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“INTERCONNECTION AGREEMENTS IN TELECOM

SECTOR IN INDIA”

Subject: PRESS, MEDIA & TELECOMMUNICATION LAW

Submitted to: - Submitted by:-

MR. KUMAR GAURAV ADHISH PRASAD

Faculty of Press, Media & Telecommunication Law Roll no: - 904

Semester: - 9th
Session: - 2013-18
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ACKNOWLEDGEMENT

I am very thankful to everyone who all supported me for I have completed my project effectively
and moreover on time. I am equally grateful to my Press, Media & Telecommunication Law
faculty: Mr. Kumar Gaurav Sir. He gave me moral support and guided me in different matters
regarding the topic. He had been very kind and patient while suggesting me the outlines of this
project and correcting my doubts. I thank him for his overall supports. Last but not the least, I
would like to thank my friends who helped me a lot in gathering different information, collecting
data and guiding me from time to time in making this project despite of their busy
schedules ,they gave me different ideas in making this project unique.

Thanking you

ADHISH PRASAD
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TABLE OF CONTENTS

1. OBJEC OF THE STUDY…………………….…....…………………………...…………4

2. RESEARCH METHODOLOGY……………………………………………………..…..4

3. SOURCES OF DATA.........................................................................................................4

CHAPTERISATION

i. INTRODUCTION …………………………………………....………….....…..5,6

ii. TELECOM INTERCONNECTION REGULATION........................................7-11

iii. TRAI’s DIRECTION ON INTERCONNECTION………………..................12-16

iv. INTERCONNECTION DISPUTES.................................................................17-22

v. CONCLUSION…………………………....................................…......…………23

BIBLIOGRAPHY……………………………………………………………...….………....24
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OBJECT OF THE STUDY-

The object of study is to find out the legal provisions of the interconnection agreements in
Telecom Sector in India.

RESEARCH METHODOLOGY-

Researcher shall emphasize and use the doctrinal method to prepare this project topic.

SOURCES OF DATA-

PRIMARY SOURCES:- SECONDARY SOURCES:-

1. Telecom Interconnection Regulation 1. Books on Press and Media

2. The Constitution of India,1950 2. Magazines

3. Press and Media Law 3. Websites

4. Journal
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CHAPTER 1: INTRODUCTION
Interconnection agreements are prescribe terms and conditions under which two licensees or
service providers interconnect their networks to allow their respective subscribers to have
seamless access to each other's networks. 1 As a legal matter, an interconnection agreement is a
binding contract that contains the rights and obligations of each contracting party with respect to
interconnection arrangements, including commercial, technical, operational, and dispute-
settlement provisions.2 The scope and content of individual interconnection agreements vary. As
discussed earlier, interconnection agreements involving service providers, which are subject to
the Telecom Interconnection Regulation, must be consistent with the basic principles of the
approved RIOs of those service providers.

As a practical matter, most interconnection agreements include: (1) technical details regarding
the interconnecting networks and the equipment used for interconnection; (2) financial terms
regarding access charges and payments between service providers; (3) billing and settlement
provisions; (4) interconnection performance standards; (5) liability, indemnity, and intellectual-
property rights; and (6) dispute-settlement clauses. These provisions mint be carefully drafted
and negotiated to avoid any subsequent ambiguity or disputes over their terms. Care must be
taken to ensure that any cross-references to, or cross-default provisions with, other licensing,
contractual, or interconnection arrangements are included after carefully assessing the
consequences, risks, and advantages of such cross-references and cross-default provisions. It
would also be prudent to ensure that these agreements are consistent with applicable TRAI
orders and regulations.

Some interconnection agreements include so-called ‘most favoured treatment clauses.’ These
clauses usually require an interconnection provider to treat an interconnection seeker in 'no less
1
Determination on Six Major Issues, at paragraph I.
2
BSNL v TRAI (BSNL-1) Appeal No 2 of 2004, (2005) 2 Comp IJ 141 (TDSAT, 21 April 2004), at paragraph 10
(describing an interconnection agreement and discussing the importance of interconnection arrangements to the
telecom industry).
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favourable' a manner than other interconnection seekers with whom the provider may have
interconnection agreements. A clause of this nature was included in the interconnection
agreement between MTNL and Data Access, a long-distance licensee. Data Access subsequently
alleged that NTNL had offered Bharti Telesonic, another long-distance licensee, a much better
package of interconnection links. It asserted that the NTNL-Bharti Telesonic arrangements were
a violation of the MTNL-Data Access interconnection agreement. TDSAT rejected Data Access's
petition on technical grounds and refused to entertain a subsequent petition as well. However, as
it turned out, MTNL had to eventually offer Data Access the same interconnection terms that it
gave Bharti Telesonic.3

CHAPTER 2: TELECOM INTERCONNECTION REGULATION

3
Data Access v .MTNL Petition No 19 of 2003 (TDSAT, 29 March 2004)
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TRAI s Telecom Interconnection Regulation is the cornerstone of its regulatory scheme for
interconnection in telecom service.4 The regulation is a set of guidelines that apply to
interconnection arrangements involving various providers with 'significant market power. 5 The
central feature of rergulation is a document called the Reference Interconnect Offer (‘Rio'). A
RIO is basically an offering document in which a licensee describes its technical and commercial
conditions for other licensees to interconnect with its networks.

The regulation requires every licensee with 'significant market power' to publish a RIO after
obtaining TRAI's approval. A service provider is deemed to have significant market power if it
controls more than 30 percent of the total activity' in a licensed service area. 6 There are four
types of telecom services covered by this requirement: (1) basic (or fixed) services; (2) cellular
services; (3) national long-distance services; and (4) international long-distance services. 7 Each
of these services constitutes a distinct market in a service area for the purposes of the regulation.
The regulation does not take into account cross-holdings in determining whether a service
provider has significant market power in a service area. Thus, a telecom company controlling 25
percent of the cellular market and 20 percent of the fixed market in the same service area is not
required to file a RIO as long as the company's individual market share in either service does not
exceed 30 percent.

Individual RIOs must be consistent with the regulation's guidelines. They must be based on the
model RIO appended to the regulation. After a service provider publishes its RIO, the RIO forms
the basis for subsequent interconnection agreements between the service provider and other
licensees and service providers.8 It can only be amended with TRAI's approval. 9 Although the
RIO provides the basic elements for a licensee's interconnection arrangements, the licensee
offering interconnection (the interconnection provider') and the party seeking interconnection

4
TRAI, Telecommunication Interconnection (Reference Interconnect Offer) Regulation (No 2 of2002) (the Telecom
Interconnection Regulation).
5
BSNL v TRAI(BSNL-II1) Appeal No 11 of 2002, (2005) 5 Comp 1J 292 (TDSAT, 27 April 2005)
6
Telecom interconnection Regulation, cl3.3
7
According to the regulation's explanatory memorandum, it is an accepted regulatory principle in several countries
that telecom companies with significant market power must publish reference offers regarding interconnection
arrangements that affect their networks.
8
Telecom Interconnection Regulation, cl 3.1
9
Ibid, cl 3.2.
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(the `interconnection seeker') are free to modify and embellish RIO's provisions when
formulating individual interconnection agreements.10

An interconnection seeker may accept the interconnection provider's RIO conditions entirely and
execute an agreement incorporating these conditions. Alternatively, it may use the RIO as a
starting point to negotiate a customised interconnection agreement with the interconnection
provider.

Model RIO
The Telecom Interconnect Regulation includes a Model RIO containing essential provisions that
interconnection providers must take into account when formulating their individual RIOs. 11

The Model RIO is organized into articles and schedules. The articles cover such technical and
commercial matters as: (1) points of interconnection and interconnection principles; (2)
procedures to provide interconnection; (3) technical-service commitments and fault repairs; (4)
technical specifications and standards; (5) network management, charging, and billing; and (6)
settlement rules and other commercial terms and conditions. The schedules contain details
regarding: (1) the location and description of interconnection points; (2) performance standards;
(3) charges for miscellaneous services; (4) charges for sharing infrastructure elements; (5) a
schedule of standards and specifications; and (6) interconnection charges for origination, transit,
and termination.

Article 2.1 of the Model RIO requires parties to ensure that their respective systems are
connected at mutually agreed-upon points of interconnection. These points of interconnection are
indicated in Schedule 1 of the Model RIO. Parties are also required to supply each other with the
telecom services, facilities, and information necessary for interconnection. 12 As a general
principle, each party must carry traffic on its network handed over by the other party for onward
transmission.

10
Ibid.
11
Telecom Interconnection Regulation, annex B, Model RIO
12
Ibid, art 2.1.
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Article III contains a procedure for the interconnection seeker to request interconnection links
from the interconnection provider. The procedure requires the interconnection seeker to contact
the prospective interconnection provider six months in advance with a request for
interconnection. The request must be accompanied by relevant details regarding the proposed
interconnection links.13 The interconnection provider must respond within 30 days after it
receives the request. It may accept the request or offer an alternative interconnection proposal. If
the request is accepted, the interconnection seeker must make the necessary payments stipulated
by the interconnection provider. The parties are expected to test the circuits before the
interconnection links are finalized.14 If an interconnection provider fails to make available the
agreed-upon interconnection facilities, it may be required to pay liquidated damages to the
interconnection seeker.15

The Model RIO casts several general obligations on both interconnecting parties. Each party is
responsible for operating its own system safely and for ensuring quality of service. Both panics
must maintain and repair faults on interconnection links in the same manner as they maintain and
repair their separate networks.16 In additiion, they must agreed uopn a mechanism to handle fault
reporting.17 They are required to formulate operating instructions with specific response times to
rectify network fault conditions.18 Interconnection facilities must satisfy technical standards
established by the Telecom Engineering Centre and TRAI's quality-of-service standards. 19
Transmission interfaces, switching, and speech performance must conform to applicable national
and international standards.20 Each party is also required to maintain a network management
system to manage interconnecting traffic.21 This system must he non-intrusive, and it should not
interfere with networks of other operators.22

13
Ibid, art 3.1.
14
Ibid, art 3.3.
15
Telecom interconnection Regulation, annex B, Model RIO, art 3.8
16
Ibid, art 5.1.
17
Ibid, art 5.3.
18
Ibid, art 5.5.
19
Ibid, arts 5.2 and 6.1
20
Ibid, art 6.4
21
Ibid, art 7.3
22
Ibid. arts 7.4 and 7.5.
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To coordinate activities and reconcile accounts, the interconnecting parties must constitute a
coordination committee.23 Among other things, the committee is to resolve disputes regarding
interconnection facilities.24 In the case of disputes between the parties, the Model RIO states that
the parties can either request TRAI's intervention or invoke the settlement-of-disputes
mechanism under the TRAI Act. 25 TDSAT has questioned the legality of this provision in
BSNL-II as it enables TRAI to exercise a dispute-resolution function, which is not recognized by
the TRAI. Act. According to the Tribunal, it is impermissible for the Model RIO to depart from
the TRAI Act's provisions for dispute-resolution. 26 As discussed earlier in this project TDSAT
has interpreted those provisions to claim extensive and exclusive jurisdiction over a large swathe
of disputes involving telecom, broadcasting, and cable services. The Tribunal believed that its
exclusive jurisdiction would be affected if TRAI were given a role vis-a-vis interconnection
disputes.

TDSAT examined the scope of the Telecom Interconnection Regulation in BSNL-111. 27 The
case involved an appeal by BSNL and MTNL, challenging TRAI's revisions to their respective
draft RIOs. In its judgment, TDSAT endorsed the Telecom Interconnection Regulation's basic
purpose, which was to facilitate effective interconnection among service providers. However, it
ruled that the Authority could not impose an entirely new set of conditions when a draft RIO is
submitted to it for its approval. Rather, TRAI must ensure that the draft RIO adheres to the basic
structure of the Model RIO, and that important issues are properly addressed. TDSAT also held
that the Telecom Interconnection Regulation does not compel service providers to adopt the
Model RIO completely when formulating their individual RIOs. The Regulation merely requires
each provider's RIO to be based on the Model RIO. Moreover, the Model RIO's principal
purpose is to function as a benchmark for mutual negotiations among service providers. It could
not take away the contractual freedom of service providers to hold mutual negotiations, and to
enter into specific interconnection agreements with each other.

23
Ibid, art 16.1.
24
Ibid, arts 3.2 and 18
25
Ibid, art 18
26
BSNL v TRAI (BSNL-II) Review Petition No2 of 2004, (2005)2 Comp LJ 191
27
BSNL v TRAI (BSNL-111) Appeal No 11 of 2002, (2005) 5 Comp LJ 292 (TDSAT, 27 April 2005)
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Finally, to resolve the underlying dispute between BSNL and TRAI in BSNL-III, TDSAT
ordered both parties to undertake negotiations to narrow their differences. These negotiations
substantially reduced the number of outstanding issues between the parties. The Tribunal then
ruled on these issues individually, and on this basis, directed BSNL to publish its RIO. However,
TRAI subsequently insisted that BSNL must re-submit its revised RIO (incorporating TDSAT's
decision) for the Authority's approval. BSNL complained to TDSAT about TRAI's position in
BSNL-V.28 The Tribunal disapproved of TRAI's position. It ruled that its appellate powers under
the TRAI Act included the power to discharge the Authority's regulatory functions under the
same statute. For instance, if the Tribunal found an error in the Authority's decisions, it was not
necessary for it to remand the matter for TRAI to reconsider. Instead, TDSAT could rectify the
Authority's error and issue appropriate directions to the concerned parties.

By the same token, BSNL was not required to resubmit its revised RIO to TRAI because the
Tribunal had already ordered its publication in BSNL III.29

28
BSNL v TRAI(BSNL-V) Appeal No 11 of 2005 (TDSAT, 29 March 2006)
29
BSNL v TRAI (BSNL-V) Appeal No 11 of 2005 (TDSAT, 29 March 2006), at paragraph 18
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CHAPTER 3: TRAI’s DIRECTIONS ON INTERCONNECTION

TRAI discharges its interconnection functions under s 11(1)(b) of the TRAI Act by issuing
directions to service providers under Sec 12(4) and 13. 30 TRAI has invoked its power to issue
directions frequently. In December 2000, some fixed providers complained to TRAI that cellular
licensees were blocking calls from fixed subscribers to cellular numbers. TRAI deplored this
practice and directed cellular licensees to ensure that calls from fixed networks were properly
completed.31 The Authority determined that selective call blocking violated its quality-of-service
standards because it resulted in a call-completion rate of zero. The practice was arbitrary, put
consumers to considerable inconvenience, and had the potential to cause great chaos in the
telecom sector.

In a direction issued in July 2003, TRAI ordered all service providers to honour interconnection
requests from other service providers within three months. 32 TRAI noted that the licenses of the
fourth cellular licensees expressly required them to provide interconnection to all eligible access
providers.

However, there was no correspondingly similar requirement in fixed licenses. TRAI observed
that mandatory interconnection for one group of service providers, and not for others, was
discriminatory and against the level-playing-field principle. Accordingly, to protect consumers
and maintain a level playing field, TRAI directed service providers to honour each other's
interconnection requests in the same service area. Service providers were required to offer direct
interconnection through a transit switch or transmission media. If there were technical problems,
mutual arrangements could be made to route the traffic through transit-service providers.

30
Part 6.4 B of this book discusses TRAI’s general and specific powers to issue directions under the TRAI Act.
31
Harsha Vardhana Singh, Secretary, TRAI, 'Directive under Section 13 ofTRAI Amendment Act on Blocking
ofTransit Calls by CMSPs', No 101-6/2002-MN (Pt) (similarly worded directives issued on 1 January 2003 and 15
January 2003). The cellular industry responded in an unusual open letter to TRATs chairperson criticizing the
direction. TRAI's rejoinder came in an usually forceful rebuke. See Letter from Harsha Vardhana Singh, to Director
General, COAL, 'Open Letter by Cellular Industry to the TRAI, published in Various Newspapers on 13th January,
2003', 14 January 2003 (regulation does not take place by creating pressure through the media or by trying to
drum up public support).
32
Letter from Rajendra Singh, Advisor, TRAI, to All Service Providers, 'Direction under Section 13 of the TRAI Act on
Direct Connectivity between Networks of Service Providers', No 101-13/2003-MN
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TRIA's direction was challenged by BSNL in TDSAT on the ground that the underlying
interconnection agreements between BSNL and cellular licensees envisage a much longer
timeframe (in some cases, 12 months) to complete interconnection. BSNL argued that the TRAI
direction was issued without proper jurisdiction, and that it was contrary to existing service
license provisions. It warned that direct connectivity would result in 'grave technical difficulties,'
and would adversely affect quality of service. The Tribunal agreed with these contentions and set
aside the direction in BSNL-III. It ruled that TRAI had no powers to interfere with the terms and
conditions of existing service licenses.33

In the same judgment, TDSAT also dealt with a petition from celluiar licensees that wanted
direct connectivity with CellOne, BSNLs mobile service. CellOne was a relatively late entrant
into the cellular market. But it quickly gained market share taking advantage of BSNL's existing
infrastructure for fixed services. Private licensees complained that Cello had not been very
responsive to their requests for direct interconnection. Among other things, CellOne required
other cellular licensees to route all their interconnecting traffic at the level-I TAX, rather than at
more convenient handover points on its network. This resulted in higher interconnection charges
for the cellular licensees and congestion at interconnection points. Therefore, the cellular
licensees asked TDSAT to compel CellOne to grant direct interconnection access. They also
wanted a refund of certain interconnection charges that CellOne had wrongly collected from
them.

TDSAT declined to order direct interconnectivity between CellOne and the private licensees on
the ground that it lacked the competence to make such an order. However, the Tribunal ordered
BSNI, to stop charging extra transit fees for calls from private cellular subscribers to CellOne
customers.34 TRAI subsequently issued a special regulation to implement this decision. 35 The
regulation forbids BSNL from levying transit charges on cellular providers that terminate their
calls on CellOne's network if the providers' networks are directly connected to BSNL switches.
In a subsequent decision, TDSAT declined to extend the benefit of its direction to a fixed
licensee that claimed it was similarly situated to the cellular licensees for whom TRAI had made

33
BSNL v TRAI (BSNL-III) Appeal No 11 of 2002, (2005) 5 Comp I4 292 (TDSAT, 27 April 2005).
34
(2005) 5 Comp 14 292, at paragraph 18
35
TRAI, Transit Charges for BSNEs CellOneTerminatingTraffic Regulation (No 10 of 2005)
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the special regulation.36 TDSAT found that the licensee had entered into separate arrangements
with BSNL after the Tribunal's earlier decision and could not take advantage of that decision to
modify those arrangements.

In January 2005, TRAI ordered all service providers to ensure that their networks were able to
recognize new codes allotted by DoT to other service providers. Another TRAI direction in July
2005 required all service providers to honour interconnection requests within 90 days after the
interconnection seeker made the required payments. 37 The Authority noted that the unavailability
of adequate interconnection arrangements among networks of service providers resulted in non-
completion of calls. This caused disruption in service, inconvenience to subscribers, and
deterioration in quality of service. Quoting from various license provisions, the Authority
ordered service providers to promptly comply with its directions regarding interconnection.

Earlier, in December 2003, TRAI had, in fact, sought to introduce procedures to prevent abrupt
termination or disruption of interconnection arrangements among service providers. Intervening
in a dispute between two services providers involving interconnection payments, Authority
admonished all telecom licensees to avoid disconnecting their interconnection arrangements
because of the inconvenience that their actions would cause subscribers. It emphasized that
disputes among service providers should be resolved through mutual agreement. If no mutual
agreement were possible, the party seeking to terminate interconnection was required to serve a
ten-day notice on the other party. A copy of this notice had to be given to TRAI. Based on this
notice, the Authority would have ten days to determine whether to intervene in the matter.

If TRAI chose not to intervene at the end of the ten-day period, the interconnection arrangements
could be disconnected. The party seeking disconnection also had the option of directly requesting
TRAI to intervene in the matter. BSNL challenged these procedures, including the ten-day
waiting period, before TDSAT in BSNL-I. 38 It contended that the procedures were ultra vires the
TRAI Act. TDSAT agreed with BSNL. It held that, by introducing the impugned procedures,
TRAI had created a dispute-resolution mechanism that was outside the scope of the TRAI Act. 39

36
Bharti Televentures v TRAI Appea1 No 8 of 2005 (TDSAT, 10 February 2006).
37
Letter from RIB Bhatnagar, Advisor, TRAI, to All Service Providers, 'Direction under Section 13 on Provision of
Interconnection', No 409-912005-FN, 7 June 2005
38
(BSNL-1) Appeal No 2 of 2004, (2005) 2 Comp lj 141 (TDSAT, 21 April 2004).
39
Ibid, at paragraph 20.
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The Tribunal ruled that the appropriate remedy for a party, which wanted to terminate
interconnection, was to request the Tribunal for appropriate relief. 40 TDSAT could issue
appropriate orders in response to such requests and resolve the merits of the underlying dispute,
if any, between the parties. But it was not appropriate for a provider to terminate interconnection
by simply notifying TRAI of its intention to do so. 41 In this connection, TDSAT emphasized that
it remained the sole judicial entity responsible for resolving all interconnection disputes among
service providers.42

TDSAT reaffirmed this position in BSNL-II43 when it rejected a review petition filed by TRAI
against its ruling in BSNL-I. It acknowledged that TRAI had the power to fix the terms and
conditions of interconnectivity among service providers to ensure technical compatibility, and
effective interconnection between service providers. 44 But TRAI could not insist that service
providers must notify it before they took any actions under their interconnection agreements. 45
TDSAT reiterated that TRAI had no adjudicatory functions under the TRAI Act.

Register of Telecom Interconnection Agreements

TRAI established a register for telecom interconnection agreements through a regulation issued
in August 1999.46 This regulation applies to all service providers that are required to provide the
Authority with information about their interconnection agreements. 47 It requires all service
providers to register any interconnect agreements to which they are parties with the Authority.
The Authority may prescribe the specific format for providers to submit information about their
interconnection agreements.

The telecom interconnection register is maintained in three parts. Part I contains a list of all
interconnection agreements with the names of interconnecting service providers, their service
40
Ibid, at paragraph 19.
41
(2005)2 Comp LJ 141 (TDSAT,21 april 2004), at paragraph 20
42
Ibid, at paragraph 21
43
BSNL v TRAI (BSNL-II) Review Petition No 2 of 2004, (2005) 2 Comp LJ 191
44
Ibid, at paragraph 8
45
Ibid, at paragharph 5
46
See TRAI, Register of Interconnect Agreements Regulations (No 2 of 1999)
47
Ibid, cl 1(iii).
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areas, and the dates on which these agreements were executed. Part II includes confidential
portions of registered interconnection agreements. Part III has non-confidential, information
about interconnection agreements. Service providers who want certain aspects of their
interconnection agreements to remain confidential must make a specific request for this
purpose.48 The Authority will take a decision on these requests in accordance with its procedures
to preserve confidentiality of information." Subject to these confidentiality requirements, the
telecom interconnection register is generally open for public inspection. A person who wants to
inspect the register must apply to a designated officer of the Authority, and pay the prescribed
fee. The designated officer is empowered to make available extracts of relevant portions from the
register for an additional fee. TRAI may also allow web access to the register under certain
conditions.

CHAPTER 4: INTERCONNECTION DISPUTES

48
Ibid, cl 4.
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As a technical matter, interconnection can take place at different network levels depending on
the symmetry of the networks involved. Yet, in some cases, interconnection providers want to
confine interconnection links to only a few locations. While interconnection seekers demand
more convenient access between networks. Therefore, the location of interconnection points is
often the cause of disputes between services providers. These disputes frequently arise when two
similar networks within the same service area are to be interconnected.

An example of such a dispute is Bharti Telenet v Union of India.49 The appellant, Bharti Telenet,
was a fixed service provider in the Madhya Pradesh service area. It sought to interconnect its
network with BSNL’s network in Madhya Pradesh. However, BSNL was only willing to offer
Bharti a limited number of interconnection points. This meant that, in many cases, Bharti would
have to route traffic over long distances and across a vast service area to reach BSNL's
designated interconnection points. Bharti challenged BSNL’s interconnection offer before TRAI.
It argued that it was entitled under the terms of its fixed license to fully utilize its networks and
minimize interconnection charges payable to other providers. Therefore, Bharti submitted that it
had the right to handover its traffic to BSNL at the farthest possible point on its network. Bharti
also challenged BSNL’s refusal to accept interconnecting traffic at the Ujjain and Indore
exchanges that originated outside the long-distance charging areas (LDCAs) for those
exchanges.50

In its ruling, TRAI noted that the BSNL-Bharti interconnection agreement required the two
networks to interconnect 'at the equivalent level.' 51 In addition, Bharti's license agreement
required the licensee to structure its network based on BSNI’s model with similar levels and
hierarchies. Based on these provisions, the Authority concluded that interconnection between the
two networks had to take place at each network level. Interconnection for local calls would take
place between the local or tandem exchanges within the same short-distance charging area
(SDCA). While long-distance interconnection would take place between corresponding trunk
automatic exchanges within the same LDCA. Accordingly, TRAI ruled, that BSNL's refusal to
accept Bharti's long-distance traffic from other exchanges at Ujjain and Indore was not illegal.
Furthermore, TRAI pointed out that Bharti's license gave it the ability to use its network to carry
49
(2005) 4 Comp LJ 242 (TDSAT, 29 July 2002).
50
The concept of an LDCA
51
TRAI, Dispute between BSNL and Bharti Telenet Relating to Handing Over of STD Traffic-Determination by TRAI
15 June 2001.
 P a g e | 18

traffic within its service area.52 Therefore, Bharti could avoid transferring long-distance calls to
BSNL if these calls began in, travelled through, and ended on. Bhariti's own network within the
service area.

TRAI also concluded that Bharti could exercise a so-called far-end handover of calls to BSNL
for two reasons. First, Bharti's service license recognized BSNL's right to make a far-end
handover of incoming calls from its network to Bharti's network. 53 TRAI explained that this
provision had been included when private fixed licensees, such as Bharti, had not commissioned
exchanges in all SDCAs. However, the ground realities had considerably changed since the
provision was first introduced. Therefore, to ensure a level playing field, TRAI believed that
both private fixed licensees and BSNL should be permitted to engage in far-end handovers.
Second, a far-end handover arrangement would be consistent with the national routing plan and
interconnection practices in other countries. Therefore, TRAI directed BSNL to allow Bharti to
make far-end handovers in Madhya Pradesh. Intermediate handovers by either party would not
be allowed. Finally, TRAI held that its order would have general applicability beyond Madhya
Pradesh to interconnection arrangements in other service areas.

Aggrieved by TRAI's determination, Bharti appealed to TDSAT. However, the Tribunal refused
to take the appeal because it was not timely filed. 54 In its judgment, TDSAT noted that the
principles underlying TRAI's determination had already been incorporated in many
interconnection agreements between private fixed licensees and BSNL. 55 Therefore, TDSAT
declined to entertain the case on limitation grounds. 56 However, this decision was subsequently
reversed by the Supreme Court in Bharti Telenet v Union of India.57 The court found that
TDSAT had wrongly invoked limitation as a ground to deny Bharti‘s appeal. It remanded the
case back to the Tribunal for reconsideration on the merits.

52
Ibid.
53
Ibid. cl 1.7.6.6.
54
Bharti Telenet v Union of India (2005) 4 Comp LJ 242, at paragraph 22.
55
TDSAT found that Bharti Telenet, itself, had signed several interconnection agreements incorporating TRAI’s
determination in other service areas. Bharti Telenet Union of lndia (2005) 4 Comp IJ 242, at paragraph 27.
56
Ibid, at paragraphs 24-26. For these reasons, TDSAT also dismissed a similar appeal by Bharti Telenet involving its
fixed services in Haryana. Bharti Telenet paragraph '3.1.5. Union ofIndia (2005) 4 Comp Lj 247 (TDSAT, 19
December 2002).
57
(2005) 4 SCC 72. The Supreme Court's decision is extensively analyzed in Part B of this book.
 P a g e | 19

Until now, a majority of the interconnection disputes have invoked government incumbents on
one side, and private licensees arrayed against the government on the other side. However, it is
increasingly common for interconnection disputes to arise among two or more private licensees.
An illustrative example is an interconnection dispute between Tata Teleservices and Reliance
Infocomm. Tata Teleservices obtained UAS licenses for 12 service areas between December
2004 and January 2005. Reliance controlled fixed networks in some of these areas. These
networks were later migrated to the unified licensing framework. Tata Teleservices sued
Reliance in TDSAT on the ground that the latter was deliberately refusing to interconnect their
respective networks. Tata Teleservices submitted that, due to Reliance's intransigence, it was
forced to route traffic bound for Reliance numbers through third-party providers. Ultimately, the
two companies reached a settlement on this matter, and the case was withdrawn from TDSAT. 58

The war between india’s top telecom firm and Reliance jio is turning into
juvenile mudslinging
Barely a fortnight after India’s richest man, Mukesh Ambani, launched his much-awaited 4G
service, Reliance Jio, the newcomer is already embroiled in a war of words with India’s biggest
telecom company, Bharti Airtel. The conflict is over providing points of interconnect. These
points help link networks so consumers can make calls between different operators, enabling a
smooth exchange of traffic. Each company claims the other isn’t coordinating and has ulterior
motives.

The sparring isn’t entirely unexpected. Jio is being touted as an industry disrupter for its
ridiculously low data prices ($0.7 per gigabyte), expansive infrastructure, and plan to entirely do
away with charges for domestic calls.

So, even before it was formally launched, incumbent players were on the edge.

58
TRAI, 'Study Paper on State of Telecom Network'
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For instance, in August, these telecom providers complained to theTelecom Regulatory

Authority of India (TRAI) that Jio was offering full-fledged services to customers and calling it
trials, even before the services began. Ambani refuted these allegations.

Then, a week before Jio’s launch, Bharti Airtel, Vodafone, and Idea Cellular—these
three control 60% of the market currently—slashed their prices for data services to keep up with
Jio’s anticipated lower rates.

Now, it has degenerated into an unseemly and public squabble between Jio and Bharti Airtel.
Here’s how it all happened, based on media statements from companies:

Sept. 17: In a statement, Airtel said it has received a payment from Jio to provide extra
interconnect points to facilitate the large call volume that the latter is expecting. According to the
interconnectivity agreements, these points should be provided within 90 days of receiving the
payment, Airtel said, but it “would work towards releasing the points of interconnect well ahead
of the contractual obligation.”

Sept. 18: In a statement, Jio said no such 90-day clause exists and that TRAI has “instructed the
incumbent operators to urgently provide requisite interconnection capacities to maintain the
quality of service parameters and not to make this subject to any contingencies or restrictions.”

In the same statement, Jio also said that Airtel hadn’t provided enough interconnect points, as a
result of which more than 20 million calls between the two networks’ subscribers fail daily. It
said Airtel is “dilly dallying” on adequate points to Jio.

Sept 18: Airtel issued a statement following Jio’s allegations. “…it is Jio that seems to be dilly-
dallying on the issue and not cooperating deliberately. It appears that the constant rhetoric may
be a ploy by Jio to cover up some technical issues in their own network, which is causing call
failures, by constantly blaming other operators,” the statement said.

Sept 18: Late on Sunday, Jio replied to Airtel’s allegation. “The statements from Airtel are
misleading and unfortunate in the context of the severe quality of service issues being faced by
the Indian customers. While there are over two crore call failures every day between the two
networks, there are no incidents of call failures within the Jio network.”
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Jio Disrupt
Telecom firms, especially Airtel, have a reason to be jittery over Jio’s plans.

The Ambani company has set a target of getting 100 million customerson board by December
2016. It’s quite a target considering that Airtel, which launched in 1995, has some 358 million
users after 20 years.

“Bharti and Idea would be impacted by the aggressive signing up of subscribers by Jio—likely as
second SIM—on account of the welcome offer and it can potentially shift voice/data usage from
incumbents,” analysts at ICICI Securities, a brokerage, said in a Sept. 02 report.

Then there’s Jio’s huge network capacity. In a report on Sept. 14, analysts at Credit Suisse
explained how Jio’s huge network capacity—three times that of Airtel—will make it a
powerhouse when it comes to pricing.

Other Competitors
As Bharti Airtel and Reliance Jio have a go at each other, Vodafone India and Idea Cellular have
been quietly ramping up their points of interconnect for Jio over the past few days.

Jio had earlier said that Vodafone and Idea did not provide enough of such points despite
frequent requests. It also said that of every 100 calls made to the Vodafone networks, 80 were
failing.

“Following guidance from TRAI and clarifications from Jio regarding its commercial launch,
Vodafone India has decided to increase the points of interconnect between the two operators by
thrice and accordingly increase the capacity to connect,” Vodafone said in a statement on
Friday (Sept. 16).

Over the next few weeks, the issue could be sorted out, but there is an even bigger war looming:
the impending spectrum allocation by the government.
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Jio has already offered the highest earnest money deposit (EMD), indicative of its plans for the
upcoming auctions. It means the company is eligible to bid in any of the country’s 22 telecom
circles and in any spectrum band. It is also the first time that the 700 Mhz band—considered the
best for 4G operations—is being auctioned. And Jio, with the highest EMD, is the only
company with the potential to buy spectrum at a base price in most of the circles.

The competition, in all likelihood, will not be pleased. 59

59
https://qz.com/784688/bharti-airtel-versus-reliance-jio-the-war-between-indias-top-telecom-firm-and-reliance-
jio-is-turning-into-juvenile-mudslinging/, accessed on 9/11/2017
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5: CONCLUSION

An interconnect agreement is a business contract between telecommunications organizations for

the purpose of interconnecting their networks and exchanging telecommunications traffic.
Interconnect agreements are found both in the public switched telephone network and
the Internet.

In the public switched telephone network, an interconnect agreement invariably involves

settlement fees based on call source and destination, connection times and duration, when these
fees do not cancel out between operators.

On the Internet, where the concept of a "call" is generally hard to define, settlement-
free peering and Internet transit are common forms of interconnection. A contract for
interconnection within the Internet is usually called a peering agreement.

Interconnect agreements are typically complex contractual agreements, involving payment

schemes and schedules, coordination of routing policies, acceptable use policies, traffic
balancing requirements, technical standards, coordination of network operations, dispute
resolution, etc. Legal and regulatory requirements are often an issue: for example, network
operators may be forced by law to interconnect with their competitors. In the United States,
the Telecommunications Act of 1996 mandated methods of interconnection and the
compensation models for doing so.

In telecommunications, interconnection is the physical linking of a carrier's network with

equipment or facilities not belonging to that network. The term may refer to a connection
between a carrier's facilities and the equipment belonging to its customer, or to a connection
between two (or more) carriers.
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BIBLIOGRAPHY

 PRIMARY SOURCE: -

STATUTE: -

 THE CONSTITUTION OF INDIA, 1950.

 PRESS COUNCIL ACT, 1978
 TELECOMMUNICATIONS ACT, 1996

ONLINE SOURCES-

 http://www.lexology.com
 http://mcdanielslaw.com
 http://www.academia.edu
 http://www.inta.org
 http://www.lawctopus.com
 http://www.mightylaws.in
 www.lawyersclubindia.com
 www.allaboutlaw.com
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