MoIT drafts own telecommunication competition rules

Despite Competition Commission of Pakistan's (CCP) sole mandate to regulate telecom sector on competition related issues, Ministry of Information Technology and Telecommunication has drafted its own 'Pakistan Telecommunication Competition Rules, 2017' to check anticompetitive behaviour in the telecommunication sector.
Sources said that the CCP had issued a Policy Note to the Ministry of Information Technology & Telecom (MOITT) recommending reviewing the Telecom Policy, 2015 in relation to the Competition Rules for the telecom sector as it is the sole jurisdiction of CCP under the Competition Act, 2010.
In its policy note, the CCP has raised two major issues ie whether do the Rules being framed by the MoIT for the telecom sector create jurisdictional overlaps and conflicts between the legislative mandate of the Commission and PTA? And whether can PTA impose ex post behavioural remedies for competition law violations, which are already being enforced by the Commission under the Competition Act?
The Competition Act being an Act of Parliament takes precedence over the Rules being framed by MoIT which is a subordinate legislation. Hence the Competition Act shall prevail in the event of any conflict or overlap between the CCP's mandate and that of any other regulatory or public body in Pakistan to the extent of matters covered under the Competition Act, CCP said. Empowering PTA to regulate competition related matters in the telecom sector will not only create redundant duplication of jurisdictions but also engender legal uncertainty for the telecom operators and consumers as well as wastage of state resources.
Through its Policy Note, CCP has made it clear that an overlapping and conflicting competition regulation regime will as is being envisioned by the MOITT cannot be used as an instrument to undermine the supreme intent of the Parliament (Majlis-e-Shoora). An attempt to empower PTA to regulate competition related matters in the telecom sector under the contemplated Competition Rules will result in duplication of jurisdiction and also create legal uncertainty for the telecom operators and consumers, CCP added.
Meanwhile, Pakistan Telecommunication Competition Rules, 2017 shall be applicable without prejudice to other regulatory requirements and compliance with the Competition Act, 2010 (Act No XIX of 2010) or any other law or rules for the time being in force.
According to the proposed rules, a licensee shall not agree or arrange with another licensee or person, where the agreement or arrangement prevents or lessens or is likely to prevent or lessen competition substantially in a market. Unless prior approval of the authority is obtained, a licensee shall not agree or arrange with another licensee or person to: (a) fix prices or restrict output; (b) co-ordinate separate bids for assets, resources or rights, or for any input in licensee's services or for the provision of any telecommunication services; (c) restrict competition in relation to the provision of telecommunication service equipment to specific customers or to competition in specific areas; (d) refuse to do business with a specific licensee, carrier, competition or customer; (e) otherwise prevent or lessen competition substantially in a market.
The authority shall ensure that open and fair competition is facilitated and encouraged in the relevant markets within the telecommunication sector. The authority shall regulate tariff or other terms and conditions for provisioning of any telecom service or facility or any other service to the telecom consumers under the license(s) issued by the PTA or under any other licence, or any other service provided to the telecom consumers as per section 26 of the act and otherwise considered necessary to safeguard the consumers or end-users from any anticompetitive, burdensome, unreasonable or unfair practices.
A licensee shall not enter into any agreement or otherwise arrange with another licensee where the agreement or arrangement is likely to prevent or substantially lessen fair competition in a market.
A licensee shall be deemed to have engaged in anti-competitive behaviour if it: a) intends to defame its competitor through commercial advertisements and or any other manner; b) activates the services and deducts charges against those services without consent of the user; c) hides actual prices of the packages; d) abuses its dominant position in the relevant market; e) refuses to provide access to essential facilities under its control or interconnection to a competitor on reasonable terms and conditions or, where applicable, on the terms and conditions notified or approved by the Authority; f) discriminates or reduces interconnection or other facilities to competing licensees; g) gets involved in vertical price squeeze in a relevant market where no substitutes are available; h) engages in cross-subsidisation; i) misuses the information acquired by it for provisioning of services to the competitor including essential facilities or interconnection; j) attempts to lock in customers by any unfair means including high switching costs; k) involves in predatory pricing by reducing the price of services below the cost of services and maintaining the same in order to incur unsustainable losses to the equally efficient competitors; l) engages in price squeezing of the margin of profit available to a competitor that requires wholesale services from the licensee by increasing the prices for the wholesale services required or decreasing the prices of the retail services in markets where the compete; m) undertakes bundling of services whereby the customers are required to purchase on product or service over which it has market power conditional on the purchase of second, competitively supplied, product or service whereas the two products or service can be provided and consumed independent of each other; n) or engages in any other unfair practice that may have the effect of impeding or preventing a competitor's entry into or expansion in a market being anti-competitive in the given circumstances indulged in a decision mutually beneficial to licensees in a specific relevant market.
The authority shall conduct a market analysis with a view to delineate relevant markets and determine significant market player in the relevant market from time to time. Significant market player (SMPs) in a relevant market will be required to introduce national roaming on a fair and non-discriminatory basis. The authority shall allow sharing of resources, including spectrum, between the licensees to improve efficiency, promote competition and ensure that the scarce resources are used product. The Authority may issue standard terms and conditions for sharing of resources by a SMP in a relevant market.
Before determining any standard terms and conditions for sharing of resources in a relevant market, the Authority shall provide opportunity of hearing to all the licensees operating in the relevant market. A licensee shall not merge/ acquire any other licensee without prior approval and/or obtaining no objection certification (NOC) from the authority with regard to adverse effect on provision of licensed services along with other licensees.
The authority shall evaluate every request for a merger/ acquisition objectively and issue a written order/determination/NOC on such request within 90 days from the date of its receipt along with such fee as prescribed in schedule-1 attached to these rules.