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1 Squire, Sanders & Dempsey L.L.P Telecommunication Competition Code Review of Significant Revisions Second Public Forum 6 July 2000
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Squire, Sanders & Dempsey L.L.P. 2 OVERVIEW Review of Comments on First Draft of the Code Major Revisions Simplified dominance definition Accelerated interconnection process Modified network unbundling and wholesale requirements Strengthened restrictions on use of customer information Expanded competition law regime Schedule for Adoption and Implementation
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Squire, Sanders & Dempsey L.L.P. 3 I. REVIEW OF COMMENTS 14 parties filed comments: Singapore-based Licensees Foreign-based Licensees Potential entrants End-users Industry interest groups Most commenters support IDA’s basic approach, but proposed various modifications IDA reviewed all comments; considered additional issues on its own initiative
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Squire, Sanders & Dempsey L.L.P. 4 II.A. DOMINANT CLASSIFICATION Each Licensee classified as Dominant or Non-Dominant Dominance: Trigger for special obligations Tariff filing (just, reasonable and non-discriminatory prices, terms and conditions) Physical interconnection, network unbundling, and access to essential support facilities Heightened competition law scrutiny
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Squire, Sanders & Dempsey L.L.P. 5 DOMINANT CLASSIFICATION First draft Test: “Market power” in a specific service Initial designation of Dominant Licensees SingTel (local exchange, xDSL and leased lines) SCV (cable modem) 1-Net (ATM backbone) Licensee can seek service-specific reclassification using market power test
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Squire, Sanders & Dempsey L.L.P. 6 DOMINANT CLASSIFICATION Revised draft Three-part test applied to Licensee Control of “last mile” facilities; and Ability to raise end-user prices and/or reduce output; or Cost or difficulty of replicating facilities creates barrier to rapid competitive entry Licensee can seek reclassification or service or facility- specific exemptions where growth of competition renders dominance regulation unnecessary
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Squire, Sanders & Dempsey L.L.P. 7 DOMINANT CLASSIFICATION Initial designation of Dominant Licensees SingTel (wireline Licensee) SCV 1-Net Goal: Simplify designation process; reflect full range of IDA policy goals
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Squire, Sanders & Dempsey L.L.P. 8 II.B.INTERCONNECTION PROCESS Co-operation among Licensees is necessary to create a competitive market IDA seeks: rapid adoption of reasonable interconnection agreements voluntary agreements, where feasible prompt and consistent resolution of post-agreement disputes limited, but effective, regulatory intervention industry fora set up to develop technical and operational processes and procedures
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Squire, Sanders & Dempsey L.L.P. 9 INTERCONNECTION PROCESS First draft Limited guidance regarding Dominant Licensees’ Reference Interconnection Offers (“RIOs”) 90-day unsupervised negotiation process IDA pre-approval of all agreements No IDA post-adoption enforcement role
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Squire, Sanders & Dempsey L.L.P. 10 INTERCONNECTION PROCESS Revised draft Clarifies “three entry paths” to interconnection with a Dominant Licensee Accept the RIO “Opt-in” to an existing agreement Enter an individualised agreement Voluntary agreement IDA Dispute Resolution Procedure
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Squire, Sanders & Dempsey L.L.P. 11 INTERCONNECTION PROCESS Revised draft Significant guidance regarding the RIO Comprehensive, but unbundled, “offer” that can be accepted without negotiations and implemented in one month Eighteen categories of issues must be addressed, including: points of interconnection origination/termination services unbundled network elements and services essential support facilities wholesale services co-location rights and procedures
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Squire, Sanders & Dempsey L.L.P. 12 INTERCONNECTION PROCESS interface information disclosure service quality service ordering new service requests portability procedures reasonable restrictions on interconnection rights
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Squire, Sanders & Dempsey L.L.P. 13 INTERCONNECTION PROCESS Dominant Licensee also must submit “narrow” Model Confidentiality Agreement Minimum RIO terms (including default prices) specified in Code appendices Revised draft addresses SingTel’s obligations IDA seeks more public input regarding SCV and 1- Net
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Squire, Sanders & Dempsey L.L.P. 14 INTERCONNECTION PROCESS Negotiation process accelerated; incentives for voluntary agreement increased Initial meeting seven days after request Confidentiality Agreement by Day 15 Individualised agreement Mandatory use of Model Agreement Requesting Licensee may accept RIO on an interim basis, pending resolution of negotiations
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Squire, Sanders & Dempsey L.L.P. 15 INTERCONNECTION PROCESS Either party can request IDA Dispute Resolution Procedure after 90 days If RIO addresses a disputed issue, IDA will apply the RIO provision If RIO does not address an issue, IDA retains full discretion to impose a solution
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Squire, Sanders & Dempsey L.L.P. 16 INTERCONNECTION PROCESS IDA pre-approvals reduced Agreements between Non-dominant Licensees and voluntary modification of any agreement effective upon IDA notification; 15-day IDA ex post review Voluntary agreements with Dominant Licensees effective after 30 days, unless IDA rejects Agreements that satisfy minimum duties and, if a Dominant Licensee is involved, do not discriminate will not be rejected
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Squire, Sanders & Dempsey L.L.P. 17 INTERCONNECTION PROCESS 171530 90105 150 165180 Request for Interconnection Initial Meeting Confidentiality Agreement Interim RIO implemented Request for IDA Dispute Resolution Licensee Response IDA Direction Resolving Dispute Submission of Conforming Agreement IDA approval or revision
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Squire, Sanders & Dempsey L.L.P. 18 INTERCONNECTION PROCESS IDA will play a role in enforcing certain interconnection agreements Licensees must agree to refer to IDA, for binding resolution, disputes regarding implementation of Interconnection Agreements based on a RIO or the IDA Dispute Resolution Procedure IDA resolution should be faster, more consistent than private litigation in the Courts
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Squire, Sanders & Dempsey L.L.P. 19 II.C. DOMINANT LICENSEE INTERCONNECTION OBLIGATIONS First draft End-to-end unbundling of all network elements required UNE platform mandated Provision of all retail services at wholesale prices required Minimal guidance regarding co-location obligations
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Squire, Sanders & Dempsey L.L.P. 20 DOMINANT LICENSEE INTERCONNECTION OBLIGATIONS Revised Approach Six designated unbundled network elements must be offered by Dominant wireline Licensees Loops (including sub-loops) Distribution frame access Dark fibre Directory listing database access White Page listings Emergency services
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Squire, Sanders & Dempsey L.L.P. 21 DOMINANT LICENSEE INTERCONNECTION OBLIGATIONS Line sharing not initially required Periodic review of list, in consultation with industry Specific cable operator unbundling obligations deferred, lack of sufficient public input Goal: encourage facilities deployment
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Squire, Sanders & Dempsey L.L.P. 22 DOMINANT LICENSEE INTERCONNECTION OBLIGATIONS Wholesale Service General obligation eliminated But Dominant wireline Licensees must offer wholesale rates for international private leased circuits during interim period Goal: Encourage facilities deployment, while retaining ability to address short-term problem of high international bandwidth prices
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Squire, Sanders & Dempsey L.L.P. 23 DOMINANT LICENSEE INTERCONNECTION OBLIGATIONS Co-location Any piece of equipment customarily used for interconnection may be co-located Dominant Licensee must avoid unnecessary space limits Security measures must be reasonable and non- discriminatory
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Squire, Sanders & Dempsey L.L.P. 24 II.D. CUSTOMER SERVICE USE INFORMATION (“CSUI”) Information about customers’ use of the network Can provide Licensee with competitive advantage in product development and marketing Dissemination raises privacy concerns First draft: Licensee allowed to use CSUI for any purpose, unless customer “opts in” by restricting use to provision of telecom service from which the information was derived
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Squire, Sanders & Dempsey L.L.P. 25 CUSTOMER SERVICE USE INFORMATION Revised draft Protection expanded Licensee can only use CSUI to provide telecom services, and cannot share with affiliates or third parties, unless customer “opts out” by authorising use for other purposes No affirmative obligation to share with third parties
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Squire, Sanders & Dempsey L.L.P. 26 II.E. COMPETITION ENFORCEMENT IDA will act as sector-specific competition authority First draft Section 7: Barred abuse of dominant position in Singapore Telecom market Section 8: Barred anti-competitive agreements between Licensees Dominant Licensees barred from requiring telecom customers to purchase any other good or service
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Squire, Sanders & Dempsey L.L.P. 27 COMPETITION ENFORCEMENT Revised Approach Section 7 expanded Licensee’s abuse of affiliate’s dominant position in foreign or non-telecom markets barred Unfair methods of competition barred False or misleading claims Service degradation Improper interference with customer relationships
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Squire, Sanders & Dempsey L.L.P. 28 COMPETITION ENFORCEMENT Section 8 expanded to cover agreements between Licensees and non-Licensees (e.g., network equipment supplier) Bundling prohibition strengthened: Dominant Licensees may not offer discounts available only to customers that purchase packages of telecom and other Licensee- specified goods or services
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Squire, Sanders & Dempsey L.L.P. 29 III. PROPOSED SCHEDULE 30 June - Revised Code released 6 July - Public Forum 14 July - Comments due 1 Sept - Code released 15 Sept - Code effective 15 Oct - Dominant Licensees file RIOs 15 Dec - RIOs effective
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