2.
Classification of Facilities-based Licensees
Introduction
2.1.
Application
2.1.1  This section applies only to Facilities-based Licensees. In this section, the term “Licensee” refers to Facilities-based Licensees.
Over-view
2.1.2  This Code distinguishes between Licensees that are subject to competitive market forces and Licensees whose conduct is not constrained adequately by competitive market forces. Because most Licensees are subject to competitive market forces, IDA will impose minimum regulatory “rules of the road,” coupled with the ex post enforcement of general prohibitions on anti-competitive conduct. By contrast, where a Licensee’s conduct is not constrained by competitive market forces, IDA will require it to comply with more stringent regulatory requirements.
Categories of Licensees
2.2.IDA will classify a Licensee as either a:
(a)Non-dominant Licensee; or
(b)Dominant Licensee.
Dominant Licensees
2.2.1  A Licensee will be classified as dominant if it controls facilities that provide a direct connection to end users within Singapore, regardless of the technology used, and:
(a)the facilities are sufficiently costly or difficult to replicate that requiring new entrants to do so would create a significant barrier to rapid and successful entry by an efficient competitor; or
(b)the Licensee has the ability to restrict output or raise prices above competitive levels for telecommunication services provided to end users over those facilities.
In addition to their other obligations, Dominant Licensees must comply with the special provisions governing Dominant Licensees set forth in subsections 3.3-3.3.5, section 5, and subsections 7.2-7.2.2.2 of this Code.
Non-dominant Licensees
2.2.2  Non-dominant Licensees are subject to competitive market forces. In the absence of evidence to the contrary, IDA will presume that all Licensees are non-dominant.
Designation of Dominant Licensees
2.3.By separate notice in the Gazette, IDA will list those Licensees classified as dominant and any exemptions to be granted.
Asset Transfers
2.4.A Dominant Licensee may not avoid the obligations specified in this Code by transferring ownership or control to another entity of facilities that the Dominant Licensee uses to provide telecommunication services and equipment to end users and interconnection to other Licencees.
Classification and Reclassification of Licensees
2.5.IDA will ensure that Licensees are classified appropriately. IDA will reclassify a Dominant Licensee as Non-dominant if IDA concludes, based on relevant evidence, that the Licensee no longer satisfies the conditions for dominant classification specified in either subsection 2.2.1 (a) or 2.2.1 (b). Classification and reclassification can occur in any of the following three ways:
Procedures
2.5.1  
Grant or Renewal of the Licence
  (2.5.1.1)  At the time it grants or renews a licence to a Licensee, IDA will make an assessment as to whether the Licensee is dominant or non-dominant.
Reclassification by IDA of a Licensee
(2.5.1.2)Where appropriate, IDA may initiate a proceeding to reclassify a Licensee. In such cases, IDA will request the Licensee to provide information that will assist IDA in determining whether or not the Licensee meets the conditions specified in subsection 2.2.1 (a) or 2.2.1 (b) of this Code. Before reclassification IDA will seek public comments.
Petitions for Reclassification
(2.5.1.3)A Licensee or other interested party may petition IDA to have a Licensee reclassified. A party seeking to have a Licensee reclassified must provide information demonstrating whether or not the Licensee meets the conditions specified in subsection 2.2.1 (a) or 2.2.1 (b) of this Code. Before acting on a petition for reclassification, IDA will seek public comments.
Evidence to be Considered
2.5.2  
Ability of Competitors to Replicate Facilities
  (2.5.2.1)  A party seeking to demonstrate whether or not a Licensee meets the conditions specified in subsection 2.2.1 (a) should submit verifiable data regarding: the facilities that the Licensee has deployed to connect to end users; the cost to a new entrant to deploy facilities that perform a comparable function; the extent to which such facilities are commercially available; the extent to which there are technical, economic or regulatory obstacles to the competitive deployment of such facilities; and the extent to which competitive deployment has occurred and is likely to occur within the foreseeable future.
Procedures
2.5.1  
Grant or Renewal of the Licence
  (2.5.1.1)  At the time it grants or renews a licence to a Licensee, IDA will make an assessment as to whether the Licensee is dominant or non-dominant.
Reclassification by IDA of a Licensee
(2.5.1.2)Where appropriate, IDA may initiate a proceeding to reclassify a Licensee. In such cases, IDA will request the Licensee to provide information that will assist IDA in determining whether or not the Licensee meets the conditions specified in subsection 2.2.1 (a) or 2.2.1 (b) of this Code. Before reclassification IDA will seek public comments.
Petitions for Reclassification
(2.5.1.3)A Licensee or other interested party may petition IDA to have a Licensee reclassified. A party seeking to have a Licensee reclassified must provide information demonstrating whether or not the Licensee meets the conditions specified in subsection 2.2.1 (a) or 2.2.1 (b) of this Code. Before acting on a petition for reclassification, IDA will seek public comments.
Evidence to be Considered
2.5.2  
Ability of Competitors to Replicate Facilities
  (2.5.2.1)  A party seeking to demonstrate whether or not a Licensee meets the conditions specified in subsection 2.2.1 (a) should submit verifiable data regarding: the facilities that the Licensee has deployed to connect to end users; the cost to a new entrant to deploy facilities that perform a comparable function; the extent to which such facilities are commercially available; the extent to which there are technical, economic or regulatory obstacles to the competitive deployment of such facilities; and the extent to which competitive deployment has occurred and is likely to occur within the foreseeable future.
Ability of Licensee to Restrict Output and Raise Prices
(2.5.2.2)A party seeking to demonstrate whether or not a Licensee meets the conditions specified in subsection 2.2.1 (b) should submit verifiable data regarding: the relevant market for the telecommunication services that the Licensee provides to end users; the participants in the market; the Licensee’s market share; the level of concentration in the market; the likelihood of timely and sufficient increases in output (either through new entry or the deployment of additional output by current market participants) in response to a significant and non-transitory price increase by the Licensee; and the likelihood that end users would respond to a significant and non-transitory price increase by switching to a competing service provider.
Exemption from Application of Special Dominant Licensee Requirements
2.6.Dominant Licensees are subject to a number of special requirements. IDA recognises, however, that as competition develops, it may no longer be necessary to apply each of these requirements to every facility operated and/or service provided by the Dominant Licensee. IDA therefore will consider requests from Dominant Licensees to exempt them from specific requirements.
Request for Exemption
2.6.1  A Dominant Licensee that seeks exemption from any special requirements applicable to such Licensees should submit an application to IDA that identifies the specific provisions (with subsection numbers) of this Code from which the Licensee seeks exemption. The Dominant Licensee must demonstrate that continued application of the provision to a specific facility and/or service is not necessary to protect end users or promote and preserve effective competition amongst Licensees. The Dominant Licensee must provide verifiable data to support its request.
IDA Review
2.6.2  IDA generally will provide an opportunity for public comment before granting any request for exemption from any special requirements applicable to Dominant Licensees. IDA will seek to issue an order granting or denying such requests within 90 days of receiving the request.