Interconnection-related issues are ranked by many countries as the single most important problem in the development of a competitive marketplace for telecommunications service. This exemplifies the importance of the role that telecommunications regulators have on interconnection[1]. The Nigerian Communications Commission, “the Commission”, is the independent regulator of the telecommunications industry in Nigeria. The Commission is governed by the Nigerian Communications Act signed into law on 8th July 2003, the “NCC Act”.

Interconnection is critical to the proper functioning of a competitive communications market. This is recognised in the Nigerian Communications Act 2003, which requires network facilities providers and network service providers to provide other licensees with interconnection on request at any technically feasible location. It stands to reason why interconnection underpins the provision of a wide range of services to consumers and is essential in order to ensure the development of “modern, universal, efficient, reliable, affordable and easily accessible communications services” in Nigeria.

Tiwalade Adesulure, LL.B, B.L, ACIArb(UK)

What then is Interconnection? Interconnection is the physical linking of a carrier’s network with equipment or facilities not belonging to that network. The term may refer to a connection between a carrier’s facilities and the equipment belonging to its customer, or to a connection between two (or more) carriers.

Rules Governing Interconnection Under The Nigerian Communications Act

The Commission as the independent regulator of the telecommunication industry in Nigeria provides for a number of rules governing interconnection. These rules are contained in Section 96- 100 of the NCC Act. They include:

  • Where a network services or facilities provider receives a request for interconnection from another licensee, it is obligated to interconnect the party making the request pursuant to terms and conditions negotiated by the parties in good faith[2];
  • Interconnection agreements are to be made in writing[3]. However, the terms and conditions of interconnection agreements shall primarily be agreed upon between the parties thereto and the Commission may intervene and make binding rulings at its instance or at the instance of either or both parties to the agreement[4].
  • All interconnection agreements must be in writing and registered with the NCC by either or both parties within 30 days from the date of the execution of the agreement[5];
  • The terms of the interconnection agreement must primarily be agreed on by the parties and the NCC must only become involved:
    • at the request of either or both parties;
    • where there is no consensus;
    • in the public interest; or
    • where the agreement is in contravention of any law or regulation; and
  • The Commission shall make interconnection regulations which may specify but shall not be limited to model terms and conditions for interconnection agreements between service providers[6].
  • A party to an interconnection agreement is prohibited from disconnecting the other party, notwithstanding the provision of the interconnection agreement, without prior written approval from the NCC[7].

Regulations and guidelines issued by the Nigerian Communications Commission (NCC) governing interconnection include:

  • the Telecommunications Networks Interconnection Regulations 2007;
  • the Guidelines on Procedure for Granting Approval to Disconnect Telecommunications Operators;
  • the Guidelines on the Technical Standards for Interconnectivity of Networks.

Arbitration Scheme, Mediation Rules and Interconnection Dispute Resolution

Interconnection Rates

A key component of the commercial aspects of interconnection is the determination of interconnection rate amongst network service providers. Interconnection rate is the price that telecommunications operators pay each other for calls terminating on their networks. The Commission handles determination of interconnection rates to ensure that they are cost-oriented in line with international best practice.

The current regime of interconnection rates was determined by the Commission’s Interconnection Rate Determination issued on 20th March 2013. Since then, the Nigerian Communications Market has seen tremendous growth in both subscriber numbers as well as traffic volumes and available technologies.

As part of the Commission’s commitment to regular reviews of the interconnection rates, and in the light of recent developments, including changes in technology as well as market evolution, the Commission decided in 2018 to review the rates set in its 2013 Determination[8].

The interconnection rates shall be applied by and payable (including by way of internal transfer  pricing) to all licensees who have been allocated numbers by the Commission. The Commission believes that it is in the public interest to intervene at its own instance to determine voice interconnection rates to be applied by all fixed and mobile operators, both in concluded agreements and when negotiating interconnection in reliance on section 97(2)(c) of the Act.[9]

Resolution of Interconnection Disputes

Regardless of the clarity of regulatory guidelines affecting interconnection, disputes are almost certain to arise. In fact, dispute resolution remains a primary responsibility of regulators, despite the attention placed on ex ante regulation. When addressing disputes, it is the goal of regulators to resolve the dispute in a timely manner and in a way that avoids service disruptions and minimizes welfare loss among stakeholders[10].

The most common reasons for disputes include:

  • Failure of an operator to develop a ‘reference interconnect offer’
  • Delay tactics
  • Disputes over termination charges or other terms, or failure of payment
  • Improper use of customer information by competing parties

The NCC Act gives the Commission the power to resolve disputes between operators. Parties must attempt to resolve disputes through negotiations before involving the Commission[11]. If negotiations fail, any of the parties to the dispute can notify the Commission in writing and request its intervention[12]. Parties to an interconnection agreement may appeal to the Commission when there are unnecessary delays in concluding an interconnection agreement or in agreeing changes to an existing agreement.

 When resolving disputes, the Commission is not bound by technicalities, legal form or rules of evidence but acts in accordance with the ethics of justice and on the merits of each case[13]. The Commission may also refuse to intervene when the issues of the dispute are deemed to be frivolous or trivial. The decision, reasoning, terms and conditions of any resolved dispute must be made in writing and copies provided to the parties by the Commission as soon as is practicable. The decision of the Commission is binding on the parties involved and can be enforced by a court in the same way as a court judgment.

A party may appeal the Commission’s decision to the Federal High Court. However, the decision remains binding until the final determination of the appeal. If a party continues to default on its obligations under an interconnection agreement, after exhausting all options in the agreement, the non-defaulting party can apply to the Commission for a disconnection of the defaulting party. In addition to the Nigerian Communications Act, the Commission has issued Rules for the Arbitration of Interconnection Issues and Disputes to govern the arbitration of  unresolved interconnection issues.

The arbitration process is commenced by the filing of a petition for arbitration by the petitioning party where the negotiating process fails to reach an agreement within a period of 90 days. The non-petitioning party may respond to a petition for arbitration within a period of 21 days after the petition has been filed[14]. Where the non-petitioning party fails to file a response to the petition, the arbitrator will proceed to determine the matter based on the documents before it in accordance with the provisions of the NCC Act and the applicable regulations and guidelines[15].

The arbitral panel must act fairly and impartially and give each party an opportunity to present its case and respond to that of its opponent. A final award must be delivered no later than six months after the commencement of the petition. The arbitrator may issue an interim ruling where a dispute directly affects the ability of a party to continue to provide an uninterrupted service to its customers[16].

In conclusion, one of the obligations of the Commission is to promote an environment that best simulates a market that would exist if sufficiently competitive. Thus, regulatory guidance to promote fair competition is vital. Above all, it is important to note that the broader world of information and communications technologies has exciting prospects in the Nigerian market if all technological “i’s” are properly dotted.

FOOTNOTES:

[1] https://en.wikipedia.org/wiki/Interconnection

[2] Section 96 Nigerian Communications Act.

[3] Section 97(1) Nigerian Communications Act.

[4] Section 97(2) Nigerian Communications Act.

[5] Section 98 Nigerian Communication Act

[6] Section 99 Nigerian Communications Act

[7] Section 100 Nigerian Communications Act

[8] Determination of Mobile ( Voice) Termination Rate Issued by Nigerian Communications Commission 1st June, 2018

[9] Determination of Voice Interconnection Rates issued by Nigerian Communications Commission issued 20th  March 2013

[10] regulationbodyofknowledge.org/faq/telecommunication-regulation-interconnection/how-should-a-regulator-resolve-disputes-related-to-interconnection/

[11] Section 74 (1) Nigerian Communications Act

[12] Section 75(1) Nigerian Communications Act

[13] Section 76 (2) Nigerian Communications Act

[14] Rule 3.1 Nigerian Communications  Commission; Rules For The Arbitration of Interconnection issues and Disputes

[15] Rule 3.2 Nigerian Communications  Commission; Rules For The Arbitration of Interconnection issues and Disputes

[16] Rule 10.2 Nigerian Communications  Commission; Rules For The Arbitration of Interconnection issues and Disputes

 

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