Tue | Jul 17, 2018

OUR: Fixed-line termination rate determination by March

Published:Friday | February 10, 2017 | 12:00 AMMcPherse Thompson
Ansord Hewitt, Director General of the OUR.

The Office of Utilities Regulation (OUR) is anticipating that it will now make a determination on fixed-call termination rates by March, more than two years after it launched a public consultation on the cost model for fixed telecommunications networks.

The consultative timetable shows that the determination notice would have been made by the end of November 2016, but the OUR said it has been pushed back because of "schedule slippage" during the data collection and consultation phase of the project.

However, the regulator said a draft model of the termination rates has been developed, consultations were conducted with stakeholders, and it is currently being finalised.

"When this is done, a determination will be issued specifying the rates for fixed termination services," the OUR said.

However, up to press time, the OUR had not responded to a query as to whether the termination rates would apply to fixed-to-fixed lines only, or include mobile-to-fixed lines and fixed-to-mobile numbers.

In its 2015/16 annual report released recently, the utilities regulator said that under the Telecommunications Act, it has a responsibility to ensure that the price levied for interconnection by dominant carriers is cost-reflective, and that the price for wholesale interconnection services is determined in a manner where it only takes account of avoidable costs.

To that end, the OUR said it has engaged the services of a consultant to develop and calibrate a suitable Long Run Incremental Cost model often used in telecommunications regulation to determine the price paid by competitors for services provided by an operator with significant market power, usually the incumbent or former monopoly.

That followed on consultations with the industry and other interested stakeholders on the principles and methodology which should guide the development of such a model.

The determination notice flowing from that, which outlined the methodological approach that would be taken in the development of a cost model to calculate the cost of wholesale fixed interconnection services, was published during the review year, said the utilities regulator.

The OUR said that having determined that Cable & Wireless Jamaica (C&WJ), which trades as FLOW, is dominant with respect to the fixed-call termination service offered, and given the mandatory requirement that interconnection tariffs must be cost-oriented, it needs to ensure that the charges imposed for this service conforms to statutory requirements.

While C&WJ is currently the only operator which has been found dominant with respect to fixed-call termination service, the model developed estimates a cost of interconnection services for a generic fixed-line operator, such that the rates obtained can be applied to any fixed network operator found to be dominant in the future, according to the consultation document.

The OUR, based on the consultation timetable, which included responses and comments to responses, had planned to determine the wholesale interconnection rates for a period of five years, which it had set for 2016 to 2020.

However, responding to Financial Gleaner queries, the OUR said the termination rates have not yet been determined, but anticipates that the project will be completed by March 2017.