【正文】 nishes? Incumbents provide cabi room and conduit access? In case there’s no excess conduit capacity, incumbent has to provide feasible expansion plan? Local practice will vary? Incumbent charges rental fee for conduit access? Incumbent charges for leased line needed for interconnect? Infrastructure and work investment related to interconnect are responsibility of both parties, separated from POIIncumbent obligation to interconnectInterconnect timeframeEnforcementAccount settlementAccess and collocationCharges and fees? If CNC work is not covered by regulation, local negotiation will leave loophole for incumbent and add delay? Incumbent local practice varies, add plexity and delay to project? Incumbent can take advantage of timeframe loopholes, add delays at local level? Central control over local TAB(2) varies due to varied degree of separation, lead to different degree of just and resolution timeframe? Upward propagation to MII time consuming, adding delays to resolution? Future economics: up to 30% of revenue paid to PSTN based on ? Incumbent can take advantage of capacity constraints to delay interconnect at local level? Some incumbent local branches require CNC to pay for investment, ownership goes to incumbent, adds cost to CNC serviceNote 1: Point Of Interconnect 2: Telemunications Administration Bureau 19 China Net The Boston Consulting GroupConfidentialDestroy by Shredding4503405Interim14Dec99TZDgxSHICLEAR GUIDANCE FOR INTERCONNECT ALREADY PUBLISHED, LOCAL PTA OBLIGED TO FOLLOW Local PTA can be resistant, also its anization not suitable for quick execution? The policy decision requesting local PTAs to corporate with interconnection trickles from top down: the central 222。 may also be expensive to obtainTime to market for local access buildout by LMDS access solutionsSubsidizing incumbent for USO affect cost structure of new entrantsUnable to reach CT local line customerMedium term implication: on voice not targeted for the near 45 years3 full service carrier including CNCMore licenses for valueadded service providers (type II)MII supports CNC IP based license as Full Service LicenseBut lack of clear documentation may cause confusion at local levelBased on cooperation of carriersArbitration/settlement process exist but time consumingMild punishment, law suit as last resortFor current IPphone trial, fees not settledLikely future settlement: LD carrier pays local PSTN operator Price floor likely specified for incumbent by regulationNo imminent initiative for rebalancingLegally feasible for public tele carrier (. CNC)Practice will have to coordinate with municipalities and infrastructure buildingControlled by MII in coordination with PTAsFrequency not likely to be auctionedUSO for incumbent with contribution from new entrant23 years before transparent and equitable approachPrefix based solution provided by regulation in 1 yearNumber as national resources controlled centrallyFee will be collected for occupation of number resource23 years before portability regulationsImpact on CNCHighest/ImmediateHigh/Medium TermKey issues Assumption Implication to CNC 15 China Net The Boston Consulting GroupConfidentialDestroy by Shredding4503405Interim14Dec99TZDgxSHIKEY REGULATORY BODIES AND RESPONSIBILITIESOther depts, SETCVarious law making bodiesNPC State CouncilDept. of Radio Frequency AdministrationTele Administration BureauOther depts.Provincial Tele Administration BureauChinaTeleNationalCompanyMunicipal Level Tele Administration BureauTele Operating Entities: . CT fixed lineProvincial governmentMIIAdministrationOperationsNationalProvincialMunicipality? Drafting, passing of tele laws and statues, . China Teles Law? International, National and InterProvincial scope license granting? Highest level of regulatory enforcement/ arbitration? International Gateway administration? National level tele resources control (. numbers, frequency spectrums)? Provincial level tele administration? Provincial level license granting? Provincial level regulatory enforcement focus on coordination? In the process of splitting operation and administration? A number of Municipal Level TABs are yet to be created? Limited enforcement power? Operation and administration not separate? Settle interconnect and other disputes? When not settled by provincial municipal coordination, propagate up to provincial level and MII…PTAsPTBSource: Pyramid Research?！?CNC must fight aggressively for them 14 China Net The Boston Consulting GroupConfidentialDestroy by Shredding4503405Interim14Dec99TZDgxSHIKEY REGULATORY ISSUES AND IMPLICATIONSService licensesFull Service license interpretationInterconnect enforcementAccount settlementPricing and rebalancingROW and access Frequency spectrum allocation and feesUniversal Service ObligationEqual AccessNumbering and portabilityIGW license important to petitiveness,size of customer base and of partnersMII notification on each instance adds delay to CNC local interconnectionTime to market in each city affected, detract CNC resourcesFuture Interconnect economicsFuture price petitiveness vs. other players (. CT)economics。 prove ourselves and then build further Assumptions:? Carrier and large and medium sized corporations are the key focus especially those in teleintensive industries? Assume a growing demand for business tele services will need both high and low growth scenarios? Need to validate the willingness of key customers to switch, and their anticipated areas of future demand growth? IP phone still the source of revenue in the near future? Dialup ISP (171) may conflict with ISP