TELECOM REGULATOR ISSUES MIXED DECISION ON LOCAL

UNCLAS SINGAPORE 001134

SIPDIS

STATE PASS TO AMBASSADOR GROSS
USTR FOR AUSTR WEISEL AND JMCHALE
COMMERCE FOR JBAKER

SIPDIS
SENSITIVE

E.O. 12958: N/A
TAGS: ECPS ECON ETRD EINV SN
SUBJECT: TELECOM REGULATOR ISSUES MIXED DECISION ON LOCAL
EXCHANGE CLOSURES

REFS: A) SINGAPORE 222

B) SINGAPORE 996


1. (U) The Infocomm Development Authority (IDA) has directed
Singapore's dominant telecom carrier, SingTel, to give
competitors up to 18 months notice concerning any local exchange
it intends to close. IDA's June 7 decision extends the previous
requirement from six months and comes nearly one year after
SingTel announced vague plans to gradually consolidate its 27
existing exchanges to 12 (ref A). Under its Reference
Interconnection Offer (RIO),SingTel is required to offer other
telecom licensees co-location spaces at its exchanges for access
to tower sites, points of interconnection, and submarine cable
landing stations.


2. (SBU) Although U.S. telecom companies welcomed the longer
notification period, they were disappointed that IDA's decision
did not also require SingTel to compensate competitors for costs
associated with exchange closures. IDA has argued that 18
months should allow adequate time for competitors to amortize
construction and other costs associated with build-out to
affected exchanges. However, industry has told us that the
average timeframe is in fact considerably longer and that their
network rollout and investment plans therefore will continue to
remain in limbo.


3. (SBU) IDA refused to consider industry recommendations (made
earlier this year during a public comment period on regulating
exchange closures) to allow competitors tandem access -- i.e.,
economically efficient points of connection -- to SingTel's
network. In particular, the Asia Pacific Carriers' Coalition
(APCC),which includes U.S. carriers, suggested that tandem
access would eliminate much of the guess-work and unforeseen
costs associated with SingTel's proposed consolidation. IDA
argued that the discussion of tandem exchange access was
"clearly outside the scope of this current regulatory
proceeding."


4. (U) The "IDA's Decision and Explanatory Memo for
Decommissioning of Co-Location Sites Under SingTel's RIO" is
available at www.ida.gov.sg under "Policies and Regulation."

Comment
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5. (SBU) IDA's unsatisfactory decision represents the latest in
a series of actions that fall short of Singapore's obligations
under the U.S.-Singapore Free Trade Agreement (FTA) to ensure
reasonable access to leased lines for competitive carriers in
the domestic market. USG senior officials and post have
repeatedly raised these concerns, most recently during the May
11 annual FTA review in Singapore (ref B). We will continue to
press the GOS to fulfill its commitments.

HERBOLD