The Peruvian experience of interconnection regulation and prospects for its application to Next Generation Networks

The purpose of this paper is to set out the main characteristics of Peruvian interconnection regulations since the August 1998 opening of the telecommunication market and to evaluate their application to next generation networks (NGNs).

Interconnection regulation development in Peru began with the opening of the market. A main aspect of the opening model was to consider interconnection as a basic element of new operator access to the market, thereby ensuring competition.

That is, it was felt that it was insufficient to obtain licenses to provide a service, but rather that it was necessary to access essential network elements of other operators, mainly the established operator, in order to provide the service and compete. In general, however, new operators have interests opposing those of established operators, emanating from the scope of the interconnection obligation and the terms on which it is to be provided.

2. Interconnection regulation : general aspects

Regulator response to the problem meant that it was necessary to establish principles of interconnection, prior regulation of the conditions on which it was to be provided, and procedures for its effective establishment.

In that context, interconnection was defined as the series of agreements and rules whose objective is to enable telecommunication service users to communicate with users of other operators. That is, interconnection was broadly defined and associated with services categorized as public, in order to ensure that it was mandatory

It was also determined that competence for its regulation would have to be assigned to a specialized entity, such as the Organismo Supervisor de la Inversión Privada en Telecomunicaciones [Supervisory Agency of Private Investment in Telecommunications] (OSIPTEL), which was assigned sufficient authority to that end.

3. Interconnection principles, rules and procedures

The Interconnection Regulations recognize the principles of neutrality, non-discrimination, free access, free and fair competition, and adjustment to more beneficial conditions. The aim of such principles is to ensure neutral and equitable operator access to interconnection services made available by the requested operator.

A supervised negotiation scheme was also established, which provides that it will be the parties who initially negotiate interconnection terms, and that intervention by the regulator will be intensive, but a posteriori, whether in approving contracts or issuing interconnection orders.

4. Problems and regulatory responses to interconnection

Circuit-switched interconnection has given rise to different problems that required OSIPTEL’s regulatory response. Examples are:

• Measures to facilitate settlement of interconnection traffic;

• Regulation of the system of granting guarantees and interconnection charge payment procedures;

• Regulation of suspension of interconnection, based on user protection procedures;

• Establishment of competitive maximum interconnection charges based on costs (mainly fixed and mobile network charges)

It should be noted that regulations have been issued based on switched networks associated with non-convergent services. Therefore, their applicability to NGNs must be evaluated in a context of convergence.

5. Convergence and prospects for application of the regulations to NGN

Convergence is the synergistic combination of voice, video, and data over infrastructures, using a variety of devices, such as mobile phones, personal computers, and television sets. NGNs are emerging packet-based networks capable of providing communication services using multiple broadband transport technologies with quality of service.

To the extent that NGN interconnection enables users to communicate with one another, it would qualify as interconnection as currently defined. The Regulations take account of a broad concept of technology-neutral interconnection, so that it is not limited to voice, but includes any type of traffic, voice or data.

However, given the nature of NGNs, regulators must evaluate whether to establish rules for them or to extend existing rules, determining which scenarios should be unregulated and those requiring regulation.

It may be asserted that the above-described principles governing interconnection should be maintained. They ensure competition and neutral access, characteristics common to switched networks and NGNs, as should a broad definition of technology-neutral interconnection focused on communication among users.

Lastly, there must be a regulator with sufficient authority to address new situations emanating from the interconnection of NGNs.

Alejandro Moscol Salinas
Attorney, Legal Manager’s Office
OSIPTEL