Disputes pertaining to access, interconnection, and other aspects of regulation are common in the telecommunications sector. This section covers:
Why Interconnection Dispute Resolution is Important?
Disputes pertaining to access, interconnection, and other aspects of regulation are common in the telecommunications sector. This can stall the development of competition, and the implementation of important national policy goals for infrastructure and economic development.
Reliance on the courts to resolve disputes between telecommunications firms is costly and can involve substantial delays. For example, in New Zealand the first major interconnection dispute between the incumbent and a new entrant took over three years to resolve through the courts and even then failed to deliver a conclusive resolution.
Without a mechanism to resolve interconnection disputes quickly and effectively, innovation and competition in the sector will be threatened. Entrants will not commit resources unless they have confidence that their business will be viable, and that they will be able to resolve any disputes in a timely fashion.
The Role of the Regulator
The World Trade Organization Agreement on Basic Telecommunications includes obligations relating to dispute resolution.
Under the Agreement, Member countries must establish an independent domestic dispute resolution body, so that interconnection disputes can be settled within a reasonable period of time. This need not be the regulator, but it often is.
Often a regulator will develop a Reference Interconnection Offer ("RIO") as part of opening the sector to competition. The RIO sets forth the terms and conditions, and prices, that a competing operator can choose to accept without further negotiations. The purpose is to avoid disputes and to shorten the entry time for a new competitor. The requirement to develop a RIO is most usually imposed on an operator that is deemed to be dominant or have significant market power. A regulatory tool that accomplishes similar things is a "most favored nation" or nondiscrimination requirement, whereby any operator can choose to accept the terms and conditions that have previously been agreed or ordered to be in place for another competitor. Many countries have adopted either or both of these measures. One example is described in the practice note on Jamaica's RIO.
Challenges for the Regulator
Dispute resolution presents a number of challenges for regulators, including:
- Access to information: Operators usually have better information than the regulator on the details of interconnection disputes. This makes it difficult for the regulator to come to a decision and be confident that it is the best one,
- “Gaming” of the process: Either party may engage in anti-competitive gaming of the dispute resolution process. For example, an incumbent may use delaying tactics to draw out the proceedings, in order to delay competitive entry. Or an entrant may not accept a reasonable interconnection offer from the incumbent if it believes that it can persuade the regulator (or dispute resolution authority) to mandate more favourable terms,
- Capacity: Many countries face a shortage of people with the necessary legal, economic, and technical expertise to resolve interconnection disputes.
Ways to Strengthen Dispute Resolution Processes
Options to strengthen dispute resolution process include[1]:
Improve information available to the regulator
Rationale: Enable the regulator to base its decision on better information.
- Ask parties to define areas of agreement and dispute, and to provide information to clarify disputed issues,
- Require written submissions from operators on areas of dispute, supported by facts and research if necessary,
- Allow others (for example customer groups and other service providers) to comment on areas of dispute.
Obtain expert assistance
Rationale: Supplement the regulator’s in-house capability by drawing on external expertise.
- Use external advisors (for example an experienced interconnection expert) to assist in resolving the dispute. The expert’s role could include clarifying areas of agreement and dispute, identifying information needs, and providing advice,
- Consider appointing an independent mediator (or, if the parties agree, an arbitrator),
- Consult with other regulators on their approach in similar cases,
- Review decisions and interconnection agreements approved by other regulators,
- Use outside parties for informal mediation, arbitration, information gathering or other assistance. This can be particularly useful in countries where the regulator lacks the legal authority to resolve the dispute, or may be biased.
Improve transparency
Rationale: Making more information publicly available should cause parties to consider their positions more carefully.
- Make parties’ submissions available for comment by other parties and the public, with summaries to protect confidential information,
- Publish a draft decision and give parties to the dispute and others an opportunity to make written submissions on it.
ENDNOTES
[1] Adapted from InfoDev, “Telecommunications Regulation Handbook, Module 3: Interconnection,” Washington, DC: The World Bank, 2000, Table 3-2.