Public Consultation Issued by the Ministry of Communications and Information Technology of the Republic of the Union of Myanmar

Transcription

1 REPUBLIC OF THE UNION OF MYANMAR MINISTRY OF COMMUNICATIONS AND INFORMATION TECHNOLOGY UNION MINISTER'S OFFICE Public Consultation Issued by the Ministry of Communications and Information Technology of the Republic of the Union of Myanmar Proposed Rules for Telecommunications Sector Relating to Licensing, Access and Interconnection, Spectrum, Numbering, and Competition November 4, 2013

2 Table of Contents I. Introduction... 5 A. Background on Regulatory Reform Process... 5 B. Implementing Rules... 5 II. Draft Licensing Rules... 6 A. Objectives of the Draft Licensing Rules... 6 B. Summary of regulatory approach Multi-service framework Technology- and service-neutral Hierarchical Overview of the Licensing Rules by Part III. Draft Interconnection and Access Rules A. Objectives of the Draft Interconnection and Access Rules B. Summary of regulatory approach Applicable licensees Role of the Department Obligation to interconnect Additional interconnection obligations for dominant service providers Access obligations beyond interconnection Obligations for all Interconnection and Access Arrangements Timeframes for interconnection and access negotiations, approval and dispute resolution Interconnection and Access Price Regulation IV. Draft Spectrum Rules A. Objectives of the Rules B. Summary of regulatory approach General principles Myanmar Table of Frequency Allocations General authorization conditions Page 2

3 4. Specific spectrum use authorizations Background on radiocommunication services Technical requirements Competition Conditions Transition provisions International obligations V. Draft Numbering Rules A. Objectives of the Draft Numbering Rules B. Summary of Regulatory Approach The role of the Department in the National Numbering Plan The Department s responsibilities for the Numbering Plan Numbering Regulatory Structure Development of Numbering Plan Numbering Conventions Consideration of the need for reform of the Numbering Plan Future management arrangements for the Numbering Plan Numbering fees and alternate proposals for restricting allocation of a finite numbering resource Carrier selection Number portability VI. Draft Competition Rules A. Objectives of the Rules B. Summary of regulatory approach Application Lessening of free competition Anti-Competitive Agreements Determination of dominant position Investigations and enforcement Review of Transactions Tariff application and review process Page 3

4 8. Miscellaneous Provisions Schedule 1: Transitory determination of relevant markets and dominant position for the purpose of ex ante regulation Schedule 2: Transitory determination of essential facilities Schedule 3: Transitory determination of designated services VII. Procedures regarding Consultation and Submission of Comments A. Submission of Comments B. Publication of Comments Page 4

5 I. Introduction November 4, 2013 A. Background on Regulatory Reform Process 1. The Republic of the Union of Myanmar has initiated a process to transform the telecommunications sector into a liberalized competitive market. As part of this process, on August 27, 2013, the legislature approved a new telecommunications law the Telecommunications Law of the Republic of the Union of Myanmar, 2013 ( Law ), which was signed by the President and enacted on October 8, The Law establishes the general legal and regulatory framework for the telecommunications sector. B. Implementing Rules 2. Pursuant to Section 88 of the Law, the Ministry of Communications and Information Technology ( Ministry ) is proposing to adopt certain rules related to licensing, access and interconnection, spectrum, numbering, and competition (collectively referred to herein as draft Rules ). The draft Rules set out the framework that the Ministry and the Postal and Telecommunications Department (the Department ) propose to follow with regard to the above-mentioned subject areas. In preparing these draft Rules we have: a) adhered strictly to the requirements of the Law; b) observed international best practice; and c) maintained consistency with relevant provisions in the two new telecommunications licenses on which the June 2013 tender was based to the greatest extent possible. 3. These proposed Rules (each of which is attached as separate annexes to this consultation document) are being issued for public review and comment. Any interested party may submit comments for consideration by the Ministry, provided that they are submitted in the format and by the deadline set forth in Part VII of this document. 4. In particular, we welcome any general comments on each of the proposed Rules, specific comments on any particular issue or issues in the proposed Rules, or comments identifying any issues the proposed Rules do not properly address. In your comments, when referring to this public consultation document, please cite to any relevant paragraph by number (e.g., para. 4), or more generally to the relevant section by its outline level (e.g., Section I.B, Implementing Rules ). If making comments regarding specific sections of the proposed Rules, please make clear reference to the specific section and particular provision of the Rules on which you are commenting. 5. Please note that these are the first set of rules on which the Ministry is seeking consultation from interested parties. The Ministry will be drafting other rules and procedures on a variety of issues such as standardization, type approval, and lawful interception in due time. Such rules and procedures also will be subject to a public consultation process. Page 5

6 II. Draft Licensing Rules November 4, 2013 A. Objectives of the Draft Licensing Rules 6. The proposed Licensing Rules, contained in Annex A Proposed Licensing Rules, provide one of the key foundations for implementing the Law and are intended to build on the Law s stated objectives, particularly relating to fostering national economic growth through the widespread adoption of telecommunications; promoting private sector participation in the telecommunications sector; and providing a framework for the management of telecommunications networks and services in the Republic of the Union of Myanmar. 7. The following section provides the objectives and principles of the Licensing Rules, as well as an overview of the Licensing Rules. 8. The objectives of the proposed Licensing Rules are to: establish a simplified licensing regime that implements the Law; ease entry by streamlining the licensing application process and setting out clear criteria for each licensing category; provide regulatory certainty by establishing standard and consistent licensing terms and conditions; and administer licensing rules in a transparent and non-discriminatory manner to all similarly situated licensees. 9. With the selection of two new telecommunications operator licensees in June 2013 and the Government s ongoing commitment to market reforms, the development of Licensing Rules is necessary to enable and facilitate market liberalization, promote growth of competition in the sector, and protect the public interest. 10. The proposed Licensing Rules are intended to encourage technological innovation and convergence, with a focus on providing an effective licensing framework. On one hand, the Licensing Rules should afford the greatest amount of flexibility to allow licensees to adopt and offer to consumers new and useful technologies and services. This is to be accomplished largely through technology- and service-neutral rules, as well as through the multi-service licensing framework addressed below. On the other hand, the Licensing Rules should provide regulatory certainty to support the substantial investments that licensees must make when building out and maintaining infrastructure and offering new services. This is to be accomplished through a variety of mechanisms based on transparency and non-discrimination principles, including treating similarly situated licensees in the same manner, subjecting changes to policies and rules to public consultation processes, and ensuring that licensees have access to objective dispute resolution and appeals processes. Page 6

7 B. Summary of regulatory approach November 4, The proposed Licensing Rules implement the provisions set out in the Law, in particular Chapter III relating to Telecommunications Service Licenses, Chapter IV relating to the Telecommunications Equipment License, and Chapter V relating to General License Conditions. 12. The Licensing Rules propose the rules, rights, and obligations to be applied to all license applicants and licensees, within their respective license categories. 13. The regulatory approach taken in the proposed Licensing Rules is based on adopting a multi-service licensing framework, to the extent afforded in the Law. The overarching principles of the Licensing Rules are to establish a multi-service licensing framework that provides transparency to all licensees and end users, promotes market entry, and creates a level playing field in the telecommunications sector. 14. The Licensing Rules set out the proposed licensing framework for telecommunications networks and services, including the introduction of the principles relating to a multiservice framework; technology and service neutrality; and a hierarchical licensing structure. 1. Multi-service framework 15. Rather than issue service-specific licenses, the proposed Licensing Rules are based on a multi-service licensing framework. This proposed framework establishes three main license categories that permit an entity to offer a wide range of telecommunications networks and/or services under a single authorization. A multi-service licensing approach has been adopted by numerous countries around the world, including Malaysia and Singapore, to promote convergence and growth in the telecommunications sector The three license categories proposed in the Licensing Rules are: Network Facilities Service (NFS), which is sub-divided into an Individual and Class license: i. NFS Individual, referred to hereafter as NFS(I); ii. NFS Class, referred to hereafter as NFS(C); Network Service (NS); and Application Service (AS). These categories and the range of activities authorized under each category are described below. 17. Network Facilities Service: Both the NFS(I) and NFS(C) licenses are facilities-based. 1 infodev, Broadband Strategies Toolkit, Chapter 3.2, Page 7

8 The NFS(I) license authorizes the licensee to provide any type of public or private telecommunications service on an international and/or national level. The NFS(I) license authorizes the construction, maintenance and operation of telecommunications network facilities and infrastructure and/or lease of all or part of the licensee s network. The types of activities authorized by the NFS(I) license include, but are not limited to, the construction, maintenance, and operation of and the provision of telecommunications services over: terrestrial fixed line transmission facilities; terrestrial radio transmission facilities; mobile base station facilities; submarine cable facilities; international gateway service facilities; satellite earth station facilities; and other satellite facilities located in Myanmar providing capabilities for transmission of telecommunications services. The NFS(C) license authorizes the licensee to construct, deploy and maintain passive telecommunications network infrastructure and to lease such infrastructure to an NFS(I) licensee and/or to construct, deploy and maintain telecommunications networks solely for the self-provision of telecommunications services. The activities authorized by the NFS(C) license relating to the deployment and maintenance of any type of passive network infrastructure for civil engineering and non-electronic elements, include but are not limited to: towers; masts; ducts; trenches; poles; and dark fiber. The activities authorized by the NFS(C) relating to the deployment and maintenance of telecommunications networks and the self-provision of Page 8

9 telecommunications services used solely for internal communications are limited to: 2 network infrastructure that only permits internal/intra-organizational communications and does not provide interconnection with any other network, whether public or private; and closed user group telecommunications services that are not offered or provided to any other Person. 18. Network Service (NS): This services-based license authorizes the licensee to lease transmission capacity directly from an NFS(I) licensee and/or connectivity services from another licensee in order to provide any public or private telecommunications service, whether on an international or national basis. The NS license does not authorize the construction, maintenance, and operation of telecommunications network facilities and infrastructure, except for switches, routers, and processing equipment necessary to provide the licensed service(s). The NS license does not permit the licensee access to scarce spectrum resources assigned by the Ministry. 3 The types of activities authorized by the NS license generally include telecommunications services that require leasing international transmission capacity and/or access to numbers pursuant to the Numbering Rules, and include, but are not limited to, the provision of the following telecommunications services: resale of wireline connectivity services; resale of terrestrial wireless connectivity services; international and domestic network transport and switching services; and resale of international gateway services. 19. Application Service (AS): Similar to the NS license, the AS license is services-based and does not authorize the construction, maintenance, and operation of telecommunications network facilities and infrastructure, except for switches, routers, and processing equipment necessary to provide the licensed service(s), nor does the AS license permit access to scarce spectrum resources assigned by the Ministry. The AS license authorizes the licensee to lease transmission capacity directly from an NFS(I) licensee and/or connectivity services from another licensee in order to provide public and private telecommunications services on a national basis, to the public, and/or to 2 A Person is not required to obtain a telecommunications service license if: (i) not deploying or operating network facilities on its side of the network boundary, but is instead purchasing private line telecommunications services from a duly authorized License; (ii) such services are capable of providing for the Person s internal communications only and do not interconnect with a public network; and (iii) the Person is not offering access to its private line telecommunications to a third party. 3 The NS license permits the licensee to use spectrum resources that are not assigned by the Ministry, such as spectrum in unlicensed frequency bands. Page 9

10 another Licensee. Unlike the NS license, an AS license does not authorize the licensee to offer telecommunications services on an international basis or to offer telecommunications services requiring numbers. 4 Notably, the term Application in this context does not refer to Internet content applications, which are not regulated or licensed under the Licensing Rules. 5 The activities authorized by the AS license include, but are not limited to, the provision of the following telecommunications services: public payphone services; public switched data services; audiotext hosting services provided on an opt-in basis; directory services; Internet service provider services; public access center services; messaging services; private line voice and/or data services; 6 and value-added services. 2. Technology- and service-neutral 20. A licensing framework based on technology and service neutrality is viewed as an important factor in promoting technological convergence and the development of new and innovative services and applications. According to the infodev Broadband Strategies Toolkit, technology neutrality is based on the premise that service providers and network operators should be allowed to use the technology that best meets the needs of their network and the demands of their customers; such choices should not be dictated by governments. In the licensing context, technology neutrality means that different technologies capable of providing similar or substitute services should be licensed and regulated in a similar way. 7 The Toolkit describes service neutrality as based on the similar premise that network operators should be allowed to provide whatever services their technology and infrastructure can deliver. 8 4 The AS license permits the licensee to use spectrum resources that are not assigned by the Ministry, such as spectrum in unlicensed frequency bands. 5 Under the Licensing Rules, Internet Content Application means an application that allows End Users to access, send or share Information through a connection to the Internet or uses an Internet browser to accomplish one or more tasks over a network. This may also be referred to as an over-the-top application. 6 This includes the leasing of capacity to provide Wide Area Network services to third parties on a commercial basis. 7 infodev, Broadband Strategies Toolkit, Chapter 3.2, 8 infodev, Broadband Strategies Toolkit, Chapter 3.2, Page 10

11 21. The proposed Licensing Rules expressly state that the framework is technology- and service-neutral, enabling licensees to offer or use any type of approved network technologies and/or services authorized within their respective license categories. For example, a licensee may offer mobile network and fixed line network services under a single NFS(I) license, due to the technology-neutral nature of that license. 3. Hierarchical 22. In an effort to simplify and streamline the framework, an entity would generally hold only one license. A hierarchical system benefits both licensees and the Department. By reducing the number of licenses that an entity must obtain and expanding the variety and breadth of services an operator may provide under a single authorization, a hierarchical system facilitates convergence and technology and service neutrality. For example, rather than seek separate licenses to offer fixed line network, mobile network services, and international gateway services, the NFS(I) license would authorize an entity to offer all under a single license. This is generally more efficient for a licensee as it can reduce the license application process and provides greater certainty that an existing licensee may expand its service offerings relatively easily as compared to service-specific licensing regimes. The Department also benefits through lower administrative costs as compared to the administration of multiple licenses. 23. As shown in Figure 1, under the hierarchical system an NFS(I) licensee would be authorized to engage in any activities established under the NFS(I), NFS(C), NS and AS licenses. The NS license authorizes the licensee to engage in any activities established under the NS and AS licenses (but not the NFS(C) license). Entities holding an AS license or NFS(C) license are authorized to engage in only those activities specified in the respective licenses. Page 11

12 Figure 1. Proposed licensing hierarchy 4. Overview of the Licensing Rules by Part 24. Part I of the proposed Licensing Rules addresses the preliminary provisions, including the citation, objectives, scope, application and definitions used throughout the Rules. 25. Part II of the proposed Licensing Rules, as detailed above, provides the proposed general licensing framework and procedures for each license category, and outlines the application process for NFS(I) and NS licenses and the registration process for AS and NFS(C) licenses. The NFS(I) and NS licenses would be subject to a more stringent application and approval process, on the basis that they involve a higher degree of technical and financial capability. In contrast, AS and NFS(C) licenses are subject to a registration-only process to encourage widespread provision of new services and faster deployment of passive infrastructure. 26. Part II also reserves the Ministry s right to exempt certain types of telecommunications services from licensing obligations, based on transparent and objective criteria and subject to public consultation. 27. Part III of the proposed Licensing Rules details the authorized activities of each category of license, as well as identifies those activities that licensees are not permitted to undertake. A list of authorized activities is provided within each license category. 28. Part IV sets out the licensees general rights and obligations, including license duration and processes for licensees that seek to expand the types of activities they are authorized to engage in and offer. Page 12

13 29. Other processes described in Part IV are those relating to: license renewal; license transfer or assignment; modification of a license by the Department; suspension or termination of a license by the Department; and surrender of the license by the licensee. 30. Part IV also provides an overview of the types of fees to which the licensees will be subject and potential penalties for failure to pay such fees. There are provisions to reserve the right of the Ministry to exempt from payment of fees certain Licensees or class of Licensees or certain types of Licenses or class of Licenses. 31. Part IV additionally focuses on ensuring that there are public consultations, dispute resolution and/or appeals procedures in place to provide transparency in decisionmaking processes relating to licensees rights and obligations. 32. Part V of the proposed Licensing Rules addresses the specific rights and obligations that may apply to certain telecommunications network and service licensees, including for those licensees determined to be dominant operators under the Competition Rules and other relevant laws, rules, regulations, orders, directives, notifications, instructions and procedures. 33. Part V also sets out various rights and obligations for facilities-based licensees relating to access to public and private property, as well as for licensees who are assigned telephone numbers according to the Telecommunications Numbering Plan; provides a basic overview of consumer protection obligations for all licensees; and reiterates the Department s authority to further establish Codes of Practice to guide licensees activities. 34. Part VI identifies other types of authorizations (other than for telecommunications networks and services) that licensees may require, including the Telecommunications Equipment License, spectrum license(s) in order to gain access to scarce spectrum resources and/or numbering assignments under the Telecommunications Numbering Plan. 35. Part VII establishes the Department s mechanisms for effective monitoring and enforcement of the telecommunications licensing framework. These mechanisms are meant to provide greater transparency and standardized processes for ensuring that all licensees are treated in an objective, non-discriminatory manner. 36. Part VII is also intended to provide the Department with authority to inspect licensees facilities and documents (such as through regular reporting requirements) and impose reasonable penalties in cases where licensees have contravened the rules while also Page 13

14 affording licensees reasonable opportunities to present their views in fair, unbiased regulatory enforcement actions (subject to appropriate appeals processes). 37. Part VIII establishes the transition provisions from the existing framework to the Licensing Rules implementing the Law. This includes providing transition provisions for existing operators and licensees, such as MPT, the two new operators selected in June 2013, and the Wide Area Network (WAN), Internet Service Provider (ISP), and Public Access Centre (PAC) licensees. 38. Part VIII also reiterates the Ministry s authority to issue notifications and orders to provide for the transition of those licenses that are under the purview of the Ministry but may be subject to a law other than the Law, such as the Computer Science Development Law or Electronic Transactions Law. 39. There are two Schedules, which form part of the Licensing Rules: Schedule A. Fees for Telecommunications Service Licenses; and Schedule B. List of Telecommunications Equipment Subject to the Telecommunications Equipment License. III. Draft Interconnection and Access Rules A. Objectives of the Draft Interconnection and Access Rules 1. Rules relating to interconnection and access are one of the key institutions of any telecommunications market. The draft Interconnection and Access Rules, contained in Annex B, set out the safeguards that are put in place to ensure any-to-any connectivity and facilitate access to network facilities and services to encourage appropriate market entry and efficient use of infrastructure. 2. The draft Interconnection and Access Rules are specifically designed to: supplement the regulatory framework set out in the Telecommunications Law; assist in ensuring that all licensees that are entitled to interconnection and access ( Qualifying Licensees ) are treated fairly and in a non-discriminatory manner with respect to the provision of interconnection and access services; and establish a process for dealing with interconnection and access disputes. 3. In light of these objectives, the proposed rules have been drafted to set out the means by which: an open and transparent regulatory framework for interconnection and access would be established and maintained; adequate and efficient interconnection and access would be promoted; expeditious and commercially viable interconnection and access arrangements would be implemented; Page 14

15 November 4, 2013 prices and other terms and conditions of interconnection and access agreements would be reviewed and approved by the Department; dominant service providers would publish Reference Interconnection and Access Offers ( RIOs and RAOs ); interconnection and access agreements may be published, amended, modified, suspended, and terminated; and disputes related to interconnection and access would be resolved in a timely manner. 4. The draft Interconnection and Access Rules have been crafted to follow international best practices to the greatest extent possible. B. Summary of regulatory approach 1. Applicable licensees 5. The definitions in the Rules are written to be consistent with definitions found in the Telecommunications Law and other draft Rules. Among the key concepts defined here that are not found in the Telecommunications Law and other draft Rules is that of Qualifying Licensee. The Qualifying Licensee is one that holds a Network Facilities Service License or a Network Services License, i.e., one that entitles that person to receive or provide interconnection or access services. 2. Role of the Department 6. The Telecommunications Law provides that the Department shall make rules on any matters relating to access and interconnection of network facilities and telecommunications services. 7. The Department will have broad power to ensure that interconnection and access takes place as appropriate to its policy objectives. This power is reflected in the draft Rules as the Department would be able, with written notice, to direct: any Qualifying Licensee to negotiate an interconnection agreement; any Qualifying Licensee, subject to public consultation, to share network facilities that the Department determines cannot be efficiently replicated by Other Qualifying Licensees; any Qualifying Licensee deemed to be dominant by the Department ( dominant licensee ) to negotiate an access agreement; and any dominant licensee to comply with additional obligations. 8. The Rules set out the role of the Department with respect to approving interconnection and access agreements and with respect to dispute resolution. Page 15

16 3. Obligation to interconnect 9. Interconnection is generally imposed as a mandatory obligation for voice networks in international best practice for two basic reasons. First, it prevents firms with significant market power from using the denial of interconnection to exclude competitors or would-be competitors. Second, it reduces transaction costs and facilitates the ability of subscribers on one network to communicate with those on another network. The obligation to interconnect can be found in Sections 7(a) and 7(b) of the draft Rules. They provide that a Qualifying Licensee may be directed by the Department to negotiate interconnection or shall negotiate interconnection if requested by another Qualifying Licensee to interconnect. 4. Additional interconnection obligations for dominant service providers 10. Interconnection regulations are said to be symmetric if they apply in the same manner to all service providers regardless of whether a service provider has significant market power. While the general obligation to interconnect is typically imposed on all voice networks, international best practice calls for imposing additional interconnection requirements on dominant service providers only, i.e., asymmetric regulation. Asymmetric regulation is justified as a tool to compensate for the relatively weaker commercial and economic position of the service providers with non-significant market power vis-à-vis the dominant service providers. The ability to impose additional interconnection obligations for dominant service providers with respect to interconnection is captured in Section 7(h) and Part IV. 11. Part IV describes the obligation of dominant licensees to issue a RIO. The dominant licensee would have sixty (60) days to produce a RIO when so directed by the Department. After approval, the RIO would have to be made available to interested parties in written form and on the dominant licensee s website to (i) ensure that all parties seeking interconnection are aware of the standard terms and conditions on which interconnection is provided, (ii) to help speed interconnection negotiations, and (iii) to prevent discriminatory treatment in the application of interconnection rates, terms and conditions. Part V also contains the minimum content that the RIO must contain. 5. Access obligations beyond interconnection 12. While regulatory intervention to ensure interconnection is virtually universal, intervention to ensure access is not. Requirements for interconnection obligations are justifiable from the outset of any competitive market to ensure any-to-any connectivity. Requirements for access generally require some consideration as to whether the service or facility is truly only available from access providers and cannot be easily replicated. 9 9 There are also cases in which access will be required, particularly infrastructure sharing, in order to address concerns other than replicability such as reducing environmental impacts and minimizing costs of network rollout to the industry overall. Page 16

17 Furthermore, regulators may choose not to mandate certain types of access in order to encourage competitive infrastructure roll-out. The draft Interconnection and Access Rules restrict the possible application of mandatory access negotiation to dominant licensees in Section 7(c) and facilities sharing in Section 7(d), but would otherwise leave matters of access to voluntary negotiation among parties (Section 7(e)). 13. Part V sets out the instances in which the Department may mandate a dominant licensee to provide access and the relevant obligations. It also provides for requiring a dominant licensee to produce a RAO. 6. Obligations for all Interconnection and Access Arrangements 14. The draft Rules specify that interconnection (provided under directed or requested negotiation) and access (provided by a dominant licensee under directed negotiation or by a Qualifying Licensee under voluntary negotiation): can only be between Qualifying Licensees; can only be undertaken under equitable and non-discriminatory conditions; can only be effective if approved by the Department; shall be provided at any technically feasible point; shall be provided in a manner that minimizes negative environmental impacts and enables the development of competition; and shall be consistent with relevant law, any relevant RIO or RAO, and the terms of the Qualifying Licensee s licenses. 15. The draft Rules, Section 13, set out the minimum content for interconnection and access agreements. Certain minimum content is relevant only for interconnection and those elements are set out separately. 7. Timeframes for interconnection and access negotiations, approval and dispute resolution 16. International best practice is to provide clear procedures and a robust process for dispute resolution. In many countries, specific timeframes are specified that trigger a resolution procedure if access agreements are not concluded in time. In those cases that specify timeframes, a period of two to three months from an access provider receiving a request is typical. 17. Section 14 of the draft rules would require that all interconnection and access agreements be sent to the Department for approval and sets out how the approval process is carried out. 18. Part III of the draft Interconnection and Access Rules addresses interconnection and access negotiation and agreements. Specific timeframes for negotiating interconnection Page 17

18 and access, when directed by the Department, are set out in Section 12. No required timeframes are set out for negotiating voluntary access agreements. 19. Section 14 describes the process by which the Department approves all interconnection and access agreements. It would limit the grounds on which the Department may reject an agreement for inconsistency with the applicable regulatory framework or for being unreasonably discriminatory or contrary to the interests of end users. 20. Sections 15 and 16 establish the requirements for publication, amendment, modification, suspension, and termination of agreements. 21. Section 17 sets out the maximum timeframes within which interconnection services must be available following the signing of an agreement. These provisions are designed to prevent undue delay in interconnection implementation. 22. Given the differing regulatory treatment of access agreements, it is not always considered necessary or desirable to impose specific timeframes in which an access agreement must be concluded. However, this can lead to abuse if a party chooses to unnecessarily delay the provision of access to prejudice its competitors or potential competitors. In these cases, the dispute resolution process can be used to prevent such gaming by ensuring that negotiations cannot continue indefinitely without regulatory intervention. Thus, although not every country imposes timelines to reach an access agreement, most, if not all, jurisdictions include clear provisions for dispute resolution. 23. Part VI establishes a regime for resolving disputes involving interconnection and access. The regime is separate and apart from the general dispute resolution mechanism provided for in the Telecommunications Law. A dispute resolution process may be initiated by a party to the dispute or the Department itself. Guidelines are provided which give the principles that the Department will adopt and the factors that it will take into account when resolving a dispute. 8. Interconnection and Access Price Regulation 24. With interconnection, parties generally pay one another for traffic exchanged. But traffic exchange is rarely balanced between two interconnecting networks and/or the price varies by the type of traffic exchange. As a result, one party will be a net receiver of interconnection revenue, the other a net payer in any given payment cycle. Payment imbalances mean that interconnection cash inflows can be a source of net revenue to some firms, so setting the right price for interconnection becomes important. Moreover, interconnection pricing will affect retail prices and the usage of telecommunications services. This is why, from a policy point of view, interconnection pricing is a key element of the regulatory regime. Regulators typically require that interconnection prices are cost-oriented. 25. The draft Interconnection and Access Rules would require that the rates for interconnection be cost-oriented (Section 9(a)). However, the draft Rules stop short of prescribing a particular costing methodology. Section 9(b) would only require that the Page 18

19 Department apply an internationally accepted methodology for determining rates. This is to provide the Department flexibility to choose an acceptable approach in light of relevant constraints including resources and time. 26. Section 9 also requires that rates be unbundled so that parties are not paying for services they do not require (Section 9(c)), and transparently determined (Section 9(e). As interconnection is a two-way, exchange relationship, the initial, one-off costs of establishing interconnection would be shared equally by the interconnecting parties (Section 9(d)). 27. With respect to access price regulation, if access providers and access seekers, operating in a market that is not fully competitive, are left to freely negotiate the terms of access a possibility exists that the dominant firm will act anti-competitively to harm rivals and ultimately consumers, through higher retail prices or reduced service variety. In these circumstances, a set of rules or principles needs to be in place to define the prices access providers may charge. 28. When an access provider has dominance in an access market, it can harm the access seeker if both parties compete in a downstream market. For example, a vertically integrated access provider that also provides broadband internet services could set the price of wholesale access so that an equally efficient downstream rival (and independent ISP) could not operate profitably in the long term. This case is often referred as an anti-competitive price squeeze (or margin squeeze). While competition provisions in the laws typically provide ex post remedies for these types of anticompetitive behavior, many regulatory authorities have instituted regulations as ex ante remedies to prevent this behavior. In many jurisdictions this takes the form of wholesale price regulation where a maximum price is mandated. International best practice suggests two types of price regulation for one-way access: (a) retail minus 10 and (b) costbased pricing. Cost-based prices are determined on the basis of a number of different methodologies including incremental cost pricing, fully allocated cost, and benchmark costs. 29. Section 10(a) of the draft Interconnection and Access Rules would require that rates for access services be cost-oriented unless the Department chooses another reasonable basis for determining the rates. This leaves the possibility open, for example, for retailminus pricing. The draft rules would also require that access pricing be sufficiently unbundled so that parties are not paying for services they do not require (Section 10(b)). 10 A Retail-minus regulation sets the wholesale price by subtracting a sum meant to represent the retail cost of an efficient firm from the retail price less any additional cost of providing access to the access seeker. Page 19

20 30. As access is a one-way relationship provided by the access-provider to the accessseeker, the initial, one-off costs of establishing interconnection would be borne by the access-seeker. 31. In access markets recognized as competitive, international best practice holds that prices for access services should be unregulated. At most, such services may fall under notification requirements where prices are published on the service provider s or Department s website or otherwise made available to the public. In the draft rules, a Qualifying Licensee can only be directed to negotiate an access agreement in specific circumstances (where it is dominant, or where it offers network facilities that cannot be efficiently replicated by other operators). If a Qualifying Licensee is not directed to negotiate access (under Section 7(c) or 7(d), it is subject to relatively light regulatory requirements, including non-discrimination Sections 7(g)(i-ii, and iv-v), Section 8(a) and Sections 8(c-d) as required by the Telecommunications Law but is otherwise unregulated. IV. Draft Spectrum Rules A. Objectives of the Rules 1. Radio spectrum is a critical public resource that is the foundation for all types of radiocommunication services. Spectrum underlies a wide variety of systems and services, including satellites, mobile voice and broadband, Wi-Fi, ship/aircraft communications, microwave backbones, and government services such as public safety and national defense. Providing adequate spectrum for all these services and the individuals that use them has become one of the key global issues faced by regulators as they look to the future. 2. The challenges in managing radio frequencies stem from the nature of the spectrum itself. It is a reusable, but finite, resource. Accommodating the many competing interests will require a regulatory regime that is flexible and forward-looking, in which competitive market forces provide incentives for innovation and more efficient use. Through these proposed Rules, the Ministry seeks to harness these forces in a technology-neutral and transparent way to extend the benefits of wireless communications across the entire country. 3. The importance of wireless services cannot be underestimated, as they are essential for economic and social growth. The rapid growth of wireless services over the last three decades is evidence of their increasingly central role in society. The Union Government has recognized this fact in its Framework for Economic and Social Reform ( FESR ), in which mobile phones and the Internet are collectively identified as one of the ten key areas that can help promote social and economic growth. The FESR sets an ambitious target of reaching 80% of the population with mobile services by 2015 and increasing Internet use to 50% by Page 20

21 4. International experience has shown that a liberalized, competitive spectrum management framework is the most effective way to drive the development of innovative services (and the networks that provide them) that customers want and that are available at reasonable prices. Such a framework will be critical to helping the country achieve its social and economic goals. The Ministry is committed to creating a competitive wireless market, where users can choose their service provider and pick the equipment and service plan that best meets their needs. To this end, the Union Government has decided to award two new licenses that will allow new companies to enter the telecommunications market and provide modern mobile broadband services. It is expected that this action, along with these proposed Rules, are the first important steps in promoting the growth of the wireless sector. 5. Consequently, these proposed Spectrum Rules have been drafted to create a simple, liberalized, transparent, and non-discriminatory spectrum management framework that promotes efficient use of the spectrum resource and encourages innovation in order to facilitate the rapid deployment of telecommunications services to the people of the Republic of the Union of Myanmar. This in turn will support economic growth throughout the country. 6. Specifically, the draft Spectrum Rules, contained in Annex C, seek to accomplish a number of important objectives, including: meeting the spectrum requirements of all users, including the Government; promoting the introduction of more spectrally efficient technologies; promoting the development of innovative technologies and services for both public and private use, particularly broadband technologies; introducing a spectrum management framework that promotes flexibility and competition, including spectrum property rights and trading; providing tools to better track and plan for increasing spectrum use; satisfying Myanmar s obligations under the international treaties and agreements to which it is a party, including harmonizing spectrum allocations; and minimizing disruption to existing radiocommunication services. B. Summary of regulatory approach 7. The following sections provide a summary of the primary issues that the Ministry proposes to address in the draft Spectrum Rules. 8. The draft Spectrum Rules are based on the language of Chapter VII of the Telecommunications Law of 2013, and have been drafted with the aim of implementing the Telecommunications Law and realizing the objectives described above, while providing for a clear and simple transition to a more transparent licensing regime. Page 21

22 9. The draft Rules propose the terms and conditions that would be applied to all spectrum authorizations and licenses awarded in Myanmar. They also set out the rights and obligations of organizations and individuals involved in the management and use of radio frequencies in Myanmar, including the Ministry and the Department. The provisions of these Spectrum Rules are complimentary to, and should be read in conjunction with, the provisions found in the other Rules. 10. In general, the draft Spectrum Rules will apply to radiocommunication services and radio equipment operating inside the Republic of the Union of Myanmar or on any ship or aircraft registered in Myanmar. These Rules would not apply to ships and aircraft not registered in Myanmar or equipment transiting Myanmar or ordinarily used outside the territorial limits (e.g., mobile phones of tourists) of the country. 1. General principles 11. Part II of the draft Rules proposes the general principles that the Ministry and Department should follow in managing the radio spectrum, including promoting harmonization of the use of the radio spectrum in Myanmar with its neighbors, ensuring that adequate spectrum is made available for all types of use, and promoting innovation. Spectrum sharing is provided for as a way to promote the most efficient use of the spectrum by allowing licensees to sub-license their spectrum to other persons that may wish to use it. Provisions are also made for radio equipment that does not require an individual license, but that may be operated on an unlicensed (licenseexempt) basis, such as Wi-Fi equipment. All these provisions are designed to promote innovative and efficient use of the spectrum, while ensuring that competitive market forces are allowed to grow and that all market participants are treated equally and fairly. Finally, provisions are made to create a National Frequency Assignment Register, which would list all the licensed radio frequency users in Myanmar. This will help the Ministry and Department ensure that spectrum is being used efficiently by all licensees and to identify sources of interference when it occurs. 2. Myanmar Table of Frequency Allocations 12. A proposed Annex (labeled C-1 for purposes of this consultation) to Part II contains the proposed new Table of Frequency Allocations for Myanmar. Internationally, the radiofrequency spectrum is governed by the International Telecommunication Union (ITU), which is a specialized agency of the United Nations. The ITU s Radio Regulations, which have international treaty status, provide the basic rules that support the provision of all types of radiocommunication services around the world. 13. Article 5 of the ITU s Radio Regulations contains the international Table of Frequency Allocations, which defines the frequency bands that are allocated to the various radiocommunication services. The international Table of Frequency Allocations is critically important, as it provides the framework for international, regional and national spectrum planning, allocations and assignments, and is the result of efforts to harmonize the global use of the spectrum. Page 22

23 14. Myanmar s Table of Frequency Allocations has been based largely on the international Table of Frequency Allocations contained in Article 5 of the Radio Regulations. The last version of the Myanmar Table of Frequency Allocations was produced in August The proposed new version of the Myanmar Table of Frequency Allocations reflects the current version of the international Table of Frequency Allocations as found in Article 5 of the Radio Regulations (Edition of 2012). As was done in the past, the international Table of Frequency Allocations has been used as the basic document with a separate column added on the right side to show Myanmar s national allocations. All footnotes from the international Table are also shown, as are the specific footnotes for the Myanmar Table (indicated by MYN[xx] ). 15. Historically, the Union Government has tried to align the allocations in Myanmar with the allocations for ITU Region 3 in the international Table of Frequency Allocations. This has been done in order to support harmonization within the region and in an attempt to minimize interference with neighboring countries. 16. Although Myanmar s allocations are generally aligned with the international Table of Frequency Allocations, some differences do exist. In some cases, this is because the particular needs and requirements of Myanmar s radiocommunication services have necessitated a deviation. Other differences result from changes that have been made to the international Table of Frequency Allocations at World Radiocommunication Conferences (most recently in 2012) that have not yet been reflected in Myanmar s Table of Frequency Allocations, which is based on the international Table as it was in August For ease of comparison, allocations to specific radiocommunication services that appear in the international Table of Frequency Allocations, but that are not allocated in Myanmar, are indicated by [GREEN] highlights in the columns on the left. Conversely, allocations that appear in Myanmar s Table of Frequency Allocations but are not allocated internationally are highlighted in [YELLOW] in the right column. 17. We propose that the Myanmar Table of Allocations be made consistent, as much as possible, with the allocations that exist for Region 3 in the current international Table of Allocations. Specifically, where there is an allocation in Region 3 that is not reflected in the Myanmar column, we propose to update the Myanmar allocations to reflect the Region 3 allocations. 18. As part of this task, it is also proposed to update the MYN footnotes, as necessary. For example, it is proposed to delete old footnote BRM1, which prohibits the use of spectrum for Amateur services in various bands. In addition, several of the footnotes are linked to dates in the past and may be able to be deleted or updated. For example, MYN 20 could be updated to include the extended GSM band. Other, minor editorial changes to the footnotes are also proposed to improve their clarity. 3. General authorization conditions 19. Part III of these proposed Rules sets out the basic general conditions for spectrum authorizations granted under these Rules. Except where noted, the requirements and Page 23