1. TRC - JORDAN Regulating interconnection The Jordanian experience 1st Regulatory Meeting for the ITU Arab Region, Algeria, 19-21 April 2003 Muna Nijem Chairman of the Board/CEO Telecommunications Regulatory Commission (TRC)

2. TRC - JORDAN Slide 2/19 Interconnection - Contents  Telecommunications and regulatory background  Interconnection Guidelines  Designation/costs  Lessons learned  Conclusions

3. TRC - JORDAN Slide 3/19 Background - Jordan  The Hashemite Kingdom of Jordan has a population of approximately 5 million people.  Liberalisation of the telecoms sector commenced in 1987 with a licence being granted to a Radio Paging operator – JRP.  The first mobile telephony operator (FASTLINK) was licensed in 1994.  The telecoms licensees now include: –1 fixed operator – Jordan Telecom – managed by France Telecom –2 mobile operators – Fastlink and MobileCom –1 radio paging operator –1 public payphone operator –10+ Internet Service Providers  Competition in fixed line market commences at the beginning of 2005.

4. TRC - JORDAN Slide 4/19 Regulatory Environment  Defined in the Telecommunications Law passed in 1995 and revised in 2002.  The Ministry of Information and Communications Technology (MoICT) has responsibility for: –Sector policy  The Telecommunications Regulatory Commission (TRC) has responsibility for: –Implementation of sector policy –Licensing operators providing public telecoms services –Issuing guidance (or instructions) to licensees on commercial and technical matters –Managing radio spectrum –Prompting & Protecting interests of end-users –Monitoring Licensees Performance

5. TRC - JORDAN Slide 5/19 Interconnection – Key to Competition  Telecommunications Law sets broad framework  Licences establish interconnection obligations and in particular, cost based charges  Interconnection Guidelines –Production of Reference Interconnection Offer

6. TRC - JORDAN Slide 6/19 TRC and Interconnection  Responsibilities of TRC –Ensure adherence to regulatory regime –Stimulation of competitive market –Maintain principle of non-discrimination –Determine general and specific terms for interconnection –Intervention to determine agreements –Resolution of interconnection disputes

7. TRC - JORDAN Slide 7/19 Interconnection Guidelines  The TRC issued Interconnection Guidelines (November 2002) after a period of consultation with licensees in Jordan  The Guidelines are a product of: –undertaking interviews with all of the main parties –Analysis of the Telecommunications Law, Licences and existing Interconnect Agreements –Drawing on international experience –seeking written submissions by licensees  The Guidelines contain a combination of mandatory requirements and recommendations

8. TRC - JORDAN Slide 8/19 Objective Principal purpose of The Guidelines is to:  clarify the arrangements for interconnection and provision of services between Licensees;  assist in ensuring that all Licensees are treated fairly and in a non-discriminatory manner;  encourage good practice by Licensees and to promote the provision of high Quality of Service to Users, through technical and economic efficiency;  engender a greater degree of co-operation between licensees;  prepare for fixed line competition;  clearly express the policy for dealing with interconnection disputes.

9. TRC - JORDAN Slide 9/19 Structure of Guidelines  The Guidelines are structured in a similar way to a Reference Interconnect Offer: –Definitions –Management of Interconnection –Interconnection services –Technical Aspects –Cost basis –Commercial aspects –Dispute resolution –General contract provisions

10. TRC - JORDAN Slide 10/19 Designation of Licensees  Guidelines apply mainly to Designated Licensees  Designation a question of market power  Tests considered: –SMP- 25% –Dominance- 50% –Benefits of size to supplement above tests, e.g.  Economies of scale  Economies of scope  Using 25% test for national market for interconnection TRC has Designated JT and Fastlink

11. TRC - JORDAN Slide 11/19 Obligations of Designated Licensees  Cost based charges  RIO  Collocation and facility sharing  Operator services  Emergency services  Directory Enquiries services

12. TRC - JORDAN Slide 12/19 Cost Basis in Interconnection  Two possible methodologies: –Fully Distributed Costs (historic) –Long Run Incremental Costs (forward looking)  FDC the preferred initial option  Operators concerned to establish network costs  Operators to provide model for establishing costs  TRC to approve outputs of models

13. TRC - JORDAN Slide 13/19 Adoption of Guidelines  The Provision of Guidelines are being implemented over a 6 month period  The objective of a phased introduction is to: –Develop and agree a RIO –Analyse costs and derive cost based tariffs –Further rebalance retail tariffs –Make any necessary changes to the network systems –Enable JT to update billing systems and OSS  Process: –Establishment of Working Groups

14. TRC - JORDAN Slide 14/19 Major effects of Interconnection Regime when implemented  Reduction in the charges made by operators to each other, which will be passed to users.  Improved Quality of Service for users.  Increased sharing of buildings and other facilities, reducing licensees’ costs.  Reduction in implementation lead-times  Less potential for disputes between licensees.  Rapid resolution of disputes  Facilitating competition

15. TRC - JORDAN Slide 15/19 Lessons Learned(1)  The Regulator has to be directly involved with the interconnection process.  Licensees cannot sort out all of their issues on a bilateral basis.  The Regulator requires information from licensees to make balanced and informed decisions.  Reference Interconnection Offers to be published by the Designated Licensee as soon as possible.

16. TRC - JORDAN Slide 16/19 Lessons Learned(2)  Develop effective consultation and dispute resolution processes –the cornerstone of any regulatory regime –useful source of feedback and knowledge –allows licensees to feel that they are involved in the decision-making process –enables transparency –assists in avoiding legal disputes –forces a decision to be made by the regulator within a fixed time scale  The challenge is to balance the interests of the country, the consumer and the individual licensees.

17. TRC - JORDAN Slide 17/19 Lessons Learned(3)  Approach to operators –Regulation is not just about knocking the incumbent. –Need to give them time to prepare for full competition. –However, cannot allow them to use their power to attempt to kill-off competition or discourage investment.  It is not sufficient to have appropriately structured Laws, licences, Guidelines and Agreement. It is essential to have: –A critical mass of staff within the licensees and Regulator who fully understand the whole regime, rights and obligations –Determination and willingness to enforce Guidelines and Licence conditions

18. TRC - JORDAN Slide 18/19 Conclusions  Development of an effective interconnection regime is a key enabler to development of the sector.  The Regulator has a complex role to play.  Direct involvement from licensed operators is important.  Operators should look to a growing total market if a working interconnection regime is introduced.  A win - win situation exists enabling all stakeholders to benefit: incumbent, new entrants, consumers as well as Governments.

19. TRC - JORDAN Slide 19/19 TRC P.O. Box 850967 Amman 11185 Jordan Tel: +(962 6) 586 20 20 Fax: +(962 6) 586 36 43 Website: www.trc.gov.jo