with each other, so that service providers can interconnect and provide their

subscribers with a facility to access all other telephone subscribers and avail

of other telecom services.

Why do we have such vague policies on interconnect when we know that the new

operator will always have problems in interconnecting with the dominant

operator, the incumbent because they are going to abuse their market power. This

has been the trend worldwide. Don’t we learn from worldwide experiences? In

spite of all these we find the same flaw in the basic service license as well as

cellular license.


The basic service license states that "The basic service licensee may

enter into suitable arrangements with other service providers to negotiate

interconnection agreements whereby the interconnected networks will provide the

following: (a) to connect, and keep connected, to their applicable systems; (b)

to establish and maintain one or more points of interconnect as are reasonably

required, and are of sufficient capacity and in sufficient numbers to enable

transmission and reception of the messages, by means of the applicable systems;

(c) to meet the reasonable demand for transmission and reception of messages

between the interconnected systems".

The cellular license states that "The interconnection tests for each and

every interface with any service provider may be carried out by mutual

arrangement between the licensee and the other party involved".

Both license agreements stress on mutual arrangement between the licensee and

the other party involved. But if there is a dispute what is the process of

dispute settlement? We do not have any answer for this in the present set up. We

open up basic services and cellular services but the interconnection rules and

regulations are not spelt out, which results in delay of service. We have

already seen this happening in the past with all sort of services , which were

liberalized by the government.


Singapore Example

The Singapore telecom market has been liberalized recently on

the domestic front. Service providers like Star Hub are planning to start

service very soon and others will follow soon because Singapore has a well-laid

policy on the interconnect front, which India lacks. The IDA has drawn three

basic policies on the interconnect front. First, one can commercially negotiate

with anybody. Second, one can negotiate on the basis of all interconnect

agreements that are already in place. Third, to sign the interconnect agreement

on the basis of Reference Interconnection Offer (RIO). The RIO is quite detailed

and runs in 640 pages. All the steps, processes, time-frames, etc, are all set

out, which gives SingTel, the incumbent, very little to maneuver.

Even in the case of dispute between the two telcos, IDA has

come out with a dispute-resolution framework for resolving the disputes.

Reference Interconnection Offer

The Info-communications Development Authority of Singapore

has published a code of practice for competition, which stipulates dominant

licensees to submit a proposed RIO to the authority for approval. RIO is in two

parts. The first part outlines the procedures necessary to accept the RIO and

enter into an agreement with the incumbent, SingTel. The second includes the

minimum terms and conditions on which SingTel will enter into such an agreement

with the telecommunications licensees.

The following interconnection-related services and wholesale

services are covered by this RIO agreement: physical and virtual interconnection

agreement; origination, termination and transit of network traffic; un-bundled

network elements; un-bundled network services; essential support facilities;

number portability; wholesale services being IPLCs; and dark fiber services.

Each party shall maintain and repair faults on

interconnection links in the same manner as it maintains similar plants and

repairs similar faults within the network.

Model Confidential Agreement

The agreement regulates the disclosure of a confidential

information, in connection with the negotiation of interconnection agreement

between the two parties. The receiving party agrees to maintain the

confidentiality and not disclose the confidential information to any other

party, and only use that confidential information subject to the terms and

conditions of this agreement.

Dispute Resolution Framework

If there is any dispute between licensees arising out of

implementation in their interconnection agreement, licensees are required to

resolve the dispute in accordance with the dispute-resolution provision as per

their interconnection agreement.

The referring party is required to notify the non-referring

party of its intention to refer the dispute to IDA, fourteen days prior to its

request. The referring party must provide evidence that it has attempted to

commercially resolve the dispute between the two parties and the non-referring

party is required to provide its comments on why IDA should not intervene to

resolve the dispute.

IDA will seek to give notice to both the parties, within

seven days of the referring party’s request, to indicate whether it will

intervene to resolve the dispute.

Once the IDA decides to resolve the dispute, the parties

shall, within fourteen days, submit a detailed report to IDA and should indicate

the sections which are confidential.

IDA shall review and consider the unresolved matters set

forth in the party’s detailed report and thereafter, issue a ‘Preliminary

Order’, within thirty days of receipt of party’s responses.

The party may within the fourteen days from the date of issue

of the ‘Preliminary Order’, request IDA to reconsider its decision, which

should be supported by the compelling reasons for it.

IDA will seek to issue a ‘Final Order’ after the review of the party’s

request to IDA, to consider its ‘Preliminary Order’. IDA will seek to issue

the ‘Final Order’, within fourteen days from the date of the party’s


Presently what BSNL is providing is Rent & Gurantee (R&G) which is

costly as well as time consuming. But, what service provider is demanding is RoW

for interconnect.

Sources in BSNL says that the interconnect agreement is in its final stage

and is expected within a week. But the question is whether it will care for the

new operators or will it open up new series of controversies which will delay

the deployment of basic services in the country.


Pravin Prashant

'We have a detailed dispute resolution process in the interconnection framework'

Audrey Lee, director, Interconnection, Infocomm Development Authority of



What were the problems faced in drafting the

Interconnection Agreement?

In our experience what we have learnt is if we do not have

RIO and when you leave any incumbent to negotiate with the new operator, the

incumbent will give the new operator the terms which they won’t like, as these

are one-sided agreements and the new operator does not posses a good bargaining

power. So it can end in a very protected and long negotiation. RIO is not a new

concept, as Europe already has it. But what is unique in our case is it is a

very detailed document because if you do not include terms and conditions in

interconnection, it becomes very vague. Thus, there is a room for the incumbent

to play around, as they can interpret it very broadly.

It is quite detailed. All the steps, processes, time-frames

and everything is set out, which gives SingTel too little to maneuver.

Everything is explicit. When RIO was out it shortens the time-frame for

negotiation. If you love this offer, you take it, you sign on to it and carry

out the implementation process.


In other countries where there are no reference offers what

we have learnt is that commercial negotiations are quite protected. And many a

times, there are a couple of unfair terms which the incumbent tries to impose.

What is unique in Singapore Reference Interconnection

Offer (RIO)?

In the code, we have already set out things which SingTel has

to put in RIO. We want to see detailed terms and conditions on things like

technical specifications, operational procedures, and physical interconnect

process, origination and termination of traffic. The quality of service should

be explicit and if you do not comply with the time-frame as stipulated in each

leg what are the charges a service provider has to pay, in terms of

compensation? We also have a detailed dispute resolution process in the

interconnection framework and if you come out with disputes what are the quick

resolution methods?


Our objective is we want the new entrant to come in to be

able to interconnect quickly and have a fair RIO. The other issue is on pricing.

SingTel is also mandated to lease their ducts and local loops to have colocation,

line sharing (for ADSL service), un-bundling of local loops, all these things

are mandated in the RIO. So if the new operator wants to rollout fast, he can

lease and start the service at the earliest.

How many disputes have you had on the interconnect front?

Not a single one, on the RIO front.

How do you settle the disputes?

We draw our powers from the Telecommunications Act and the

competition code. The dispute between the parties is governed by the

dispute-resolution process or agreement in the interconnection offer. So,

usually what we see in interconnection offer is that there is an element for

them to raise to IDA. We will then step in and decide whether is it within our

power to resolve the dispute.

If it is a policy issue and falls under the jurisdiction of

the IDA then the regulator steps in. We have a detailed dispute-resolution

framework for interconnection. The case is raised to us and then we stick to the

time-frame to resolve the case. The maximum time-frame for settling out dispute

is about three months.

What about interconnect charges?

IDA actually determines the rate for commercial interconnect and does not

leaves it for commercial negotiation because they will never agree. So, we use

the principle of cost-based in long run average incremental cost and determine

these rates.