ICP-ANACOM intends to launch the flat interconnection tariff in Portugal and has thus approved the launch of its public consultation. In the flat interconnection tariff, PT Comunicações (PTC) will offer alternative operators a specific interconnection capacity at a given point at a fixed price, as opposed to the current system which is based on delayed interconnection where operators pay PTC according to the volume and duration of calls.
The aim of this capacity-based interconnection system (flat interconnection tariff) is to bring the cost structure of new operators closer to PTC's existing cost structure.
In fact, the cost structure of PTC's network primarily reflects the costs of the infrastructure's size and not its traffic volume; while 'per minute' billing imposes a substantial variable cost to competitors.
By replicating PTC's offers and developing sustainable competition, operators competing with PTC can take advantage of a cost structure, derived from the interconnection conditions with PTC, which is identical to that of the incumbent.
Thus, when creating an actual competitive environment allowing other operators to replicate PTC's operating conditions, since the marginal cost of PTC's network traffic volume tends to be zero, these service providers' marginal costs for traffic must also be zero. This goal can be achieved with capacity-based interconnection prices.
In this context, by ICP-ANACOM determination dated 17 December 2004 regarding the imposition of obligations in wholesale markets for call origination and termination, the obligation to provide a flat interconnection tariff was imposed upon the PT Group. ICP-ANACOM has promised, before the end of the first half of 2005, to present discussion guidelines for the alteration of the Reference Interconnection Offer (RIO) so that it may accommodate the flat tariff.
This interconnection model raises questions in the following areas: (1) applicable price, (2) definition of the fundamental unit of capacity, (3) traffic and services eligible for capacity-based interconnection, (4) definition of traffic transfer conditions, including an incentive price for correct planning, (5) network operation and maintenance including procedural definitions, (6) implementation deadlines for capacity-based interconnection, (7) quality and service levels and indicators.
ANACOM has thus launched a 30-day public consultation to reflect on this issue (as well as past experiences in the Spanish market, where a capacity-based interconnection offer exists for voice and Internet) and invites discussion on the various questions whose answers will be valuable in ultimately defining the capacity-based interconnection model to be adopted in Portugal.
Consult:
- Capacity-based interconnection offer (flat interconnection tariff) https://www.anacom.pt/render.jsp?contentId=1092889
