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INTERCONNECT: Still Undecided

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Voice&Data 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?

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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.

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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.

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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
request.

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.

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Pravin Prashant

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

Audrey Lee, director, Interconnection, Infocomm Development Authority of
Singapore

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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.

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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?

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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.

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