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I.
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OBJECTIVES OF
THIS POLICY
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The
objective of this Policy is to create an open market for the provision
of facilities and services and conditions in Anguilla’s telecommunications
sector in support of the continued development of tourism, financial
services and information-based services on the Island, including the
processing and secure storage of all types of data, encryption, software
development, web hosting and back office services in the information
technology sector, and international finance, trust and company management,
insurance, and company registration in the financial services and insurance
sectors
While Anguilla can be proud of a highly developed and ubiquitous telecommunications
network, it often comes up short of being able to satisfy the requirements
for the reliable, high quality and affordable telecommunications of
sufficient capacity to transmit the ever increasing quantities of information
needed for the production of these quickly evolving services.
It is the Government’s opinion that certain constraints, which impede
the rapid development of these and other services, can be overcome by
encouraging additional investment in telecommunications and by facilitating
the entry of those who wish to invest in the telecommunications sector
in Anguilla.
In order to achieve the objectives of this Policy, a central goal of
the Government is to encourage the development and widespread use of
broadband network infrastructure.
There are also important social reasons for promoting the development
of telecommunications in Anguilla, which because of its limited resources
is dependent on outside revenue sources to support education and health
services. Reliable, good quality, efficient, and affordable telecommunications
services are essential to ensure that all citizens and residents
can access these essential social services.
Development of the information-based and financial services industries
in Anguilla will require a highly specialized and trained workforce.
With its limited resources Anguilla is unable to provide all the needed
training on its own. Implementation of high-speed data networks easily
accessible to all citizens and residents will facilitate access to the
best and most up-to-date training available.
Improved communications and information technology will also make government
more efficient through electronic processing, storage, and retrieval
of information related to rates, taxes, licence fees, filing and copy
fees, for court documents, citizens records, infrastructure planning
and organization, budgets and expenditures. Improved communications
and information technology will also give added support to the emergency
measures currently in place to facilitate preparedness for hurricanes
and other disasters.
The Government recognizes the important role that the British Government
and the incumbent operator, Cable & Wireless, have played in the
development and operations of telecommunications networks on the Island.
It is the sincere desire of the Government that Cable & Wireless
continue to participate alongside other new operators and service providers
in making Anguilla’s information and communications technology sector
the most developed and vibrant of the region.
This Policy proposes a new institutional and legal structure, with conditions
to ensure fair competition for the telecommunications sector in Anguilla
and a timetable for its implementation.
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II.
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THE CURRENT LEGAL AND REGULATORY FRAMEWORK FOR TELECOMMUNICATIONS IN
ANGUILLA
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The
existing legal and regulatory framework for telecommunications in Anguilla
is outdated and not appropriate for promoting the economic and social
objectives of the Government and those sectors dependent on telecommunications.
The
Telecommunications Act and Telecommunications Rules, which were adopted
50 years ago, regulate the various types of wireless equipment used
by radio amateurs, ships, aircraft, and broadcasters.
The Telecommunications Ordinance, which allows Cable & Wireless
to establish telecommunications within the Island and authorizes the
issuance of an external operating licence, was introduced in 1973, and
the Telecommunication Operating Licence that was granted to Cable &
Wireless dates back to 1988. Taken
together, the present framework did not foresee nor does it adequately
cater for modern telecommunications systems and services.
Indeed, even the most recent of these documents, the licence
granted to Cable & Wireless in 1988, did not foresee the provision
of access to the Internet as a specific service.
The current framework requires the licensing of anyone that establishes
any telecommunications station, that installs and operates any telecommunications
apparatus (including a simple telephone set), or that sells or leases
any telecommunications apparatus.
The sector
consists today of a single operator and service provider, Cable &
Wireless (Anguilla), and a Government department, the Ministry of Transport
and Communication, which sets policy, supervises the sector, and manages
the radio frequency spectrum.
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III.
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THE TELECOMMUNICATIONS NETWORK AND SERVICES IN ANGUILLA TODAY
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There are currently in excess of 6,000 telephone
customers connected to Cable & Wireless' fixed telephone network,
which has been completely digitised since 1986. The penetration rate of over 50 main telephone
lines per 100 population is similar to that of the developed economies
and some other Caribbean countries such as Antigua, Barbados and St.
Kitts & Nevis. Indeed, penetration is continuing to increase and
it is estimated that there are only about 350 households on the island
that do not have a telephone. The penetration rate is significantly
higher than that of Jamaica and Trinidad & Tobago. The current exchange
line capacity for the Island is about 8,400.
Anguilla
is currently connected to the outside world through a STM 4 (565 Mbit/s)
spur on the Eastern Caribbean Fiber Optic System and through a 36 km
microwave link to the 140 Mbit/s Digital Eastern Caribbean Microwave
System in Saba. When this link
is taken out of service at the end of this year, it will be replaced
by a new microwave system between Anguilla and St. Martin/St.
Maarten. This will provide continued
redundancy on Cable & Wireless' international network.
Anguilla
is not currently connected to the rest of the world via satellite.
Cable & Wireless operates the only cellular mobile system in Anguilla. It is a TDMA system with a limited amount
(10%) of AMPS capacity to serve the few remaining analogue customers. There are close to 2,200 subscribers, equivalent
to a penetration of about 19 wireless telephone subscribers per 100
population. This is up from about 7% penetration two years ago. This
level is a third to one-half of that found in European countries that
have similar fixed telephone penetration rates. In July 2001 Cable &
Wireless began to offer limited inbound and outbound roaming. Tariffs for the mobile wireless telephone
service are based on the principle of Calling Party Pays (CPP); that
is, the wireless telephone subscriber does not pay for incoming calls.
The person making the call does.
Cable
& Wireless also offers various data services including frame relay
and X.25 as well as paging, Internet and leased line services. It has over 1,000 Internet customers of which
about 10 are connected to dedicated leased lines.
Weblinks
has established a Wireless Local Area Network (WLAN) that supplies high
speed Internet access to its customers.
The WLAN operates in
the 2.4 to 2.5 GHz frequency band and provides a 11 Mbit/s access service. Weblinks had initially provided its customers
access to the Internet through a 128 Kbits/s leased circuit connection
provided by Cable & Wireless. This
service was terminated by Cable & Wireless in February 2001.
This termination and the legality of the Weblinks service are
presently the subject of litigation between the parties.
This course of events is predicated on the lack of clarity in
the legal and regulatory framework. Currently Weblinks provides access
to the Internet by way of a leased microwave link service provided by
a supplier located in St. Maarten.
There are three licensed radio broadcast stations and one television
broadcaster. All Island Cable
TV provides a cable television service using coaxial cable, which serves
close to 3,000 subscribers or almost 100% of all households in Anguilla.
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IV.
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THE TELECOMMUNICATIONS SECTOR IN ANGUILLA TODAY: THE IMPEDIMENTS TO GROWTH
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IV.1
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Introduction
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As
in other countries in the region and elsewhere, where there is only
one supplier of telecommunications services, quality of service in Anguilla
is perceived to require improvement to meet international standards,
and prices, particularly for international services, are considered
to be too high. Consumers have no choice and the incumbency
of the operator is generally perceived to be contrary to best interests
of the people and the economy of the Island. This Policy seeks to establish a framework
and propose legislation that will remedy this situation.
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IV.2
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Quality of Service
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There
is some dissatisfaction among business and residential customers with
the quality of telecommunications services being provided by Cable &
Wireless. There are complaints
of poor sound quality in the fixed telephone service, long service outages
in the data services including Internet, and lack of prompt response
in repairing faults. A particularly
disturbing complaint concerns the difficulty that overseas clients of
businesses in Anguilla have in completing calls to the Island. It has
not been determined if the source of this problem is with the originating
operator, Cable & Wireless, or some transit point.
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IV.3
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Investment
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There
is evidence that Cable & Wireless is not investing sufficiently
to maintain and expand its network, and to introduce technologies to
meet the growing demand for existing and new telecommunications services. The decline in the level of investment between
1995 and 2000 bears this out.
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IV.4
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Prices
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One of
the main objectives of this Policy is to create the means and the incentives
for all users to be able to benefit from the technical advances and
structural changes in the sector, which have caused a significant impact
not only on the quality and quantity of services that are available
but also on their prices. While
comparison of prices of individual service offerings can be misleading,
the general perception of users in Anguilla is that the price of international
services (for example, international switched telephone and leased circuit
services) are high when compared to other countries with a competitive
market environment. Accordingly, the objective of this Policy is to
reduce prices through the promotion of competition and by regulation,
where competition alone is inadequate to lower prices.
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V.
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THE
NEW LEGAL AND REGULATORY FRAMEWORK
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V.1
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Introduction
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This
Policy calls for the implementation of a new legal and regulatory framework
that will create a stable, predictable, institutional environment for
the development of telecommunications in Anguilla. The new framework
will create a climate which is conducive to private investment and which
will contribute to overall economic development of the territory and,
in particular, to the development of financial services, tourism, and
information technology. It will create an open market for the provision
of telecommunications networks and services under conditions of fair
competition. It will promote the development of telecommunications for
the social, economic, and cultural wellbeing and the safety and security
of all people living in Anguilla. It will ensure universal access to
essential telecommunications services and will protect consumers.
Under the new framework, only public telecommunications networks and
public telecommunications services that provide real time voice and
data communications services will be subject to a licence and, therefore,
to the conditions attached to those licences. The provision of value
added services will not require a licence or other authorization but
may be subject to regulation if provided under conditions of exclusivity
or dominance, nor will telecommunications networks and services for
private or restricted use be regulated (except if they use spectrum
or public rights of way). The regulations may require, however, that
certain types of service providers that are not otherwise subject to
licensing or authorization register their services.
The new framework relies on an independent telecommunications regulatory
capability (an independent regulator) with responsibility for supervising
the proper functioning of the sector and ensuring that the Government’s
policy for the sector is implemented.
This capability will be incorporated into the Public Utilities
Commission (“PUC”), which is soon to be established by enactment of
the Public Utilities Commission Act.
Given the limited resources available in Anguilla to supervise the telecommunications
sector, it is intended that regulation will be light-handed and confined
to the essential requirements to ensure the optimal implementation of
this Policy and the smooth and efficient functioning of the sector.
The regulatory function will encompass the granting of licences
and authorizations, and ensuring compliance with their terms and conditions;
monitoring the sector and regulating to promote competition; protecting
consumers; ensuring the fulfilment of and funding for universal service
obligations; managing and administering the use of scarce resources
such as frequencies, domain names and numbers; and preparing regulations
as necessary to accomplish all of the foregoing.
The respective roles of the Minister and the PUC as they relate to these
functions are described in Sections V.2 and V.3 below.
Under the new regulatory framework, the development and implementation
of the Government's telecommunications policies and the implementation
of laws and regulations will be transparent; that is, any decisions,
rules, guidelines and procedures affecting the sector will be developed
through a process of open, public consultation, where all stakeholders
will be able to express their views, with the assurance that these views
are taken into account. All such decisions, rules, guidelines and procedures
will be set forth in writing.
The following sections describe the roles of the Minister and the regulator
and the proposed policies with respect to licensing, convergence, interconnection,
management of scarce resources, prices, consumer protection, quality
of service, the terminal equipment market, and ensuring fair competition.
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V.2
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Role of the Minister
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The Minister
responsible for the telecommunications sector will continue to develop
sector policy, prepare legislation, manage the radio frequency spectrum,
and administer numbers and other scarce resources in a non-discriminatory,
fair and transparent manner, and represent the international interests
of the Government of Anguilla.
The Minister
will not be able to interfere with the functions committed by legislation
to the regulator, including decision-making as it relates to supervision
and regulation of the telecommunications sector in Anguilla.
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V.3
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Role of the Regulator
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The newly
established regulator will be responsible for implementing the Government’s
policy for the sector, issuing licences and authorizations, collecting
licence and spectrum usage fees, ensuring compliance with terms and
conditions of licences and authorizations, enforcing competition rules
for the sector, protecting consumers, including the regulation of prices,
where this in necessary, monitoring compliance with and, where necessary,
establishing standards for telecommunications services and equipment,
recommending policy to, and formulating legislative proposals for, the
Minister, ensuring that universal service obligations are met and that
Anguillians have easy and ready access to emergency communications,
and ensuring that Anguilla’s international obligations with respect
to the sector are met.
The
new legislation will ensure that the new regulator is able to function
effectively and independently.
The new regulator will be independent of any operator, service provider
or user of telecommunications services in Anguilla or elsewhere. It will also be independent of the Minister.
The Governor-in -Council will appoint and may remove members
of the PUC and may issue written policy directions to the regulator.
The head of the PUC will be a highly qualified professional with relevant
experience, such as in regulation, law, economics or administration,
and with an appointment based on his or her integrity and professional
qualifications, and not on political or other allegiances. It will be
possible to remove the him or her for criminal reasons, incapacity or
malfeasance. The division of the PUC responsible for telecommunications
will be staffed with suitable professionals and other support personnel.
The law will provide that the Commissioners of the Public Utilities
Commission will be subject to strong and effective conflict of interest
rules, including the requirement that they declare their interest, and
that all senior officers also be subject to those rules. The statute
will provide that decisions of the regulator can be appealed to the
High Court in certain circumstances. The standard of review that the
High Court will apply will be limited, such as where the regulator has
made an error in law, or where the decision is not supported by the
facts. Finally, the regulatory process will be completely transparent
and, to the extent possible, the regulator will be financed independently
of the Government's revenues.
The regulator will also be empowered to arbitrate in disputes between
users, on the one hand, and network operators and service providers,
on the other, and among the latter if invited to do so.
It will have the power to resolve disputes in cases where the
parties involved in a dispute are unable to agree.
The regulator’s
actions and proceedings applicable to the regulation of the sector including
the regulations identified in this Policy will be developed in an open
and transparent way and subject to public consultation. In addition,
the PUC’s relationship with the Minister and the Governor-in-Council
generally will be open. This does not, however, mean that the regulator
will divulge sensitive or commercially confidential information, which
regulated network operators and service providers will have provided
as part of their licensing conditions.
The regulator's
operating (and to the extent necessary) capital expenses will be funded
through a levy on all licensed operators and service providers. This levy will be fair, proportionate, and
will be kept to the minimum required for the functioning of the regulator.
The funding
formula and precise amounts to be imposed on each licensed operator
and service provider will be established once the new regulatory framework
has been put into place. Funding
obligations from the telecommunications sector will, to the extent possible,
be limited to funding the administration and supervision activities
of the PUC and the Ministry as they relate to telecommunications. In
other words, regulatory activities of the PUC that are specific to other
sectors, or that may fall under the responsibility of other government
departments, will not be funded through licence fees imposed on regulated
operators and providers in the telecommunications sector. The Government
measures that will set out the licence fee obligations will be subject
to public consultation when they are being drafted. In practical terms,
establishing an independent regulatory capability for telecommunications
will require the new Public Utilities Commission to develop or hire
a few telecommunications specialists, who will be supported by the cross-sectoral
legal, economic, financial, and consumer protection specialists in the
Commission. It is also expected that the help of outside experts will
be sought during peak work periods, especially during the transition
period described below and during the early stages of liberalization
of the telecommunications sector.
The regulator's
annual accounts will be publicly available and be subject to audit by
the Auditor General and scrutiny by the Government.
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V.4
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Licensing
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The
objective of this Policy is to promote market entry, competition and
investment in a wide range of existing and future telecommunications
services. In order to encourage maximum participation in the telecommunications
sector in Anguilla there will be a simple, non-discriminatory, transparent
and light-handed licensing scheme.
A licence (concession) will be required to operate a public telecommunications
network (whether terrestrial, mobile or satellite-based), to provide
public telecommunications services that offer real time voice or data
services , and to operate any system that uses the radio frequency spectrum. Licence holders will be subject to a certain
number of conditions, which will be described in their licences. These
include, inter alia, the obligation
to pay an annual licence fee based on a percentage of annual revenues
in an amount needed to fund the regulator’s operating and capital expenses
on a pro rata basis to pay an annual spectrum usage fee according to
a formula established by the Minister, to contribute to funding universal
and emergency services, to refrain from anti-competitive behaviour,
to provide services on a non-discriminatory basis to all users (including
other service providers and end users, without regard to their use of
the services being provided), to use scarce resources effectively and
efficiently, to provide certain information to the regulator so as to
enable it to supervise the sector, to make interconnection available
to competing operators and service providers, and to protect consumers’
rights and their confidentiality.
The number
of licences that will be issued for any particular type of service may
be limited if scarce resources, such as frequencies, are unavailable
or for economic reasons.
Licences
to operate networks, provide services and for the use of spectrum will be granted by the regulator. Licences
will be for a fixed term and will be subject to renewal where the licence
holder has not breached the terms and conditions of its licence.
Licences
issued for particular networks or services will be non-discriminatory;
that is similarly situated providers will have identical licence conditions.
Where a network or service provider is dominant, certain licence provisions
will apply. No licence will be required to provide information or value-added
services. Value-added services are services, other than public telecommunications
services, that modify the form, content, code, protocol, or other similar
aspect of the communication, restructure, add or supply information
or permit user interaction with information.
For the
purposes of the new regulatory framework in Anguilla, access to the
Internet, other online services, access to Web sites and similar services
all will be considered as value-added services and, therefore, not subject
to a licence; however, any entity in Anguilla offering voice services
generally to the public, be it over the Internet or by other means,
will be considered to be offering a public telecommunications service
and, therefore, subject to a licence and the conditions incumbent on
licensed service providers.
No
licence will be required for the establishment of telecommunications
networks and telecommunications services that are private or otherwise
restricted, except to the extent that they may make use of the radio
frequency spectrum or cross public rights-of-way.
All licence
holders will be subject to licence and annual spectrum usage fees, which
will be established to cover only the costs of administering and regulating
the sector and the spectrum used not bring in additional amounts for
the Treasury. In addition all
licensed operators and service providers may be required to contribute
to funding universal access and emergency services. All such fees and contributions will be will be fair, reasonable
and proportionate.
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V.5
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Convergence
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Voice,
data and images are indistinguishable when transmitted over modern digital
networks. This convergence of technologies of transmission has created
certain regulatory uncertainties. For example, access to the Internet
allows not only the transmission of e-mail messages or voice but also
the downloading of recorded music and movies.
The
new framework created by this Policy recognizes this convergence of
technologies, which allows previously distinct services to be delivered
over the same medium, be it a simple telephone line, a coaxial or fibre
optic cable connection to the home, a satellite link, or a fixed or
mobile wireless link. Under
the new framework, the means by which this information is transmitted
is covered, irrespective of the technological medium used; however,
regulation of content is outside the scope of this Policy and this new
framework, and falls under the jurisdiction of the Ministry responsible
for information and broadcasting.
The new
telecommunications framework will regulate radio and television over-the-air
broadcasting only if and the extent to which these require the use of
a scarce resource, namely, the radio frequency spectrum. Furthermore, under this framework, other
content delivery services that may make use of other resources, such
as public rights of way, may also be subject to some regulation under
the new law or to the jurisdiction of the Planning Department.
Convergence
may also raise issues of fair competition where, for example, an operator
of a telecommunications network merges with a provider of content. To
the extent that convergence or market concentration raise issues of
potential or actual anti-competitive behaviour, they will be dealt with
under the competition rules that will be developed separately. (See
Section V.12 below)
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V.6
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Interconnection and Access to Infrastructure
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Anyone
who is licensed to operate a public telecommunications network or to
provide public telecommunications services will be obliged to provide
interconnection for the purposes of transmitting public telecommunications
traffic between subscribers of different networks.
In the
first instance, operators seeking to interconnect their networks will
be required to negotiate interconnection arrangements on a commercial
basis. The regulator will only
intervene in these negotiations if invited to do so by the negotiating
parties or if they are not able to come to agreement within a specified,
reasonable time period. The regulator will have the authority to resolve
disputes. Interconnection agreements
will be made public.
In order
to facilitate such negotiations and to ensure that interconnection is
based on fair, non-discriminatory and transparent terms, the regulator
will establish general rules, guidelines, conditions and procedures
for interconnection. These will be issued after a process of public
consultation(s) governing interconnection.
Prices
for interconnection must be based only on the cost of providing the
required interconnection. Such
cost-based pricing means that the operator providing interconnection
services must base its prices on the proportionate costs of the elements
of its network and services used by the operator seeking such interconnection.
Any operator
in a dominant position will be required to publish an offer that sets
out the terms and conditions of interconnection to its network. This offer must include all financial, technical,
commercial and informational elements in a clear and unambiguous manner.
These terms and conditions will be available equally to all operators
and service providers seeking to interconnect their networks and services
with those of the dominant operator(s).
Dominance will be defined in the same way as it is defined for
the purposes of price regulation. (See Section V.9 below).
To ensure
that new entrants will have access to facilities, that may be technically
or commercially essential, operators (and public utilities) will be
required to provide access to their infrastructure (such as towers,
poles, conduits and other facilities) to other operators on the basis
of fair and non-discriminatory terms and conditions, and on a timely
basis. Access may be denied only for specified reasons,
such as safety, interference or lack of space. Disputes among operators may be mediated
or be subject to arbitration by the regulator.
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V.7
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Regulation of Scarce Resources
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Scarce
resources in the telecommunications sector include the electromagnetic
spectrum and the space segment, numbers, rights-of-way and Internet
domain names. Fair, open and
non-discriminatory treatment of these scarce resources is essential
in supporting effective competition.
This is reflected, for example, in the World Trade Organization’s
principles pertaining to competition in the telecommunications sector.
Accordingly, the Minister will be responsible for Anguilla’s radio frequency
spectrum. He will do this on
behalf of and in co-operation with all users of spectrum in Anguilla,
including broadcasters, public security, civil aviation, maritime transport,
Government services and, of course, the telecommunications sector.
Government
Policy and implementing regulations will determine the specific process
for allocating and licensing use of spectrum. The Government reserves
the right to charge for the use of a national resource, such as spectrum,
based on the value of that resource (as determined for example, by the
price paid at auction).
Access
to public, rights-of-way for licensed operators and service providers
will be made available through the Planning Department. Any major infrastructure
development, including the erection of towers and the laying of terrestrial
and submarine cables on Anguillian territory, will be subject to applicable
environmental regulations.
Given
that there are competing uses of scarce resources, all planning, policy,
and regulations related to such resources will be developed through
consultation with all stakeholders.
It will
also be the responsibility of the Minister to co-ordinate spectrum use
regionally with the other countries and regional organizations, such
as Eastern Caribbean Telecommunications Authority (ECTEL) and the Inter-American
Telecommunications Commission (CITEL) of the Organization of American
States, and globally within the framework of the International Telecommunication
Union.
The Minister
will also ensure that there is transparent and non-discriminatory access
to space segment through any fixed or mobile satellite service, be it
Intelsat or any other global and regional satellite system.
The Minister
will be responsible for administering Anguilla’s (264) numbering plan in a fair, non-discriminatory
and transparent manner; the numbering plan will be based on the numbering
plan currently being used in Anguilla The Minister may assign this task to a neutral,
non-governmental organisation.
As competition
in the sector develops, the Government and the regulator will consider
whether to require number portability, whereby any customer who wishes
to change telecommunications providers is able to maintain the number
that he or she has been assigned. The
Government recognizes that number portability is an important goal that
will facilitate competition. The Government and the PUC will evaluate
the possible future number portability requirement in light of economic
and technical considerations.
Anguilla's
“Top Level Domain” (.ai) will be administered by the
Minister, who may, however, assign this task to a neutral, non-governmental
organisation. In any case the
Minister will be responsible for ensuring that administration of this
scarce resource is open, transparent and non-discriminatory.
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V.8
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Consumer
Protection
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The legislation and implementing regulations and licences will require
that public telecommunications network operators and service providers
directly respond to complaints addressed to them by their customers. The regulator will monitor compliance with
these requirements to ensure that these operators and service providers
respond properly, adequately, and rapidly to each of these complaints.
The regulator will not normally be expected to intervene but will be
available at the request of either party to either arbitrate or mediate
in any such dispute. (See Section
V.10 below).
The regulator will publish guidelines on consumer protection, including
the procedures to be followed in dealing with customer complaints and
standards for customer contracts and bills. These will be developed
in consultation with consumers, industry groups, operators and service
providers.
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V.9
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Regulating Prices for Users
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This
Policy and the implementing legislation will establish the principle
that prices for telecommunications networks and services, in an open
and competitive market, will not be regulated. Instead, they will be
freely determined by the principles of supply and demand in the market. Nevertheless, in the following limited circumstances,
the regulator will be able to regulate prices: where there is only one operator or service
provider supplying a particular facility or service (monopoly supplier);
where an operator or service provider is in a dominant position as the
supplier of the particular facility or service; where, in the regulator’s
opinion, there is no fair and open competition to establish prices;
or where there is evidence of anti-competitive pricing practices.
Increasingly, an incentive-based approach is being adopted internationally
as the standard for regulating the prices of dominant providers. Such an approach places caps on certain prices, to assure end
users that prices will not increase above a ceiling; instead, this approach
generally requires certain price decreases, and allows a provider to
retain profits if it increases its efficiency.
The Government and the regulator will consider this approach
with respect to regulating those services of Cable & Wireless, where
it is dominant.
The regulator
will establish rules and procedures for regulating prices of networks
and services in the above-described cases. This will be done through a process of public consultation. Prices for the supply of all regulated services
and facilities will be published.
The regulator
will also determine what constitutes dominance of a facility or service
in a market for the purposes of regulating a dominant provider’s prices.
One of several possible tests of dominance is whether an operator
or service provider is able to raise prices without its customers moving
away to other suppliers. In addition, as the telecommunications sector
and particular services become competitive, an operator or service provider
that had been dominant may no longer be so. The PUC, upon petition,
may determine that it is no longer warranted to treat such entity as
dominant.
The Government
undertakes to determine the extent to which current prices for the supply
of certain services and facilities are provided either below or above
their cost of production. It is the intention of the Government to allow
prices, which do not reflect the cost of supplying the particular service
or facility, to evolve toward cost in a transition period to full liberalization
of the market. This should prevent “cream skimming”, where new entrants
may be tempted to enter only market segments, where current prices are
above cost. This process of
rate rebalancing, by which prices of services will be aligned more closely
with costs, will need to take place before any price cap formula is
fully implemented.
An analysis
of prices being currently charged may reveal that Cable & Wireless
is subsidizing the supply of certain non-profitable services and facilities
with the benefits derived from market segments, where it is able to
price its services or facilities above cost. The regulator will determine
to what extent it is currently not possible to supply these subsidized
facilities and services on a commercial basis and develop a program
to ensure that these are made available at affordable prices to the
extent it is considered that they are essential. (see Section VI. Universal
Access to Communications, below)
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V.10
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Quality of Service
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As competition
develops, it can be expected that competitors will improve their service
to maintain and obtain customers. Nevertheless, because quality of service
for licensed services is an important policy goal, ongoing oversight
by the regulator will be important.
Licensed
service providers will be required to develop quality of service procedures
and processes for handling of customer complaints.
In addition
the regulator will establish a list of quality of service performance
indicators for all licensed services.
Public
telecommunications network operators and service providers will be required
to report regularly on their performance as measured against these indicators.
The regulator will have the power to verify the reported results
through independent investigations. Performance indicators and results obtained
will be published at regular intervals.
Public
telecommunications network operators and service providers will have
to respond quickly and adequately to customer complaints related to
quality of service. The regulator will have the power to intervene in
disputes between the customer and an operator or service providers,
if they are not able to satisfy the customer regarding his or her complaint
in a reasonable time, or if the regulator is requested to intervene
by either party.
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V.11
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Terminal Equipment and Technical Standards
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The
market for the supply of any telecommunications equipment that can be
attached to a public telecommunications network will be open under the
new regulatory framework; however, there will be provisions to ensure
that such terminal equipment is compatible with and does not pose a
risk of harm to any public telecommunications network, that it is not
harmful to the environment or to the health and safety of anyone and,
if it uses the radio frequency spectrum, that it does not interfere
with other users of the spectrum.
The new
regulator will define standards for such equipment. It will do so generally
by adopting internationally approved standards, in consultation with
the public telecommunications network operators.
One approach is for the regulator to recognize approval of telecommunications
equipment by other jurisdictions, such as the European Union or the
United States. No licence or
any permission will be required to install, own and operate any equipment
that has been approved by the regulator for attachment. There will, furthermore, be no restrictions
on building, importing and selling such equipment as long as it has
been approved by the regulator for attachment to a public telecommunications
network.
The Government
intends to liberalise the ownership of inside wiring. The regulator
will establish a procedure and timetable for such liberalisation. In
addition, the provision of customer premises equipment will be unbundled
from telecommunications services.
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V.12
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Regulating to Ensure Fair Competition
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One of
the main functions of the regulator will be to ensure that there is
fair competition, that services and facilities are made available to
consumers and interconnecting operators and service providers at cost-based
prices, and that operators and service providers that are in a position
of monopoly or dominance do not discriminate against existing or potential
new competitors by subsidizing their competitive business with the benefits
of their non-competitive businesses or through other anti-competitive
practices, such as predatory pricing.
Other
types of anti-competitive practices will also be proscribed. The regulator,
for example, will have the principal responsibility for ensuring that
operators and service providers comply with the law, applicable regulations
and their licences, if any. That
is, operators and service providers
may not take it upon themselves to determine whether a person
to whom they are providing service is complying with applicable law
and regulations; instead the regulator and the law enforcement authorities
will have this responsibility.. Accordingly, except for reasons relating
to billing, public safety and other specified circumstances, an operator
or service provider should not be able to disconnect the service of
a competitor on the ground of non-compliance absent a determination
of the regulator.
Over time,
particular networks and services will be subject to full competition,
which will supplant the need for regulatory intervention to ensure fair
competition or to protect the interests of users. Accordingly, the new
law will provide that the regulator may forbear from imposing regulatory
obligations when and as they are no longer justified.
The Government
will separately be developing a policy and legislation to ensure fair
competition in all sectors.
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VI.
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UNIVERSAL ACCESS TO COMMUNICATIONS
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The Government
considers that it is a fundamental right of each citizen, resident,
social and community organisation, and business establishment to have
access to the basic means of communication. This access has to be of
good quality and affordable for all users.
The definition of what constitutes basic means of communication will
evolve with time but must today include basic voice telephone service,
a free telephone directory and operator assisted information services,
free emergency services access, and special voice telephone services
for the handicapped. This list will be reviewed from time to time
in consultation with all stakeholders and revised as necessary.
Before implementation of the new regulatory framework the Government
will undertake a study of the availability and prices of these essential
services today. Such a study will have three elements. First, the Government
will determine to what extent these services would continue to be unavailable,
if they are currently unavailable, or would no longer be available,
after the telecommunications market in Anguilla is liberalized. Secondly,
if the Government and, subsequently, the newly established regulator
determine that not all these services would be universally available
under the new regime for the sector at prices that people on the Island
can afford, they will establish a program designed to ensure that anyone
who wants and needs these services can obtain them at affordable prices. Such a program will consist of methods of funding and realizing
universal access, including by establishing obligations to provide universal
services and determining a service provider of last resort. Thirdly,
the Government will determine the costs associated with providing universal
service based on appropriate costing methodologies.
If it
is determined that a funding mechanism does need to be established,
all licensed public telecommunications network operators and service
providers will be obliged to contribute. The new regulator will develop
regulations establishing a fair, non-discriminatory, and proportionate
formula for determining contributions to universal access for each licensed
public telecommunications network operator and service provider. Contributions
may be based on a percentage of gross revenues less settlement payments.
Regulations will also define the functioning of the universal access
fund and how universal access objectives are to be achieved. The new regulator will have responsibility for administering the
program of universal access to the extent that it is considered to be
necessary. Its administration will be transparent.
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VII.
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REGIONAL COOPERATION
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Development of the information and technology
sector will not succeed in Anguilla if it is treated on the scale of
the Island alone. The Government recognizes that the economics of developing
this highly capital intensive sector will require regional cooperation
and that there is a need to share the few, very specialized human resources,
which each of the small economies in the region can offer. Consequently,
the Government will explore the possibility of developing cooperative
arrangements initially with the other Overseas Territories to share
the expertise and burden of regulating this highly specialized sector.
The goal is to agree with the Overseas Territories on a common regulatory
framework for the information and communications technology sector and
to establish a single regulatory capability, which can share the function
of regulating the sector among all the territories.
Indeed, the Government of Anguilla will welcome an initiative
to have all Overseas Territories adopt common legislation designed to
promote information and communication technologies.
In addition, the new regulator will look into the possibility of entering
into a cooperative agreement with the newly established Eastern Caribbean
Telecommunications Authority (ECTEL) with the objective of cooperation,
and harmonization of the regulatory framework of countries and territories
in the Caribbean and of eventually joining this organization.
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VIII.
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IMPLEMENTATION
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On approval of this Policy by the Executive Committee, the Government
will initiate the process of drafting new legislation to give effect
to this Policy. Concurrently, the Government will be negotiating with
Cable & Wireless with a view to reaching agreement on modifications
required to its present licence in order that the Policy, once implementing
legislation is adopted, can be put in place as quickly as possible.
The Government will consult with interested stakeholders and provide
an opportunity for public comment on the new legislation. The Government’s
timetable for implementation of this Policy is set out in Attachment
A.
Liberalisation of the telecommunications sector in Anguilla will begin
immediately on passage of the new law; however, in order to ensure a
smooth transition from monopoly provision of telecommunications services
to full competition, there will be a period of transition of one year
to permit:
·
prices for services and facilities to be adjusted so that they are cost-
based in order to minimize the possibility of cross-subsidization of
competitive services with potential benefits gained from services being
provided under non-competitive circumstances. The Government undertakes
to carry out a study of prices of services and facilities to determine
the extent to which they may currently be above or below their cost
of production. It will subsequently negotiate with Cable & Wireless
a formula for adjusting or re-balancing of prices, if this should prove
necessary;
·
the putting into place of an adequate regulatory framework necessary
for competition to work. This includes required provisions for interconnection
of competing networks and services (including all pricing, technical,
accounting and informational aspects), authorization of the existing
operator and new entrants, tariffs and quality of service regulations,
and essential regulations pertaining to the use of scarce resources
such as frequencies and numbers. During
this period, the Government will establish the required telecommunications
regulatory capability within the PUC and give the Minister the power
he requires to fulfil his duties under the new legislation.
·
the Government to determine the extent to which the provision of essential
services will be affected by the introduction of competition and the
liberalization of prices and to design a program to ensure universal
access is available to these services at affordable prices.
On passage of the new law, it will be possible for anyone, including
the incumbent, to provide all services and networks that do not require
licences, including the establishment of private networks, the provision
of value added services, access to the Internet, and the provision,
acquisition and installation of terminal equipment. In addition, public
data networks will be permitted to operate under a provisional licence
upon the passage of the new law. Finally, international satellite-based
mobile service providers will be licensed to provide service as of the
effective date of the new law.
Any
entity that is operating a network or providing a service under the
current legal and regulatory framework that would require a licence
under the new framework will be able to operate that network and provide
that service until it has a licence under the new regime, or until a
licence is finally denied. During a transitional period, existing operators
and service providers, that will be required to obtain a licence under
the new framework will be given an opportunity to file applications;
However, During this one-year transition period only Cable & Wireless
will be able to operate a public telecommunications network for voice
services or offer a public telecommunications voice service, except
as provided in the last sentence of the preceding paragraph.
The Government will also confirm any current licences for the operation
of public telecommunications networks and the provision of services
during the transition period.
The Government will, after passage of the new law, open a tender process
for a second cellular operator licence. This licence will permit the
licensee to offer both domestic and off-Island services for its customers
immediately; until the end of the one-year transition, the licensee
will be required to offer off-Island services only by using the international
facilities of Cable & Wireless, which will be required to make its
services available at wholesale rates.
In connection with the transition to competition in international services,
the regulator will have to develop and implement the mechanism by which
subscribers will chose their provider for these international services,
when there is more than one. In addition, such rules will have to ensure
that any domestic provider of telecommunications services provides equal
access to all competing operators and service providers, who offer an
international service.
Anyone wishing to provide a public telecommunications network or service
will be free to apply for a licence; the Government may, however, initially
limit the number of licences it will issue for the use of scarce resources
such as the radio frequency spectrum. Applications can be submitted
before the end of the transition period to full liberalization; however,
new entrants who are granted licences may not begin operations or provide
services before the end of that period.
During the period of transition and before the new regulator is fully
functional, the Government will do everything to ensure a smooth passage
to a fully liberalized telecommunications market.
In particular, the Government will monitor the sector to ensure
that no providers engage in anti-competitive practices that would inhibit
any new operator or service provider from entering the market. It will also ensure that all the necessary
implementing regulations are in place before the market is fully liberalized.
These include regulations governing interconnection, the funding
and provision of universal services, prices and rate rebalancing (where
required), licensing, cost accounting and internal, public comment and
other administrative procedures. To engage in this activity, the Government
will, to the extent, necessary, seek outside assistance and support.
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