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Regulatory Requirements for Broadband. Lebanese Broadband Stakeholders’ Group Workshop TELECOMMUNICATIONS REGULATORY AUTHORIT Y (TRA), LEBANON January 2010. There are three building blocks to the development of competition and take up of broadband services in Lebanon.

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Regulatory Requirements for Broadband

Lebanese Broadband Stakeholders’ Group Workshop TELECOMMUNICATIONS REGULATORY AUTHORIT Y (TRA), LEBANON

January 2010


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There are three building blocks to the development of competition and take up of broadband services in Lebanon

1- Complete the corporatization and subsequent licensing of Liban Telecom

  • Transforming the fixed line operation currently under MoT into a corporate entity and licensing it is one of the main drivers of infrastructure based competition and will :

    • Create a healthy corporate structure with more developed and optimized human and financial resources

    • Reinforce Liban Telecom position in the market by increasing its competitiveness

    • Increase Liban Telecom value in the market

    • Pave the way for a healthy retail versus wholesale corporate identify

2- Ensure infrastructure and service based competition in the Broadband market

  • Infrastructure competition will ensure abundant national and international capacity with high grade of services and at competitive prices, that are necessary for the development of the retail broadband market.

  • Service based competition is the main driver for increasing consumer satisfaction with regard to broadband services (by lowering prices and increasing the quality of service) and will bring great economic benefits to the country.

  • In order to spur competition in the infrastructure and service competition,

    • Issue long term licenses to existing DSPs and ISPs

    • Issue a limited number of National Broadband Carrier licenses through a transparent and competitive process (plus Liban Telecom)

    • Issue new National Broadband Licenses on the access level (with and without frequency)

3- Introduce and enforce “best practice” regulations

  • Adequate regulation will ensure competition in the market. TRA regulatory framework is based on:

    • Imposing an open access regime on all essential facilities owned by dominant players (local loop, backbone, etc…)

    • Issuing a decree by the Council of Ministers on Access to Public Property & Rights of Way (duct sharing reduces around 70% of the cost of laying fiber)

    • Mandating structural separation between the wholesale and retail segment of vertically integrated players

    • Enforcing Significant Market Power (SMP) regulation and all other TRA regulations


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TRA has proposed a broadband licensing plan that would ensure competition in backbone high-speed networks, international gateway facilities, and access

Liban Telecom Universal License

National Broadband Carrier Licenses (NBCL)

  • Obligation to rollout a national high speed NGN transmission network

  • Exclusivity on backbone wholesale services for 5 years (Initial period)

  • Right to build a access network with rural/suburban rollout coverage obligations

  • Right to build an International gateway facility with an exclusivity period for international wholesale for 5years (Initial period)

  • All type of Telecommunications Services ( subject to COM decision on Mobility and LT’s exclusivity)

  • 15 year license

  • Awarded through international auction

  • All type of Telecommunications Services

  • National Backbone and Access Networks

  • International gateway facility (already exists)

  • 20 year license term

  • Awarded as per the Telecommunications Law 431

Broadband Access Licenses (NBL)

  • Obligation to cover main cities with an access network

  • No rights to build and operate a metro, backbone or international facility network before 5 years (end of NBCL exclusivity period) – exception to existing service providers (using existing microwave networks)

  • 10 year license

  • Spectrum will be awarded through auctions

  • All type of Telecommunications Services ( subject to NBCL initial exclusivity of 5 years and COM decision on mobility and LT exclusivity)


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The ensure competition in backbone high-speed networks, NBCLs (incl. LT) will compete on providing high speed connectivity between major towns and other licensees will compete in access to broadband services all over Lebanon

  • urban coverage of Lebanon can be completed within 12 to 18 months , Universal coverage within 5 years.

Core

International

Access

Metropolitan

Tripoli

RasBeiru

RasBeirut

User1

Achrafieh

Beirut

Bekaa

Mazraa

User3

User2

Sin El Fil

Saida

National Broadband Licenses

Incumbent DSPs (through their legacy Microwave Metro)

National Broadband Carrier Licenses

Liban Telecom (with exclusivity over national fixed calls)


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The empowerment of the TRA ensure competition in backbone high-speed networks, and implementation of Law 431 are conditions for the development of the telecom market and to ensure benefits to all stakeholders

Investors

  • Investment opportunities

  • Lower risks

  • Regulated environment

TRA

Challenges

1- Signing of MoU with MoT to complete transfer of regulatory functions

2- Financing 3- Staffing

4- Nomination of 5th Board Member

  • Broader range of services

  • Lower prices

  • Better quality

Telecom Operators

  • Fair treatment

  • Fair competition

Consumers

  • New and recurrent revenue streams

  • Economic boost

Government of Lebanon


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The broadband agenda will benefit from clarity on a number of policy issues

  • Liban Telecom exclusivity

The exclusivity period of Liban Telecom over basic telephony and international voice services should be defined but should not exceed a 5-year period (incl. “managed” VOIP)

  • Mobility or No Mobility

Mobility –or the ability to provide mobile services- requires a COM decision to be included in the Broadband licenses

  • Rights of Way (including access to the ducts)

Ensuring RoW and access to the ducts will incentivize new entrants by reducing significantly the sunk costs and eliminate needless duplication of infrastructure

Spectrum Fees and Administrative Charges

TRA has prepared a draft decree for setting up the spectrum Right to Use (RTU) fees based on Administrative Incentive pricing and the Spectrum Administrative Charges (SAC) based on cost accounting

  • Revenue Sharing

To be applied to all licensed service providers operating in the same markets and holding licenses with similar terms and conditions (incl. LT) - Revenue sharing should be offset against RTU fees and

  • Building Code

TRA has prepared a draft decree to amend the current building code to enable new buildings to be ready for Fiber access (decree to be presented to the Minister of Public Work and Transportation)


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Policy initiative on a number of related issues will also have an impact on the long term development of broadband

High Impact

Moderate Impact

Illegal Providers

GoL to clarify its policy towards illegal operators and the possibility of regularizing

Cyber-Security

GoL to adopt strategy to ensure security of national networks

Universal Service

Digital Switchover (DSO)

GoL to support the migration from Analog to Digital TV by 2015

GoL to clarify policy on universal service

ICT National Strategy

Social Policy

GOL to clarify and begin implementing policy to promote e-education, e-government, e-health, etc.

GOL to promote access of people with special needs to broadband