Interconnection Executive Development Program NetTelAfrica University of Zambia

1
Interconnection(Executive Development
Program) NetTel_at_Africa
University of Zambia

2

• prepared presented
• by
• David Mukosa

3
Interconnection
4
Sessions Objective

• The core learning objective for this
  Interconnection session is to provide the basic
  regulatory and economic principles and the
  contemporary issues related to interconnection

5
Sessions Outcomes

• The learning outcomes are to enable the
  learner to know the role of the regulator in the
  interconnection process, examples of
  interconnection agreements, the impact of
  interconnection on competition and the effect of
  issues like pricing

6
Interconnection Session Summary

• Defining Interconnection
• The role of Interconnection
• Principles of Interconnection
• Peering Agreements
• Incentives for peering
• Examples of Interconnection
• Agreements
• 7. Interconnection Pricing
• 8. Interconnection Costs and Tariffs
• 9. Interconnection Disputes

7
1. Defining Interconnection

• Interconnection refers to the
• establishment of electronic
• linkages between service
• providers so that they can
• conduct business transactions
• electronically

8
Some other definitions

• "The physical connection of separate telephone
  networks to allow users of those networks to
  communicate with each other. Interconnection
  ensures interoperability of services and
  increases end users' choice of network operators
  and service providers" (International
  Telecommunication Union, Trends in
  Telecommunication Reform 2000-2001 -
  Interconnection Regulation (2001)

9
Some other definitions ctd/

• "While definitions cannot encompass the
  complexity of the matter, loosely speaking
  interconnection comprises the commercial and
  technical arrangements under which service
  providers connect their equipment, networks and
  services to enable customers to have access to
  the customers, services and networks of other
  service providers" (ITU, The Changing Role of
  Government in an Era of Telecom Deregulation -
  Interconnection Regulatory Issues, Report of the
  Fourth Regulatory Colloquium, ITU Headquarters
  (1995)

10
2. The role of Interconnection

• New entrants need access to the networks of
  incumbents so that they can resell services
• Competitive voice, data, and wireless carriers
  need access to "last mile" facilities to deliver
  services to end users
• All carriers need access to each other's
  back-office systems to fulfil number portability
  mandates and to exchange the forms and messages
  involved in fulfilling customer orders.

11
3. Principles of Interconnection

• Discrimination between parties must be avoided
• Interconnection should be permitted at any
  technically feasible point
• Regulatory guidelines should be prescribed in
  advance
• see notes on more guidelines

12
Regulators role in interconnection

• Establishing guidelines in advance of
  negotiations
• Setting default interconnection arrangements in
• advance of negotiations
•  Establish deadlines for various stages of the
• negotiations
•  Establish Industry technical Committees
•  Appoint mediators or arbitrators

13
6. Example of an Interconnection Agreement
9
4
Network peering Point (NAP)
1
3
5
8
2
Direct peering connection
7
6
14
7. Interconnection Pricing

• Originating and termination
• principles
• Two party agreements
• Policy issue of cost based or
• market based interconnection
• prices

15
8. Interconnection Costs and Tariffs

• Fixed costs
• - cost of renting technical
• premises and land
• - costs of leasing masts
• - cost of leasing specialized links
• - cost of power

16
Interconnection Costs and Tariffs

• Variable Costs
• - cost of routing
• - cost of handling calls in the following
• fixed to cellular
• cellular to cellular
• cellular to fixed
• cellular to national and international
  
• networks and vice versa

17
9. Interconnection DisputesDiscussion

• Do we have any interconnection disputes
  examples between -incumbents new entrant ,
  new entrant new entrant for the countries
  represented here?
• Any regulatory intervention?

18
Reading Material

• Principles and Practices of Interconnection
  Networks, William James Dally Brian Towles
• Handbook of Telecommunications Economics, Vol 1.
  Martin E. Cave,Sumit K Majumdar Ingo Vogelsang
• Pricing Communication Networks, Costas Cour
  coubetis Richard Weber
• Competition in Telecommunication, Jean-Jacques
  Laffont and Jean Tirole

19

• H. Intven, J. Oliver and E. Sepu'lveda,
  Telecommunications Regulation Handbook, Module 3
  - Interconnection (2000)
• http//www.infodev.org/projects/314regulationhandb
  ook/
• Asia-Pacific Economic Cooperation (APEC)
  Telecommunications and Information Working Group
  materials on interconnection from1999
  http//www.apectelwg.org/apecdata/telwg/interTG/AT
  TZ2FG1.htm
•  

20

• International Telecommunication Union, Trends in
  Telecommunication Reform 2000-2001 -
  Interconnection Regulation
• Michael Klein and Philip Gray, Competition in
  Network Industries- Where and How to Introduce
  it, Note No.104, Private Sector, The World Bank
  Group, January 1997
• W Melody, Telecom Reform - Principles, Policies
  and Regulatory practice, Chapter 5-
  Interconnection Cornerstone of Competition
  (2001)

21

• International Forum on Dispute resolution in
  Telecommunications (R Hill and J Watkinson eds),
  White paper - Telecommunications Disputes
  Specificities, Problems, Solutions (17 June 1999)
  
• (http//www.icc-uk.com/rhill.html)
•  
• Telecommunications Association of Southern Africa
  (TRASA), Guidelines on Interconnection for SADC
  countries, 29 May 2000

22

• Oftel's November 2000 report on "Consultation on
  future interconnection arrangements for dial-up
  Internet in the United Kingdom"  
• 1997 EU Directive on Interconnection. The WTO
  Reference Paper is at http//www.wto.org/english/n
  ews_e/pres97_e/refpap-e.htm

23

• http//europa.eu.int/ISPO/infosoc/telecompolicy/re
  view99/Welcome.html
• "Telecommunications Interconnection A Literature
  Survey, Prepared for Asia Pacific Economic
  Cooperation (APEC) Organization," by Julian K.
  Wright, Eric K. Ralph and D. Mark Kennet (2000).
• "Setting Up Interconnection Regimes References
  for Regulators," US Federal Communications
  Commission (FCC) (22 Nov 2002 

24

• Links to laws and policies of a number of
  countries can be found at http//www.itu.int/ITU-
  D/treg/related-links/links-docs/interconnectlegisl
  .html
• The UK policy at http//www.oftel.gov.uk/publicat
  ions/1999/competition/gii799.htm  

25

• The OECD has materials on the interconnection
  policies of its members at http//webnet1.oecd.org
  /oecd/pages/home/displaygeneral/0,3380,EN-document
  -41-1-no-no-5001-0,FF.html  

26
The End__________________________

• Thank you for your attention