COMMENT BY CHUKWUYERE E. IZUOGU TO THE NIGERIAN COMMUNICATIONS COMMISSION ON THE OPEN ACCESS MODEL FOR NEXT GENERATION OPTIC FIBRE BROADBAND NETWORK

1. Introduction
1.1 Commenter welcomes the consultation launched by the Nigerian Communications Commission (the Commission) concerning the Open Access Model For Next Generation Optic Fibre Broadband Network (the Industry Consultation Paper). This matter is no doubt of great importance to Nigeria’s economic growth. Consistent with the mandate of Mr. President as set out in the Nigerian National Broadband Plan 2013 – 2018 “Internet and Broadband have been globally acknowledged as the foundation for transformation to a knowledge-based economy. It is also widely acknowledged that broadband infrastructure is an enabler for economic and social growth in the digital economy. Broadband has the potential of enabling entire new industries and introducing significant efficiencies into education delivery, health care provision, energy management, ensuring public safety, government/citizen interaction, and the overall organization and dissemination of knowledge.”

1.2 Comment is in regard to the need for “a robust telecommunication regulatory regime encouraging non-discriminatory and price competitive open access to support nationwide fibre deployment and provision of transmission and fibre services” as set out under Paragraph 3 of the Industry Consultation Paper. The main thrust of Commenter’s argument is the non-discrimination obligation that will be imposed on Infrastructure Companies (InfraCos) and other operators in the Broadband market.

2. Comment
2.1 The question of non-discrimination in granting network access is a key Broadband policy issue today. Commenter strongly believes that the central mandate for the emerging field of network infrastructure policy for National Governments should be the one eloquently articulated by the Commission in the Industry Consultation Paper: Non-discriminatory and open access.

2.2 Commenter believes that the general obligation of non-discrimination is a very important regulatory tool to ensure a level playing field amongst all InfraCos and operators in the market for Broadband services and that the Commission should impose it.


2.3 Commenter suggests that in setting out the specific regulatory guidelines for the management of InfraCos, the Commission should define what constitutes “discrimination” or “discrimination between access seekers” for the purpose of imposing the non-discrimination obligation on InfraCos and other Broadband market operators.

2.4 Commenter wishes the Commission to note that Section 97 Nigerian Communications Act 2003 (the Act) requires that all interconnection and/or access agreement between Communications licensees must comply with the principles of neutrality, transparency, non-discrimination, fair competition, universal coverage, access to information, equality of access and equal terms and conditions [emphasis on non-discrimination].Pursuant to Section 8 b of the Competition Practice Regulations 2007 (the Regulations), discriminating in the provision of interconnection or other communications services or facilities to competing Licensees, except under circumstances that are objectively justified is a conduct deemed to result in a substantial lessening of competition. Commenter notes that neither the Act nor the Regulations in their present form, have provided any clear guidance on what exactly constitutes “non-discrimination”.

2.5 In the case of wholesale Broadband access, which must be provided on a non-discriminatory basis whilst still, ensuring that the quality of service provided to Retail Service Providers (RSPs) is the same as that of the owner and operator of the Broadband network, Commenter is of the view that all competitors should have access to the infrastructure under fair and transparent conditions and any practice resulting in a competitive disadvantage to any operator should be prohibited by the regulatory guideline (to be issued by the Commission). To this end, Commenter sees the need for a clear and specific guideline on the non-discrimination obligation as necessary to ensure consistency in the deployment of Broadband infrastructure.

2.6 Discrimination in Commenter’s view may also relate to elements such as tariffs, restrictions or delays in making network connections, the provision of maintenance or repair services or information about network programming and interoperability, and routing. In respect of the technical configuration of access, Commenter believes that discrimination may arise in relation to; (i) the degree of technical sophistication of the access (i.e. restrictions on the type or level in the network hierarchy of exchange involved in the access or the technical capabilities of this exchange); (ii) the number and/or location of the connection points (i.e. the requirement to collect and distribute traffic for particular areas at the switch which directly serves the area rather than at a higher level of the network hierarchy may have a significant impact on the cost of the company seeking access); and/or equal access. As opined by several academic commentators, discrimination in the conditions of network access will restrict competition on the downstream market on which the access seeker is operating or planning to operate.

2.7 In defining what constitutes “discrimination”, Commenter notes that the Australian Competition and Consumer Commission (ACCC) has adopted a two part test to wit; (i) whether access seekers belonging to the same class have been given an equal opportunity to obtain the same term or condition, or receive the same treatment; and (ii) whether any differences in opportunity between access seekers belonging to the same class are consistent with statutory objectives, thus the ACCC will deem a difference in the terms, conditions or manner of treatment between access seekers as discriminatory unless it passes this test.

2.8 In the US, Commenter also notes that the Federal Communications Commission (FCC) has held in its “Implementation of the Local Competition Provisions in the Telecommunications Act of 1996 Proceeding” that the term “non discriminatory” in relation to the statutory obligation to interconnect (in Section 251 of the US Telecommunications Act 1996) applies to the terms and conditions an incumbent Local Exchange Carrier (LEC) imposes on third parties as well as on itself, the FCC further held: “that the equal in quality standard of section 251(c)(2)(C) requires an incumbent LEC to provide interconnection between its network and that of a requesting carrier at a level of quality that is at least indistinguishable from that which the incumbent provides itself, a subsidiary, an affiliate, or any other party”.

2.9 With respect to non-discriminatory access to unbundled network elements, FCC held that it means at least two things: “first, the quality of an unbundled network element that an incumbent LEC provides, as well as the access provided to that element, must be equal between all carriers requesting access to that element; second, where technically feasible, the access and unbundled network element provided by an incumbent LEC must be at least equal-in-quality to that which the incumbent LEC provides to itself”

2.10 In reaching this conclusion, the FCC rightly noted that an incumbent LEC could potentially act in a non-discriminatory manner in providing access or elements to all requesting carriers, while providing preferential access or elements to itself.

2.11 Also in the European Union (EU), Commenter notes that the Access Directive provides that: “Obligations of non-discrimination shall ensure, in particular, that the operator applies equivalent conditions in equivalent circumstances to other undertakings providing equivalent services, and provides services and information to others under the same conditions and of the same quality as it provides for its own services, or those of it subsidiaries or partners”.

2.10 Accordingly, the central theme in these policy/legal documents suggests that discrimination consists of not only treating like cases alike but also of treating different cases in the same way.

3 Conclusion
3.1 Commenter notes that discriminating in providing access to competing operators in certain circumstance can be a conduct deemed capable of a substantial lessening of competition under Section 8 (b) of the Regulations.

3.2 The European Commission in its public consultation on the application of non-discriminatory obligation notes that traditional investigation into discriminatory conduct of operators primarily focuses on price discrimination while non-price discriminatory conduct are often overlooked and can be equally, if not even more severe. OFCOM the UK communications regulator is of the view that it is unlikely that such non-price discriminatory conduct will be objectively justified by lack of capability to harm to competition. In this regard, Commenter suggests that in issuing guidelines on the non-discrimination obligation, the Commission should kindly note that non-discrimination would include both price discrimination and non-price discriminatory conduct.

3.3 Lastly, the Commission should also note that the obligation not to discriminate in providing access to network infrastructure seeks to ensure that undertakings with significant market power, in particular where they are vertically integrated, do not discriminate against their competitors in favour of their own downstream businesses, thus preventing, restricting or distorting competition.

Submitted by:
Chukwuyere E. Izuogu, LL.M (Hannover), A.CIArb, AMBCS
Streamsowers & Köhn
Flat CT 3 Stallion Estate Lobito Crescent
Wuse II
Abuja-FCT
chukwuyere@sskohn.com
chukwuyere.izuogu@yahoo.com