1 telecommunications competition code overview of draft interconnection policies may 15, 2000
TRANSCRIPT
2
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
Agenda
3
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
IntroductionIntroduction
4
Approach
Con
sum
er N
eeds
Tec
hnol
ogic
al D
evel
opm
ent
GovernmentObjectives
InterconnectionPolicy Objectives
PoliciesPolicies
Consultative Process
IndustryDevelopment
IntroductionIntroduction
5
Challenges IntroductionIntroduction
•Greater service innovation, choice and any-to-any connectivity
•Creation of an attractive environment for infrastructure investment
Singapore as Info-comm Hub
• 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
• 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
6
Elements
Obligation to Provide Services
Obligation to Provide Services
Responsibility for Charges
Responsibility for Charges
Structure of Charges
Structure of Charges
Cost StandardsCost Standards
Who are the eligible requesting and providing operators for the interconnection related services? What are their obligations, and are these time bound?
Where do the responsiblities lie for costs incurred in establishing or maintaining these interconnection related services?
What rules will be applied to the make-up and level of interconnection charges?
What guidelines should govern the structure of charges?
IntroductionIntroduction
Scope of services
Scope of services
What are the likely interconnection related services that can be requested in a fully liberalized market?
7
Future Considerations IntroductionIntroduction
• Universal Service Obligations
• Retail Price Regulation
• Consumer Protection
• Mobile Access
• Universal Service Obligations
• Retail Price Regulation
• Consumer Protection
• Mobile Access
The following topics are not part of the focus of today’s discussion:
Operator to Operator
Operator to Service Innovator • Network and Service Bundling
• Intellectual Property Rights
• Allocation of Network Capacity
• Network and Service Bundling
• Intellectual Property Rights
• Allocation of Network Capacity
8
Today’s Focus IntroductionIntroduction
Customer to customer access
Operator to customer access
Customer to service innovator access
Service innovator to customer access
1. Physical Interconnection (PI)2. Origination and Termination (O/T)
1. Physical Interconnection (PI)2. Unbundled Network Elements
(UNEs)3. Essential Support Facilities (ESFs)
Out of scope
Out of scope
Op
erat
or
to
Op
erat
or
Inte
rco
nn
ecti
on
Op
erat
or
to S
erv
ice
In
no
vat
or
Inte
rco
nn
ecti
on
Scenario Interconnection Related Service
Application
Customer pays network provider who compensates service provider (e.g. CATV)
Customer pays service provider, who purchases network (e.g. ISP)
Network operator pays network operator (e.g. unbundled loop)
Network traffic and payment exchanged (e.g. PSTN)
Today’s Focus
9
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
Agenda
10
Interconnection Related Services Scope of ServicesScope of Services
Type Description Current Example
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
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
One-Time
On-going
11
Identification and Examples of PI
Type
O/T Enabling
UNE/ESF Enabling •Collocation (space, heat, light, power)•OSS Interconnection, where appropriate
Competition Enabling •Local Number Portability•White Pages/Directory listings•Equal Access
Examples of PI
•Collocation for FBOs•Signaling Interconnection• Interconnection Trunks
Scope of ServicesScope of Services
12
Scope of ServicesScope of ServicesIdentification and Examples of UNEs
Current
Potential Broad-band
Example Logic IssuesIssues
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
• 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
• 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
• As above plus• Space and Power• Network Intelligence
Access to CATV plant at the Final Distribution Node
Access to CATV plant at the Final Distribution Node
• Allows others to provide two way high speed service over CATV plant
• Allows others to provide two way high speed service over CATV plant
• As above plus• Network Intelligence
• As above plus• Network Intelligence
13
Identification and Examples for O/T Scope of ServicesScope of Services
Example Logic IssuesIssues
Termination of call (PSTN)
• Allows network interconnection for voice services
• Type of origination (National/International)
• Pricing• Asymmetric traffic (e.g.
Dialup ISP, 800)
• Type of origination (National/International)
• Pricing• Asymmetric traffic (e.g.
Dialup ISP, 800)
X.25, Frame Relay, and ATM Packet Termination
• Allows data network interconnection for packet services
• Pricing• Standards• Performance
• Pricing• 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
• Call Quality (delay, voice, quality) and Pricing
• Signaling• Type of Origination
Native IP Interconnection
Native IP Interconnection
• Allows peering (interconnection) between IP based networks
• Allows peering (interconnection) between IP based networks
• Network performance• Pricing• Signaling• Type of traffic
• Network performance• Pricing• Signaling• Type of traffic
Cu
rren
tP
ote
nti
al B
road
ban
d
14
Identification and Examples of ESEs
Example Logic IssuesIssues
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
• 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
• Ownership• Availability• Repair and
Maintenance
Towers • Radio towers create environmental impact
• Ownership• Wind loading• Power, spectrum
etc.
• Ownership• Wind loading• Power, spectrum
etc.
Rooftop SpaceRooftop Space • Similar to in building distribution and risers rooftop space is required for radio/satellite based service providers
• Similar to in building distribution and risers rooftop space is required for radio/satellite based service providers
• Ownership• Availability
• Ownership• Availability
Scope of ServicesScope of Services
15
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
Agenda
16
Policy ObligationsObligations
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
17
Clarification on Availability
IRS Status
Providing Operator’s Obligation
Available - not in use and not reserved
Not Available - in use or reserved
Lease on a Permanent Basis (100% capacity, e.g. loop)
Lease on a Transactional Basis (100% capacity, e.g. call completion) obligation to build
Lease on a Permanent Basis (<100% capacity, e.g. cable channel)
if customer or customer group agrees
ObligationsObligations
18
Classes of Requesting Operators
Service Innovator
Services Based Operators (SBOs)
Facilities Based Operators (FBOs)
Service Classes Description Examples
IBMCNNCredit Card Processor
EquantPhoenix Network Inc.
SingTelSCVStarHub
1. Owns or operates switching/ broadcasting equipment but leases transmission capacity from a FBO
2. Operates a private network
Directly or indirectly owns and operates transmission plant together with switching/broadcasting equipment
1. Provides communications, computing or broadcasting services
2. Owns or operates systems that operate over telecommunications facilities
ObligationsObligations
Affected Operators
19
Summary
Obligations Rights
Class Dominant Non-Dominant
Not in Code Not in Code
Must Provide• PI• O/T• UNE• ESF
Must Provide• PI• Direct/Indirect O/T
• Existing ESF
Class All Operators
Not in code
May use• PI• O/T• UNE• ESF
Must Provide• PI• O/T
May use• PI only for O/T
FBO
SBO
Service Innovator
FBO
SBOMust Provide• PI• O/T
Service Innovator
ObligationsObligations
20
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
Agenda
21
ResponsibilityResponsibilitySummary
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)
None
Requesting Operator Providing OperatorPI, competition enabling
PI, UNE/ESF
O/T
UNE
PI, O/T
ESF
22
•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
•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
Facilitating Competition ResponsibilityResponsibility
23
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
Agenda
24
StructureStructure
Investment Required by Requesting Party
Low High
Low
High
Unit Cost of Goods Sold to Deliver Service for Requesting Party
End Users
Resale of Retail Service
Leased Bandwidth
Origination / Termination
Policy
Unbundled Network (UNE)
Essential Support Facilities (ESF)
FBOs Only
25
Time
Cost Retail Rate
Time Limits on UNEs
UNE
UNEs may not be available after a certain time
StructureStructure
26
Symmetrical Charges StructureStructure
Asymmetrical Symmetrical Bill and Keep
Advantages
Disadvantages
• Can help to remove new technology entry barriers
• Covers operators actual costs
• Can be used to deal with Universal Service Obligations
• Rewards inefficiency• Difficult to administer• Leads to arbitrage
• Easier to administer• Can be used to ease new operator market entry (e.g. reciprocal compensation)
• Technology neutral
• Open to significant arbitrage
• Does not reflect the reality in the choice of technology in each network
• Simple to administer
• Does not promote arbitrage
• Technology neutral
• Does not assist market entry
27
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
Agenda
28
Policyobjectives
Cost standards
Maximise customer benefits
Long Run Incremental Cost
low charge
Long Run Average Incremental Cost
fair and equitable charge
Fully Distributed Costs high charge
Efficient Component Pricing Rule high charge
Stand Alone Costhigh charge
Promote investment
Promote effective competition
Optimise resource utilisation
Simple and practical
partially compensatory level “playing” field avoid duplication implementable
fully compensatory; right cost of IRSs
no discrimination optimal use of resources implementable
arbitrary apportionment distorts investment
prone to incumbent’s manipulation new entrants over-invest facilities implementable
price may include monopoly profit
barrier to entry by raising price inefficient duplication if tariffs do not reflect costs
difficult to implement
SAC exceeds cost of providing IRSs
efficient entry discouraged duplication of facilities practicable
StandardsStandardsJustification of Cost Standards
Not desirable for achieving policy objectives
Desirable for contributing to policy objectives
Desirable for achieving policy objectives
29
Not desirable for achieving policy objectives
Desirable for contributing to policy objectives
Desirable for achieving policy objectives
Policy objectives
Cost bases
Maximise customer benefits
Historical or Embedded Cost
tend to be higher
Current or Replacement Cost tend to be lower
Forward Looking Economic Cost
likely to be the lowest
Promote investment
Promote effective
competition
Optimise resource utilisation
Simple and practical
no correct signals for investment decisions
prone to incumbent’s manipulation
new entrants over-build systems
transparent and auditable
correct “build or buy” signals
not subject to incumbent’s manipulation
no over-building of systemssometimes difficult to
quantify
invest in efficient and advanced technology
encourage efficient entry; discourage inefficient entry
no wasteful duplication very difficult and time-consuming to
estimate/determine
StandardsStandardsJustification of Cost Bases
30
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
Agenda
31
SummarySummary
Obligation to Provide Services
Obligation to Provide Services
Responsibility for Charges
Responsibility for Charges
Structure of Charges
Structure of Charges
Cost StandardsCost Standards
Scope of servicesScope of servicesAll technically feasible IRS across different types of networks
• Based on licensee’s status• Time Bound ?
• Requesting operator for PI, UNE and ESF
• Pay own for O/T or shared to establish
• Asymmetrical ?• Usage Based
• LRAIC• FLEC or Current or Replacement Costs
• Issue implementation details
• Issue enforcement procedures
• Outline the methodology for the calculation of charges to facilitate negotiations between operators
Defining Elements of Interconnection
32
iDA Process Review
iDA set framework
Operator requests inter-connection (O /T)
iDA set framework
Can commercial agreement be reached?
Is one operator dominant?
Is the facility necessary?
iDA dispute resolution
Ida puts out costing methodology and guideline
Can commercial agreement be reached?
Is one operator dominant?
iDA dispute resolution
iDA review
No Yes
iDA review
No
Yes
Yes Yes Yes
No action unless appealed to the iDA due to lack of agreement
No
Yes No
No Yes
Can the facility be replicated / obtained?
No
Is the facility available?
SummarySummary
1. Commercial agreements published or iDA arbitrates in the case where dominant carriers are involved
2. If dominant carrier is not involved, no arbitration