Boostrapping India : COMM.05 - RLPP over phone exchange/wire companies
Proposed administrative procedure
COMM.05   -   RLPP   over   Phone   Wire/Exchange   Companies
Purpose : To enable citizens to replace phone wire/exchange companies.
Pre-requiste readings :
Administrative issues in telecommunication.
- Overview of telewire network, and bottlenecks
- COMM.05 - RLPP over phone company
- How can telecom companies do business in COMM.05?
- Inter-exchange communication in COMM.05
- Advantages of COMM.05
- Draft of the act to create procedure COMM.05
Overall structure of telephone network, and bottlenecks in improving competitiveness
The telephony can be divided into following broad parts
Connectivity in phone-lines
- phonelines (i.e. wires) from home/office to local-exchange
- wires that connect two neighboring local exchanges
- wires of trunk-lines (trunk lines are from exchange to exchange and play role in STD calls)
- exchanges which serve as switches to the trunk lines
A telephone is connected to a local exchange. And a local-exchange is connected to a trunk-exchange using a trunk-line and trunk-exchanges are connected with each other using thicker trunk lines.
The call routing in telephone network is similar to the system in post-office. How does a letter from a person living, say, in zip code 380001 reach home in zip code, 380001, 380002 or 400004? When a person living in a zip-code 380001 posts a letter to a person living in the same zip-code, the local post-office will deliver. But if a person living in 380001 posts a letter to a person living in zip-code 38002, the letter will go the post-office of 380001 which will send it to the post-office of 38002, and the postman from 380002 will deliver the letter. Now if a person living in 382111 writes a letter to 400004, the letter from his post-office will go to
- post-office of 382111
- from 382111, it will go to post-office of 380001
- from 380001 it will go to post-office of 400001
- from 400001 it will go to post-office of 400004
- postman from 400004 will deliver it to the destination.
In some ways, call-routing in a telecommunication network resembles the way letters get routed in posts. Say a person from phone P1 dials phone P2. Now if both phones are in the same exchange E1, the exchange will connect them. But say if the phone numbers are in different exchanges E1 and E2, then first E1 will establish a connection with E2 and then P1 and P2 will be able to communicate. Now how will E1 and E2 establish connection? The if E1 and E2 are in the same City/District, they may have a link with each other. In that case E1 will directly connect with E2. But if E1 and E2 are far apart, they would not have direct connection with each other. So E1 will connect with some Trunk Exchange T1 which will connect with E2. Sometimes, if the call is between two phones which are very far apart, it may use 3-4 intermediate Trunk Exchanges, and connection between those trunk exchanges may be via undersea cables or satellites.
How is the situation is similar posts? The local post-office is analogous to the local phone-exchange and the postman is analogous to the wire between the telephone and the local-exchange. The zonal post-offices are analogous to the trunk-exchanges and the mailbags, which go from local-post-office to zonal-post-offices for out-of-state mails are analogous to the trunk-lines.
Now in a country of 10 lakh citizens, postal department would only need 10-15 local post-offices and only 1 or 2 zonal post-offices. In a country of 10 crore or more citizens, the post system would need not just 2, but 3 or 4 levels of post offices.
Same is the case of phones. A local exchange can serve 500 to 10000 phone lines. But larger population would need one more level of exchange. Also, 1 local phone-exchange can serve only radius of a few kilometers. Larger geographical area, even if population is small, would need more local-exchanges. In a countries like US or India, 3 to 5 levels of trunk exchanges are used.
COMM.05 - RLPP over phone companies
The procedures are similar to COMM.03 and are as follows :
- The Mayor will divide the City into Telephone Areas of population of about 10,000. The Mayor will decide maximum number of phone-wire companies in a ward.
- The Mayor will let the companies who already have license to put phonewires continue.
- Using a RLPP, each citizen can Approval upto twice the maximum number of wiring-companies allowed for putting phonelines. (For example, if the Mayor has created space for 3 companies, then each citizen can approve upto 6 companies).
- Allowing a new player : If any company has Approval of highest number of citizens and over 25% of the citizens in that Area, the Mayor will allow that company to put phonelines in that Area.
- Expelling an existing phoneline-company to allow new one : Now suppose the Mayor has decided to allow 5 companies in a ward. Say there are already 5 companies in the field. Now say 25% of the citizen-voters approve 6th company. In that case, the Mayor will expel the company with lowest Approval-count and allow the 6th company to enter in the field. The expelled company will have to remove all its wires and equipment within 30 days or else the Pipe/pole, after the Approval of the Jury, can remove them.
- The citizens using RLPP can approve companies for local phone-exchanges
- Allowing a new player : If any company has approval of highest number of citizens and over 25% of the citizens in a ward, the Mayor will allow that company to setup an exchange in that ward.
- Expelling an existing phoneline-company to allow new one : Now suppose the Mayor has decided to allow 5 companies in a ward. Say there are already 5 companies in the field. Now say 25% of the citizen-voters approve 6th company. In that case, the Mayor will expel the company with lowest Approval-count and allow the 6th company to enter in the field. The expelled company will have to vacate the site within 30 days.
How can telecom companies do business in COMM.05?
Can a local-line-owning company or local-exchange-owning company sustain itself under such restrictions imposed by Procedure COMM.05?
Yes. The so called scale-of-economy in the telephone industry is with respect to the design-cost of equipment such as telephone switches. So the equipment manufacturing companies will be few in number. So cost of manufacturing 100 telephone-switches will be significantly less than cost of manufacturing 10 telephone-switches. But to run local-exchanges, since local-exchange-owner ONLY buys the switch and does not design/manufacture it, there is no scale of economy when it comes to running exchanges.
In other words, cost of running 100 local-exchanges, on per exchange-basis, WILL NOT be less than cost of running 10 local-exchanges as all the exchanges are buying the switch at the same price and cost of other factors are not dependent on the scale.
The situation is similar to what we see in the personal computer industry. There is scale of economy in manufacturing chips and boards. So there are few chip manufacturers. But there is no scale of economy at running a cyber-cafe. So there are 1000s of independent cyber-cafes. A telephone-exchange is analogous to a cyber-cafe and a PC is analogous to a phone-switch inside that a cyber cafe. And in fact, there ARE boards which can convert a PC into a small internal PBX-exchange.
So restricting an individual to directly or indirectly own too many phonewires and exchanges WILL NOT have any adverse effect on the phone industry. The telephone industry can vey well go on under COMM.05
Inter-exchange communication in COMM.05
Using COMM.05, a company can obtain a slot in pipes/poles meant to support telecommunication and a company can also obtain a land/building site to place an exchange. This feature is sufficient to support inter-exchange communication. How? If a company plans to put a long distance cable that runs thru several wards, then it will have to obtain one slot in EVERY ward, and put a cable. To facilitate, the Mayor can reserve certain slots for large cables only, so that only companies interested in inter-exchange communication would apply, and get.
Advantages of COMM.05
COMM.05 reduces nexusproneness in the supervision of local telephony, increases competition and thus reduces the cost.
Draft of the act to create procedure COMM.05
I have drafted the text for "COMM.05 : RLPP over Local Phone Companies", which if passed by City Councils will enable citizens expel/invite local phone companies. To see the draft, please click here.
Now citizens can ask City Councilors to pass this Act. But IMO, it will be wiser for citizens to first enact procedure LM.01, and then use LM.01 to pass this COMM.05 draft WITHOUT any help from Councilors. To know about procedure LM.01, please click here.
If you have any other question, please mail it to MehtaRahulC@yahoo.com. Thousand thanks in advance.