HIPCAR - Harmonization of ICT Policies, Legislation and Regulatory Procedures in the Caribbean

Stakeholder Consultations onInterconnection and Access

Castries, Saint Lucia 27-28 June 2011

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This document has been produced with the financial assistance of the EuropeanUnion. The views expressed herein do not necessarily reflect the views of theEuropean Union.

The designations employed and the presentation of material, including maps, do notimply the expression of any opinion whatsoever on the part of ITU concerning thelegal status of any country, territory, city or area, or concerning the delimitations of itsfrontiers or boundaries. The mention of specific companies or of certain productsdoes not imply that they are endorsed or recommended by ITU in preference toothers of a similar nature that are not mentioned. This report has not been subjectedto editorial revision.

The copyrights for all documents produced under the consultants’ assignments shall be jointly vested with ITUand the Government of Saint Lucia.

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Interpretation

Words used in the Regulations and requiring definition are not redefined in the Regulations where they are already provided for in the Act.

Recommendation : only words not defined in the Act to be defined.

Objective

The HIPCAR Model Legislative text specifies the objective of the Interconnection Regulations as providing further detail relating to -• principles relating to access and interconnection • Interconnection procedures; and • Dispute resolution proceduresRecommendation: Add HIPCAR section 2

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International and National cooperation

Access to detailed information relating to operators and well as to technical and economic information relating to interconnection is necessary for effective regulation by the regulator.

Such access may be facilitated through international and regional co-operation which are important to ensure transparency.

Recommendation: Add HIPCAR section 3

Role of the National Regulatory Authority

The intervention of the regulator may be necessary infacilitating interconnection and access to an incumbent’snetwork. This will assist new entrants into the informationand technology market at appropriate prices terms andconditions and will allow for competition.

Recommendation: Add HIPCAR Section 5

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Conditions set by National Regulatory Authority

In order to redress consequences of market power, it may be necessary to set s necessary to impose additional conditions on dominant operators in relation to interconnection and access.

According to HIPCAR guidelines, the decision to impose obligations on a dominant operator must be appropriate, dependent on the specific case, reasonable , proportionate justifiable; and may include obligations -

for transparency in relation to publication of information, for accounting separation in respect of specific activities related to access and interconnection;to respond to reasonable requests for access; andprice control and cost accounting.

Recommendation: In addition to providing for the form and content of an interconnection agreement as in regulation 17 of the Saint Lucia Interconnection Regulations. There is need to add HIPCAR section 6 and to provide for the imposition of conditions relating to dominant operator.

Rights and obligations of interconnection

Same comment that no distinction is made as perdominance in the Saint Lucia Interconnection Regulationsand it is considered that the distinction should be madeand additional obligations should be imposed on thedominant provider.

Recommendation: Modify regulation 4 of Saint LuciaInterconnection Regulations in line with HIPCAR sections7 and 8.

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National Regulatory Authority Treatment ofConfidential information

The HIPCAR model legislative text considers that in theinterest of stakeholder confidence, the requirement forconfidentiality in relation to interconnection agreementsand negotiations should be imposed not only on theoperators but also on the regulatory authority.

Recommendation: Insert HIPCAR section 10.

Equal Responsibility

In recognition of the importance of interconnection theresponsibility to enable access and interconnection as soonas is reasonable practicable on both.

Recommendation: ADD HIPCAR section 12.

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Nature, form and content of interconnection agreement

Notwithstanding that interconnection agreements areessentially private legal agreements, there is need toregulate interconnect and this may be facilitated throughthe imposition of model agreements or the provision ofessential elements which are included in modelagreements provided by the NRA which can then benegotiated.

Recommendation: ADD HIPCAR 15, 16 and modifyHIPCAR Section 17 with Saint Lucia Regulation 17.

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Timeframes for negotiations and approval

To ensure that negotiations of interconnection agreements are not too protracted timeframes should be included in the legislative framework.Recommendation: ADD HIPCAR 18, and modify regulation 21 of the Saint Lucia Regulations with the HIPCAR 19.

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Revision of interconnection agreement

The detail provided in the HIPCAR Model is helpful to facilitate the process for revision of an interconnection agreement.

Recommendation: modify regulation 23 of the Saint Lucia Regulations to include HIPCAR 21.

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Implementation of interconnection agreements

The intervention of the regulator may be necessary in facilitating interconnection and access to an incumbent’s network.

This will assist new entrants into the information and technology market at appropriate prices terms and conditions and will allow for competition.

Recommendation : ADD HIPCAR 27.

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Costs of modification of network or equipment

Interconnection charges are usually provided for either through-

• revenue sharing, for example, on a percentage basis; or

• interconnection usage charges which imply setting charges to compensate explicitly one operator for the costs imposed on him by the other operator’s use of his network to originate or terminate a call

• .Recommendation : ADD HIPCAR 28.

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Authority to Determine Dominance

While the Saint Lucia Interconnection Regulations appear to be quite complete and include a number of key principles in particular the need for public consultation and the need to look at positions in different telecommunications service markets, the HIPCAR Model Legislative Text goes further to impose different obligations for dominant operators and non-dominant operators and to determine dominant status on a fair and transparent basis.

Regulation of dominant provider

HIPCAR 29-54 provide a clear framework for regulation ofdominant operators which includes -

• Provision for the criteria to determine dominantoperators in a relevant market include the imposition,maintenance, amendment or withdrawal of obligations,

• the provision of an obligation of transparency, obligationof non-discrimination and obligation of accountingseparation.

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Co-location obligation

To promote competition and in accordance with bestinternational practice it is necessary to impose appropriateand reasonable obligations on dominant operators and toprovide and clear rules and guidelines on co-location,access to rights of way and facility-sharing are necessary fornew entrants in particular to effectively compete againstincumbents that otherwise have no incentive to allowaccess or share facilities.

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Review of determination of dominance and removal of dominant status

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In any market, regulation needs to be able to adapt to changing circumstances. This is especially important in the information and communications industry, where outdated regulation risks stifling market growth and innovation.

Thus in the interest of fairness it will be important to review of determination of dominance periodically and to remove dominant status where a provider can no longer Fall under that category.

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Reference interconnection offer

The reference interconnection offer obligation should be imposed only on dominant operators only as an effective regulatory tool to regulate dominance.The reference interconnection offer should set out matters relating to the price and terms and conditions under which dominant operator will permit and facilitate interconnections with other operators.

The Regulations should therefore provide for –• Publication of reference interconnection offer guidelines, including

model reference interconnection offers by the regulatory authority.

• Modification of the reference interconnection offer guidelines bythe regulatory authority -Here the regulatory authority may requestthe dominant operator to modify the terms and conditions on whichinterconnection shall be offered, provided such modifications arejustified for compliance with the principles of non-discriminationand cost-orientation of interconnection.

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• Modification of reference interconnection offer guidelines by theoperator ; and

• Regulatory approval of the reference interconnection offer with theuse of transparent procedures by the regulator.; and

• Publication of the reference interconnection offer for example, byposing on the website of the dominant operator .

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Content of reference interconnection offer

The content of reference interconnection offer is requiredto be as detailed as possible in order to facilitate contractnegotiations and to contain all of the terms and conditionscontained in interconnection agreement and otherconditions if requested by at least one operator.

Recommendation: ADD HIPCAR section 48.

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Methodology for Rate DeterminationIn order to determine the most appropriate rate,consideration should be given to -

the services to be benchmarked;the countries to be included in the study;the sources of data;the effect of exchange rates on the currencies used in thestudy; andthe methodology to be used to determine abenchmarked rate.

Recommendation: Add HIPCAR section 49.

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The legal standing of a reference interconnection offer

In the interest of clarity, provision should be made for theinterconnection agreement and its reference interconnection offerto be consistent with each other and for the terms and conditionsof the reference interconnection offer to prevail in cases ofconflict.

Recommendation: Add HIPCAR section 50

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Unbundling

It is recommended that the legislative framework should provide for the reference interconnection offer should contain a description of the components of the offer, associated terms and conditions, including the structure and level of prices.

Recommendation: ADD HIPCAR 51

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In order to ensure effective competition clauses 52 -53 ofthe proposed framework deals with access obligations fordominant operators and for the publication by thedominant operator of a reference access order. Theprovisions which apply to reference interconnection offeralso apply to a reference access order

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Measures to promote competition and innovation

Measures to promote competition and innovation shouldbe introduced into the legislative framework these include-the imposition of obligations on a dominant networkoperators –• to respond to reasonable requests for access to and use of

specific network components and associated facilities,particularly in situations where the denial of access orthe setting of unreasonable conditions would hinder theemergence of a sustainable competitive market at theretail level or harm the interests of end-users.

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• to provide access to international gateways particularly forsubmarine cable landing stations.;

• the encouragement of the sharing of facilities or property amongpublic network operators;

• regulatory intervention in infrastructure sharing so that theCommission may impose general facility or property sharingarrangements (including physical co-location) after an appropriateperiod of public consultation during which all interested partiesshall be given an opportunity to express their views;

• the encouragement of access to alternative infrastructure on thebasis of commercial negotiations, in order to foster competition asrapidly as possibilities;

• unbundling of the local loop subject to public consultation;• Provisions for regulatory intervention with regard to wholesale

charges; and• The retention of the right of the regulatory authority to intervene in

determining termination rates,.• Recommendation: ADD HIPCAR 55-61.

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Interconnection Dispute Resolution Guidelines

The power to issue guidelines for interconnection disputeresolution gives the Commission the flexibility andopportunity to add additional provisions as the need arises.

Recommendation and draft legislation: ADD HIPCAR 62.

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Authority to Require Information and Inspection

In order to resolve a dispute regarding interconnection oraccess, the regulatory authority should be given thediscretion to access for inspection of its facilities orongoing monitoring once notice is served by the afternotice.

Recommendation and draft legislation: ADD HIPCARsection 63.

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Response to Request for Dispute Resolution

Provision is made in the regulations for the Commission, in responding to a request for assistance to resolve an interconnection or access dispute to act as arbitrator of that dispute; or to appoint a mediator to that dispute.

Recommendation: ADD HIPCAR section 64.

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Regulatory Authority in Dispute Resolution

Provision is made in the legislative framework for the regulatory authority to have an active role in the resolution of disputes where the matter is referred to the regulatory.

Recommendation :Keep Saint Lucia regulation 30 and ADD HIPCAR 65.

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Resolving Dispute

In order to provide guidance to the regulator and transparency tooperators as to interconnection procedures provision should be made inthe legislative framework for the regulatory authority to attempt toachieve a fair balance between the legitimate interests of the parties tothe dispute, and to act as promptly as practicable, preserving anyagreements between the parties over issues that are not in dispute

Recommendation: ADD HIPCAR Section 66.

Timeframe for disputes

The legislative framework should provide timeframes forresolving disputes and also for intervention by theregulatory authority where the timeframes are not met.

Recommendation: Add HIPCAR 67

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Temporary Measures

Provision should be made in the legislative framework for theCommission to have the discretion to initiate the dispute resolutionprocess on its own initiative and impose temporary measures against apublic network operator to ensure interconnection disputes do notadversely affect the public interest for example in terms of availabilityof service and interconnectivity.

Recommendation : ADD HIPCAR Section 68

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