Transcript No Slide Title

Telecommunications Competition Code
Overview of Draft Interconnection Policies
May 15, 2000
1
Agenda
Introduction




Objectives
Approach to Developing Interconnection Principles
Challenges
Framework for Interconnection and Access Regulation
Proposed Interconnection Policies





Scope of Services
Obligation to Provide Access
Responsibility for Charges
Structure of Charges
Charging Standards
Summary
2
Introduction
Change Driver
 Infrastructure moves from service specific to multi-services
 Existing infrastructure can be re-used in ways it was not originally designed
 Standards bodies have not been able to keep up with technological change
 Content has a significant impact on service demand
 Demand is difficult to forecast
 Traffic patterns change
3
Approach
Introduction
Technological Development
Consumer Needs
Government
Objectives
Interconnection
Policy Objectives
Policies
Industry
Development
Consultative
Process
4
Challenges
Introduction
Singapore as
Info-comm Hub
•Creation of an attractive
environment for
infrastructure
investment
•Greater service
innovation, choice
and any-to-any
connectivity
•
Protection of Investments Except in Instances of Genuine Market Failure
•
Network Ownership, Planning, and Design At the Discretion of Operators
•
Fair and Just Compensation for Network Usage
•
Preference for Commercial Arrangements within Broad Guidelines
•
Regulatory Intervention Only As Necessary
•
Bias Towards Open Access for All
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Elements
Introduction
Scope of
services
What are the likely interconnection related services
that can be requested in a fully liberalized market?
Obligation to
Provide Services
Who are the eligible requesting and providing
operators for the interconnection related services?
What are their obligations, and are these time bound?
Responsibility
for Charges
Where do the responsiblities lie for costs incurred in
establishing or maintaining these interconnection
related services?
Structure of
Charges
What guidelines should govern the structure of
charges?
Cost Standards
What rules will be applied to the make-up and level of
interconnection charges?
6
Future Considerations
Introduction
The following topics are not part of the focus of today’s discussion:
Operator to Operator
• Universal Service Obligations
• Retail Price Regulation
• Consumer Protection
• Mobile Access
Operator to Service
Innovator
• Network and Service Bundling
• Intellectual Property Rights
• Allocation of Network Capacity
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Operator to Service
Innovator
Interconnection
Operator to
Operator
Interconnection
Today’s Focus
Introduction
Scenario
Interconnection Related
Service
Customer to customer
access
1. Physical Interconnection (PI)
2. Origination and Termination (O/T)
Operator to customer
access
1. Physical Interconnection (PI)
Network operator pays
2. Unbundled Network Elements
network operator (e.g.
(UNEs)
unbundled loop)
3. Essential Support Facilities (ESFs)
Customer to service
innovator access
Service innovator to
customer access
Out of scope
Application
Network traffic and
payment exchanged (e.g.
PSTN)
Customer pays network
provider who
compensates service
provider (e.g. CATV)
Customer pays service
provider, who purchases
network (e.g. ISP)
Out of scope
Today’s Focus
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Agenda
Introduction




Objectives
Approach to Developing Interconnection Principles
Challenges
Framework for Interconnection and Access Regulation
Proposed Interconnection Policies





Scope of Services
Obligation to Provide Access
Responsibility for Charges
Structure of Charges
Charging Standards
Summary
9
Interconnection Related Services
Type
Description
Scope of Services
Current Example
One-Time
Physical Interconnection
• The physical act of
connecting two networks to
allow O/T and/or to permit
the use of UNE / ESF
• Items that enable
competition
• Collocation (for O/T)
• Virtual Collocation
• SS7 interconnection
• Local Number Portability
• Collocation for (UNE)
• Emergency Services
• Operator Services
On-going
Originating and Terminating
Charges
• Network to Network
interconnection charges for
traffic origination or
termination
• Call termination
• Class 5 Aggregation
• Equal access
Unbundled Network Element
• Elements that will be made
available to allow new
operators to offer service
and promote competition
• Local loop
• Switch port
Essential Support Facility
• Competitive bottleneck that
do not provide a
telecommunications service
• Conduit
• Utility poles
• Radio Tower
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Identification and Examples of PI
Type
Scope of Services
Examples of PI
O/T Enabling
• Collocation for FBOs
•Signaling Interconnection
• Interconnection Trunks
UNE/ESF Enabling
• Collocation (space, heat, light, power)
• OSS Interconnection, where appropriate
Competition Enabling
• Local Number Portability
• White Pages/Directory listings
• Equal Access
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Identification and Examples of UNEs
Example
Current
Potential
Broadband
Logic
Scope of Services
Issues
Telephone Loop
(Feeder, Distribution,
and Drop)
• Made available in conjunction with the sale
of service (including the service already
using the loop)
• Asset ownership
• Availability
• Repair and
Maintenance
• Cream skimming
Switch Port
• Made available to connect to another
carrier’s access network
• Asset ownership
• Repair and
Maintenance
Access to the
Feeder/Drop at the
Jumper Wire Interface
• Allows VDSL type services to be provided
• As above plus
• Space and Power
• Network Intelligence
Access to CATV plant
at the Final
Distribution Node
• Allows others to provide two way high speed
service over CATV plant
• As above plus
• Network Intelligence
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Identification and Examples for O/T
Potential Broadband
Current
Example
Logic
Scope of Services
Issues
Termination of call
(PSTN)
• Allows network interconnection for
voice services
X.25, Frame Relay,
and ATM Packet
Termination
• Allows data network interconnection for • Pricing
packet services
• Standards
• Performance
Voice over IP
Termination on
PSTN
• Allows IP based and PCM based
networks to be interconnected
• Call Quality (delay, voice,
quality) and Pricing
• Signaling
• Type of Origination
Native IP
Interconnection
• Allows peering (interconnection)
between IP based networks
• Network performance
• Pricing
• Signaling
• Type of traffic
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• Type of origination
(National/International)
• Pricing
• Asymmetric traffic (e.g.
Dialup ISP, 800)
Identification and Examples of ESEs
Example
Logic
Scope of Services
Issues
Conduit
• Difficult/expensive to replicate
• May not be being used effectively
• Lots of conduit will become available as
fiber replaces copper pair
• Ownership
• Availability
• Repair and
Maintenance
In building risers
and signal
distribution
networks
• Difficult/expensive to replicate
• Control over these resources have
created significant problems for service
providers in North America
• Ownership
• Availability
• Repair and
Maintenance
Towers
• Radio towers create environmental
impact
• Ownership
• Wind loading
• Power, spectrum
etc.
Rooftop Space
• Similar to in building distribution and
risers rooftop space is required for
radio/satellite based service providers
• Ownership
• Availability
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Agenda
Introduction




Objectives
Approach to Developing Interconnection Principles
Challenges
Framework for Interconnection and Access Regulation
Proposed Interconnection Policies





Scope of Services
Obligation to Provide Access
Responsibility for Charges
Structure of Charges
Charging Standards
Summary
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Policy
Obligations
Element
Current and Future
PI
• All operators and requesting parties
O/T
• All dominant operators for all customers /
services mix
• All other operators direct or indirect
UNE
• All dominant facilities based operators where:
–No commercial agreement can be reached
–Not economically possible to replicate or
bypass
–Necessary to provide “telecom” service
ESF
• All facilities based operators and building
landlords / owners for current
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Clarification on Availability
Obligations
IRS Status
Providing Operator’s
Obligation
Available - not in use
and not reserved
Not Available - in use
or reserved

if customer or customer
Lease on a Permanent
Basis (100% capacity,
e.g. loop)

Lease on a Permanent
Basis (<100% capacity,
e.g. cable channel)


Lease on a Transactional
Basis (100% capacity,
e.g. call completion)


group agrees
obligation to build
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Classes of Requesting Operators
Service Classes
Service Innovator
Services Based
Operators (SBOs)
Obligations
Description
Examples
1. Provides communications,
computing or broadcasting services
2. Owns or operates systems that
operate over telecommunications
facilities
IBM
CNN
Credit Card
Processor
1. Owns or operates switching/
broadcasting equipment but leases
transmission capacity from a FBO
Equant
Phoenix Network
Inc.
2. Operates a private network
Facilities Based
Operators (FBOs)
Directly or indirectly owns and
operates transmission plant together
with switching/broadcasting
equipment
Affected Operators
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SingTel
SCV
StarHub
Summary
Obligations
Rights
Obligations
Class
Dominant
Non-Dominant
Class
Service
Innovator
Not in Code
Not in Code
Service
Innovator
Must Provide
• PI
• O/T
Must Provide
• PI
• O/T
Must Provide
• PI
• O/T
• UNE
• ESF
Must Provide
• PI
• Direct/Indirect
O/T
• Existing ESF
SBO
FBO
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SBO
FBO
All Operators
Not in code
May use
• PI only for O/T
May use
• PI
• O/T
• UNE
• ESF
Agenda
Introduction




Objectives
Approach to Developing Interconnection Principles
Challenges
Framework for Interconnection and Access Regulation
Proposed Interconnection Policies





Scope of Services
Obligation to Provide Access
Responsibility for Charges
Structure of Charges
Charging Standards
Summary
20
Summary
Responsibility
Requesting Operator
PI, competition
enabling
PI, O/T
PI, UNE/ESF
O/T
UNE
ESF
Providing Operator
Pays own
Pays own
Shared
Shared
All
(including costs of
modifications)
None
Pays Own
Pays Own
All
(including costs of
modifications)
None
All
(including costs of
modifications)
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None
Facilitating Competition
Responsibility
•In order to ensure that the creation of PI does not
become a barrier to competition, the iDA proposes that
the dominant operator is initially responsible for the
investment
•The iDA will ensure that the dominant operator will
provide PI in a timely manner
•The requesting operators will reimburse the dominant
operators as they use the PI
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Agenda
Introduction




Objectives
Approach to Developing Interconnection Principles
Challenges
Framework for Interconnection and Access Regulation
Proposed Interconnection Policies





Scope of Services
Obligation to Provide Access
Responsibility for Charges
Structure of Charges
Charging Standards
Summary
23
Policy
High
Structure
FBOs Only
End Users
Resale of
Retail
Service
Unit Cost of
Goods Sold
to Deliver
Service for
Requesting
Party
Leased
Bandwidth
Unbundled
Network (UNE)
Essential
Support
Facilities
(ESF)
Low
Low
Investment Required
by Requesting Party
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Origination /
Termination
High
Time Limits on UNEs
Structure
Retail Rate
Cost
UNEs may
not be
available
after a
certain
time
UNE
Time
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Symmetrical Charges
Asymmetrical
Advantages
• Can help to remove
new technology
entry barriers
• Covers operators
actual costs
• Can be used to deal
with Universal
Service Obligations
Structure
Symmetrical
• Easier to administer
• Can be used to ease
new operator market
entry (e.g. reciprocal
compensation)
• Technology neutral
• Open to significant
arbitrage
• Rewards inefficiency
Disadvantages
• Difficult to administer • Does not reflect the
reality in the choice of
• Leads to arbitrage
technology in each
network
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Bill and Keep
• Simple to
administer
• Does not promote
arbitrage
• Technology
neutral
• Does not assist
market entry
Agenda
Introduction




Objectives
Approach to Developing Interconnection Principles
Challenges
Framework for Interconnection and Access Regulation
Proposed Interconnection Policies





Scope of Services
Obligation to Provide Access
Responsibility for Charges
Structure of Charges
Charging Standards
Summary
27
Justification of Cost Standards
Policy
objectives
Promote effective
competition
Optimise
resource
utilisation
Simple and
practical
partially compensatory
level “playing” field
avoid duplication
implementable
fair and equitable charge
fully compensatory; right cost of
IRSs
no discrimination
optimal use of resources
implementable
Fully Distributed
Costs
high charge
arbitrary apportionment distorts
investment
prone to incumbent’s
manipulation
new entrants over-invest facilities
Efficient Component
Pricing Rule
high charge
price may include monopoly
profit
barrier to entry by raising price
inefficient duplication if tariffs do
not reflect costs
difficult to implement
high charge
SAC exceeds cost of providing
IRSs
efficient entry discouraged
duplication of facilities
practicable
Cost
standards
Long Run
Incremental Cost
Long Run Average
Incremental Cost
Stand Alone Cost
Maximise
customer
benefits
Promote
investment
low charge
Standards
Not desirable for achieving policy objectives
Desirable for contributing to policy objectives
Desirable for achieving policy objectives
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implementable
Justification of Cost Bases
Policy
objectives
Cost bases
Historical or
Embedded Cost
Current or
Replacement
Cost
Forward Looking
Economic Cost
Maximise
customer
benefits
Standards
Promote
investment
Promote
effective
competition
Optimise
resource
utilisation
tend to be higher
no correct signals for
investment decisions
prone to incumbent’s
manipulation
new entrants over-build
systems
tend to be lower
correct “build or buy” signals
not subject to incumbent’s
manipulation
no over-building of systems
likely to be the lowest
invest in efficient and
advanced technology
encourage efficient entry;
discourage inefficient entry
no wasteful duplication
Not desirable for achieving policy objectives
Desirable for contributing to policy objectives
Desirable for achieving policy objectives
29
Simple and
practical
transparent and auditable
sometimes difficult to
quantify
very difficult and timeconsuming to
estimate/determine
Agenda
Introduction




Objectives
Approach to Developing Interconnection Principles
Challenges
Framework for Interconnection and Access Regulation
Proposed Interconnection Policies





Scope of Services
Obligation to Provide Access
Responsibility for Charges
Structure of Charges
Charging Standards
Summary
30
Defining Elements of Interconnection
Scope of services
All technically feasible IRS across
different types of networks
Obligation to
Provide Services
• Based on licensee’s status
• Time Bound ?
Responsibility for
Charges
• Requesting operator for PI, UNE
and ESF
• Pay own for O/T or shared to
establish
Structure of
Charges
• Asymmetrical ?
• Usage Based
Cost Standards
Summary
• LRAIC
• FLEC or Current or Replacement
Costs
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• Issue
implementation
details
• Issue enforcement
procedures
• Outline the
methodology for
the calculation of
charges to
facilitate
negotiations
between operators
iDA Process Review
iDA set
framework
Ida puts out
costing
methodology
and guideline
Summary
1.
Commercial agreements published or iDA arbitrates
in the case where dominant carriers are involved
2.
If dominant carrier is not involved, no arbitration
iDA review
Yes
Operator
requests
interconnection
(O /T)
No
Can
commercial
agreement
No
be reached?
Is one
operator
dominant?
Yes
iDA dispute
resolution
iDA review
Yes
iDA set
framework
Can
commercial
agreement
be
reached?
No
No
Is one
operator
dominant?
Is the
facility
Yes
necessary?
No
Yes
Can the
facility be
replicated /
obtained?
Yes
Is the
facility
available?
Yes
iDA dispute
resolution
No
No action unless appealed to the iDA due to lack of
agreement
32