OVERVIEW OF THE PROPOSED CODE OF PRACTICE FOR COMPETITION IN THE PROVISION OF TELECOMMUNICATION SERVICES IDA PUBLIC FORUM Singapore International Convention.

OVERVIEW OF THE PROPOSED CODE OF PRACTICE FOR COMPETITION

IN THE PROVISION OF TELECOMMUNICATION SERVICES

IDA PUBLIC FORUM

Singapore International Convention and Exhibition Centre

15 May 2000

Squire, Sanders & Dempsey L.L.P.

Squire, Sanders & Dempsey L.L.P. (2000)

Slide No. 2

SQUIRE, SANDERS & DEMPSEY ADVISORY TEAM

ANTONY CORELSS&D Hong [email protected]

JACK NADLERSS&D [email protected]

202-626-6838

THOMAS RAMSEYSS&D Brussels

[email protected]


Slide No. 3

OVERVIEW

Integrated CodeRegulatory frameworkConsumer protection rulesInterconnection regimeSector-specific competition rulesEnforcement mechanism


Slide No. 4

OVERVIEW

Ten Sections Introduction (Section 1)

GoalsScopeRegulatory principlesLegal authority

Classification of Licensees (Section 2) Duty to End-Users (Section 3)


Slide No. 5

OVERVIEW

Interconnection Regime (Sections 4-6)Duties of all facilities-based LicenseesDuties of Dominant LicenseesInfrastructure sharing


Slide No. 6

OVERVIEW

Sector-specific Competition Regime (Section 7-9)Abuse of position by Dominant LicenseesAgreements that unreasonably restrict competitionConsolidations

Enforcement (Section 10)


Slide No. 7

INTRODUCTION

Goals of the CodeFoster competition and industry self-regulationEncourage investment in telecom infrastructureEnsure wide-spread, affordable access to quality

telecom servicesPromote Info-Communication sectorSecure Singapore's position as a regulatory and

market leader


Slide No. 8

INTRODUCTION

Scope of the CodeAll provisions apply to facilities-based Licensees,

regardless of technologyInterconnection regime does not apply to service-

based Licensees, such as resellersValue-added service providers may seek carrier-to-

carrier interconnection or obtain end-user connection


Slide No. 9

INTRODUCTION

Regulatory PrinciplesReliance on market forces and voluntary

agreements, where feasibleRegulation when needed, but only to the extent

necessaryPlatform neutralityOpen and reasoned decision-making


Slide No. 10

INTRODUCTION

Legal AuthorityTelecom Act 26 - authority to promulgate Codes

of PracticeIDA Act 7(1) - authority to take “advantageous,

necessary or convenient” actions to discharge statutory functions, including promoting competition

IDA Licenses obligates Licensees to comply with Codes and Regulations


Slide No. 11

CLASSIFICATION OF LICENSEES

Each Licensee Classified as “Dominant” or “Non-dominant”Differing regulatory obligations based on extent to

which Licensee is constrained by market forcesInitial presumptions

Singtel SCV 1-Net


Slide No. 12


Service-specificRevisions as competition develops

IDA initiated Licensee-initiated

Economics-based analytic framework


Slide No. 13


RationaleMinimises market distortionsTargets administrative resourcesConsistent with international “best practices”


Slide No. 14

CONSUMER PROTECTION

All Licensees Must Modify Customer Contracts to ProvidePeriodic, accurate and timely billsProtection against a “slamming” and “cramming”Dispute resolution proceduresProtection of customer information


Slide No. 15

CONSUMER PROTECTION

Additional Duties of Dominant LicenseesCost-oriented pricingTariff filingNon-discriminationUnbundlingNo excessive early termination liability


Slide No. 16

INTERCONNECTION

Non-Dominant Classification Dominant

YES VoluntaryAgreement

AgreementMeeting

MinimumRequirements

IDAReview

IDAReview

IDADispute

Resolution

NO YES NOVoluntaryAgreement

Ability toNegotiate with

DominantLicensee

AgreementMeeting

MinimumRequirements

AgreedTerms Plus

DefaultTerms


Slide No. 17

INTERCONNECTION

Non-dominant LicenseesDuty to provide direct or indirect interconnection;

any agreement must meet minimum terms Non-discriminatory quality Number portability Technical standards Access to towers, poles, ducts and rights-of-

way


Slide No. 18

INTERCONNECTION

Limited IDA role Reliance on market forces to foster agreements Confirm that agreements meet minimum

requirements Mediation Private enforcement

Option to seek interconnection with Dominant Licensee


Slide No. 19

INTERCONNECTION

Dominant LicenseesMust publish a “Reference Interconnection Offer”Must negotiate in good faith with any Licensee

requesting interconnectionLicensees may agree on any terms that:

meet minimum requirements are non-discriminatory


Slide No. 20

INTERCONNECTION

If the Licensees do not agree, the Requesting Licensee may seek IDA dispute resolution

To the extent the Licensees have not agreed, IDA will impose default terms, such as: interconnection at any technically feasible

location provision of unbundled loops (or equivalent) physical co-location


Slide No. 21

INTERCONNECTION

Infrastructure SharingLicensee may request right to share “essential”

infrastructure necessary to provide a service cannot efficiently be replicated sharing technically and economically feasible

Voluntary negotiations, supplemented by IDA dispute resolution procedure


Slide No. 22

COMPETITION REGIME

Over-viewSector-specific rulesBased on economic principles and international

best practicesEmphasis on ex post enforcementImportance will increase a competition takes root


Slide No. 23

COMPETITION REGIME

Abuse of Dominant PositionPricing abuses

Predatory pricing Price squeezes

Monopoly leveraging Cross-subsidisation Discrimination


Slide No. 24

COMPETITION REGIME

Agreements Between Licensees That Unreason-ably Restrict CompetitionSome agreements prohibited under any

circumstance Price fixing Bid rigging Customer allocation Group boycotts


Slide No. 25

COMPETITION REGIME

Permissibility of most agreements based on competition effects Joint ventures among competing licenses “Vertical” non-price agreements


Slide No. 26

COMPETITION REGIME

ConsolidationsIDA approval required for assignments and

transfers of control of licensesIDA actions based on economic assessment of the

likely impact of the consolidation on competitionIDA may approve, deny or grant subject to

conditions


Slide No. 27

ENFORCEMENT MECHANISMS

IDA Enforcement ActionsNotice and opportunity to respondRemedies

Warning Cease and desist order Monetary sanctions, proportionate to the

contravention


Slide No. 28


Private Requests for EnforcementProvide facts that, if proven, demonstrate a

contraventionSupport allegationPropose remedyIDA retains full enforcement discretion


Slide No. 29


Requests for Advisory GuidanceInquiry regarding rights and duties in specific

situationsIDA guidance non-binding


Slide No. 30

CONCLUSION

Proposed Code reflects international best practices, Singapore’s legal environment and policy goals

Designed to be clear and forward-looking Further refinements based on forum, public

comments and experience

OVERVIEW OF THE PROPOSED CODE OF PRACTICE FOR COMPETITION IN THE PROVISION OF TELECOMMUNICATION SERVICES IDA PUBLIC FORUM Singapore International Convention.

Documents

net slide

market leader slide

analytic framework slide

reasoned decisionmaking

enduser connection slide

service based licensees

dominant licensees agreements

code foster competition