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Unbundling of Access and Services

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Unbundling of Access and Services Consultation Paper Unbundling of Access and Services Pakistan Telecommunication Authority Document classification Paper for Public Consultation Document version Public_Consultation_150508 Filename Unbundling Version release date 15 th May 2008 Present Subject Unbundling of Access and Services Version Date Author Changes to previous version 01 03/03 Naseem Ahmed Modifications incorporated after internal Vohra consultation Consultant Technical PTA 02 28/03 Naseem Ahmed Released for Public Consultation on 15 th May Vohra 08 after approval of the Authority Consultant Technical PTA Unbundling of Access and Services Table of Contents Executive Summary .......................................................................................................... 5 I. Introduction .............................................................................................................. 14 A. Purpose of this document................................................................................. 14 B. Unbundling....................................................................................................... 14 C. Objectives of Unbundling ................................................................................ 14 D. Policy on Unbundling ...................................................................................... 15 E. Network elements candidate for unbundling ................................................... 15 F. Local Loop Unbundling................................................................................... 16 G. Bit stream access.............................................................................................. 22 II. Alternatives to Unbundling ...................................................................................... 24 1. Broadband Wireless Access (BWA)........................................................... 24 2. 3G Data Services......................................................................................... 27 3. High Speed Packet Access.......................................................................... 28 4. Wi Fi Hotspots ............................................................................................ 28 5. WiMAX ...................................................................................................... 29 6. Optical Fibre Access Network .................................................................... 32 7. Fibre to the Home (FTTH).......................................................................... 33 8. Fiber to the Curb/Node (FTTC/FTTN)....................................................... 33 9. Carrier pre-selection (CPS)......................................................................... 35 10. Wholesale Line Rental (WLR) ................................................................... 36 III. Unbundling around the Globe .................................................................................. 37 A. History of unbundling ...................................................................................... 37 B. LLU Deployment around the globe ................................................................. 54 C. Broadband Growth Trends............................................................................... 57 1. World Growth Trend................................................................................... 57 2. Growth Trends in European Union............................................................. 58 3. North American Growth Trend................................................................... 58 4. Growth Trends-UK ..................................................................................... 59 D. Broadband Technology Trends........................................................................ 61 1. World Trends .............................................................................................. 61 2. European Union Trends .............................................................................. 64 3. Trends in UK............................................................................................... 68 4. North American Trends .............................................................................. 71 IV. WTO Obligations ..................................................................................................... 74 V. Market Conditions in Pakistan ................................................................................. 75 A. Feedback from Current Providers .................................................................... 83 B. Deregulation Policy.......................................................................................... 86 C. Broadband Policy............................................................................................. 88 D. Reference Unbundling Offer............................................................................ 89 VI. Options and Recommendations................................................................................ 91 A. Key issues to be addressed............................................................................... 91 B. Unbundling options.......................................................................................... 91 C. Analysis of options........................................................................................... 92 1. Option 1: Unbundled Network Elements (UNE)........................................ 92 2. Option 2: Local Loop Unbundling (Full unbundling) ................................ 95 3. Option 3: Local Loop Unbundling (Sub Loop Unbundling) ...................... 96 4. Option 4: Wholesale Bitstream Access....................................................... 98 5. Option 5: No unbundling ............................................................................ 99 D. Recommendations on unbundling option....................................................... 102 Unbundling of Access and Services E. Pricing model ................................................................................................. 104 F. Geographical region and market segment considerations.............................. 105 G. Bitstream access............................................................................................. 105 VII. Implications for Recommendation ......................................................................... 106 A. Implications on incumbent............................................................................. 106 1. Response to RUO request ......................................................................... 106 2. Rollout of bitstream access ....................................................................... 107 3. Changes in RIO......................................................................................... 107 4. Accounts Separation ................................................................................. 107 5. Service provisioning Response time......................................................... 107 B. Implications for PTA...................................................................................... 108 1. Amendments to RIO ................................................................................. 108 VIII. Conclusions.................................................................................................... 108 A. Conclusions drawn ......................................................................................... 112 B. Recommendations .......................................................................................... 112 IX. Glossary of Terms .................................................................................................. 112 Unbundling of Access and Services Executive Summary Unbundling, in telecommunications, refers to the obligations that regulators impose on the dominant operators to sell the functionalities of their network elements to new entrants; a facilitation to remove the entry barriers to data services market. Several forms of unbundling have been implemented over the years. Unbundling, as a policy, is built on the recognition that incumbent operator has a dominant position in the provision of local communication access by virtue of its control over the local loop, an essential facility that cannot be economically replicated by alternative operators, more so in the face of much higher cost for laying copper cable as compared to other technologies which have invaded telecommunication market more recently. The Federal Communications Commission (FCC) was the first regulator to obligate telecom operators in the US to unbundle their networks under the Telecommunication Act 1996 with the objective to promote competition in order to secure lower prices and higher quality services for consumers and encourage the deployment of new services. Under the ACT incumbent local exchange carriers (ILEC) were mandated to divide their traditional vertical hierarchy of telephone network into parts known as Unbundled Network Elements (UNE) and provide competing telecommunications carriers with access to these elemnets on unbundled basis to allow non facility based telecommunications providers to deliver service without laying network infrastructure, such as copper wire, optical fiber, and coaxial cable. Such unbundled access allowed companies, such as cable television, wireless providers, and electric/gas utilities, who already had customers, installation and maintenance crews, and billing systems, to
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