1. +41 79 75 236 22 rory@rorymacmillan.com _______________ R ORY M ACMILLAN Legal Mediation Rory Macmillan Telecom Sector Dispute Resolution: Alternative Dispute Resolution as a Strategic Resource October 30, 2004 TDSAT Seminar Delhi, India

2. _______________ R ORY M ACMILLAN Legal Mediation +41 79 75 236 22 rory@rorymacmillan.com The basic questions we should be asking about ADR concern resources and responsibilities Who should bear responsibility for the various functions involved in dispute resolution? Who has the resources for those functions? How can responsibilities and resources be arranged to ensure efficient, effective dispute resolution in line with sector policy? What type/level of official involvement best achieves policy goals?

3. _______________ R ORY M ACMILLAN Legal Mediation +41 79 75 236 22 rory@rorymacmillan.com The telecom sector has some particular features Complex network industry with operators and service providers Capital intensive business, so many are there for the long haul Webs of on-going long term commercial relationships

4. _______________ R ORY M ACMILLAN Legal Mediation +41 79 75 236 22 rory@rorymacmillan.com ADR may be useful given these features Many ADR techniques emphasise the importance of parties’ long term relationships Emphasis throughout sector regulation in many countries on negotiated results Durability in ADR from parties’ owning the results arising out of converged interests

5. _______________ R ORY M ACMILLAN Legal Mediation +41 79 75 236 22 rory@rorymacmillan.com Indeed, the private sector is introducing new ADR mechanisms by itself UK Competitive Telecom Association’s dispute resolution scheme Vodafone, BT and others are setting up their own dispute resolution schemes using Chartered Institute of Arbitrators and CEDR Private sector initiatives suggest demand in the market for ADR

6. _______________ R ORY M ACMILLAN Legal Mediation +41 79 75 236 22 rory@rorymacmillan.com “ADR” means many things to many people Arbitration and expert determination? Non-binding expert determination and evaluative mediation Ombudsmen schemes Mediation, conciliation and facilitation Negotiation Consensus building

7. _______________ R ORY M ACMILLAN Legal Mediation +41 79 75 236 22 rory@rorymacmillan.com To think strategically about ADR, we have to look at two key issues 1. How much of the process and result are determined by a 3 rd party or through consensual negotiation by the parties? 2. How much involvement does the official sector have at various levels in the process? Determinative?Consensual? Official?Non-official?

8. _______________ R ORY M ACMILLAN Legal Mediation +41 79 75 236 22 rory@rorymacmillan.com Each part of dispute process can be more or less consensual/determinative and official/non-official Setting the rules and process Choosing the 3 rd party neutral Deciding the result of the process Reviewing the process/result Enforcing/implementing the result Official? Non-official? Determinative? Consensual?

9. _______________ R ORY M ACMILLAN Legal Mediation +41 79 75 236 22 rory@rorymacmillan.com Dispute resolution techniques may be mapped along these two key axes Determinative/ adjudicatory Consensual/ negotiated Official Unofficial Regulatory adjudicatio n Arbitration and expert determinatio n Mediation & conciliation Non-binding expert determination Ombudsman schemes Consensus building

10. _______________ R ORY M ACMILLAN Legal Mediation +41 79 75 236 22 rory@rorymacmillan.com How “official” and “unofficial” a process is affects efficiency and effectiveness of dispute resolution Imbalance of market power between parties Official control of results may be necessary in some cases (e.g., spectrum frequencies and numbering) Regulators’ and courts’ enforcement remedies can be useful But official processes can be an impediment where they are inadequate, badly exercised or unnecessary

11. _______________ R ORY M ACMILLAN Legal Mediation +41 79 75 236 22 rory@rorymacmillan.com Whether more “determinative” or “consensual” also affects efficiency and effectiveness Formality of the process Protection of a weaker party Definitiveness of the outcome Ownership of the result

12. _______________ R ORY M ACMILLAN Legal Mediation +41 79 75 236 22 rory@rorymacmillan.com This makes various interesting hybrid approaches available in dispute resolution Jordan permitting arbitration in place of regulatory adjudication for interconnection disputes Hungary establishing a bank of approved arbitrators for telecom disputes The UK regulator approves dispute resolution schemes set up by operators Many regulators are acting formally or informally as mediators

13. _______________ R ORY M ACMILLAN Legal Mediation +41 79 75 236 22 rory@rorymacmillan.com The UK’s local loop unbundling adjudicator scheme illustrates the hybrid possibilities Telecom adjudicator appointed by OFCOM But adjudicator is to be “independent” of OCFOM Adjudicator’s authority to resolve decisions is based on private agreement of parties like arbitration Certain key policy matters reserved to the regulator and are off-limits to the adjudicator (e.g., pricing) Scheme largely designed and pushed by regulator

14. _______________ R ORY M ACMILLAN Legal Mediation +41 79 75 236 22 rory@rorymacmillan.com Is there a problem encouraging ADR where matters of public policy are at stake? What if an arbitral panel in Jordan awards a result contrary to TRC regulatory policy? Does the TRC have any right of review? How will courts review arbitral awards in light of “public policy” when asked to enforce them?

15. _______________ R ORY M ACMILLAN Legal Mediation +41 79 75 236 22 rory@rorymacmillan.com There may be ways to mitigate this concern about leaving “public policy in private hands” The legal notion of “arbitrability” can be used to prevent arbitration and restrict important matters to official control Arbitral awards can be reviewed at enforcement stage to ensure the integrity of the arbitral processes Mediations could be structured and sometimes run by regulators Arbitral awards could be explicitly required to comply with the regulatory regime and if necessary require pre-approval Arbitrators and mediators could be selectable only from a register of telecom experts defined by the official sector

16. _______________ R ORY M ACMILLAN Legal Mediation +41 79 75 236 22 rory@rorymacmillan.com The official sector can improve dispute resolution by tapping into ADR resources strategically Work out where the resources are available in each step of the dispute resolution process Align available ADR resources with the needs Ensure there is adequate official sector control of important public policy issues

17. _______________ R ORY M ACMILLAN Legal Mediation +41 79 75 236 22 rory@rorymacmillan.com Some specific ideas for leveraging ADR resources to improve dispute resolution Ask arbitration institutions in the country to create dispute resolution processes for the telecom sector Establish registers of qualified arbitrators and mediators for telecom disputes Train arbitrators and mediators in telecom policy Train telecom veterans to be arbitrators or mediators Develop standards of review of ADR processes

18. _______________ R ORY M ACMILLAN Legal Mediation +41 79 75 236 22 rory@rorymacmillan.com For further information “Dispute Resolution in the Telecommunications Sector: Current Practices and Future Directions”, Robert Bruce, Rory Macmillan et al: http://www.itu.int/ITU- D/treg/Events/Seminars/2003/GSR/Documents/DRS_Final_GSR_5.pdf http://www.itu.int/ITU- D/treg/Events/Seminars/2003/GSR/Documents/DRS_Final_GSR_5.pdf ITU Case Studies in interconnection dispute resolution, Robert R. Bruce & Rory Macmillan: http://www.itu.int/ITU- D/treg/Case_Studies/index.htmlhttp://www.itu.int/ITU- D/treg/Case_Studies/index.html ITU web pages on dispute resolution: http://www.itu.int/ITU- D/treg/related-links/links-docs/dispute.htmlhttp://www.itu.int/ITU- D/treg/related-links/links-docs/dispute.html Contact Rory Macmillan directly on +41 79 752 3622 or at rory@rorymacmillan.com rory@rorymacmillan.com