Contents of module
- Part One: Introduction to Interconnection
- Interconnection index
- eLearning main Index
Liberalisation and Interconnect
With the opening and liberalisation of telecommunications markets across the world, the issue of interconnection has become perhaps the most important practical issue facing policy-makers and regulators as well as incumbent operators and new entrants.
The success of policy often depends upon it. Regulators have to find ways to make it happen in an efficient manner.
Incumbent operators at first often regard interconnection as an invasion of their market, although it can also generate more traffic across their networks if the competition that accompanies it drives the market.
New entrants, on the other hand, will be tempted to neglect investment in their own networks and ride upon the incumbent’s network unless the policy and regulations are carefully designed to incentivise them to build their own.
Again, the new entrants may benefit in the longer term by building their own networks as they have greater freedom to choose new technologies and to adopt them faster.
Because interconnection issues are universally important there are many studies which examine them in detail. There is a range of issues involved, including physical points of interconnection between networks, the technical requirements and specifications of interconnection, and the cost arrangements. These are substantive issues.
There are also procedural issues, such as how to bring about interconnection agreements and to what extent should they be mandated and to what extent left to commercial negotiation between the parties concerned.
The greater the role of the regulator, the more the need for the regulator to have information on all these issues from the incumbent, but the less the role of the regulator, the greater the need to have cost and time efficient ways to resolve disputes between the incumbent and new entrants.