1. 1 1Page Interconnection and Facilities Leasing Discussion 1. Introduction and Objectives 2. Chapter 10 Market Review Process - Overview 3. Relevant markets, essential facilities and Ch 10 4. Consolidated approach to Ch 7 (IC), Ch 8 (FL) and Ch 10 5. Remaining conceptual IC and FL issues Pricing Principles Framework for Tech & Fin feasibility Manner of unbundling 6. Summary 7. Way forward

2. 2 2Page CH 10 Market Assessment Process Competition assessment SMPRemedies Dominance Control of Essential Facilities Vertical relationship Market Definition Conceptual Framework 67(4)(b) 67(6) (b) Approach 67(4)(d) 67(5) Potential PCC 67(4)(c) 67(7) Approach DS, SS, SSNIP 67(4)(a) 67(6)(a) Anti-comp Behaviour Monitoring 67(4)(f) Periodic Reviews Review Process 67(4)(e) Market Review Process S 67(4) Enabling Regulations

3. 3 3Page Essential Facilities, Relevant Markets and Ch 10 Exclusively/ predominantly provided by single/limited number of licencees AND Cannot be feasibly substituted/ duplicated (environmentally, economically or technically) Competition assessment SMP List Essential Facilities Remedies Dominance Control of Essential Facilities Vertical relationship Market Definition ECA Qualifying criteria List Ex-ante Markets 67(6)(a) & EU criteria High non-transitory barriers to entry (structural, legal, or regulatory) AND Dynamic functioning and character of markets / markets whose structure does not tend towards effective competition within the relevant time horizon AND The application of competition law alone would not adequately address the market failure(s) concerned Conceptual Framework 67(4)(b) 67(6) (b) Approach 67(4)(d) 67(5) Potential PCC 67(4)(c) 67(7) Approach DS, SS, SSNIP 67(4)(a) 67(6)(a) “Indicative” lists

4. 4 4Page Consolidated approach to IC, FL and Ch 10 Access obligation (appl. of 37(1), 38(5) and 43(1), 44(5)) Other obligations Interconnection General obligation to IC on request (NO general exemption ito 38(5) ) Obligation to interconnect subject to test for reasonableness (Tech. & Fin. Feas. & economic efficiency) Agreement principles and procedures for concluding IC Agreements RIO (subject to SMP) (Acct. Sep, LRIC, charge unbundling etc) Subject to Chapter10 and excluded from IC Regulations Specific to relevant market Duplication of 67(4)(c) regulations ? Facilities Leasing Obligation to lease subject to SMP (general exemption ito 44(5) ) Financial feasibility and economic efficiency tests not applicable to SMP licensees Obligation to lease subject to test for reasonableness (Tech. & Fin. Feas. & economic efficiency) Agreement principles and procedures for concluding FL Agreements RECFLO (subject to SMP) (Pricing - LRIC etc) Subject to Chapter10 and excluded from FL Regulations Specific to relevant market/facility Duplication of 67(4)(c) regulations ? What is on the table (Draft Regulations)KEY: Proposed approach   

5. 5 5Page Essential Facilities and Ch 10 Access obligationOther obligations Essential Facilities (List) Section 43(8) Qualifying criteria in ECA definition Automatic Subject to SMP & ineffective competition Agreement principles and procedures Included in FL Regulations Automatic (Pricing - LRIC, COACAM) Subject to Chapter10 Excluded from EF list  What is on the table (Draft Regulations)KEY: Proposed approach   

6. 6 6Page Interconnect & Facil. Leasing Regulations (s38 & s44) Regulations to facilitate the conclusion of agreements (principles & procedures): – Reference Offers with model T&C – Time frames and procedures for negotiation, conclusion and implementation of agreements – Quality & service levels – IC Pricing principles and FL rates – Information requirements – Dispute resolution procedures – Billing and settlement procedures – Associated support services – Access and security arrangements – Framework for technical and financial feasibility and efficient utilisation of EC networks/services – Manner of unbundling services Detailed input in many of these areas is covered in the various individual submissions, but we address conceptual approaches to the bold underlined areas in the next slides Subject to Chapter 10 To be assessed case-by-case Part of market definition

7. 7 7Page Pricing Principles Specific pricing principles or approaches are considered to constitute remedies and should be subject to Chapter 10 market review process. Any specific pricing approaches should not form part of the IC and FL regulations. Different underlying IC and FL services may warrant materially different pricing approaches, whether offered on commercial terms or subject to a finding of SMP and ineffective competition.

8. 8 8Page Framework for assessing “reasonableness of requests” Interconnection and Facilities Leasing Regulations may include: “a framework for determining technical and financial feasibility and promotion of efficient use of electronic communications networks and provision of services” IC and FL both potentially represent a wide variety of different underlying services. Therefore it would be difficult to set out a framework that is both instructive and sufficiently flexible to facilitate meaningful evaluation of financial and technical feasibility and economic efficiency A framework would undoubtedly be helpful but it is probably more practical to evaluate the reasonableness of requests on a case-by-case basis

9. 9 9Page Unbundling of services and facilities Interconnection and Facilities Leasing Regulations may include: “the manner in which interconnection services are to be unbundled and made separately available by licensees” “the manner in which unbundled electronic communications facilities are to be made available” Unbundling would more pragmatically form part of the market definition exercise e.g. Origination, transit, termination Voice, messaging, data Fixed, wireless, mobile\ Cable landing station, co-location, MDF, backhaul Such unbundling and access requirements should thus not be part of the IC and FL regulations, but are a logical outcome of the Chapter 10 market definition and competition assessment process.

10. 10 Page Summary Network operators, have reached a simple and clear consensus which would make the draft IC, FL and EF package acceptable to them (once drafting / nuts and bolts issues resolved): Price remedies should always be subjected to a full Chapter 10 process Facilities leasing obligations should always be subject to SMP finding The implication / proposed implementation of these two principles are: Remedies removed from IC, FL and EF Regulations and be subject to full Chapter 10. Generic exemption from the obligation to lease facilities for non-SMP operators (as per current draft regulations) Essential Facilities Regulations be reduced to a list of assets which meet the qualifying criteria of the ECA definition

11. 11 Page Thank You

12. 12 Page ECNS ECS ECNS/ECS and Interconnection ? ECNS ECS IC NS Application Routing (L3) Switching (L2) Transmission (L1) ECNS ECS