Local loop unbundling
Encyclopedia
Local loop unbundling (LLU or LLUB) is the regulatory process of allowing multiple telecommunications operators to use connections from the telephone exchange
to the customer
's premises. The physical wire connection between the local exchange and the customer is known as a "local loop
", and is owned by the incumbent local exchange carrier
(also referred to as the "ILEC", "local exchange", or in the United States
either a "Baby Bell" or an independent telephone company
). To increase competition, other providers are granted unbundled access
.
, that they are forced to provide competitors with essential business inputs, that LLU stifles infrastructure-based competition and technical innovation because new entrants prefer to 'parasitise' the incumbent's network instead of building their own and that the regulatory interference required to make LLU work (e.g., to set the LLU access price) is detrimental to the market.
New entrants, on the other hand, argue that since they cannot economically duplicate the incumbent's local loop, they cannot actually provide certain services, such as ADSL
without LLU, thus allowing the incumbent to monopolise the respective potentially competitive market(s) and stifle innovation. They point out that alternative access technologies, such as wireless local loop
, have proven uncompetitive and/or impractical, and that under current pricing models, the incumbent is in many cases, depending on the regulatory model, guaranteed a fair price for the use of its facilities, including an appropriate return on investment. Finally, they argue that the ILECs generally did not construct their local loop in a competitive, risky, market environment, but under legal monopoly protection and using taxpayer's money, which means, according to the new entrants, that ILECs ought not to be entitled to continue to extract regulated rates of return, which often include monopoly rents from the local loop.
Most industrially developed nations, including the USA, Australia
and the European Union
Member States, and India have introduced regulatory frameworks providing for LLU. Given the above-mentioned problems, regulators face the challenging task of regulating a market that is changing very rapidly, without stifling any type of innovation, and without improperly disadvantaging any competitor.
The process has been long - the first action in the EU resulted from a report written for the European Commission in 1993. It took several years for the EU legislation to require unbundling and then in individual EU countries the process took further time to mature to become practical and economic rather than simply being a legal possibility.
In 1996 the United States Telecommunication Act
(in section 251) defined the unbundled access
as "The duty to provide, to any requesting telecommunications carrier for the provision of a telecommunications service, nondiscriminatory access to network elements on an unbundled basis at any technically feasible point on rates, terms, and conditions that are just, reasonable, and nondiscriminatory in accordance with the terms and conditions of the agreement and the requirements of this section and section 252. An incumbent local exchange carrier shall provide such unbundled network elements in a manner that allows requesting carriers to combine such elements in order to provide such telecommunications service.
The 1993 report referred to the logical requirement to unbundle optical fibre access but recommended deferral to a later date when fibre access had become more common. In 2006 there were the first signs that (as a result of the municipal fibre networks movement and example such as Sweden where unbundled local loop fibre is commercially available from both the incumbent and competitors) policy may yet evolve in this direction.
telecommunications law can be read to require unbundling:
The question has not been settled before a WTO judicial body, and, at any rate, these obligations only apply where the respective WTO Member has committed itself to open its basic telecommunications market to competition. About 80 (mostly developed) Members have done so since 1998.
Although BSNL is a monopoly, it is used as a tool to ensure competition by the government.
European States that have been approved for membership to the EU have an obligation to introduce LLU as part of the liberalisation of their communications sector.
operation under local loop unbundling. Ofcom
had hoped that 1 million local loop connections would be unbundled by June 2006. However, as reported by The Register, on 15 June 2006, the figure had reached only 500,000, but was growing by 20,000 a week. Ofcom announced in November 2006 that 1,000,000 connections had been unbundled. By April 2007, the figure was 2,000,000.
By June 2006, AOL UK had unbundled 100,000 lines through its £120 million investment, making it the largest single LLU operator in the UK market.
On 10 October 2006, Carphone Warehouse announced the purchase of AOL
UK, the leading LLU operator, for £370m.
This makes Carphone Warehouse the third largest broadband provider and the largest LLU operator with more than 150,000 LLU customers.
On 8 May 2009, TalkTalk, who are owned by The Carphone Warehouse, announced that they would purchase ailing Tiscali UK's assets for £235 million. On 30 June 2009, Tiscali sold its UK subsidiary to The Carphone Warehouse following regulatory approval from the European Union. This purchase made TalkTalk the biggest Home Broadband supplier in the UK, with 4.25 million home broadband subscribers, compared with BT's 3.9 million. The service was rebranded as TalkTalk in January 2010.
Most LLU operators only unbundle the broadband service leaving the traditional telephone service using BT's core equipment (with or without the provision of carrier preselect
). Where the traditional telephone service is also unbundled (full LLU), operators usually prohibit the facility where selected calls can be made using the networks of other telephone providers (i.e. accessed using a 3 to 5 digit prefix beginning with '1'). These calls can usually still be made by using an 0800 or other non-geographic (NGN) access code.
, the Federal Communications Commission
(FCC) requires that ILECs lease local loops to competitors (CLEC
s). Prices are set through a market mechanisms.
recommended against local loop unbundling in late 2003 as Telecom New Zealand
offered a market-led solution. In May 2004 this was confirmed by the Government
, despite the intense "call4change" campaign by some of Telecom's competitors. Part of Telecom's commitment to the Commerce Commission to avoid unbundling was a promise to deliver 250,000 new residential broadband connections by the end of 2005, one-third of which were to be wholesaled through other providers. Telecom failed to achieve the number of wholesale connections required, despite an attempt by management to claim that the agreement had been for only one-third of the growth rather than one-third of the total. That claim was rejected by the Commerce Commission, and the publicised figure of 83,333 wholesale connections out of 250,000 was held to be the true target. The achieved number was less than 50,000 wholesale connections, despite total connections exceeding 300,000.
On 3 May 2006 the Government announced it would require the unbundling of the local loop. This was in response to concerns about the low levels of broadband uptake. Regulatory action such as information disclosure, the separate accounting of Telecom New Zealand business operations, and enhanced Commerce Commission monitoring was announced.
On 9 August 2007 Telecom released the keys to exchanges in Glenfield and Ponsonby in Auckland
. In March 2008 Telecom activated ADSL 2+ services from five Auckland exchanges – Glenfield, Browns Bay, Ellerslie, Mt Albert and Ponsonby – with further plans for the rest of Auckland and other major centres, allowing other ISPs to take advantage.
is one of the last OECD
nations to provide for unbundling, because the Swiss Federal Supreme Court held in 2001 that the 1996 Swiss Telecommunications Act did not require it. The government then enacted an ordinance providing for unbundling in 2003, and Parliament amended the act in 2006. While infrastructure-based access is now generally available, unbundled fast bitstream access is limited to a period of four years after the entry into force of the act.
Unbundling requests tend to be tied up before the courts, however, because unlike in the EU, Swiss law does not provide for an ex ante regulation of access conditions by the regulator. Instead, under the Swiss ex post regulation system, each new entrant must first try to reach an individual agreement with Swisscom
, the state-owned ILEC.
; the government considered it a good time to withdraw mandatory local loop unbundling policy, to persuade operators to build their own networks and let businesses run themselves with a minimum of government intervention. At the meeting of the Executive Council on 6 July 2004, the government decided that the regulatory intervention under the current Type II interconnection policy applicable to telephone exchanges for individual buildings covered by such exchanges should be withdrawn, subject to conditions documented in this Statement of the Telecommunications Authority. After that, the terms of interconnection will be negotiated between telephone operators. Hong Kong is the first and the only advanced economy that has withdrawn the mandatory local loop unbundling policy.
established the Local Loop Unbundling Committee chaired by Professor Tshilidzi Marwala
to recommend the appropriate local loop unbundling models. The Local Loop Unbundling Committee submitted a report to Minister Matsepe-Casaburri on 25 May 2007. This report recommends that models that permit customers to access both voice and data be offered by many different companies. The models recommended are Full Unbundling, Line Sharing and Bitstream Access. It is recommended that customers should exercise carrier pre-selection and thus be able to switch between service providers. It is also recommended that an organisation be created to manage the local loop and that this organisation should be under the guidance of the regulator Icasa and that Icasa be capacitated in terms of resources. The committee recommended that service providers approved by Icasa should have access to the telephone exchange infrastructure whenever necessary. The committee recommended that a regulatory guideline be established and be managed by Icasa to guarantee that strategic issues like quality of the local loop be optimised for regulation and delivery of services. Based on this report the Minister has issued policy directives to Icasa to move swiftly with the unbundling process. At the end of March 2010 nothing has happened yet, however a deadline of November 1, 2011 has been set by the Minister of Communications for monopoly holder, Telkom SA to finalise the unbundling process.
Telephone exchange
In the field of telecommunications, a telephone exchange or telephone switch is a system of electronic components that connects telephone calls...
to the customer
Customer
A customer is usually used to refer to a current or potential buyer or user of the products of an individual or organization, called the supplier, seller, or vendor. This is typically through purchasing or renting goods or services...
's premises. The physical wire connection between the local exchange and the customer is known as a "local loop
Local loop
In telephony, the local loop is the physical link or circuit that connects from the demarcation point of the customer premises to the edge of the carrier or telecommunications service provider's network...
", and is owned by the incumbent local exchange carrier
Incumbent local exchange carrier
An ILEC, short for incumbent local exchange carrier, is a local telephone company in the United States that was in existence at the time of the breakup of AT&T into the Regional Bell Operating Companies , also known as the "Baby Bells." The ILEC is the former Bell System or Independent Telephone...
(also referred to as the "ILEC", "local exchange", or in the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
either a "Baby Bell" or an independent telephone company
Independent telephone company
An Independent telephone company in the United States was a telephone company providing local service that was not part of the Bell System group of companies, "Ma Bell", before the 1984 Bell System divestiture or breakup of the Bell system...
). To increase competition, other providers are granted unbundled access
Unbundled Access
Unbundled access is an often practiced form of regulation during liberalization, where new entrants of the market are offered access to facilities of the incumbent, that are hard to duplicate...
.
Policy background
LLU is generally opposed by the ILECs, which in most cases are either former investor-owned (North America) or state-owned monopoly enterprises forced to open themselves to competition. ILECs argue that LLU amounts to a regulatory takingRegulatory taking
Regulatory taking refers to a situation in which a government regulates a property to such a degree that the regulation effectively amounts to an exercise of the government's eminent domain power without actually divesting the property's owner of title to the property.-United States law:In common...
, that they are forced to provide competitors with essential business inputs, that LLU stifles infrastructure-based competition and technical innovation because new entrants prefer to 'parasitise' the incumbent's network instead of building their own and that the regulatory interference required to make LLU work (e.g., to set the LLU access price) is detrimental to the market.
New entrants, on the other hand, argue that since they cannot economically duplicate the incumbent's local loop, they cannot actually provide certain services, such as ADSL
Asymmetric Digital Subscriber Line
Asymmetric digital subscriber line is a type of digital subscriber line technology, a data communications technology that enables faster data transmission over copper telephone lines than a conventional voiceband modem can provide. It does this by utilizing frequencies that are not used by a voice...
without LLU, thus allowing the incumbent to monopolise the respective potentially competitive market(s) and stifle innovation. They point out that alternative access technologies, such as wireless local loop
Wireless local loop
Wireless local loop , is a term for the use of a wireless communications link as the "last mile / first mile" connection for delivering plain old telephone service and/or broadband Internet to telecommunications customers....
, have proven uncompetitive and/or impractical, and that under current pricing models, the incumbent is in many cases, depending on the regulatory model, guaranteed a fair price for the use of its facilities, including an appropriate return on investment. Finally, they argue that the ILECs generally did not construct their local loop in a competitive, risky, market environment, but under legal monopoly protection and using taxpayer's money, which means, according to the new entrants, that ILECs ought not to be entitled to continue to extract regulated rates of return, which often include monopoly rents from the local loop.
Most industrially developed nations, including the USA, Australia
Australia
Australia , officially the Commonwealth of Australia, is a country in the Southern Hemisphere comprising the mainland of the Australian continent, the island of Tasmania, and numerous smaller islands in the Indian and Pacific Oceans. It is the world's sixth-largest country by total area...
and the European Union
European Union
The European Union is an economic and political union of 27 independent member states which are located primarily in Europe. The EU traces its origins from the European Coal and Steel Community and the European Economic Community , formed by six countries in 1958...
Member States, and India have introduced regulatory frameworks providing for LLU. Given the above-mentioned problems, regulators face the challenging task of regulating a market that is changing very rapidly, without stifling any type of innovation, and without improperly disadvantaging any competitor.
The process has been long - the first action in the EU resulted from a report written for the European Commission in 1993. It took several years for the EU legislation to require unbundling and then in individual EU countries the process took further time to mature to become practical and economic rather than simply being a legal possibility.
In 1996 the United States Telecommunication Act
Telecommunications Act of 1996
The Telecommunications Act of 1996 was the first major overhaul of United States telecommunications law in nearly 62 years, amending the Communications Act of 1934. This Act, signed by President Bill Clinton, was a major stepping stone towards the future of telecommunications, since this was the...
(in section 251) defined the unbundled access
Unbundled Access
Unbundled access is an often practiced form of regulation during liberalization, where new entrants of the market are offered access to facilities of the incumbent, that are hard to duplicate...
as "The duty to provide, to any requesting telecommunications carrier for the provision of a telecommunications service, nondiscriminatory access to network elements on an unbundled basis at any technically feasible point on rates, terms, and conditions that are just, reasonable, and nondiscriminatory in accordance with the terms and conditions of the agreement and the requirements of this section and section 252. An incumbent local exchange carrier shall provide such unbundled network elements in a manner that allows requesting carriers to combine such elements in order to provide such telecommunications service.
The 1993 report referred to the logical requirement to unbundle optical fibre access but recommended deferral to a later date when fibre access had become more common. In 2006 there were the first signs that (as a result of the municipal fibre networks movement and example such as Sweden where unbundled local loop fibre is commercially available from both the incumbent and competitors) policy may yet evolve in this direction.
World Trade Organisation
Some provisions of WTOWorld Trade Organization
The World Trade Organization is an organization that intends to supervise and liberalize international trade. The organization officially commenced on January 1, 1995 under the Marrakech Agreement, replacing the General Agreement on Tariffs and Trade , which commenced in 1948...
telecommunications law can be read to require unbundling:
- Sect. 5(a) of the GATSGeneral Agreement on Trade in ServicesThe General Agreement on Trade in Services is a treaty of the World Trade Organization that entered into force in January 1995 as a result of the Uruguay Round negotiations...
Annex on Telecommunications requires WTO Members to guarantee service suppliers "access to and use of public telecommunications transport networks ... for the supply of a service". New entrants argue that without LLU they cannot supply services such as ADSL. - Sect. 2.2(b) of the 1998 Reference Paper, to which some Members have subscribed, requires "sufficiently unbundled interconnection" with major providers. However, the Paper's definition of interconnection appears to exclude LLU.
- Sect. 1 of the Reference Paper requires Members to maintain "appropriate measures ... for the purpose of preventing [major] suppliers ... from engaging in or continuing anti-competitive practices." New entrants argue that such practices include not giving competitors access to facilities essential to market entry, such as the local loop.
The question has not been settled before a WTO judicial body, and, at any rate, these obligations only apply where the respective WTO Member has committed itself to open its basic telecommunications market to competition. About 80 (mostly developed) Members have done so since 1998.
India
LLU has not been implemented in Indian cities as of now. However, BSNL recently stated that it will open up its copper loops for private participation. In addition to this, the proliferation of WiMax and cable broadband has increased broadband penetration and market competition. As of 2008 the price war had reduced basic broadband prices to INR 250 (USD 6), including line rental without any long term contracts. In rural areas, the state player, BSNL, is still the leading, and often the only supplier.Although BSNL is a monopoly, it is used as a tool to ensure competition by the government.
European Union
The implementation of local loop unbundling is a requirement of European Union policy on competition in the telecommunications sector and has been introduced, at various stages of development, in all member states (Operators with Significant Market Power shall publish (from 31 December 2000, and keep updated) a postreference offer for unbundled access to their local loops and related facilities. The offer shall be sufficiently unbundled so that the beneficiary does not have to pay for network elements or facilities which are not necessary for the supply of its services, and shall contain a description of the components of the offer, associated terms and conditions, including charges).European States that have been approved for membership to the EU have an obligation to introduce LLU as part of the liberalisation of their communications sector.
United Kingdom
As of 14 January 2006, 210,000 local loop connections had been unbundled from BTBT Group
BT Group plc is a global telecommunications services company headquartered in London, United Kingdom. It is one of the largest telecommunications services companies in the world and has operations in more than 170 countries. Through its BT Global Services division it is a major supplier of...
operation under local loop unbundling. Ofcom
Ofcom
Ofcom is the government-approved regulatory authority for the broadcasting and telecommunications industries in the United Kingdom. Ofcom was initially established by the Office of Communications Act 2002. It received its full authority from the Communications Act 2003...
had hoped that 1 million local loop connections would be unbundled by June 2006. However, as reported by The Register, on 15 June 2006, the figure had reached only 500,000, but was growing by 20,000 a week. Ofcom announced in November 2006 that 1,000,000 connections had been unbundled. By April 2007, the figure was 2,000,000.
By June 2006, AOL UK had unbundled 100,000 lines through its £120 million investment, making it the largest single LLU operator in the UK market.
On 10 October 2006, Carphone Warehouse announced the purchase of AOL
AOL
AOL Inc. is an American global Internet services and media company. AOL is headquartered at 770 Broadway in New York. Founded in 1983 as Control Video Corporation, it has franchised its services to companies in several nations around the world or set up international versions of its services...
UK, the leading LLU operator, for £370m.
This makes Carphone Warehouse the third largest broadband provider and the largest LLU operator with more than 150,000 LLU customers.
On 8 May 2009, TalkTalk, who are owned by The Carphone Warehouse, announced that they would purchase ailing Tiscali UK's assets for £235 million. On 30 June 2009, Tiscali sold its UK subsidiary to The Carphone Warehouse following regulatory approval from the European Union. This purchase made TalkTalk the biggest Home Broadband supplier in the UK, with 4.25 million home broadband subscribers, compared with BT's 3.9 million. The service was rebranded as TalkTalk in January 2010.
Most LLU operators only unbundle the broadband service leaving the traditional telephone service using BT's core equipment (with or without the provision of carrier preselect
Carrier Preselect
Carrier preselect is a term relating to the telecommunications industry. It is the process whereby a telephone subscriber whose telephone line is maintained by one company, usually a former monopoly provider , can choose to have some of their calls automatically routed across a different telephone...
). Where the traditional telephone service is also unbundled (full LLU), operators usually prohibit the facility where selected calls can be made using the networks of other telephone providers (i.e. accessed using a 3 to 5 digit prefix beginning with '1'). These calls can usually still be made by using an 0800 or other non-geographic (NGN) access code.
United States
Pursuant to the Telecommunications Act of 1996Telecommunications Act of 1996
The Telecommunications Act of 1996 was the first major overhaul of United States telecommunications law in nearly 62 years, amending the Communications Act of 1934. This Act, signed by President Bill Clinton, was a major stepping stone towards the future of telecommunications, since this was the...
, the Federal Communications Commission
Federal Communications Commission
The Federal Communications Commission is an independent agency of the United States government, created, Congressional statute , and with the majority of its commissioners appointed by the current President. The FCC works towards six goals in the areas of broadband, competition, the spectrum, the...
(FCC) requires that ILECs lease local loops to competitors (CLEC
Competitive local exchange carrier
A competitive local exchange carrier , in the United States, is a telecommunications provider company competing with other, already established carriers ....
s). Prices are set through a market mechanisms.
New Zealand
The Commerce CommissionCommerce Commission
The Commerce Commission is a New Zealand government agency charged with enforcing legislation that promotes competition in the country's markets and prohibits misleading and deceptive conduct by traders...
recommended against local loop unbundling in late 2003 as Telecom New Zealand
Telecom New Zealand
Telecom New Zealand is a New Zealand-wide communications service provider , providing fixed line telephone services, a mobile network, an internet service provider , a major ICT provider to NZ businesses , and a wholesale network infrastructure provider to other NZ CSPs...
offered a market-led solution. In May 2004 this was confirmed by the Government
Fifth Labour Government of New Zealand
The Fifth Labour Government of New Zealand was the government of New Zealand between 10 December 1999 and 19 November 2008.-Overview:The fourth National government, in power since 1990, was widely unpopular by 1999, with much of the public antagonised by a series of free-market economic reforms,...
, despite the intense "call4change" campaign by some of Telecom's competitors. Part of Telecom's commitment to the Commerce Commission to avoid unbundling was a promise to deliver 250,000 new residential broadband connections by the end of 2005, one-third of which were to be wholesaled through other providers. Telecom failed to achieve the number of wholesale connections required, despite an attempt by management to claim that the agreement had been for only one-third of the growth rather than one-third of the total. That claim was rejected by the Commerce Commission, and the publicised figure of 83,333 wholesale connections out of 250,000 was held to be the true target. The achieved number was less than 50,000 wholesale connections, despite total connections exceeding 300,000.
On 3 May 2006 the Government announced it would require the unbundling of the local loop. This was in response to concerns about the low levels of broadband uptake. Regulatory action such as information disclosure, the separate accounting of Telecom New Zealand business operations, and enhanced Commerce Commission monitoring was announced.
On 9 August 2007 Telecom released the keys to exchanges in Glenfield and Ponsonby in Auckland
Auckland
The Auckland metropolitan area , in the North Island of New Zealand, is the largest and most populous urban area in the country with residents, percent of the country's population. Auckland also has the largest Polynesian population of any city in the world...
. In March 2008 Telecom activated ADSL 2+ services from five Auckland exchanges – Glenfield, Browns Bay, Ellerslie, Mt Albert and Ponsonby – with further plans for the rest of Auckland and other major centres, allowing other ISPs to take advantage.
Switzerland
SwitzerlandSwitzerland
Switzerland name of one of the Swiss cantons. ; ; ; or ), in its full name the Swiss Confederation , is a federal republic consisting of 26 cantons, with Bern as the seat of the federal authorities. The country is situated in Western Europe,Or Central Europe depending on the definition....
is one of the last OECD
Organisation for Economic Co-operation and Development
The Organisation for Economic Co-operation and Development is an international economic organisation of 34 countries founded in 1961 to stimulate economic progress and world trade...
nations to provide for unbundling, because the Swiss Federal Supreme Court held in 2001 that the 1996 Swiss Telecommunications Act did not require it. The government then enacted an ordinance providing for unbundling in 2003, and Parliament amended the act in 2006. While infrastructure-based access is now generally available, unbundled fast bitstream access is limited to a period of four years after the entry into force of the act.
Unbundling requests tend to be tied up before the courts, however, because unlike in the EU, Swiss law does not provide for an ex ante regulation of access conditions by the regulator. Instead, under the Swiss ex post regulation system, each new entrant must first try to reach an individual agreement with Swisscom
Swisscom
Swisscom AG is a major telecommunications provider in Switzerland. Along with Swiss Post, it is a successor company to the former state-owned PTT. Its headquarters are located at Worblaufen near Bern...
, the state-owned ILEC.
Hong Kong
Mandatory local loop unbundling policy (termed Type II Interconnection (Traditional Chinese:第二類互連) in Hong Kong) started on July 1, 1995 (the same day of telephone market liberalisation), to ensure choice to customers. After 10 years, new operators have built their networks covering a large region of Hong KongHong Kong
Hong Kong is one of two Special Administrative Regions of the People's Republic of China , the other being Macau. A city-state situated on China's south coast and enclosed by the Pearl River Delta and South China Sea, it is renowned for its expansive skyline and deep natural harbour...
; the government considered it a good time to withdraw mandatory local loop unbundling policy, to persuade operators to build their own networks and let businesses run themselves with a minimum of government intervention. At the meeting of the Executive Council on 6 July 2004, the government decided that the regulatory intervention under the current Type II interconnection policy applicable to telephone exchanges for individual buildings covered by such exchanges should be withdrawn, subject to conditions documented in this Statement of the Telecommunications Authority. After that, the terms of interconnection will be negotiated between telephone operators. Hong Kong is the first and the only advanced economy that has withdrawn the mandatory local loop unbundling policy.
South Africa
On 25 May 2006 the Minister of Communications of South Africa Dr Ivy Matsepe-CasaburriIvy Matsepe-Casaburri
Ivy Matsepe-Casaburri was a South African politician. She was the country's Minister of Communications from 1999 until her death....
established the Local Loop Unbundling Committee chaired by Professor Tshilidzi Marwala
Tshilidzi Marwala
Tshilidzi Marwala born 28 July 1971 in Venda, Limpopo South Africa is a Dean of Engineering at the University of Johannesburg.-Academic career:...
to recommend the appropriate local loop unbundling models. The Local Loop Unbundling Committee submitted a report to Minister Matsepe-Casaburri on 25 May 2007. This report recommends that models that permit customers to access both voice and data be offered by many different companies. The models recommended are Full Unbundling, Line Sharing and Bitstream Access. It is recommended that customers should exercise carrier pre-selection and thus be able to switch between service providers. It is also recommended that an organisation be created to manage the local loop and that this organisation should be under the guidance of the regulator Icasa and that Icasa be capacitated in terms of resources. The committee recommended that service providers approved by Icasa should have access to the telephone exchange infrastructure whenever necessary. The committee recommended that a regulatory guideline be established and be managed by Icasa to guarantee that strategic issues like quality of the local loop be optimised for regulation and delivery of services. Based on this report the Minister has issued policy directives to Icasa to move swiftly with the unbundling process. At the end of March 2010 nothing has happened yet, however a deadline of November 1, 2011 has been set by the Minister of Communications for monopoly holder, Telkom SA to finalise the unbundling process.
See also
- Product bundlingProduct bundlingProduct bundling is a marketing strategy that involves offering several products for sale as one combined product. This strategy is very common in the software business , in the cable television industry Product bundling is a marketing strategy that involves offering several products for sale as...
- Sub-loop unbundlingSub-loop unbundlingIn the telephony business, Sub-loop unbundling is the process by which a sub-section of part of the local loop is unbundled. In practice this often means the competitor placing a small street cabinet with a DSLAM, next to a telco local copper aggregation cabinet or Serving area interface and using...
- Forced-access regulationForced-access regulationForced-access regulation refers to any regulation put into place by the state forcing private communication carriers to allow its competitors to use their networks for their own business purposes....
- Local number portabilityLocal number portabilityLocal number portability for fixed lines, and full mobile number portability for mobile phone lines, refers to the ability to transfer either an existing fixed-line or mobile telephone number assigned by a local exchange carrier and reassign it to another carrier...
- Mobile number portabilityMobile number portabilityMobile number portability enables mobile telephone users to retain their mobile telephone numbers when changing from one mobile network operator to another.- General overview :MNP is implemented in different ways across the globe...
Further reading
- OECDOrganisation for Economic Co-operation and DevelopmentThe Organisation for Economic Co-operation and Development is an international economic organisation of 34 countries founded in 1961 to stimulate economic progress and world trade...
, Universal Service and Rate Restructuring in Telecommunications, Organisation for Economic Co-operation and Development (OECD) Publishing, 1991. ISBN 92-64-13497-2