Jamaica: Cable & Wireless Reference Interconnection Offer

Editor’s Note: In February 2001 Jamaica’s Office of Utilities Regulation (OUR) approved Cable & Wireless Jamaica’s first Reference Interconnection Offer (RIO). This note summarizes how the Reference Interconnection Offer fits into Jamaica’s regulatory regime for interconnection, and provides an overview of experience under the RIO to date.

 Jamaica’s Interconnection Framework

In Jamaica, the principal actors within the framework for liberalization and competition are:

  • The sector specific regulator, the Office of Utilities Regulation (OUR),
  • The Spectrum Management Authority (SMA),
  • The competition authority, the Fair Trading Commission (FTC), and
  • The Minister with portfolio responsibility for the telecommunications sector.

The Telecommunications Act, which came into effect on March 1, 2000, empowers the OUR to regulate interconnection, including:

  • Arbitrating pre-contract interconnection disputes,
  • Objecting to interconnection agreements that have been lodged with the OUR, and
  • Assessing Reference Interconnection Offers (RIOs) developed by the incumbent (Cable & Wireless Jamaica, C&WJ) or other dominant carriers.

Terms and conditions of interconnection may be established by:

  • Voluntary commercial negotiations between the parties,
  • An entrant accepting the incumbent’s Reference Interconnection Offer,
  • RIO terms and conditions approved or prescribed by the regulator, and
  • The regulator acting as arbitrator of pre-contract disputes.

Objectives and Role of the Reference Interconnection Offer

A “Reference Interconnection Offer” is an offer document setting out matters relating to the price and terms and conditions under which a public voice carrier will permit interconnection to its public voice network.

The incumbent (and any dominant carrier) is required by statute to lodge a RIO. Non-dominant carriers may submit their RIOs to the OUR but this is not obligatory.

The requirement for a RIO aims to provide entrants with sufficient information about the incumbent’s network to allow for decision-making, and to provide a baseline for negotiating an interconnection agreement.

The publication of a standard offer, in the form of a RIO, narrows the scope for a dominant operator to discriminate among applicants for interconnection.

The requirement also gets the incumbent to start thinking about interconnection well ahead of time, rather than waiting until a request is made and thereby delaying the process. It also ensures that the incumbent has internal mechanisms in place to effectively manage interconnection arrangements with other operators.

Regulatory Approval of the RIO

The OUR may approve a RIO in whole or in part. The approval process includes public consultation in which interested parties are invited to submit written comments on the RIO to the OUR.

Terms and conditions of the RIO that are approved by the OUR must form part of all interconnection agreements and all agreements must be lodged with the OUR. In approving the RIO (or part thereof) the OUR must ensure that the RIO is consistent with principles for interconnection [link to anchor “Interconnection_Principles”] contained in the Telecommunications Act.

The OUR rejects RIO terms and conditions, and interconnection agreements, that do not comply with these principles. The OUR also rejects terms and conditions that are found to breach the Fair Competition Act (Jamaica’s competition legislation).

Even where the terms and conditions of interconnection agreements are based on voluntary negotiations, or on acceptance of the RIO, the OUR may reject them if they are not consistent with the Telecommunications Act and the Fair Competition Act. Similarly, the OUR may approve an agreement that is consistent with these Acts, even if it is not consistent with an approved RIO.

Telecommunications Act Principles for Interconnection [insert anchor “Interconnection_Principles”]

The Telecommunications Act sets out the following basic principles for connectivity between public voice carriers:

  • Interconnection on request,
  • Any-to-any connectivity to enable the customers of each carrier to complete calls to customers of another carrier or to obtain services from other networks,
  • End-to-end operability to facilitate the provision of services by an interconnecting carrier to a customer notwithstanding that the customer is directly connected to a different network, and
  • Shared responsibility for establishing interconnection. The interconnection seeker and provider are equally responsible for establishing interconnection, as quickly as is reasonably practicable.

In order to discourage unfair competition, the Act includes additional interconnection principles, to apply to the incumbent and any other dominant carriers:

  • Non-discrimination,
  • No unfair arrangements for cross-subsidies,
  • Reasonable and transparent terms and conditions,
  • Cost-oriented charges, [1] and
  • ‘Unbundling’ —the interconnection offer must be unbundled to ensure that a party only orders and pays for the network components it requires to complete the interconnection.

The incumbent and other dominant carriers must maintain separate regulatory accounts. This enables the OUR to assess whether that carrier provides interconnection in accordance with the principles for dominant operators set out above, and in particular to identify price squeezes or other anti-competitive pricing conduct.

Contents of the Reference Interconnection Offer

The main elements of Cable & Wireless Jamaica’s Reference Interconnection Offer are listed in Table 1:

Table 1: Contents of Cable & Wireless Jamaica’s RIO

 Legal Framework General terms and conditions (for example, provisions for review, termination, and amendments to interconnection agreements).
 Definitions Definitions of terms used throughout the document.
 Service Description Description of the services on offer (joining; termination services; ancillary services; wholesale services).
 Tariff Schedule Tariff levels and structure.
 Service Schedule List of services to be provided by the parties.
 Joint Working Manual Technical specifications and standards; procedures for forecasting, ordering, testing, fault management, billing of services; technical and service parameters.

Summary of Experience Under the RIO

Since the OUR approved Cable & Wireless Jamaica’s first RIO in 2001, competing mobile operators have entered the market. Competition has driven significant increases in teledensity, from 43.53 telephones per 100 people in 2001 to 100.90 in 2004.

The legal framework provided by the terms of the RIO has helped to avoid interconnection disputes. Since liberalization there have only been two major interconnection disputes involving the regulator. Disputes between operators about the terms and conditions of interconnection have occurred, but are rare.

The RIO has improved transparency about the interconnection process and the terms and conditions on which interconnection is available. Transparency is further enhanced by the OUR’s practice of public consultation with interested stakeholders and regulatory organizations before approving a new or modified RIO.

The OUR treats the RIO as a “living document” that is kept under constant review and updated regularly. Since approving the initial RIO in 2001, the OUR has revisited the terms of the RIO to:

  • Keep pace with the phased liberalization of the sector (for example when the fixed line market was liberalized),
  • Revise interconnection charges to reflect up-to-date information on costs and volume of minutes, and
  • Reflect government policy, for example imposition of a universal service surcharge on the interconnection rate for international long distance calls.

Endnotes:

[1] Cost oriented charges are defined as any charge between Total Long Run Incremental Cost (TLRIC) and Stand Alone Cost (SAC). Cost oriented interconnection charges should include operating expenditure, depreciation, and a reasonable rate of return on capital, but should not include disproportionate burden of recovery of common costs.

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