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Structural or Fuctional Separation?

Structural or Fuctional Separation?

Ratings: (0)|Views: 16|Likes:
I personally believe in structural separation since everybody talks about cost of internet being skyrocketing. I have a sixteen components model, but we always tend to forget the competition part of it.

There’s something we refer as “critical resources” where any government is required to intervene on proper use of that resource by publishing that Reference Interconnection Offer (RIO) for access seeker competing operators. The domestic transmission cost is still astronomical than that of our pricy international access.

Carrying a unit of international bandwidth to the landing station does bear about the same hefty price tag when you simply pass it on to mainland from that very landing station.

Is access still an issue? Or some directives which mandate non-discriminatory, fair and open access at the cable landing stations?

Some says, a clean split between the monopoly elements (i.e. transmission links) of the communications network and the sale & marketing of services that use it, would lead to the most competitive possible environment for telecommunication service providers – and thus would be in the best interests of people.

Let’s go back to my basic regulatory book “ICT Regulation Toolkit” which explicitly says;

There are three levels of separation under consideration by regulators and policymakers.

a. full structural separation involving separate ownership of previously commonly owned divisions;

b. functional separation of infrastructure and retail business lines involving staff divisions; and

c. accounting separation between the infrastructure and the retail business.

As it continues, structural separation requires an operator to separate its own network infrastructure from those units offering services using this same infrastructure. Also known as ‘ownership unbundling’ or ‘divestiture’, structural separation means that all of the network elements are placed in a separate legal entity and are under a different ownership.
Can you believe that?

On the other hand, Operational separation was always a second best option.

The “functional separation” dictates the separation of business units with separate accounting that are created for the network provider’s retail pricings and wholesale pricings. The wholesale business part of it would sell to its retail business unit on the same terms and conditions as to competitors for the retail services.

I know – you have to differ here, a big time.

Sometimes, lacking the clarity of a legal separation, as it tries to create the same incentives through virtual splits between network, for the wholesale and retail, which are highly prone to discriminating against third party service providers, almost whenever it could.

Time’s up!

That being said, structural separation might seem hard when network players are already in different licensing segments. But, operational separation would do justice when it comes to providing equitable access to transmission, that is – delineation of bottleneck resources. This requires that network provider’s control of bottleneck resources be “neutralized” so as to prevent monopoly abuse and the accompanying losses. Then a mobile player, in such case – would have separate subsidiaries [accounting separation] for its own ISP and network wholesale (transmission) unit. Other retail units of this mobile player would have to buy the services on the same terms and conditions as with other competitors like ISPs and different service providers.

Then on, you can expect half the price of internet what you are paying today!
I personally believe in structural separation since everybody talks about cost of internet being skyrocketing. I have a sixteen components model, but we always tend to forget the competition part of it.

There’s something we refer as “critical resources” where any government is required to intervene on proper use of that resource by publishing that Reference Interconnection Offer (RIO) for access seeker competing operators. The domestic transmission cost is still astronomical than that of our pricy international access.

Carrying a unit of international bandwidth to the landing station does bear about the same hefty price tag when you simply pass it on to mainland from that very landing station.

Is access still an issue? Or some directives which mandate non-discriminatory, fair and open access at the cable landing stations?

Some says, a clean split between the monopoly elements (i.e. transmission links) of the communications network and the sale & marketing of services that use it, would lead to the most competitive possible environment for telecommunication service providers – and thus would be in the best interests of people.

Let’s go back to my basic regulatory book “ICT Regulation Toolkit” which explicitly says;

There are three levels of separation under consideration by regulators and policymakers.

a. full structural separation involving separate ownership of previously commonly owned divisions;

b. functional separation of infrastructure and retail business lines involving staff divisions; and

c. accounting separation between the infrastructure and the retail business.

As it continues, structural separation requires an operator to separate its own network infrastructure from those units offering services using this same infrastructure. Also known as ‘ownership unbundling’ or ‘divestiture’, structural separation means that all of the network elements are placed in a separate legal entity and are under a different ownership.
Can you believe that?

On the other hand, Operational separation was always a second best option.

The “functional separation” dictates the separation of business units with separate accounting that are created for the network provider’s retail pricings and wholesale pricings. The wholesale business part of it would sell to its retail business unit on the same terms and conditions as to competitors for the retail services.

I know – you have to differ here, a big time.

Sometimes, lacking the clarity of a legal separation, as it tries to create the same incentives through virtual splits between network, for the wholesale and retail, which are highly prone to discriminating against third party service providers, almost whenever it could.

Time’s up!

That being said, structural separation might seem hard when network players are already in different licensing segments. But, operational separation would do justice when it comes to providing equitable access to transmission, that is – delineation of bottleneck resources. This requires that network provider’s control of bottleneck resources be “neutralized” so as to prevent monopoly abuse and the accompanying losses. Then a mobile player, in such case – would have separate subsidiaries [accounting separation] for its own ISP and network wholesale (transmission) unit. Other retail units of this mobile player would have to buy the services on the same terms and conditions as with other competitors like ISPs and different service providers.

Then on, you can expect half the price of internet what you are paying today!

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Published by: Raqueeb Hassan, Lt Col Md Rakibul Hassan on Dec 04, 2010
Copyright:Attribution Non-commercial

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03/23/2011

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 1Structural or Functional Separation?
   s   t  , 
Structural or Fuctional Separation?
Sunday, August 22, 2010 by  Raqueeb Hassan 
I’m not writing for ages! Forget about creative writing when I recently finished
yes, procrastinationis long lost problem.
?I hear you saying that.
But, you don’t
want to talk about it.
On a given 10 minutes (before power blackouts here in my place) situation and here’s what I’ve
compiled as fictional non-fiction.
The words “affordable internet” are still a problem for Country “A”.
 I personally believe in structural separation since everybody talks about cost of internet beingskyrocketing. I have a sixteen components model, but we always tend to forget the competitionpart of it.
There’s something we refer as “critical resources” where any government is required to
 intervene on proper use of that resource by publishing that Reference Interconnection Offer(RIO) for access seeker competing operators. The domestic transmission cost is stillastronomical than that of our pricy international access.Carrying a unit of international bandwidth to the landing station does bear about the samehefty price tag when you simply pass it on to mainland from that very landing station.Is access still an issue? Or some directives which mandate non-discriminatory, fair and openaccess at the cable landing stations?Some says, a clean split between the monopoly elements (i.e. transmission links) of thecommunications network and the sale & marketing of services that use it, would lead to themost competitive possible environment for telecommunication service providers
 –
and thuswould be in the best interests of people.
Let’s go back to my basic regulatory book
” which explicitly says;
 There are three levels of separation under consideration by regulators and policymakers.

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Abu Saeed Khan added this note
Any form of separation has to begin with the incumbent. Ignoring BTCL doesn't demonstrate any innocence. Everybody cherishes the sadistic pleasure of bashing the private sector. Are the state-owned enterprises above the law? Regulation seems to be anybody's cup of tea.

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