David - well done on the legislative change regarding bandwidth.   mcs




David Merrill@ENRON_DEVELOPMENT
13/07/2000 09:39
To: donald_lassere@enron.net
cc: james_row@enron.net, Nicole Palczer@ENRON COMMUNICATIONS, Mark 
Schroeder@ECT, Scott Bolton@ENRON COMMUNICATIONS, Colin Jackson@ECT, Sarah 
Goodpastor@ENRON COMMUNICATIONS 

Subject: Singapore Telecom Competition Code - Second Draft


Bandwidth Trading

The second draft of the Singapore competition code did add a reference to 
bandwidth trading,
as we suggested.   The drafters chose to put the reference in the section on 
the competition 
regime, as an example of agreements that do not restrict competition.    

   Under Section 8 of the draft Code, which deals primarily with agreements 
between licensees 
   that unreasonably restrict competition, there is a subsection dealing with 
"Exceptions for 
   Agreements Necessary for Legitimate Collaborative Ventures".   That 
section says:

   "Nothing [in this Code containing various prohibitions on restrictions of 
competition] ... prohibits
   agreements amongst Licensees that enter into an efficiency- enhancing 
integration of economic
   activity, where such agreement is no broader than necessary to achieve the 
pro-competitive
   benefit.  For example, if competing licensees establish a joint purchasing 
or production venture,
   which is designed to increase total output and lower prices, the two 
parties could agree regarding
   the prices to be paid by the joint venture.   Similarly, if competing 
Licensees were to establish a
   market for trading bandwidth, the Licensees could exclude competitors that 
did not agree to 
   certain standardized terms, if those terms are necessary to allow for the 
efficient operation if
   the market."

This seems to accomplish our purpose of referencing bandwidth trading in the 
code as a  
worthy concept in Singapore, and does not restrict bandwidth trading to the 
situation used
in the example.

Other changes in the second draft of the Code:

-  Definition of dominant carrier changed:   

            Rather than depending on market power in a specific service, 
dominant definition 
            of a carrier will relate to its control of last-mile facilities; 
ability to raise end-user prices
            and/or reduce output; and cost or difficulty of  replicating 
facilities.   

            Dominant carriers initially are still Singtel (wireline license 
only), SCV, and 1-Net.

-  Process for licensees to get interconnection agreements with Dominant 
Licensees accelerated
            and new entrants given options for interconnecting with Dominant 
Licensees
            even while negotiations ongoing so that DL's cannot stall new 
entrant operations.

-  Changes in unbundling requirements for dominant carriers.

-  Competition law regime strengthened.

Schedule:   

   The Code will be released Sept 1 and will become effective Sept 15.   
Dominant
   Licensees have to file Reference Interconnection Offers by Oct 15 and they
   will become effective Dec 15.

DM