The document may be obtained here.

 
2006-09-13 

 
Figure 1: Example of VSAT based Bypass configuration

2.5    The bypass operator goes through the normal approach in applying for high capacity access to the local PSTN (typically T1 lines). Their stated line of business (typically market research) usually calls for such access and many telephone handsets. Consequently the PSTN network provider installs the T1 lines and a ‘key system’ (or small capacity PBX) that is used to provide the switching connectivity for the many phones installed. This is depicted in ROOM 1 in figure 1. The equipment in room 1 would appear normal to the untrained eye. However, in a separate room (room 2), which is normally not accessible by the network provider’s technicians Kelcom Inspector, the bypass operator sets up the heart of the bypass operation (i.e., the interface between the Internet and the local PSTN). A vigilant inspector would recognize that the bypass operator would have disconnected the T1 lines from the key system and connect them to the VoIP gateway. The equipment depicted in room 2 shows a typical supplier’s equipment; however, there are many suppliers on the market for such equipment. A brief description of the functionality of the equipment follows:

•     The satellite modem establishes connectivity via a VSAT which provides a high speed connection to the Internet via a similar VSAT located in another country.
 
•     Cisco 3640 ® router establishes point-to-point logical connectivity to the Internet.
 
•     The Cisco 2509 ® router combines with the Multitech ® modem to provide remote dial-up access in order to facilitate remote network management and control. This means little or no local technical manpower is required and therefore most of these sites are typically un-manned.

•     The Cisco ® AS5300 is the VoIP gateway which provides the interfacing functionality between the Internet world and the PSTN. Such gateways can have the capacity to manage 4 T1’s (equivalent to 96 64-kbps voice channels).
 
•     The Cisco 2900 provides local area network connectivity for the above mentioned devices.

3.0  BYPASS VIA INTERNATIONAL PRIVATE LEASED CIRCUITS (IPLC’S)

3.1    In this scenario the bypass operator gains access to the Internet via an IPLC. The IPLC replaces the VSAT and removes the physical visibility of any international communications link.

4.0 BYPASS VIA PRIVATE DATA NETWORKS

4.1    This scenario is similar to the IPLC scenario. The difference lies in the fact that instead of a point-to-point connection, as in the case of the IPLC, connection is possible over multiple points on an international data network (e.g., Wide Area networks).

5.0 GSM GATEWAY BYPASS

5.1    This is new and growing fast. GSM gateway fraud occurs when call resellers use GSM gateway devices for fixed-to-mobile calls and mobile-to-mobile calls. A GSM gateway is a device that contains a set of SIM cards, and by interfacing with landline equipment such as a PBX or the Internet provides access to a GSM network. The result is that traffic delivered to GSM operators by unlicenced carriers is billed as internal rather than interconnect traffic.

Figure 2.a. shows a national scenario and figure 2.b. shows an international configuration. Figure 2.b. is more applicable to the Barbados context.

Figure 2.a: National Scenario

Figure 2.b: International Scenario

 
5.2 There are four entities that should be concerned by bypass fraud. These are:

(1)     The International carriers:
 
•     these stand to lose revenue earning opportunities.

(2)    The local fixed network providers:
 
•     will lose revenue through them not being able to collect terminating fees;
 
•     will experience inefficient use of network capacity due to excess and illegal traffic occupying plant and equipment;
 
•     may have to invest in additional network capacity to maintain optimum network efficiency and Grade of Service.
 
(3)     The local cellular network provider who:
 
•     will suffer consequences similar to those encountered by the local fixed network provider.
 
(4)     The Barbados Government who:

•     will suffer revenue losses through reduced VAT and corporation tax collections;

 
•     from the perspective of law enforcement and national security, will find it difficult to counter the illegal activities of drug pushers, money launderers and terrorists who all use such networks to maintain their anonymity;

•     will find it difficult to encourage investment in telecommunications networks, particularly by foreign investors.

6.0 VOICE OVER INTERNET PROTOCOL (VoIP)
 
6.1    The Voice over Internet Protocol (VoIP) policy being developed states that:

•     The use of Net2phone, Vonage, Voice Sticks and IBN Flyfone service and any other such VoIP devices will be allowed, provided these VoIP providers enter into a partnership with a holder of a Barbados International Licence and such services are provided under the name of the Barbados Licence holder.

 
•     All VoIP adapters (IP to telephone line) or IP phones will be prohibited unless the importer produces to the Customs Department a valid Barbados international/domestic carrier and service provider licence and (proof) certified by the Telecommunications Unit that the importer has such licences.

7.0 ¼STRONG>CONTROL OF BYPASS  ¼/STRONG>

7.1    The Telecommunications Unit is limited to the identification and inspection of VSAT’s which can sometimes be difficult to spot because some owners go to great lengths to conceal the dish antennae. There is a database of all known VSAT’s on the island, this currently stands at 15 VSATs..

7.2    The fixed mobile and international network providers can do one or more of the following:

•     disconnect the offending operators in accordance with Section 74 of the Telecommunications Act – Cap 282B;

•     inform and liaise with the Telecommunications Unit in taking whatever action is deemed to be necessary and legal;

•     build a database which profiles those fraudulent cases that have been discovered;

•     share the above-mentioned database with The Telecommunications Unit;

•     pursue civil law suits against the perpetrators of such activities.

7.3    The Telecommunications Unit will rigorously investigate such cases and enforce the relevant laws of the Barbados.

7.4    Satellite telephones will be strictly controlled as these can contribute to the bypassing of international networks. The use of these phones is limited to disaster relief and mitigation only and all such users of these phones must be registered with the Telecommunications Unit. A policy on the use of Satellite Telephones has been published.

8.0 ¼/FONT>EXEMPTION TO THE BYPASS DEFINITION

8.1    We propose to exempt the following:

•     VoIP (the service) includes but is not limited to, peer-to-peer (p2p) type voice service. This involves calls made between two computers connected via the Internet, using IP-enabled voice communications services that do not connect to the PSTN and do not generally use (North American Numbering Plan) NANP-conforming telephone numbers, (p2p) services are not considered as telecommunication services as no numbers are used.
 
•     VoIP (the service) includes but is not limited to, Pc-to-Phone, and Phone-to-PC and are considered as (VoBB), VoIP over Broadband. The dilemma facing regulations is how to regulate VoBB such as Skype, Yahoo, Google and the others as they do not have a physical presence in the network. However, consumers using such services usually must have a PSTN telephone or else face the risk of non connection to the emergency services, or suffer the consequences of power outages.

9.0        CONCLUSION
 
9.1    The Telecommunications Unit will on discovering that a person or persons is engaging in bypass request that a Prohibition Order is issued by the Minister in accordance with Section 67 of Cap 282B. After this the procedures as laid down in Sections 68 to 74 of Cap 282B will apply.
 
Issued by Telecommunications Unit

August 25, 2006

A levy on operators has been the most commonly used approach with the levy ranging from 1% (Argentina, Brazil), to 5% (India), 6% (Malaysia) to over 10% (US). The table below indicates some examples of required contributions from operators across in a range of countries.
 
Some Examples of Universal Service Funds

Country Source of Revenue Administering agency Method of allocating funds

Argentina 1% if all operators’ gross revenues Operators (virtual fund) Government to determine based on its goal to increase fixed teledensity and mobile teledensiy.

Australia Levy on licensed operators depending on market share of eligibility revenue Australian Communications and Media Authority (ACMA) The government determines the level of subsidy paid to the USO provider. A USO model was previously used but subsidy amounts are now administratively determined, broadly based on previous modeled amounts.

Brazil 1% of service providers gross operational revenues earned from the provision of telecom services Anatel, the regulatory agency Universal Service Fund (FUST) will support ICT projects consistent with the government’s development objectives

Canada All market participants, both fixed and mobile pay fixed % of eligible telecom revenue (1.1% in 2003 & 2004) CRTC, regulatory agency Universal Service Fund to compensate costs estimated on basis of Long Run Marginal Costs plus 15% for joint and common costs.

Chile Government’s budget Subtel, the regulatory agency Subsidies distributed through competitive bidding (lowest bid wins)

Country Source of Revenue Administering agency Method of allocating funds

Colombia 5% of national and long distance operators’ revenues plus funds from license fees Ministry of Communications Subsidies distributed through competitive bidding (lowest bid wins)

France Operators contribute a % of revenue Caisse des Depots et Consignations Compensation for costs incurred by USO provider (France Telecom)

Italy Contribution of 1% of revenue by 4 major operators Ministry of Communications USO provider (Telecom Italia) makes offer to provide services at specified cost and regulator decides what part(s) of offer to accept

Japan Operators contribute to Universal Service fund Ministry Fund compensates US provider

Malaysia Fixed and mobile network operators contribute 6% of their weighted revenue from designated services to the Fund Malaysian Communication and Multimedia Commission (CMC), regulatory agency During an interim period (1999 to 2002), Telekom Malaysia was the only operator with access to funds.   Starting in 2002, other operators were invited to submit proposals for USP and be compensated from the fund through a competitive process

Nepal 2% level on the revenue of the incumbent operator, ISPs and mobile operators. NTA (Nepal Telecom Authority) Subsidies distributed through competitive bidding

India 5% levy on the revenue of telecommunication operators TRAI (the telecom regulator) Subsidies distributed through competitive bidding (with lowest bid winning)

Peru 1% of all operators’ and CATVs’ gross revenues OSIPTEL, regulatory agency Subsidy goes to lowest bidder

South Africa 0.16% of all operators’ revenues Universal Service Agency, specially created unit to manage fund Subsidies mainly awarded to telecentre projects and areas of greatest need

Switzerland     ISUO Licence publicly tendered to lowest bidder. Swisscom AG won bid (did not seek any subsidy)
 
 
Country Source of Revenue Administering agency Method of allocating funds

United States 11.1% in second quarter of 2005 on operators interstate end-user revenue (which is passed on to customers as a Universal Service Fund fee levied on monthly phone bills) Universal Service Administrative Company (a private not-for-profit-corporation) A number of programs, including: high cost support mechanism; low-income support mechanism; rural health care support mechanism; schools and libraries support mechanism (E-rate)
 
6.4     ¼STRONG>The ITU’s definition of Next Generation Networks

 Next Generation Network (NGN): a packet-based network able to provide telecommunication services and able to make use of multiple broadband. QoS-enabled transport technologies and in which service-related functions are independent from underlying transport-related technologies. It enables unfettered access for users to networks and to competing service providers and/or services of their choice. It supports generalized mobility that will allow consistent and ubiquitous provision of services to users.

Source: ITU-T Recommendation Y.2001 (2005)

6.5        Migration from PSTN TO NGN

In suggesting that mobile technology be permitted to play a role in delivering USOs, the suggestion is not that mobile technologies should be subject to an additional USO, but that a USO couched in terms of basic voice and data services might be delivered through either fixed or wireless technologies or, indeed, a combination of these and other technologies. In short, the choice of technology should not be specified. A specification that fixed line be used may have been justified at the time it was introduced e.g., because it allowed provision of data services, including broadband. But other technologies, including wireless mobile technologies, are now also promising broadband capacity.

With spectrum becoming an increasingly important resource, there is need to review spectrum allocation ad management policy with a view to allowing more flexible use of spectrum, including spectrum trading and liberalization. This will enable: a bigger role for the market in deciding how much spectrum should be allocated to different uses; faster flexible access to spectrum, including unused and underused spectrum; the development of new, spectrum efficient technologies; and innovation in the use of the spectrum and spectrum-based products and services.

Satellite systems have also been developing technologically enhancing ability to serve rural areas. Prices for VSATs have fallen rapidly allowing manufacturers to expand sales of VSAT systems into low-end applications such as rural telephony.

Power-line. Use of the power grid as a communications network – known as broadband over power lines” (BPL) in the US, and “power-line communications” (PLC) in Europe – appears to be receiving official acceptance with the FCC approving the use of power-line technology in the US in October 2004. Advocates of the technology argue that it promises several advantages offering not only voice but broadband with connection speed not dependent on distance from the telephone exchange (as with DSL), or on the number of customers (as with cable). Also, unlike its rivals, power-line offers uploads at the same speed as downloads and promises to offer far more capacity than today’s cable networks.

Moreover, the technology will reportedly allow utilities to: monitor what is happening on their power grids in real time, down to local substations; read power and water meters without entering customers’ premises; and manage peak loads by, for example, turning down a residential air conditioner remotely while a customer is at the office, in return for a lower tariff.

Advocates claim that a single airship could potentially provide coverage over an area of about 800,000 square kilometers. It should thus be possible to create “hotzones” of coverage encapsulating entire cities and their surrounding countryside, rather than the smaller “hotspots” of Wi-Fi coverage found in airports and coffee shops. Moreover, Stratellites are expected to cost much less than satellites (about US$20 million each) and can be reused. After hovering for 18 months they can be recovered for servicing and then re-launched.

6.7        Pro-competition regulation

Pro-competition regulation is also important to make rural and remote markets more attractive to prospective new entrants. But there should also be vigilance to eliminate regulations (including local government regulations) that serve as a barrier to new entry. Countries that have committed to apply the pro-competitive regulatory guidelines espoused in the WTO Reference Paper attached to the February 1997 Agreement on Basic Telecommunications need to apply these principles vigorously.

Incentives for NGN roll-out in rural areas

In some areas (especially in rural areas of developing countries) incentives and subsidies may be necessary. The Telecommunications Regulatory Authority of India (TRAI) has made a number of recommendations in regard to providing incentives for telecommunications infrastructure roll out in rural areas of India (which are worth noting here since these recommendations may also be relevant to other developing countries) including:

•     Providing financial support from a universal service fund for sharing of infrastructure.
•    Supporting backbone infrastructure through a USO fund.
•    Discounting annual license fee and spectrum charges linked to rural coverage.
•    Reducing rural VSAT license fees and spectrum charges and provision of transponders at affordable rates.
•    Abandoning rights of way charges for networks in rural areas.
•     Supporting niche operators from a USO Fund and through exemption from spectrum charges.
•     Abstaining from charging spectrum fees for usage of innovative new technologies in rural areas as well as for usage of 450 MHz.
•     Requiring no prior permission for deployment of telecommunications towers of up to 40 meters in rural areas.
•     Making available funds collected as universal access levies to the USO Fund rather than to general revenue.

But as noted earlier, there may be increasing pressure on the ability of telecommunications operators to contribute to USO funds. In these circumstances, even more effort will need to be made to encourage private sector investment. In this context, the World Bank Group has suggested a number of guidelines relating to the development of initiatives to support private-government partnerships in the deployment of ICT infrastructure in developing economies that deserve attention.

Spectrum Related Issues.  Improved spectrum allocation and management is especially important in facilitating network deployment in the rural areas of developing countries. In this context, the best practice guidelines for spectrum management to promote broadband access tabled by the ITU’s 6th Global Symposium for regulators are noteworthy. The broad dimensions of the guidelines include:
 
•     Facilitating deployment of innovative broadband technologies
•     Promoting transparency
•     Embracing technology neutrality
•     Adopting flexible use measures
•     Ensuring affordability
•     Optimizing spectrum availability on a timely basis
•      Managing spectrum efficiently
•      Ensuring a level playing field
•      Harmonizing international and regional practices and standards
•      Adopting a broad approach to promoting broadband access.

6.8         Delicensing spectrum for Wi-Fi and WiMax

Consideration could be given to creating more unlicensed spectrum bands that will encourage innovation and deployment of advanced wireless communication technologies across a country, but especially in rural and remote areas. To provide connectivity at affordable prices and to encourage use of advanced wireless technologies such as Wi-Max, spectrum in 5.7 GHz, 3.5 GHz and 700 MHz frequency range could be delicensed or made available at nominal charges. Consideration could also be given to the use of spectrum trading to allow spectrum to go to the highest-valued uses.

A systematic review of universal access/service programs should be based on (at least) the following considerations. 
 
6.9      Emergency Services
The possibility to make emergency calls and to route the call to the nearest authority (fire department), police, hospitals, etc) is a mandatory element of telecommunications services in a number of countries. Also caller location information is increasingly becoming a requirement for both fixed and mobile telephony. Because VoIP calls can be made from any Internet connection, a major question to be faced is how to provide emergency services with information regarding the caller’s location, which must accompany emergency calls. In VoIP it is possible to maintain the positioning and routing information for emergency calls for a fixed location. However, in nomadic use, at the present level of technological development, the caller position information cannot be made available with the emergency call.

1)       Clear and specific articulation of the objectives and coverage of universal service.
          It is crucial to specify the intended beneficiaries clearly. In this regard, it would help to break down the broad objective of universal access into a range of distinct, realizable and measurable targets for its sub-components. For example, these targets may include: universal geographic service; universal affordable access; universal access to the disabled; universal quality of service, etc.

2)              Identification of barriers to universal service.
Such information is necessary to guide the development of effective universal service policies.

3)              Identify schemes that could cost-effectively address the identified barriers to universal service.
To maintain the benefits of a competitive or ‘contestable’ market in the delivery of universal service, the option for a universal service provider to be replaced by a more cost-effective supplier should be preserved.

4)              Estimate the cost of programs for universal service
The costing principles, process and outcomes should be transparent and subject to audit; it should be subject to regular disclosure.

5)              The relative merits of alternative mechanisms for funding universal service should be considered
The funds to support universal access schemes can come e.g., from taxation revenue, levies on telecommunications users, from telecommunications operators, from licensing and spectrum auction receipts, etc. Whatever the mechanism chosen, it is important to ensure that it s carefully structured and targeted so as to minimize market distortions.

6)               Ensure regular public reporting of progress in achieving universal service.

7)               Ensure regular monitoring ad evaluation of performance in the delivery of universal service.
The evaluation should include comparison of achievements in delivery against a pre-set delivery schedule and targets.

8)               Set suitable universal service objectives based o the level of access provision likely to be sustainable and defining the scope of access.

9)               Identify regulatory mechanisms for reaching universal service objectives.

10)          Establish a mechanism to raise universal service funds.

11)           Facilitate public-private co-financing of infrastructure investments; and

12)           Promote local participation in community based access centre initiatives.

Aim to expand communications infrastructure, especially in rural and remote areas, by keeping the market open and ensuring competitive and technological neutrality. This would be consistent with the ‘light-touch’ regulation (including regulatory ‘forebearance’) that seems needed in a dynamic, competitive, convergent communications sector that is expected to characterize an IP-enabled NGN.

Governments can stimulate and facilitate a maximum role of the private sector (while recognizing that government-private sector partnerships can be cost-effective, especially in the case of developing countries) and encourage effective competition that can serve to minimize the subsidies required).

Base universal service programs on clearly defined transparent goals and policy objectives and keep subsidies t the minimum necessary to meet these objectives.

All providers should be able to compete equally for the right to fulfill universal service orders.

The criteria for carriers to be eligible for universal service support should be open, transparent, competitively neutral, and designed so that it does not exclude new entry in favor of legacy monopoly providers. The geographic area that carriers are required to serve should not be so large as to effectively limit support to new entrants/alternative service providers and to exclude other facilities-based providers (other than the incumbent).

Deployment of innovative broadband technologies should be facilitated.
Competitive and technology neutrality should be embraced. Adopt technology-neutral licensing practices that encourage new investments in telecommunication infrastructures and facilitate competition within the sector.

Design USO programs to put competitive pressure on suppliers to supply services at the lowest possible cost.

The use of well designed competitive tenders can (in certain competitive circumstances) help to generate incentives to contain costs, innovate, and reveal the true cost of delivering universal service (thus helping to minimize the subsidy required).

Minimise intervention since, while more substantial intervention might lead to greater short-term benefits, it could potentially stifle a dynamic market process with adverse competitive, economic and even social consequences in the longer term.

Where feasible, target (means-tested?) subsidies directly to those in need.

In countries where there is no ubiquitous fixed line coverage already available, it may be cost effective to encourage widespread rollout by a mobile operator.

Allocate spectrum on the basis of achieving economically efficient competitive and structurally desirable outcomes (rather than to maximize revenue for government).

Encourage improved spectrum allocation and management; optimize spectrum availability on a timely basis; and adopt flexible use measures, including consideration of spectrum liberalisation and secondary trading.

Facilitate sharing of facilities and infrastructure (where sharing can be beneficial, for instance, through accelerated network rollout, potential elimination of unnecessary cost duplication, and minimization of adverse environmental impacts).

In an NGN environment, where effective competition is established on where there is a reasonable prospect of an effectively competitive market in the near term, there are strong arguments for being wary of heavy-handed regulation and the disposition should sensibly be towards light-touch regulation, including regulatory ‘forebearance’.

6.10     Criteria for assessing universal access/service delivery mechanisms

In principle, the selection of implementation mechanisms for universal access/service delivery can be guided by a range of criteria, including:

Sufficiency:    Does the mechanism help to ensure comparability of service and rates between urban and rural customers?

Affordability: Does the mechanism enable providers to offer the supported services in an affordable manner?

Competition: Does the mechanism minimize distortions to competition, does it encourage and facilitate competition by precisely targeting support to high cost customers?

Flexibility:      Is the mechanism able to evolve as new technologies are introduced, as competition develops and as the definition of universal access/service changes over time/

Protection and advancement:        Does the mechanism prevent degradation of the existing infrastructure and the current level of service? Does the mechanism produce an investment incentive to upgrade facilities used to provide universal service?

Portability:     Can the mechanism provide all eligible operators with an appropriate amount of support in a competitively neutral manner?

Predictability:            Does the mechanism enable an operator to determine in advance the amount of support it will receive on behalf of a customer?

Practicality:    Is the mechanism economically and administratively viable?

Transparency: Is the mechanism transparent and open to monitoring and review?

Cost-effectiveness: Does the mechanism enable objectives to be achieved at least cost?

In NGN, broadband subscribers can access VoIP at low prices, bundled with subscription. However, those without broadband will be dependent on voice service from PSTN (which is likely to be degraded as migration to NGN proceeds) or wireless, and this could raise USO concerns related to availability or quality of voice service. In theory, any Internet connection could be used, including dial-up, but dial-up is not widely used to provide VoIP services.

VoIP services typically use a broadband connection to provide voice call services using VoIP technology from either a personal computer (“PC”) and dedicated handset/headset or a traditional telephone handset using an adaptor. There are now a wide and increasing number and variety of VoIP service propositions in the marketplace. For instance, in the UK these include:

•      PC-based services that allow calls from one personal computer to another (such as Skype PC-to-PC and Google Talk) commonly referred to as PC-to-PC services;

•      Services marketed as secondary line services that allow calls to and from traditional telephone numbers (such as Freetalk, Wanadoo, BT Communicator, Tesco and Gossitel); some of these services include the ability to make calls to emergency services (e.g., 999 in the UK) and some do not;

•      Other services that are marketed as replacements for traditional PSTN based call services; typically, the PSTN line remains in place and the VoIP service is then used only for long distance calls; and

•      Services targeted for nomadic and mobile use have also begun to enter the market. Voice over Wireless (“VoWLAN”) services is being developed and other services are being deployed that rely on wireless access solutions using licensed radio spectrum.

The approach taken by a number of countries to address the calls to emergency service is noteworthy.

United States. In the US, calls to 911 with traditional phones provide emergency service dispatchers with the caller’s number and address. Internet-based phone providers have limited access to the systems connecting those calls to primary emergency lines and location information is not always available. In May 2005, the FCC adopted rules requiring interconnected VoIP providers such as Vonage to provide emergency E911 service.

Vonage has reportedly concluded agreements with the big local telephone carriers for its customers who dial 911 to be connected to the primary lines in emergency call centres. In the US, VoIP providers do not have unrestricted access to the telephone system built for the nation’s 3 200 emergency calling centres that are owned and controlled by Verizon and the three other Bell operating companies.

So they still cannot successfully route a 911 call to the right emergency calling centre or provide emergency operators with the caller’s phone number and location. This can force the Net-phone companies into less effective ways of routing 911 calls. Rather than being routed directly to trained emergency dispatchers, the calls are typically relayed to administrative lines at call centres, which then transfer them to dispatchers. The concern is that in an emergency, the few seconds lost could be difference between life and death.

6.11  ¼STRONG>Criteria for assessing a sustainable funding mechanism

Broadly, the merits of funding arrangements can be judged according to its implications for:

•     economic efficiency – the financing of universal service should distort economic behaviour as little as possible;
•     equity – equity is a contentious ‘normative’ criterion’ that may be variously defined/accessed e.g., whether there are similar costs for people with similar abilities to pay, and whether contributions are fair and reasonable;
•   competitive neutrality – doesnot discriminate in favour of any company;
•   technology neutrality – does not discriminate in favour of any technology;
•   certainty – specific, predictable and sustainable arrangements;
•    transparency – the opportunity for public scrutiny of information, to the maximum extent possible;
•   cost effectiveness – cost effective to introduce (if a new scheme), and cost effective to administer on an on-going basis;
•     avoidance – scope for avoidance minimised.

7.       Public Call Boxes

            Public Call Boxes (PCBs) provide a service that is valued and needed by many people without a phone or those away from home, who cannot, for whatever reason, use their mobile. Many disadvantaged and vulnerable customers still rely on PCBs.
 
Service for customers with disabilities
            Universal Service measures provide access to, and affordability of, a range of essential services for customers with disabilities. A key service is the text relay, which needs to evolve as demand and technology changes.

8.         In the United States of America telecommunications, universal service was conceived by Theodore Vail, at AT&T, in the late 1800s; any user could connect. This concept has been extended to users on the Internet.

            Universal service is an evolving level of telecommunications services that:

(a)       are essential to education, public health, or public safety;

(b)       have, through the operation of market choices by customers, been subscribed to by a substantial majority of residential customers;

(c)        are being deployed in public telecommunications networks by telecommunications carriers; and

(d)       are consistent with the public interest convenience, and necessity.

9.         The Universal Service Principles are:

(1)       Quality and rates. –Quality services should be available at just, reasonable, and affordable rates.

(2)       Access to advanced services. – Access to advanced telecommunications, broadband information services

(should be provided in all regions of the country).

(3)       Access in rural and high cost area. – Consumers in all regions of the country, including low-income consumers and those in rural, insular, and high cost areas, should have access to telecommunications and information services, including broadband and advanced telecommunications and information services, that are reasonably comparable to those services provided in urban areas and that are available at rates that are reasonably comparable to rates charged for similar services in urban areas.

(4)       Specific and predictable support mechanisms. – there should be specific, predictable and sufficient public mechanisms to preserve and advance universal service.

(5)       Access to advanced telecommunications services for schools, healthcare and libraries – Elementary and secondary schools and classrooms, health care providers, and libraries should have access to high speed broadband services.

(6)       Additional principles. – Such other principles as the Fund Administrator determine are necessary and appropriate for the protection of the public interest, convenience, and necessity.

10.       It is our belief that the Universal Service Fund (USF) should not be used to fund services which advance competitiveness and choice and so lead to reductions in prices to consumers such as:

(a)       Equal/Indirect Access
(b)       Local Numbering Portability
(c)        Local Loop Unbundling

 (a)       Equal Access is a technology that provides consumers with the ability to access the international service provider to which they are presubscribed by dialing 1 number; that is without having to dial an access code.

            Indirect Access or 10-XXX Access (“dial around”) means the consumer has to dial “10“ plus a five digit Carrier Identification Code (“CIC”) in order to reach the international carrier of their choice.

(b)       Local Numbering Portability (LNP) means the ability to allow customers to change their service provider (fixed or mobile) with respect to a telecommunications service without being required to change their telephone number.

(c)        Local Loop Unbundling (LLU) can be used to supply plain old telephone services (POTS). Competitors using such loops can gain a competitive advantage by offering ancillary service to customers, e.g., convenient and understandable billing.

            Unbundling loops can also be used to supply advanced and high-speed services including internet services, e-commerce, video services and other data services. Customers may be able to take a variety of services, together with telephony, over the local loop, direct from new providers. LLU has the advantage of avoiding the duplication of infrastructure of competing access networks, thereby increasing network operating efficiencies. It can also reduce disruption of the environment due to construction of new access networks.

The Government of Barbados will engage consultants to carry out Cost/Benefit Analysis on LNP. The Telecommunications Unit is currently concluding the Cost/Benefit Analysis on Equal/Indirect Access, and Local Loop Unbundling.

11.       We wish now to define the USO as these are to be the new sections of Cap.282B:

32.       The universal service policy of the Government of Barbados is aimed at ensuring that every resident, every business enterprise, and designated public institution of Barbados has access to reliable, affordable telecommunications services throughout Barbados on an equitable basis.

33. (1)            There shall be a universal service obligation which is an obligation imposed on the Universal Carrier designated by the Minister under section 34(1), to provide:

(a)       Voice grade access to the public switched network; including:
(i)         single party service;
(ii)        free access to emergency services;
(iii)       access to directory services;
(iv)       quality service should be available at reasonable and affordable rates.

(b)       Ensure that payphones are reasonably accessible to all people in Barbados.
(c)        Access to basic Internet Service (128 Kbps) should be provided throughout Barbados.
(d)       Provide appropriate telecommunications equipment to disabled persons to ensure access by those persons to the basic telecommunications service.
 
(e)       Bridging the digital divide for all persons in Barbados, by providing Broadband connectivity to all communities and sectors, including all educational institutions, community centres, health care facilities, libraries and archives.

33. (2)            In giving effect to the provisions of subsection (1), the Minister shall ensure, in furtherance of the policy referred to in that subsection, that
(a)       the universal service obligation described in this Part is fulfilled as efficiently and economically as practicable;

(b)       the net avoidable costs that result from providing services in the course of fulfilling the universal service obligation are recovered from all carriers and service providers in accordance with sections 35 and 36 on an equitable basis;

(c)        the universal service obligation does not impose an unfair or unreasonable burden on the universal service providers or persons required to contribute to the provision of universal service;

(d)       the provision of the universal service obligation is co-ordinated with cost-oriented pricing efforts so that rate structures and levels for telecommunications services appropriately reflect underlying cost structures and levels; and

(e)       the universal service obligation is transparent, nondiscriminatory, non-preferential, and competitively neutral.

33. (3)             The Minister may, after consultation with the Commission and the universal service carriers, modify in writing the universal service obligation referred to in section 33(1).

(4)             In modifying a universal service obligation pursuant to subsection (3), the Minister, in consultation with the Commission,

(a)       shall permit the universal service carrier concerned in the modification to recover the cost of providing the modified universal service obligation; and

(b)       ensure that no unfair or unreasonable burden is placed on the universal carrier or any person required to contribute to the provision of the service.

(5)            In this section “net avoidable costs” means all costs incurred by the universal service provider in connection with the fulfillment of the service obligation less any revenues derived from the provision of universal service.

34. (1)             The Minister shall designate by Order the carrier to be the Universal service carrier for Barbados,       

(2)              A designation under this section takes effect on the date specified by the Minister and shall have effect for the duration of the licence of the universal service carrier unless otherwise specified by the Minister, or unless the Minister designates another carrier to be the universal service carrier.

(3)              Where the Minister designates another carrier as a universal service carrier under subsection (2), the Minister shall give 12 months notice in writing of the new designation.

(4)              The carrier licence or the service provider licence of a designated carrier is subject to the condition that the carrier must fulfill the universal service obligation.
 
35.     

(1)       The Commission may prescribe a charge to be known as “an access deficit charge” to be paid by all carriers and service providers interconnecting to service.

(2)       The Commission shall establish guidelines in writing for determining the amount of the access deficit charge.
 
36.               Universal Service Funding Proposals
The USO can be funded by:
(1)       the collection by all International incoming international calls being terminated on fixed, fixed wireless or mobile networks in Barbados. This means that the levy will not be applicable to the Barbadian consumer.

(2)       By a CESS on all mobile phone users.
 
12.       The Telecommunications (Universal Service) Regulations, 2003 – S.I. 2003 No. 97 will have to be completely revised, once the funding mechanism has been agreed and S.I. 2003 No. 97 is revised.

13.       The proposal is to commence the USO by a date to be designated by the Minister by Order.
 
14.       Notes on Proposal (1) of USO Funding
•     This method of funding ensures that there will be no increase in the international rates to the Barbadian consumer.
•     The rate of 4 BDS cents per minute will yield between 4 to 5 million Barbados dollars per annum as a minimum.
•     This rate is comparable to US 2 cents in Jamaica on mobile terminated calls, and US 3 cents on fixed terminated calls in Jamaica.
•     The current wholesale rate charged by operators in Barbados to international operators (e.g., MCI) is an average US 14 to 15 cents per minute. The proposed new levy will increase this rate to 16 – 17 US cents per minute. MCI retail rate for all calls between the USA and Barbados is US 52 cents per minute, this illustrates that there is no need for the USA international operators to increase the rates to USA consumers.
•      It may be necessary for the Minister to defend the new levy before the Federal Communications Commission (FCC) of the USA.
•      We should consult the Jamaican Office of Utilities Regulation (OUR) as to the correct process.
•      The full international settlement rates for the European Union are being researched.
•      Persons responding on this document are requested to comment on their preference for Universal Service Funding.

1.0        Introduction

1.1    The Government of Barbados invites applications for the provision of public mobile telecommunications services in Barbados.

1.2          The successful applicant will be entitled and required to provide public mobile cellular telecommunications services through the design, construction, maintenance and operation of the network necessary for the provision thereof, and in accordance with the legal, regulatory and administrative requirements for the provision of telecommunications services in Barbados.

2.0 General Information

2.1  The telecommunications sector in Barbados has transitioned from  that of a monopoly to one which is competitive. All Telecommunications Licences in Barbados are issued on a technology neutral basis.

2.2     A new telecommunications Act was proclaimed on September 30, 2002, which provides the legislative framework to govern the telecommunications sector during the transition and beyond. There are a number of policies and regulations issued.

2.3  Attached to this Request for Proposals are copies of the Telecommunications Act 2001-36, Utilities Regulation Act 2000-30 and the Fair Trading Commission Act 2000-31. It should be noted that sections 18(4), 103(5) and paragraph 4 of the First Schedule of the Telecommunications Act 2001-36 have been exempted from proclamation. 

2.4          Also attached are:

•     The Fair Competition Act 2002-19

•     The Consumer Protection Act 2003-20

•     The Numbering Plan and Guidelines

•     The Barbados National Spectrum Management Plan;

•     Barbados Interconnection Policy

•     Use of International Signalling Point Codes Policy

•     Barbados Unregulated Services Policy

•     Transmitting Antennae RF Emission Safety, Rules,

      Procedures and Practical Guidance

•     Barbados (RF) Transmitting Antennae Inspection Policy

•     Barbados Policy on Electromagnetic Compatibility (EMC).

2.5 Regulations will be supplied on:

      •     Universal Service

      •     Spectrum Management and Licensing

      •     Licence Fees

      •     Confidentiality

      •     Services to be Regulated

      •     Public Telecommunications Licensing

      •     Numbering and Dominance.

3.0 Licence

3.1 The Minister responsible for telecommunications will issue the licence. At present the Minister having responsibility for telecommunications is the Minister of Economic Affairs and Development.

3.2          The frequencies available for operation of the mobile cellular licence are 800 MHz, the (900 and Extended 900 MHz Band), the 1800 MHz band and the 1900 MHz band.   Frequencies of 3rd Generation Cellular are also available at 2.1 to 2.2 GHz. Frequency allocation for licence holders includes guard bands against adjacent operators using dissimilar technologies.  

3.3          The licence will be for a duration of 15 years from the date of grant and may be renewed upon the approval of the Minister responsible for telecommunications. However, no automatic grant of renewal is provided to applicants or the holder of the licence.

3.4          For GSM provision, the Home Network Identity (HNI) Code must contain the MCC of Barbados which is

3.5 The HNI will be issued by the Telecommunications Unit.

4.0      Applications

4.1     Every applicant may only submit one application. An individual applicant or a member of an applying consortium may not submit a further proposal either individually or as a member of another consortium. Original and duplicate copies of the application shall be prepared in typed or printed form on A4-sized format with all

supporting documentation.

4.2     Applications shall be addressed to the Chief Telecommunications Officer, “The Business Centre”, Upton, St. Michael and shall be delivered by hand no later than 16:00 hours local time on Friday, September 29, 2006. Applications that are received after this time will not be considered and will be returned unopened to the applicant. The applications shall be in English. Each applicant shall submit five copies of the application. An authorised signatory shall sign the original. The original shall be marked “Original Copy” and the copies with “Duplicate Copy No [ ]” (with the relevant number). The envelope shall be marked “Mobile Licence Application” and also state the name and address of sender.

4.3          It is desirable that confidential information is gathered together in a separate appendix or that the applicant’s view that the information is confidential is clearly marked. The applicant shall in the application state a telefax number to which messages may be sent. Telefax messages from the Ministry of Economic Affairs and Development shall be deemed to have been delivered when the Ministry of Economic Affairs and Development receives a confirmation of the telefax transmission. The Ministry’s telefax number is (246) 436-7910.

4.4          Applications cannot be altered or supplemented by the applicant after submission, though the Ministry of Economic Affairs and Development may request further explanatory information from applicants after the expiry of the application period.

4.5          All applications must include completed application forms for the following licences:-

•     Cellular Service Provider

•     Cellular Network Carrier and

•     Spectrum

5.0     Application Content

5.1     Applications shall be presented as outlined below:

A.             Executive Summary

B.             Information about the Applicant, including ownership structure

C.             Applicant’s Financial Capacity, including letters of intent from financial institution(s), equipment vendor(s) and supplier(s)

D.             Technical Feasibility, including technical plan and operational plan, choice of technology and network design

E.             Commercial Feasibility, including marketing plan, market estimates, business plan and cash flow, revenue and cost projections as well as pro forma financial statements, for a period of at least (5) years

F.              Applicant’s Expertise and Experience, including mobile cellular experience, telecommunications experience and local market knowledge and expertise

G.             Corporate Development Plan, including plans showing, inter alia structure and staffing of the company at 3 years, 5 years and 10 years

H.             Directors Names, Addresses including overseas addresses and Date of Birth

I.                Affiliated Companies.

6.0       Costs relating to Applicant’s Proposals

6.1     Applicants shall bear the full costs incurred in connection with the preparation and submission of their proposals. Regardless of the outcome of the process, applicants may under no circumstances claim reimbursement from the Minister or his agents or any other Government agency of any costs related directly or indirectly to the proposal. A non-refundable application fee of $11,000.00 must be paid at the time of the application.

7.0   Ownership Structure

7.1          All companies submitting applications must be registered in Barbados and must have at least 25% Barbadian shareholding. A copy of the relevant Company Registration Certificate must be attached to the application. In addition, the names of all shareholders, percentage shareholding and the names and addresses of all Directors should be provided. In the case of a consortium, an original signed copy of the agreement reached between the parties must be submitted with the application.

7.2          The existing licence holders (Cable & Wireless (Barbados) Limited) or any of its affiliated companies associated with the existing licence holder, Digicel (Barbados) Limited and Sunbeach Communications Inc. or any of their affiliates may not apply for any additional licence.

8.0   Previous Applicants

8.1     All those persons who previously indicated an interest in obtaining a mobile cellular licence should apply in accordance with the terms and conditions of this Request for Proposal.

9.0   Selection

9.1     Applications received will be subject to a detailed evaluation and selection procedure. For an application to be considered, it must satisfy the formal requirements specified in this Request for Proposal.

9.2          Factors, which will be considered during the evaluation process, will include, but may not be limited, to the following:-

•     Technical feasibility of the application

•     Commercial feasibility of the application

•     Appropriate expertise and experience of the applicant

•     Financial capacity of the applicant and

•     Corporate Social Responsibility

10.0 Enquiries and Information

10.1   The Ministry of Economic Affairs and Development will accept enquiries concerning the application procedure. Enquiries should be made to the Chief Telecommunications Officer.

11.0 Licence Fee

11.1   The successful applicant will be required to pay an annual licence fee. The annual licence fee will be payable to the Chief Telecommunications Officer, Ministry of Economic Affairs and Development.

11.2   Applicants who already hold a valid international licence will be required to pay the sum of $375,000.00 for the mobile licence. Applicants who do not have any licences will be required to pay the sum of $750,000.00 for the new Mobile International Licence. After year one, the licence fee is $750,000.00 or 3% of Annual Gross Turn Over (AGTO) (less interconnection charges), whichever is greater.

MEMORANDUM

From: CHIEF TELECOMMUNICATIONS OFFICER

TO: All Interested Parties

DATE: 1 AUGUST 2005

SUBJECT: Comments requested on Universal Service Policy
The Minister responsible for Telecommunications intends to implement a policy on Indirect/Equal Access in Barbados. Please review the attached draft policies and forward your comments by mail to:

Mr. Chelston Bourne
Chief Telecommuncations Officer
Upton Business Centre
St. Michael
Barbados

or email to:
Chelston_Bourne@barbadosbusiness.gov.bb
or by  fax to: (246) 426 0960.

Comments should reach the Ministry no later than 31st August 2005

 MS WORD- Universal Service Policy

 PDF- Universal Service Policy

Datacommunication Licence Awarded

Wamco Technologies Inc. is the first company to be awarded a datacommunications licence under Phase II of the Transition Time Table for the Liberalisation of Telecommunications in Barbados.
 

 
Barbados now enters Phase III

Barbados moves to Full Liberalisation of the Telecommunications Industry.The Minister of Energy and Public Utilities, The Honourable Anthony Wood, in a cermony held at Sherbourne Conference Centre, issued new Non-Exclusive International Licence to Cable and Wireless (Barbados) Ltd in exchange for its Exclusive Licence which was scheduled to expire in 2011. In so doing, the Minister marked the start of Phase III of the Liberalisation Process which allows the Minister to issue any licence within the context of the Telecommunications Act 2001-36 as he sees fit.