In order to accelerate deployment of mobile networks to rural areas, policy makers and regulators may consider adopting regulatory measures to promote site sharing. This section reviews measures that may be taken in order to encourage passive sharing in mobile networks.
Mandatory sharing
In countries where mobile site sharing is mandatory, operators generally are required to allow third parties to share their facilities upon request. The scope of mandatory site sharing may vary, depending on the needs of local markets and the policy objectives of the government. For example, sharing obligations might only be imposed on operators that have significant market power (SMP) while site sharing remains optional for non-dominant operators. The regulator might elect to require sharing of only certain infrastructure elements. The scope of mandatory sharing may also vary based on the degree of independence operators have in negotiating the specific terms of site sharing agreements.
For information about what regulators should consider when setting a policy for mandatory sharing, please see the Practice Note entitled “Regulating Mandatory Site Sharing Agreements”. A link to this Practice Note is set out below.
Box 1: Site Sharing in New Zealand
Subject to limited exceptions, mobile site sharing is mandatory upon request in New Zealand, although access seekers and access providers are free to set their own pricing arrangements for collocation. In 2007, an investigation conducted by the New Zealand Commerce Commission (the Commission) found that although collocation agreements for mobile site sharing had been in place for many years, collocation had occurred on less than 0.5% of available towers. The investigation further found that pricing for collocation services was not the impediment to mobile collocation. Instead, the Commission considered that collocation had not occurred more frequently because “incumbent operators had control over optimal co-location sites and incumbents had no or limited incentives to support co-location (sic) by competing networks.” (Commerce Commission, Schedule 3 Investigation into Amending the Co-Location Service on Cellular Mobile Transmission Sites, 14 December 2007, p. 9, para. 49.)
In response to these findings, the Commission undertook a process to determine the Standard Terms for collocation on mobile cellular transmission sites. The Commission released its Determination on these Standard Terms (the “STD” or “Standard Terms Determination”) in December, 2008. The Commission’s STD was aimed at enabling the efficient provision of mobile collocation services and at providing access seekers and access providers with appropriate incentives to make efficient use of mobile network resources for the long-term benefit of end-users. The Commission identified three aspects of the STD in particular that it considered will contribute to more rapid collocation of mobile network transmission and reception equipment:
(1) the standard type site solution process;
(2) the ability for access seekers to make multi-site applications; and
(3) the Service Level capacity limit for each access provider of ten applications per access seeker per five day working period.
The Commission also stated that it would also monitor the implementation of the STD closely, given the limited progress that has been made towards collocation. The Commission stated that it “will be carefully examining the Service Level performance reports, with particular attention on the number of co-location (sic) Applications received and final approvals issued by Access Providers, as well as Service Level defaults.” (Commerce Commission, Standard Terms Determination for the specified service Co-location on cellular mobile transmission sites, Decision 661, December 11, 2008, p. xii, para. xxvii.)
Source: Commerce Commission, Standard Terms Determination for the specified service Co-location on cellular mobile transmission sites, Decision 661, December 11, 2008.
Optional sharing
Policy objectives play an important role in deciding whether site sharing should be mandatory or optional. When the policy is geared toward stimulating operators to invest in their own infrastructure, optional sharing may be applied.[1]
In many cases, operators may opt for site sharing voluntarily, in order to reduce costs. Regulators who wish to minimize market interventions may take measures to stimulate site sharing without mandating it. Measures to promote site-sharing arrangements might include: adopting model agreements; facilitating self-regulation; providing guidance on the types of sharing that is permitted; permitting the sharing of government-owned facilities; and providing financial incentives for sharing. A Practice Note containing further information about these options is linked below. This Practice Note is entitled “Measures to Promote Optional Passive Sharing”.
The role of local authorities
The ability to construct sites in certain areas may be limited by local land use or other regulatory restrictions. In most countries, local authorities are involved in granting permission to install masts and towers for wireless communications. These city or township authorities may take part in promoting site sharing, for example by requiring that new masts or towers be designed to accommodate more than one operator. Local authorities may also require operators to place their equipment on existing masts, unless this is not possible for technical reasons.
To promote site sharing successfully, local authorities must work closely with operators and their representatives. Disputes between operators and local authorities can hinder network roll-outs and increase communities’ often-unnecessary fears of negative impacts from tower sites. Associations of operators may be an important factor in establishing a dialogue between local communities and operators, increasing awareness about the presence and the location of masts in their communities and any possible health or environmental effects of those masts. Such associations may also develop, in cooperation with local communities, guidelines for building new sites or installing new equipment at existing sites. The goal is to increase local participation, improve the availability of information and create legal certainty for operators willing to roll out their networks.
It is also possible for national authorities to develop site-selection rules or guidelines to be followed by local authorities. These guidelines could address environmental factors or distinguish between the conditions that apply in urban and rural, less-populated areas.
Encouraging the participation of infrastructure providers (tower companies)
Telecommunications operators that own towers, masts or other infrastructure may have incentives to prevent competitors from sharing their sites. However, the outsourcing of tower operations may be an interesting option from a business perspective. Specialized tower companies have every incentive to sell their services to as many telecommunications service providers as possible.
Tower companies own the towers and masts or, in some case, the whole site. They provide a variety of services to customers, such as: radio and transmission planning; site acquisition; site construction and equipment installation; and/or site maintenance.
Outsourcing deals may create considerable financial value for operators and free them up to focus on their core wireless businesses. Outsourcing of site infrastructure has been particularly successful in North America, where it is considered one of the key enablers of effective mobile network roll-out.[2]
Although not as well known as in the United States, tower companies also are becoming more common in Europe.
[3]
For information about how policy makers and regulators may promote the emergence of tower providers, please see the Practice Note entitled “Tower Companies and the Promotion of Passive Sharing”.
Financial incentives
Sharing arrangements can often reduce costs and make wireless deployment more viable in many areas. In this regard, operators have an incentive to pursue sharing arrangements. Governments can also implement various measures to create additional financial incentives. Such measures could include tax and fee exemptions, the reduction of fees imposed by local authorities, and subsidies. The Practice Note entitled “Encouraging Passive Sharing Using Financial Incentives” discusses these measures in greater detail. A link to this Practice Note is set out below.
[1] Cf. Article 8 of the European Framework Directive, according to which one of the principle policy objectives of the European electronic communications policy is to promote efficient investment in infrastructure.
[2] In the United States, the majority of mobile sites are owned by tower companies, and not by mobile operators. Among successful tower companies in North America are: American Tower, Crown Castle and Spectra Site.
[3] The company Alticom B.V., which is a subsidiary of the French company TDF S.A., has recently entered the Dutch market in order to operate a tower business for wireless transmission. TDF also operates a tower business in other European countries.