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

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Presentation on theme: "OVERVIEW OF THE PROPOSED CODE OF PRACTICE FOR COMPETITION IN THE PROVISION OF TELECOMMUNICATION SERVICES IDA PUBLIC FORUM Singapore International Convention."— Presentation transcript:

1 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.

2 Squire, Sanders & Dempsey L.L.P. (2000) Slide No. 1 SQUIRE, SANDERS & DEMPSEY ADVISORY TEAM ANTONY COREL SS&D Hong Kong JACK NADLER SS&D Washington THOMAS RAMSEY SS&D Brussels

3 Squire, Sanders & Dempsey L.L.P. (2000) Slide No. 2 OVERVIEW Integrated Code ä Regulatory framework ä Consumer protection rules ä Interconnection regime ä Sector-specific competition rules ä Enforcement mechanism

4 Squire, Sanders & Dempsey L.L.P. (2000) Slide No. 3 OVERVIEW Ten Sections Introduction (Section 1) ä Goals ä Scope ä Regulatory principles ä Legal authority Classification of Licensees (Section 2) Duty to End-Users (Section 3)

5 Squire, Sanders & Dempsey L.L.P. (2000) Slide No. 4 OVERVIEW Interconnection Regime (Sections 4-6) ä Duties of all facilities-based Licensees ä Duties of Dominant Licensees ä Infrastructure sharing

6 Squire, Sanders & Dempsey L.L.P. (2000) Slide No. 5 OVERVIEW Sector-specific Competition Regime (Section 7-9) ä Abuse of position by Dominant Licensees ä Agreements that unreasonably restrict competition ä Consolidations Enforcement (Section 10)

7 Squire, Sanders & Dempsey L.L.P. (2000) Slide No. 6 INTRODUCTION Goals of the Code ä Foster competition and industry self-regulation ä Encourage investment in telecom infrastructure ä Ensure wide-spread, affordable access to quality telecom services ä Promote Info-Communication sector ä Secure Singapore's position as a regulatory and market leader

8 Squire, Sanders & Dempsey L.L.P. (2000) Slide No. 7 INTRODUCTION Scope of the Code ä All provisions apply to facilities-based Licensees, regardless of technology ä Interconnection regime does not apply to service- based Licensees, such as resellers ä Value-added service providers may seek carrier-to- carrier interconnection or obtain end-user connection

9 Squire, Sanders & Dempsey L.L.P. (2000) Slide No. 8 INTRODUCTION Regulatory Principles ä Reliance on market forces and voluntary agreements, where feasible ä Regulation when needed, but only to the extent necessary ä Platform neutrality ä Open and reasoned decision-making

10 Squire, Sanders & Dempsey L.L.P. (2000) Slide No. 9 INTRODUCTION Legal Authority ä Telecom Act  26 - authority to promulgate Codes of Practice ä IDA Act  7(1) - authority to take “advantageous, necessary or convenient” actions to discharge statutory functions, including promoting competition ä IDA Licenses obligates Licensees to comply with Codes and Regulations

11 Squire, Sanders & Dempsey L.L.P. (2000) Slide No. 10 CLASSIFICATION OF LICENSEES Each Licensee Classified as “Dominant” or “Non-dominant” ä Differing regulatory obligations based on extent to which Licensee is constrained by market forces ä Initial presumptions © Singtel © SCV © 1-Net

12 Squire, Sanders & Dempsey L.L.P. (2000) Slide No. 11 CLASSIFICATION OF LICENSEES ä Service-specific ä Revisions as competition develops © IDA initiated © Licensee-initiated ä Economics-based analytic framework

13 Squire, Sanders & Dempsey L.L.P. (2000) Slide No. 12 CLASSIFICATION OF LICENSEES Rationale ä Minimises market distortions ä Targets administrative resources ä Consistent with international “best practices”

14 Squire, Sanders & Dempsey L.L.P. (2000) Slide No. 13 CONSUMER PROTECTION All Licensees Must Modify Customer Contracts to Provide ä Periodic, accurate and timely bills ä Protection against a “slamming” and “cramming” ä Dispute resolution procedures ä Protection of customer information

15 Squire, Sanders & Dempsey L.L.P. (2000) Slide No. 14 CONSUMER PROTECTION Additional Duties of Dominant Licensees ä Cost-oriented pricing ä Tariff filing ä Non-discrimination ä Unbundling ä No excessive early termination liability

16 Squire, Sanders & Dempsey L.L.P. (2000) Slide No. 15 INTERCONNECTION Non-Dominant Classification Dominant YES Voluntary Agreement Meeting Minimum Requirements IDA Review IDA Review IDA Dispute Resolution NOYESNO Voluntary Agreement Ability to Negotiate with Dominant Licensee Agreement Meeting Minimum Requirements Agreed Terms Plus Default Terms

17 Squire, Sanders & Dempsey L.L.P. (2000) Slide No. 16 INTERCONNECTION Non-dominant Licensees ä Duty 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

18 Squire, Sanders & Dempsey L.L.P. (2000) Slide No. 17 INTERCONNECTION ä Limited IDA role © Reliance on market forces to foster agreements © Confirm that agreements meet minimum requirements © Mediation © Private enforcement ä Option to seek interconnection with Dominant Licensee

19 Squire, Sanders & Dempsey L.L.P. (2000) Slide No. 18 INTERCONNECTION Dominant Licensees ä Must publish a “Reference Interconnection Offer” ä Must negotiate in good faith with any Licensee requesting interconnection ä Licensees may agree on any terms that: © meet minimum requirements © are non-discriminatory

20 Squire, Sanders & Dempsey L.L.P. (2000) Slide No. 19 INTERCONNECTION ä If the Licensees do not agree, the Requesting Licensee may seek IDA dispute resolution ä 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

21 Squire, Sanders & Dempsey L.L.P. (2000) Slide No. 20 INTERCONNECTION Infrastructure Sharing ä Licensee may request right to share “essential” infrastructure © necessary to provide a service © cannot efficiently be replicated © sharing technically and economically feasible ä Voluntary negotiations, supplemented by IDA dispute resolution procedure

22 Squire, Sanders & Dempsey L.L.P. (2000) Slide No. 21 COMPETITION REGIME Over-view ä Sector-specific rules ä Based on economic principles and international best practices ä Emphasis on ex post enforcement ä Importance will increase a competition takes root

23 Squire, Sanders & Dempsey L.L.P. (2000) Slide No. 22 COMPETITION REGIME Abuse of Dominant Position ä Pricing abuses © Predatory pricing © Price squeezes ä Monopoly leveraging © Cross-subsidisation © Discrimination

24 Squire, Sanders & Dempsey L.L.P. (2000) Slide No. 23 COMPETITION REGIME Agreements Between Licensees That Unreason- ably Restrict Competition ä Some agreements prohibited under any circumstance © Price fixing © Bid rigging © Customer allocation © Group boycotts

25 Squire, Sanders & Dempsey L.L.P. (2000) Slide No. 24 COMPETITION REGIME ä Permissibility of most agreements based on competition effects © Joint ventures among competing licenses © “Vertical” non-price agreements

26 Squire, Sanders & Dempsey L.L.P. (2000) Slide No. 25 COMPETITION REGIME Consolidations ä IDA approval required for assignments and transfers of control of licenses ä IDA actions based on economic assessment of the likely impact of the consolidation on competition ä IDA may approve, deny or grant subject to conditions

27 Squire, Sanders & Dempsey L.L.P. (2000) Slide No. 26 ENFORCEMENT MECHANISMS IDA Enforcement Actions ä Notice and opportunity to respond ä Remedies © Warning © Cease and desist order © Monetary sanctions, proportionate to the contravention

28 Squire, Sanders & Dempsey L.L.P. (2000) Slide No. 27 ENFORCEMENT MECHANISMS Private Requests for Enforcement ä Provide facts that, if proven, demonstrate a contravention ä Support allegation ä Propose remedy ä IDA retains full enforcement discretion

29 Squire, Sanders & Dempsey L.L.P. (2000) Slide No. 28 ENFORCEMENT MECHANISMS Requests for Advisory Guidance ä Inquiry regarding rights and duties in specific situations ä IDA guidance non-binding

30 Squire, Sanders & Dempsey L.L.P. (2000) Slide No. 29 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


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