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Peacefmonline.com can confirm that there are attempts to push through the Electronic Communications (Amendment) Act before Parliament rises on Thursday.

The bill will establish the Interconnect Clearing House as the only way for networks to inter connect with each other. The ICH will be operated by Afriwave (awarded the licence under controversial circumstances).

There is currently a suit in court filed by the NPP MP for Obuasi West, Hon Kweku Kwarteng, who is challenging the implementation of the ICH based on the threat it poses to subscribers' privacy.

Interestingly, while the case is pending, peacefmonline is reliably informed plans are underway to change the law to render the court case moot.

An ICH will mean all calls between networks will be routed through a central location. This will make the whole country susceptible to a possible total mobile outage where there is a challenge with the ICH.

Find below a document relating to the subject matter clearly showing why the ICH should not be passed in its current state.


WE, THE UNDERSIGNED;

·         Scancom (MTN Ghana)

·         Ghana Telecommunications Ltd (Vodafone Ghana)

·         Millicom (Tigo Ghana)

·         Airtel Ghana

·         Expresso

·         Globacom

·         Ghana Chamber of Telecommunications;

BEING AN INDUSTRY REPRESENTATIVE AND TELECOMMUNICATION SERVICE PROVIDERS DELIVERING SERVICES TO APPROXIMATELY 35 MILLION MOBILE SUBSCRIBERS IN GHANA; PETITION YOUR OFFICE TO INTERVENE IN THE PASSAGE OF THE ELECTRONIC COMMUNICATION (AMENDMENT) BILL IN ITS PRESENT FORM FOR THE FOLLOWING REASONS:

That,

The conclusion reached and recommendation made by the joint committees of Communications and Finance on the Electronic Communications (Amendment) Bill, 2016, was flawed as a result of having relied in part on stated matters of fact asserted by the National Communications Authority (NCA) which are not reflective of the true state of the telecommunications industry.

Evidence-based Market study:

· There's no reference in the Committee's report of any evidence-based market study from the National Communications Authority, which establishes a market failure and warrants the introduction of the Interconnect Clearing House policy;

 

o   Under Section 5 of the governing laws of the NCA (Act 769), the Regulator is required to advise the Minister for Communications on matters relating to the industry in accordance with regulatory best practise.

 

o   However, to the extent that in advising the sector Minister in relation to the ICH, the NCA failed to rely on an evidence-based market study which proves a market failure, flies in the face of industry best practise.

 

o   Additionally, during the Public consultation of the ICH, the regulator failed to provide any evidence-based market study to support its assertions made and same of which was presented to the Joint Committees. Reason being that it had none.

 

·         The following assertions made by the NCA in the Memorandum to the Bill, indicated that the ICH was being used to address technical, financial and regulatory challenges which exists in the industry. It was also to deliver cost efficiency and reduce the cost of interconnection. In making its recommendations to the House, the Committee relied on the NCA’s assertions below as being prevalent in the Telecoms market notwithstanding the contrary being the case;

 

Technical assertions made by NCA

1.      Interconnect challenges due to differences in service providers’ technology and equipment

2.      Multiplicity of interconnection links under the peer-to-peer system

3.      Difficulty in expanding interconnect routes

4.      Insufficient capacity between operators on interconnect routes

5.      Delay in new expansions and allowing new operators access to connectivity

6.      Simplify operation and coordination of analysing and routing calls

7.      Industry challenges with respect to lack of technical ability to undertake load of digit analysis for inter-operator and inter-circle call

8.      The ICH will enable support of services such as VOIPs, video, rich multi-media content, messaging applications, mobile video messaging and various data services.

What actually pertains in the Industry

On point 1, Network Operators do not interconnect at the access level. All connections are made at the core level based on standard protocols and not the equipment types or technology.

Therefore the suggestion that interconnect challenges exist because of differences in technology and equipment, is not true.  

On point 2, Multiple connections are a normal feature of telecom networks based on ITU standards for interconnections and they provide the necessary network security and redundancy and resilience to limit potential outages.

The smart architecture of peer-to-peer interconnection provides for multiple contingencies and ensures business continuity as calls are re-routed to accommodate a single link failure on a link.

On points 3, 4 and 5, All network operators in Ghana are currently interconnected without disputes or ‘stand offs’.

None of the undersigned network operators have had challenges expanding their interconnect routes in order to accommodate growing traffic volumes or new operators.

On point 6 and 7, digit analysis is conducted on the network where a call originates. All network operators would have to perform digits analysis to determine whether to rout a call from its network to another network.

The introduction of an ICH will neither remove the need for an operator to perform this function nor enhance the technical capacity of a new operator who lacks such capacity to do digit analysis.

On point 8, VOIPs, video, rich multimedia content, messaging applications, mobile video messaging and other data services are not unique to an ICH and are already extensively provided by operators on their existing IP networks.

 
Financial assertions made by NCA

1.      High interconnection rates primarily because of the lack of a third party to facilitate accurate reconciliation

2.      Rising cost of interconnection due to existing peer-to-peer system

3.      Difficulty in reconciling call data records under dispute

4.      The cost of upgrading, monitoring and maintaining interconnect links will be saved through an ICH

5.      The generation of much needed revenue for government and reducing revenue loss.

What actually pertains in the Industry

On points1 and 2, Operators do not determine the interconnection rates for both local and international calls.

The interconnection rates for both local and international calls are set by the NCA. The ICH operator will have to invest in excess of $20m in acquiring switches for routing of traffic, a cost which will inevitable be passed onto the consumers in the form of higher interconnection rates by the NCA.

On point 3, the billing and reconciliation of the interconnect voice and SMS services from one Operator to another is presently managed by each Network Operator’s internal revenue assurance teams in line with agreed settlement procedure.

There are no settlement or CDR reconciliation disputes in recent memory which required the NCA’s intervention. Introducing a third party to the reconciliation process complicates rather than simplifies the process of settlement. 

Any interconnect issues that arose between operators have been as a result of an operator not being in a financial position to immediately settle their interconnection indebtedness rather than a dispute over the bill.

The situation will be no different from the ICH because it will also collect interconnection charges from operators some of whom might still default in payment.

On point 4, the capacity growth requirements for upgrading of all operators can only properly be identified by an operator and not a third party.

An operator may have growth plans which will inform investment plans to augment capacity at the point of interconnection. On the contrary an ICH may in not be able to expand its capacity to accommodate massive growth in operators’ traffic volumes where it has not planned for same or lacks the finances to do such expansion.

On point 5 revenue monitoring by the ICH will be limited to off-net traffic which account `for averagely about or less than 30% of an operator’s traffic but will require an investment of over $20m which will have to be recouped from Government.

Already, the Ghana Revenue Authority through its agent Subah Info Solution is conducting revenue monitoring exercises on all operators’ networks for all traffic volumes without this huge investment cost and associated risks.

This is clear proof that revenue assurance can be conducted without the huge set-up and operational costs of operating an ICH.

The fact that this revenue monitoring exercise has not uncovered any schemes by operators to divert or under-declare revenue raises serious questions about claims that the ICH will lead to ‘an accurate declaration of revenue by telecom operators to Government’.

 
Regulatory assertions made by NCA

1.      Reduce SIMboxing, deal with the challenge faced with the absence of a centralised redress to issue stolen phones, uncertain subscriber identity.

2.      The reduction of cases which require mediation by National Communications Authority

3.      The provision of cheaper services to subscribers as savings from cost of doing business will be passed to subscribers.

 

What actually pertains in the Industry

On point 1, the practice of SIM boxing has grown because of the opportunity for arbitrage that was created and exists between the minimum flat rate for terminating international incoming traffic and domestic mobile termination rates. An ICH will not eradicate SIM boxing.

SIM box fraud affects not just government receipts from international incoming calls but primarily the revenues of telecom companies.  Over the years operators have made considerable investments in the latest technologies to remove SIM box diverted calls over their networks.

A January 2016 NCA SIM Box detection service report covering October to December 2015 noted that the hit rate (measure of the number of times a detected SIM card still gets to carry traffic before finally being disabled) has improved considerably as operators improve the frequency of disabling detected SIM cards.

Further the ICH will be limited to off-net traffic volumes which will not capture the on-net SIM box activity undertaken by SIM box fraudsters on an operators network. The ICH can therefore not be a solution to SIM box fraud.

On point 2 and 3, as previously stated any issue on interconnection has been limited to non-payment of indebtedness for interconnect services rendered as opposed to a dispute on traffic volumes exchanged between parties which will require an interconnect exchange for the purposes of reconciling such disputes.

Further, competition in the industry has driven down mobile rates considerably hence cheaper services are the outcome of market forces rather than the operation of an ICH monopoly which will require significant set-up cost to be recouped by passing it on to subscribers.

Fate of peer-to-peer interconnection:

In conclusion we observe that, the joint Committee in its report limited the operators’ submissions made to the narrow issue of their anxiety over capital investments they have made in infrastructure; a position which is contrary to the core views expressed by the operators during the meeting with the joint committee.

We as operators expressed concerns about the risk of introducing a single point of failure with the establishment of an ICH. The telecoms industry forms part of Ghana’s critical infrastructure and at the present growth of the industry Parliament cannot allow such critical infrastructure to be placed with the singular control of one entity.

Any challenge affecting the infrastructure, organisation and provision of services by the ICH will be critical and would have a major detrimental impact on the availability or integrity of essential services, leading to severe economic or social consequences or even to loss of life.

The introduction of the ICH as previously noted will require massive capital expenditure in excess of over $20m which will have to be recouped by the ICH operator which it will inevitably pass on to consumers. This will lead to increased cost to consumers.

Our current operating licenses require us to deliver calls (call set-up) within 10 seconds in not less than 95 percent of call monitored. A number of operators have been sanctioned with fines of fifty thousand Ghana cedis for failing to meet these standards.

However the NCA finds it prudent to add not less than 3 seconds to call set times with the operation of the ICH. This will result in a degradation of quality of service and delay in setting up of calls.

Consumers will still hold their network operators responsible notwithstanding the role of an ICH operator in causing degradation in the quality of service.

From the foregoing it is clear that there is more at stake than investments or the interest of operators.

The risk to the whole industry and ordinary Ghanaian citizen as well as the entire business environment in Ghana by the introduction of the policy and now proposed law not backed by empirical data cannot understated.

In light of the enumerated risks and reasons operators should not be compelled to connect to and route their traffic though a mandatory connection with a clearing house.

Rather in the interest of new entities who are not in the position to acquire switches and other equipment that allows them to interconnect, the ICH should be a voluntary means of connecting to other existing operators.

The existing operators should be allowed to maintain their existing peer-to-peer interconnection for the purpose of routing traffic whiles maintaining a connection to the ICH.

This would safeguard traffic from a single point of failure and also make provision for any new entrant to be able to connect to existing operators who are already interconnected.

In view of the suggestions made we propose the following amendments to clause 4 and clause 73A

“A Network operator or service provider shall within six months after the coming into force of this act connect to an Interconnect Clearing House for the purpose of establishing and maintaining interconnection with any new service provider or routing interconnect traffic to any new service providers”

“A network operator or service provider which possesses an existing peer-to-peer interconnection shall be entitled to maintain this direct interconnection with existing service providers for the purpose of routing its interconnect traffic”.

The proposed Section 73A of the Electronic Communication (Amendment) Bill 2016, which seeks to create an offence for a telecom operator who (wilfully or negligently) fails to prevent the USE of its SIM card for terminating an international call as local call should be removed in its entirety.

We note that persons who have been arrested for terminating international calls as local calls could not be easily prosecuted because of lack of a clear legal provision which criminalizes SIMbox.

We respectfully suggest that Parliament should use this opportunity to create an offence for any person who engages in SIMbox and impose severe penalty for the offence to deter people from engaging in that act. In this regard, we propose the following provision:

“A person who uses a subscriber identity module or user identity (SIM) for terminating an international call on any network in Ghana as a local call commits an offence and is liable on summary conviction to a fine of two thousand penalty units per day for each subscriber identity module used in terminating the international call as a local call”.

THEREFORE, your petitioners humbly petition your office to stop the passage of the Electronic Communications (Amendment) Bill in its present form and as recommended by the Joint Committees of Communications and Finance.