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Briefing on the Code of Practice for Competition
in the Provision of Telecommunication Services
20 September 2000
Confidential© IDA Singapore 2000
www.ida.gov.sg
OVERVIEW - SCOPE OF THE CODE
• Integrated Code
• Regulatory principles and framework (Sections 1 & 2) • Consumer protection rules (Section 3)• Interconnection regime (Sections 4 & 5)• Infrastructure sharing (Section 6)• Sector-specific competition rules (Sections 7 & 8)• Mergers and consolidation (Section 9)• Enforcement mechanism (Section 10)• Interconnection Pricing Approach (Appendices I & II)
INTRODUCTION
Formulation of Code
• Further refinements based on feedback from industry (public forums & comments received) and consultants’ experience/expertise
• Reflects international best practices, Singapore’s legal/regulatory environment and policy goals
• Provisions for review as market develops
(Triennial review)
INTRODUCTION
• Goals of the Code• Promote int’l competitiveness of our info-comms
industry• Ensure affordable access to wide range of quality
telecom services• Promote and maintain fair and efficient market conduct• Encourage and facilitate industry self-regulation• Encourage investment in telecom infrastructureto enhance Singapore’s position as hub of choice
• Regulatory Principles• Reliance on market forces and voluntary agreements,
where feasible• Proportionate regulation • Technological neutrality• Open and reasoned decision-making
INTRODUCTION
Categoryof
Licensee
Duty to End-User
Interconnection & Sharing
Competition Enforcement
DominantFBO
Non-DominantFBO
selected
provisions
selected
provisions
selected
provisions
SBO withswitching/routingequip
selected
provisions
selected
provisions
selected
provisions
SBOwithoutswitching/routingequip
selected
provisions
selected
provisions
DealerLicensees
selected
provisions
selected
provisions
CLASSIFICATION OF LICENSEESAsymmetric approach
• Dominant licensees • Control facilities that provide a direct connection to end
users and have:
(a) ability to restrict output and raise prices; or
(b) facilities too difficult and costly to replicate• can seek reclassification or exemption from obligations
on a service/facility basis• required to comply with more stringent requirements on
interconnection and consumer protection and ex-ante tariffing/competition provisions
• Non-dominant licensees• all other licensees• minimum “rules of the road” and ex-post
enforcement
CLASSIFICATION OF LICENSEES
This Approach Reflects different market/bargaining positions of different licensees Focuses IDA effort on areas where need for intervention is greatest given current market devt
• Code provides three paths for reclassification• Petition for reclassification by licensee • Petition from application of relaxation from specific
dominant licensee regulation• IDA’s triennal review of Code
• Code specifies criteria and considerations IDA will apply; but no automatic quantitative “trigger”
• IDA will encourage industry forums to work out detailed operational and technical processes and procedures
CLASSIFICATION OF LICENSEES • Initial Designation of Dominant Licensees
• Singapore Telecommunications Ltd• does not include its subsidiaries such as SingTel
Mobile, SingTel Paging, SingNet
• Singapore Cable Vision Pte Ltd• temporary exemption from interconnection obligations
given current technical difficulties of unbundling its network
• still required to comply with tariffing/competition requirements
• 1-Net• classified as non-dominant
CONSUMER PROTECTIONAll Licensees
• Provision of services to end users at just, reasonable and non-discriminatory terms• Advance disclosure of all prices, terms and conditions• Periodic, accurate and timely bills• No charges for unsolicited telecom services or
equipment • Dispute resolution procedures• Protection of customer information
• Additional duties of Dominant Licensees• Duty to provide services to any end user upon
reasonable request and in a non-discriminatory manner
• Duty to file tariffs with IDA• Duty to provide unbundled telecom services
INTERCONNECTION
Greater emphasis placed on private commercial negotiations
However, recognising that:
• Dominant Licensees lack commercial incentives to voluntarily negotiate and given market situation now
IDA will take more active role to ensure just, reasonable and non-discriminating Interconnection Agreements (IAs), including setting of prices for interconnection services for period of 3-year subject to review if market conditions change
INTERCONNECTION
• Interconnection with Non-dominant Licensees
• Limited IDA role• Reliance on market forces and commercial
negotiations to foster agreements• Confirm that agreements meet minimum
requirements• Mediation• Private enforcement
• Option to seek interconnection with Dominant Licensee Dominant Licensee:interconnection operator of last resort
INTERCONNECTION• Interconnection with Dominant Licensees
• Dominant Licensee Interconnection Obligations• Must publish a “Reference Interconnection
Offer”(RIO)• that addresses 18 categories of issues identified by
IDA
• Must negotiate in good faith with any Licensee requesting interconnection• Licensees may agree on any terms that meet
minimum requirements & are non-discriminatory
• Must provide designated services at IDA’ determined rates (dark fibre, IPLC)
INTERCONNECTION• Must offer physical co-location where feasible
• Must offer specified Interconnect Related Services (IRS) (e.g, PI, ESF, UNEs, O/T/T)
• Physical Interconnect (PI)physical links between networks• Essential Support Facilities (ESFs)e.g.manholes, cable chambers, trenches, conduits,
masts, towers, poles, space within cable risers• Unbundled Network Elements (UNEs)e.g local loops, sub-loops, line sharing (loop
spectrum), distribution frame access• Origination, Transit and Termination (O/T/T)PSTN Voice
INTERCONNECTION
• 3 options for entering into an IA with a Dominant Licensee:
• Adopting the RIO• dominant licensee must submit RIO for approval• IDA will put up for public consultation
• Opting into an existing IA
• Enter into individualised agreement• Voluntary Agreement• Dispute resolution procedure
INTERCONNECTION
Either party can request IDA Dispute Resolution Procedure after 90 days
If RIO addresses a disputed issue, IDA will apply the RIO provision
If RIO does not address an issue, IDA retains full discretion to impose a solution
INTERCONNECTION PROCESS
1 7 15 30 90 105 150 165 180
Reques
t for I
nter
conn
ectio
n
Initi
al M
eetin
g
Confiden
tialit
y Agre
emen
t
Inte
rim R
IO im
plem
ente
dReq
uest f
or IDA D
ispute
Res
olutio
n
Licen
see
Response
IDA D
irect
ion R
esolv
ing D
ispute
Submis
sion o
f Confo
rmin
g Agre
emen
t
IDA a
pprova
l or r
evis
ion
INFRASTRUCTURE SHARING
• FBOs may request right to share at cost-based prices “Critical Support Infrastructure” (e.g. masts, poles, ducts, poles, towers) which are
• necessary to provide a service
• cannot efficiently be replicated
• sharing technically and economically feasible
• Voluntary negotiations, supplemented by IDA dispute resolution procedure
COMPETITION REGIME
• Over-view
• Sector-specific rules
• Based on economic principles and international best practices
• ex ante regulation where competition not developed
• ex post regulation and enforcement as competition takes root
COMPETITION REGIMEProhibitions against
• Abuse of Dominant Position such as
• Pricing abuses• Predatory pricing (price cutting)
• Price squeezes (pricing inputs too high)
• Monopoly leveraging
• Cross-subsidisation (monopoly profits to subsidise a competitive svs)
• Discrimination (treating own affiliates more favourably)
COMPETITION REGIME
• Agreements Between Licensees That Unreasonably Restrict Competition (applicable to all Licensees)
• Price fixing (collude to fix a price / output)
• Bid rigging (collude for scarce resources or rights)
• Customer allocation (agree not to compete for specific customers / markets)
• Group boycotts (refusal to serve a customer)
ENFORCEMENT MECHANISMS
• Process• Notice given with opportunity to respond
• Enforcement actions• Warnings• Cease and desist orders• Monetary sanctions, proportionate to the
contravention (Up to S$1,000,000 per contravention)
• In imposing financial penalties, IDA will consider aggravating or mitigating factors of the circumstances
IDA will be reviewing monetary sanctions
Interconnection Pricing
• Costing generally based on FLEC/LRAIC principle• ensure no distortion of “build vs buy” decision• facilitate rapid entry whilst encouraging
infrastructure investment• wholesale prices for some elements based on
retail-minus, and benchmarked against other countries for reasonableness meant to facilitate rapid entry & competition by
entrants in end-user markets and address bottleneck situations when the market is first liberalised
• IDA worked with SingTel to specify availability and pricing of core group of IRS
Interconnection Pricing
• Prices valid for 3 years, but IDA reserves the right to review and modify prices prior to the end of the period to ensure continued relevance
• IRS applicable to FBOs but SBOs only for OTT
• List of Prices Available include:• IPLC & Dark fibre• O/T/T charges• UNEs• ESFs
• For strategic reasons, Interested FBO licensees should write in to IDA directly for this pricing list which will be released subject to confidentiality undertaking
Thank You
www.ida.gov.sg
Policy & Regulation Codes of Practices
Telecom Competition Code