Charging Regimes for Interconnection Services - Future Options and Potential Outcomes

Over the last few years, many discussions have centred around the issue of interconnection rates and their economic impact on the market. Interconnection charging in Europe is still based mainly on the calling party pays (CPP) principle combined with element based charging (EBC). Due to the convergence of the classical PSTN/ISDN and the IP world to next generation networks (NGN), the different charging principles and systems are being reviewed to determine the optimal solution for the future.In its working program for the year 2008, the Austrian Regulatory Authority (RTR) launched an industry working group on charging principles and systems for wholesale services. This paper highlights some of the central issues of the discussions that have taken place and contains the authors' views and conclusions. Further, the paper identifies possible charging systems, as well as economic assessment criteria for these systems and how the different charging systems may be evaluated with respect to those criteria. Regarding the usefulness of industry working groups, the work has shown that these lead to a higher degree of transparency between regulator and market players as well as a better understanding between the market players themselves. The main drawback is that working groups are time consuming and that it is almost impossible to agree on meaningful outcomes.Regarding the assessment of the charging models it was possible to derive a set of 10 criteria according to which charging systems can be evaluated. There was a rather broad consensus on the delineation of charging models as well as the economic criteria. When it comes to the results of the evaluation, the discussions brought forward very controversial views amongst the participants. No common views could be achieved on which the charging model fulfills the defined criteria in the best manner