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Should a standard interconnect agreement be mandated asks TRAI


India’s telecom regulator TRAI is seeking comments from telcos and stakeholders for reviewing existing regulation regarding interconnection between telecom service providers. When two telcos fail to mutually negotiate the terms and conditions of interconnection, ‘should a standardized interconnect agreement be made mandatory?’ the regulator asked in a consultation paper (pdf) titled “Review of the Regulatory Framework for Interconnection”

It also suggests financial disincentives or penalties to telcos in case they fail to arrive into an interconnection agreement within a stipulated time-frame, or in case they violate interconnection-related clauses in their license. TRAI also looks into creating a “coordination committee” to facilitate interconnection agreements between telcos.

The consultation comes in the light of the recent interconnection issues between new entrant Jio and incumbents, and with TRAI proposing a Rs 3050 crore penalty for operators like Airtel, Vodafone, and Idea for violating license norms regarding interconnection witn new entrant Reliance Jio.

Current regulations regarding interconnection 

All interconnection agreements between telcos are currently finalized based on mutual negotiations. A Reference Interconnection Offer (RIO) has also been prescribed by the regulator as a standard reference interconnection agreement between an operator who commands a large market share identified as a Significant Market Power (SMP) and a new/existing operator. Any operator identified as an SMP is required to offer an RIO to other telcos; and both parties will later negotiate the final terms.

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In addition to this, several clauses in the Unified License require telcos to provide adequate interconnection and deploy sufficient Points of Interconnection to “enable transmission and reception” of messages without any interference or congestion between PoIs. The clauses also mandate that enough interconnection points are installed to keep services on prescribed Quality of Service (QoS) parameters for the end customer.

Why TRAI is calling for a change in interconnection regulations

In case there are disputes regarding interconnection, TRAI could be referenced by any operator. However, some telcos “have reported severe delays in setting up and augmenting the required number of E1 ports despite firm demand made by the interconnection seekers,” the regulator pointed out. Despite a reference template for an interconnection agreement between an existing and new operator, there is no explicit term in the license that points out a difference between SMPs (telco with large market domination) and telco with a considerable market control.

And more importantly, TRAI said that some telcos have reportedly “resorted to disconnection of E1 ports at some PoIs on the basis of their own assessment of required number of E1 ports, without even consulting the interconnected parties.”

Apart from this, TRAI also points other multiple reasons including:

-Changes in nature of telecom market—from monopolistic to intensely competitive and the considerable increase in number of International/National Long-distance operators.
-Landline usage is declining and the market is more inclined towards mobile telephony or cellular communication.
-Technological advancements or migration of legacy PSTN networks to IP-based and next generation networks (NGN).
-Expiry of telecom licenses of some telcos and the impending need for re-negotiation of interconnection agreements.

Questions for consultation

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TRAI has subsequently issued a 26-point questionnaire for this consultation. Stakeholders, telcos and the general public can send comments to: interconnection.trai@gmail.com by 21st November 2016.

Q1: Which amongst the following is the best option to ensure fair, reasonable and non-discriminatory terms and conditions of interconnection agreement between telecom service providers (TSPs), in view of the technological, market, licensing, regulatory and legal developments in the telecommunication services sector in India since 2002?

(i) To amend the Telecommunication Interconnection (Reference Interconnection Offer) Regulation, 2002 taking into consideration the technological, market, licensing, regulatory and legal changes since the year 2002;
(ii) To prescribe a Standard Interconnection Agreement, which must be entered into between interconnecting TSPs, in case they are unable to mutually agree on terms and conditions of interconnection agreement between themselves in a specified time-frame;
(iii) To prescribe only the broad guidelines based on fair, reasonable and non-discriminatory principles and leave the details of the interconnection agreement to be mutually decided by the interconnecting TSPs in a time-bound manner; or
(iv) Any other method.

Please provide justification in support of your response.

Q2: Whether existing interconnection agreements should also be allowed to be migrated to the new framework which will come out as a result of this consultation process?

Q2: Whether existing interconnection agreements should also be allowed to be migrated to the new framework which will come out as a result of this consultation process?

Q3: What should be the time-frame for entering into interconnection agreement when a new TSP with a valid telecom license places a request for interconnection to an existing TSP?

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Q4: Which details should a new TSP furnish while placing request for entering into interconnection agreement? Please provide detailed justification in support of your response.

Q5: Should an interconnection agreement between TSPs continue to operate if an interconnecting TSP acquires a new license upon expiry of an old license? Alternatively, should fresh agreements be entered into upon specific request of either party to the interconnection?

Q6: Whether it is appropriate to mandate only those TSPs who hold significant market power (SMP) in a licensed service area to publish their Reference Interconnect Offers (RIOs)? If yes, what should be the criteria for reckoning a TSP as SMP? If no, what could be the other approaches to streamline the process of interconnection in a fair, reasonable and non discriminatory manner?

Q7: Whether there is a need to continue with the present concept of interconnection seeker/ interconnection provider? If yes, what should be the criteria?

Q8: Whether there is any need to review the level of interconnection as mentioned in the Guidelines annexed to the Telecommunication Interconnection (Reference Interconnection Offer) Regulation, 2002? If yes, please suggest changes along with justification.

Q9: In case interconnection for Inter-circle calls to fixed-line network continues to remain at Short Distance Charging Area (SDCA), should alternate level of interconnection be specified in cases of technical non-feasibility (TNF) at SDCA level?

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Q10: What should be the framework to ensure timely provisioning/ augmentation of E1 ports? Please provide full framework with timelines including the following aspects:
(a) Minimum number of E1 ports for start of service;
(b) Maximum time period for issuance of demand note by the interconnection provider;
(c) Maximum time period for payment for demanded E1 ports by the interconnection seeker;
(d) Intimation of provisioning of requested E1 ports by interconnection provider;
(e) Space allocation for collocation of transmission equipment;
(f) Maximum time period for establishment of transmission links by the interconnection seeker;
(g) Maximum time period for acceptance testing;
(h) Maximum time period for issuance of final commissioning letter by the interconnection provider; and
(i) Maximum time period for start of traffic in the POI after provisioning/ augmentation of E1 ports for which payment has already been made.

Q11: Whether augmentation of ports be allowed at higher levels such as STM-1 in place of E1?

Q12: What should be the criteria to ensure that inflated demand for ports is not made by interconnection seeker?

Q13: In case the interconnection seeker agrees to bear the total cost of equipment required for augmentation in advance, should the interconnection provider give the requested ports irrespective of volume of traffic at POI?

Q14: Should separate time periods for provisioning of ports be prescribed for (i) fixed-line networks and (ii) mobile/ IP networks?

Q15: Whether financial disincentive should be imposed on TSPs for-
(a) not entering into interconnection agreement within a stipulated timeframe;
(b) not providing initial POI;
(c) not augmenting POI within stipulated timeframe;
(d) for violation of any clause prescribed in the regulations.
If yes, what should be the amount of such financial disincentives?

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Q16: Whether there is a need to have bank guarantee in the interconnection agreement? If yes, what should be the basis for the determining the amount of the bank guarantee?

Q17: What should be the method to settle Interconnection Usage Charges and how should the delayed payment between TSPs be handled?

Q18: Whether interconnection and interconnection agreement should be service-specific or service-agnostic (i.e. a TSP can send any type of traffic on a point of interconnection which is allowed under the terms and conditions of the license given to it)? What are the advantages/ disadvantages of having service specific POIs when the TSPs are equipped with call data record (CDR) based billing systems?

Q19: If POIs are merged together, what methods of discovery, prevention and penalization of any traffic manipulation by TSPs (whereby higher IUC traffic is recorded as lower IUC traffic in the CDR of the originating TSP) should be put in place?

Q20: Which policy and regulatory measures are required to be taken to encourage TSPs to migrate to Interconnection at IP level? What should be the terms and conditions for inter-connection at IP level?

Q21: Whether there is a need to establish a framework for Interconnect Exchange to eliminate bilateral interconnection issues?

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Q22: Is there any need for a separate framework for Interconnect Exchanges in view of the fact that the new NLDO authorization permits transit traffic to be carried over by NLDO?

Q23: Whether access providers should be allowed to transit intra-circle calls?

Q24: Under what circumstances, a TSP can disconnect POIs? What procedure should be followed before disconnection of POI?

Q25: Is there a need to have a coordination committee to facilitate effective and expeditious interconnection between TSPs? If yes, who should be the members of the co-ordination committee? What should be the overall operating framework for the committee?

Q26: Is there any other relevant issue which should be considered in the present consultation on the review of regulatory framework for Interconnection?

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