New Rules for Interconnection

Principles
Application
Contracts
Proceedings
Dispute Resolution
Penalties

The National Telecommunications Commission (CONATEL) established a new regime for the interconnection of private telecommunication companies through Resolution 871 of July 17 2002.

The regulation establishes guidelines regarding:

• interconnection among networks;

• interconnection contracts;

• service providers; and

• subscribers and users.

The regulation applies to providers of the basic telephony service, as well as providers of mobile and prepaid discount cellular services, and others as determined by CONATEL.

Principles

Pursuant to the regulation, the underlying principles for interconnection are as follows:

• Clarity of agreement: contracts must be written, and may not impose technical conditions that might ban or complicate interconnections with other service providers.

• Neutrality: a service provider that offers more than one service or that is a dominant provider within the market must not take advantage of its position through anti-competitive activities.

• Non-discrimination and equal access: all service providers have a right to the same technical, economic and legal treatment. As such, a condition must be included within the interconnection contract to the effect that interconnection costs and/or economical conditions will be adjusted in the event that one of the parties later negotiates a more beneficial contract with a third party.

• Committment to obligations: all service providers are obliged to interconnect their services upon request (although exceptions apply to illegal interconnections and interconnections that may endanger individuals (in terms of their security or technical installations or equipment).

• Effectiveness: a provider must not set terms and conditions of interconnection that could impact on the technology and effectiveness of other providers.

• Planning by design: providers must use designs according to the Fundamental Technical Plans determined by CONATEL.

• Cost effectiveness: costs must be calculated according to the methodology established in the regulation.

Application

CONATEL will oversee the regulation's application and interpretation.

Contracts

Pursuant to the regulation, interconnection contracts must be in writing and include the following, among others:

• details of the parties and subject of the contract;

• technical conditions, including a general description of the project (covering, for example, services to be provided, and current and future interconnection capacity) and economic conditions (eg, covering interconnection costs); and

• legal conditions (covering the execution of installations, acceptance tests, investments and interconnection schedules).

Proceedings

A provider should declare its interest in establishing an interconnection with the provider that owns the network in question, in writing to CONATEL.

The applicant will assume the interconnection costs.

Negotiations to determine terms and condition of an interconnection contract should not exceed 60 days, although an additional extension of up to 60 days is available.

The provider that receives the interconnection request must submit the interconnection contract to the CONATEL within at least 90 days of the contract taking effect.

Before the relevant date, CONATEL must issue a resolution approving the contract or establishing the technical terms to be included therein. If CONATEL fails to issue a decision within 90 days, the contract will be considered to be approved.

If the negotiation term expires and the parties have failed to reach an agreement in relation to the interconnection, CONATEL will issue a draft interconnection mandate (at the request of either or both parties).

The draft should be forwarded to the parties for their comments within the term set by CONATEL (ie, at least 10 days).

The mandate must be issued within 90 days of the solicitor's first presentation.

Dispute Resolution

In the event of a disagreement regarding the contract's interpretation, performance, or non-compliance, one of the parties has the right to file a petition or claim before CONATEL.

CONATEL's final resolution will be binding on both parties.

Penalties

CONATEL may penalize the provider for:

• unjustified interconnection delays;

• omission to submit contracts to CONATEL;

• refusal to deliver information requested by CONATEL to resolve interconnection conflicts;

• improper use of confidential information;

• deliberate breach of agreed terms and conditions that were approved by CONATEL;

• lack of notification of failures, or repeated lack of attention to failures that may affect interconnection;

• intentional delivery of information, services or facilities that may decrease the quality of interconnection of others;

• unauthorized intentional disconnection;

• fraud through the modification of information; and

• other actions or omissions, to be established by the law and its regulation.

Penalties will be applied pursuant to the Telecommunications Law.

For further information on this topic please contact Luis Breuer at Berkemeyer Attorneys and Counselors by telephone (+595 21 446706) or by fax (+595 21 449694) or by email ([email protected]). The Berkemeyer Attorneys and Counselors website can be accessed at www.berke.com.py.