Whether mobile sharing involves passive or active infrastructure, there are a number of key regulatory issues that must be addressed. These issues are outlined below.
Licensing: Regulators and policy makers must assess the current licensing framework to ensure that it accommodates mobile network sharing, whether in terms of active or passive infrastructure. In particular, regulators and policy makers should consider whether the terms and conditions of existing licensees permit sharing and whether current categories of licences accommodate new types of industry participants such as infrastructure providers (e.g., tower companies) and mobile virtual network operators. Other authorization-related issues will also require considerations, such as fees and universal access obligations.
Mandatory or optional sharing: Regulators and policy makers must determine whether to mandate sharing or to permit it at the option of the operator. A related issue is what types of sharing to permit and on what basis. A good example is spectrum sharing: although it is technically possible to share spectrum, only the Brazilian regulator, ANATEL, has taken steps towards permitting it and then only in certain limited contexts. By contrast, tower sharing is widely permissible around the world, and 3G network sharing is becoming more common. At present, several countries including Jordan, Hong Kong China, and India permit MVNOs, though the terms under which MVNOs may operate differ to quite a degree from jurisdiction to jurisdiction.
Box 1: Commonly-recognized acceptable grounds for refusing access and sharing requests
- Insufficient capacity (all existing capacity is occupied or reserved).
- Granting of access is technologically impossible.
- The access or sharing request, if granted, would breach safety and reliability standards.
Standard terms and conditions: Regulators and policy makers may consider adopting standard terms and conditions to govern sharing arrangements. Alternatively, they may opt to require dominant service providers to file Reference Offers for sharing of essential facilities. One other option is to stipulate that operators are free to negotiate their own terms and conditions for sharing on a commercial basis, and to require that operators enter into arbitration or mediation if they cannot reach an agreement within a prescribed period of time. The Bangladeshi Guidelines for Infrastructure Sharing, for example, provide that parties must negotiate commercial agreements for infrastructure sharing in good faith. However, if the parties are unable to come to an agreement, either party may ask the Bangladesh Telecommunication Regulatory Commission (BTRC) for assistance. Any decision issued by the BTRC in such a case is final and binding. The Guidelines for Infrastructure Sharing specifically state that disputes about tariffs or charges are to be resolved by the BTRC and that the BTRC's decision is final and binding.
In most cases, it is preferable to allow operators to negotiate their own arrangements on a commercial basis. Regulators may safeguard against anti-competitive behaviour in this context by setting some general principles for agreement and by establishing time deadlines for completing agreements. General principles that regulators may consider adopting include:
- Non-discrimination;
- Provision of access and capacity on a “first-come, first-served” basis;
- A requirement to return excess capacity and penalties for operators who order too much capacity;
- Prohibitions on exclusivity arrangements;
- Transparency; and
- Acceptable grounds for refusing access and sharing requests.
Incentive regulation:
Regulators and policy makers may consider implementing various measures designed to create incentives for sharing generally and/or for complying with the terms and requirements surrounding sharing. One common approach is to require that all operators keep a log of access requests, along with notes about the measures taken to respond to these requests. Operators may be required to file these logs with the regulator on a regular basis or may simply be required to keep these records and to produce the logs upon request.
[1] Another measure that may be taken to enhance the efficiency of processing access requests is to allow operators to file more than one access request with an operator at one time. In New Zealand, for example, the Commerce Commission approved a set of standard terms for mobile collocation that allows access seekers to make up to ten requests to an access provider at a time.
Pricing: Regulators and policy makers must determine whether to set prices for sharing or to allow operators to negotiate prices, subject to the general requirement that prices be fair and commercially reasonable. This decision typically turns on the infrastructure in question and on the parties involved. Pricing controls are necessary where prices are unlikely to be fair or where pricing may be used to impose a barrier to market entry. Thus, while it may be necessary to regulate the prices charged for access to essential facilities owned and operated dominant service providers, it may not be necessary to set prices in other contexts where competition is healthier, such as tower sharing. Where prices are controlled, the adoption of some form of cost-based methodology is generally considered the best practice.
Dominance or Significant Market Power (SMP): Policies to promote ICT sector development and competition require a comprehensive framework for preventing and managing anti-competitive conduct. Regulators must prevent any abuse of dominance in cases where the infrastructure owner also competes downstream with other service providers in the same market. Such policies should be premised on the understanding that regulatory intervention is primarily needed only when an operator possesses Significant Market Power (SMP) and begins abusing that power. The standard best practices for intervention apply in infrastructure sharing regulation as they would in pricing, interconnection and other areas of competition policy.
Enforcement and dispute resolution: Whether governments choose a policy of mandatory or optional sharing, efficient enforcement mechanisms and dispute resolution processes should be in place. It is not possible to prescribe the exact enforcement measures that regulators should take; each country has its own institutions and laws. The common thread, however, is a solid and effective mechanism for handling complaints and disputes, with sufficient sanctions to discourage violations. See the Practice Note entitled “Dispute Resolution for Mobile Sharing” for more information about dispute resolution.
[1] See Booz Allen Hamilton Inc, "Telecom Infrastructure Sharing – Regulatory Enablers and Economic Benefits", November 2007, p. 8 available online at: www.boozallen.com/media/file/Telecom_Infrastructure_Sharing.pdf.