broadband strategies handbook.pdf - Khazar University

example, after conducting a review of wholesale inputs for broadbandInternet access, the regulator found that cable landing stations constitutedessential facilities and required landing station operators to provide accessto their facilities on nondiscriminatory terms and to publish a referenceaccess offer. 17Self-regulation can also be a tool for reducing costs and increasing accessto facilities required for international connectivity. Consortium agreementsfor submarine cable systems, for example, are progressively including nondiscriminationand open-access clauses, whereby third parties are guaranteedaccess to facilities and capacity at terms comparable to those offered tothe facilities’ owners or subsidiaries. For instance, the Eastern African SubmarineCable System (EASSy), which runs from South Africa to Sudan withconnections to all countries along its route, includes such safeguards.Launched in 2010, EASSy allows any consortium member to sell capacity inany market in the region to licensed operators on nondiscriminatory termsand conditions (Williams 2008, 42).Domestic Backbon eConstituting the second level of the network element supply chain, a country’shigh-capacity domestic backbone network is essential for broadbandconnectivity since it provides the link from international gateways to localmarkets as well as domestic connectivity between major cities and towns.However, backbone networks require extensive investments. A majorimpediment to reducing these costs, particularly in many developing countries,relates to vertical integration in which the backbone network providersare vertically integrated with the local access network operators. Thisresults in a single end-to-end provider that can wield great market power.As such, other service providers may not have access to the backbone ormay face high costs for interconnecting, a problem addressed in growingdebates on open network access.From a regulatory perspective, the first step toward facilitating competitionin vertically integrated networks is to ensure a liberalized market. Insome countries in Sub-Saharan Africa, for example, mobile operators areprohibited from using the incumbent’s network for backbone services,resulting in slow growth in broadband infrastructure. The second steptoward increasing competition may entail targeted, ex ante regulationsrequiring the backbone network provider to offer network capacity on awholesale, open-access, and nondiscriminatory basis to downstream providers.Alternatively, some countries are setting up national backbone operatorsthat only provide wholesale broadband services on an open-accessbasis in order to prevent any vertical integration. This scheme is being114 Broadband Strategies Handbook