Cable & Wireless (Barbados) Ltd Consolidated Reference Interconnection Offer

• Jurisdiction: Barbados
• Judgment Date: 22 February 2010
• Docket Number: No: FTC/UR/2010-01
• Court: Fair Trading Commission (Barbados)

Cable & Wireless (Barbados) Ltd. Consolidated Reference Interconnection Offer

No: FTC/UR/2010-01

FAIR TRADING COMMISSION

DECISION

Introduction and Background

1 On September 25, 2008 the Fair Trading Commission “Commission” requested that Cable & Wireless (Barbados) Ltd. “Cable & Wireless” file a Consolidated Reference Interconnection Offer (RIO). The Company was asked to include in this RIO the terms and conditions for interconnection of mobile, domestic fixed wireless and international service providers.

2 Previously, the interconnection process was regulated by three separate Reference Interconnection Offers — Mobile (filed August 22, 2003), Domestic Fixed Wireless (filed January 22, 2004) and International (filed July 30, 2004). These RIOs marked the phased liberalisation of the Barbados telecommunications market.

3 The liberalisation schedule for the telecommunications sector has been completed. TeleBarbados Inc. “Telebarbados”, Blue Communications Inc. “Blue” and Digicel (Barbados) Ltd. “Digicel” have entered the market and there has been growth in services such as mobile and ADSL and the introduction of new telecommunications policies. Consequently, the Commission determined that it was necessary to implement a consolidated RIO to streamline the process for interconnection among all telecommunications providers.

Legislative Framework

4 The telecommunications sector is regulated by the Commission as well as the Minister responsible for Telecommunications through the Telecommunications Unit in the Ministry of Finance, Investment, Telecommunications and Energy.. The industry is governed primarily by the Telecommunications Act CAP. 282B and sections of the Utilities Regulation Act.

5 Section 26 (1) of the Telecommunications Act CAP. 282B states that the dominant carrier is required to file with the Commission a RIO, which sets out the terms and conditions for interconnection. These terms and conditions are set out in Section 26 (2) of the Telecommunications Act CAP. 282B. On April, 24, 2003 Cable & Wireless was declared dominant carrier in S.I. 2003, No. 75, Telecommunications Act CAP. 282B, Telecommunications (declaration of dominance) Regulations, 2003.

6 The Telecommunications Act CAP. 282B requires the dominant carrier to ensure, inter alia, that:

• a. Interconnection charges are cost oriented;

• b. Interconnection services allow the requesting carrier to select the services required and not require the carrier to stand the cost of network components, facilities or services that are not required or have not been requested by that carrier; and

• c. Interconnection terms are non-discriminatory and non-preferential.

7 Pursuant to Section 27(3) of the Telecommunications Act 282B, in deciding whether or not to approve the RIO, the Commission is required to:

• (a) consult with the carrier providing the RIO and any other carriers likely to seek interconnection to that carrier's network; and

• (b) have regard to:

  • • the interconnection principles set out in section 25;

  • • the interconnection policy specified by the Minister;

  • • the need to promote competition;

  • • the long-term interests of end-users; and

  • • the submissions, whether oral or written, of the carriers providing and seeking interconnection.

8 In arriving at its decision, the Commission took into consideration the Fair Trading Commission's Interconnection Guidelines — Accounting, Costing and Pricing Principles Doc. No. FTC 03/03 and the Dispute Resolution Procedures Doc. No. FTC 03/04 issued on July 01, 2003 and the principles embodied in Section 25 of the Telecommunications Act. The Commission also examined the previously approved RIOs and RIOs from other regional and international jurisdictions.

Public Consultation

9 On December 5, 2008, Cable & Wireless filed the Consolidated RIO with all of the Tariff Schedules.

10 On January 11, 2009 the Commission commenced public consultation on the Consolidated RIO as part of its review process whereby parties were invited to review the Consolidated RIO and submit written comments. The Consolidated RIO was made available at the Commission's office and on its website. This consultation period ended on March 10, 2009. Submissions were received from TeleBarbados, Blue, Digicel and Caritel.

11 The Commission also invited parties to an Oral Presentation on June 19, 2009. Presentations were made by Cable & Wireless, TeleBarbados, Digicel, Blue, and interested party Caritel.

12 The Commission considered these submissions and consulted further with Cable & Wireless and the other parties on these issues through written correspondence.

13 The Commission advised Cable & Wireless that it was not satisfied with certain aspects of the RIO submitted in December 2008 and the Commission requested that Cable & Wireless revise its submission. Cable & Wireless submitted the revised Consolidated RIO on December 15, 2009 for approval.

Issues Raised

14 The following section represents an overview of the issues raised during the consultation on the Consolidated RIO which was submitted December 2008.

15 The issues raised during the written consultation and oral presentation were:

• • Interconnection Charges

• • Two-Stage Dialling and Indirect Access

• • Access Deficit Charges

• • Direct Mobile Interconnection

• • Incoming International Call Termination to PSTN

• • Capacity Requirement

• • Carrier Identification Codes

• • IP Peering

16 Based on these issues and the information in the Consolidated RIO submitted December 2009 the Commission makes the following findings.

Interconnection Charges

17 The rates proposed by Cable & Wireless in the Consolidated RIO of December 2008 were the same as those in the existing approved RIOs with the exception of the Mobile Termination Part Usage charge of the PLMN to PLMN Termination Access Service and the Mobile Termination Charge payable to Third Party Mobile Telecom providers. These charges were decreased from $0.30 to $0.275 per 60 seconds in order to match the rate for Incoming Interconnection Call termination to PLMN service.

18 All service providers either directly or indirectly raised the issue of high interconnection charges. The Commission's decision on Interconnection Guidelines — Accounting, Costing and Pricing Principles, dated June 30, 2003 was not implemented. This decision stated that ultimately the interconnection rates should be based on Total Service Long Run Incremental Cost (TSLRIC) which is a forward looking cost methodology, rather than a historical approach such as Fully Distributed Cost (FDC). The Commission had preliminary discussions with Cable & Wireless on this issue but acknowledges that implementation was delayed.

19 TeleBarbados' and Blue's submissions argued that due to the non implementation of this decision the interconnection charges are based on FDC. It is for this reason that service providers contended that interconnection charges are too high. Digicel also believed that the cost of special access services (including emergency services and directory inquiries) are high.

20 Cable & Wireless stated that establishing a Long Run Incremental Cost (LRIC) methodology (which would be a basis for TSLRIC) is not a short-term exercise, and suggested that a multi-stage process is the best way to obtain optimum results. As a result Cable & Wireless proposed that they reduce domestic interconnection tariffs for PSTN Termination Access Service, PLMN Termination Access Service and PSTN Transit Service by 5% on the adoption of the Consolidated RIO, and further annual reductions of 5% each over the next two years.

21 The Commission closely examined Cable & Wireless' offer of 5% reductions every year for three years as well as the responses received from the respondents who were also given the opportunity to comment on the offer.

22 The Commission concluded that a one-time 15% reduction in interconnection rates for the specified services should be implemented as these rates had not changed since 2003 and there was general information that the cost of telecommunications had decreased. This was communicated to Cable & Wireless who subsequently submitted a revised Tariff Schedule in the Consolidated RIO submitted in December 2009.

23 The Commission noted anomalies in these tariffs and brought this to the attention of Cable & Wireless on February 03, 2010. Cable & Wireless made the adjustments in accordance with the Commission's directive and resubmitted the revised Tariff schedule on February 15, 2010.

24 This Tariff schedule details reduced tariffs for the following interconnecting services:

• i) PSTN Terminating Access Service: inclusive of charges for call set up, call duration and interconnect specific;

• ii) PLMN to PLMN Terminating Access Service, Transit Part: inclusive of charges for call set up, call duration and interconnect specific;

• iii) PLMN to PLMN Terminating Access Service, Mobile Terminating Part: inclusive of call duration charges;

• iv) Incoming International Call...