3. Interconnection Charges Regulation: How Is Telecom Different from the Internet?

Interconnection is one of the important characteristics that define the network effect of the telecom industry. Interconnection between networks using standardized technical interfaces enables telephone calls to originate and terminate across networks spanning geographies and service providers. However, there are contentions between telecom operators on charges levied for traffic that spans across networks. Further, with technologies enabling VoIP and Internet Telephony, calls span across the Internet and the traditional telecom networks (e.g. PSTN/PLMN). Though the technical interfaces have been standardized, there are commercial issues on interconnection that needs to be addressed with regulatory guidance. This chapter provides a taxonomy of interconnection charges and discusses the different types of charges, especially the mobile termination charges and international settlement charges in detail. The chapter also highlights how the advances in technologies such as Internet Telephony, VoLTE, RCS and WebRTC continue to pose interesting regulatory questions as follows: