1. Rory Macmillan Telecom Sector Dispute Resolution: Alternative Dispute Resolution as a Strategic Resource October 30, 2004 TDSAT Seminar Delhi, India

2. The basic questions we should be asking about ADR concern resources and responsibilities • Who should bear responsibility for the various functions involved in dispute resolution? • Who has the resources for those functions? • How can responsibilities and resources be arranged to ensure efficient, effective dispute resolution in line with sector policy? • What type/level of official involvement best achieves policy goals?

3. The telecom sector has some particular features • Complex network industry with operators and service providers • Capital intensive business, so many are there for the long haul • Webs of on-going long term commercial relationships

4. ADR may be useful given these features • Many ADR techniques emphasise the importance of parties’ long term relationships • Emphasis throughout sector regulation in many countries on negotiated results • Durability in ADR from parties’ owning the results arising out of converged interests

5. Indeed, the private sector isintroducing new ADR mechanisms by itself • UK Competitive Telecom Association’s dispute resolution scheme • Vodafone, BT and others are setting up their own dispute resolution schemes using Chartered Institute of Arbitrators and CEDR • Private sector initiatives suggest demand in the market for ADR

6. “ADR” means many things to many people • Arbitration and expert determination? • Non-binding expert determination and evaluative mediation • Ombudsmen schemes • Mediation, conciliation and facilitation • Negotiation • Consensus building

7. To think strategically about ADR,we have to look at two key issues Consensual? Determinative? 1. How much of the process and result are determined by a 3rd party or through consensual negotiation by the parties? 2. How much involvement does the official sector have at various levels in the process? Official? Non-official?

8. Each part of dispute process can be more or less consensual/determinative and official/non-official Setting the rules and process Choosing the 3rd party neutral Deciding the result of the process Reviewing the process/result Enforcing/implementing the result Consensual? Official? Determinative? Non-official?

9. Dispute resolution techniques may bemapped along these two key axes Mediation & conciliation Non-binding expert determination Unofficial Arbitration and expert determination Consensus building Ombudsmanschemes Regulatory adjudication Official Determinative/adjudicatory Consensual/ negotiated

10. How “official” and “unofficial” a process is affects efficiency and effectiveness of dispute resolution • Imbalance of market power between parties • Official control of results may be necessary in some cases (e.g., spectrum frequencies and numbering) • Regulators’ and courts’ enforcement remedies can be useful • But official processes can be an impediment where they are inadequate, badly exercised or unnecessary

11. Whether more “determinative” or “consensual” also affects efficiency and effectiveness • Formality of the process • Protection of a weaker party • Definitiveness of the outcome • Ownership of the result

12. This makes various interesting hybridapproaches available in dispute resolution • Jordan permitting arbitration in place of regulatory adjudication for interconnection disputes • Hungary establishing a bank of approved arbitrators for telecom disputes • The UK regulator approves dispute resolution schemes set up by operators • Many regulators are acting formally or informally as mediators

13. The UK’s local loop unbundling adjudicator scheme illustrates the hybrid possibilities • Telecom adjudicator appointed by OFCOM • But adjudicator is to be “independent” of OCFOM • Adjudicator’s authority to resolve decisions is based on private agreement of parties like arbitration • Certain key policy matters reserved to the regulator and are off-limits to the adjudicator (e.g., pricing) • Scheme largely designed and pushed by regulator

14. Is there a problem encouraging ADR where matters of public policy are at stake? • What if an arbitral panel in Jordan awards a result contrary to TRC regulatory policy? • Does the TRC have any right of review? • How will courts review arbitral awards in light of “public policy” when asked to enforce them?

15. There may be ways to mitigate this concern about leaving “public policy in private hands” • The legal notion of “arbitrability” can be used to prevent arbitration and restrict important matters to official control • Arbitral awards can be reviewed at enforcement stage to ensure the integrity of the arbitral processes • Mediations could be structured and sometimes run by regulators • Arbitral awards could be explicitly required to comply with the regulatory regime and if necessary require pre-approval • Arbitrators and mediators could be selectable only from a register of telecom experts defined by the official sector

16. The official sector can improve dispute resolution by tapping into ADR resources strategically • Work out where the resources are available in each step of the dispute resolution process • Align available ADR resources with the needs • Ensure there is adequate official sector control of important public policy issues

17. Some specific ideas for leveraging ADR resources to improve dispute resolution • Ask arbitration institutions in the country to create dispute resolution processes for the telecom sector • Establish registers of qualified arbitrators and mediators for telecom disputes • Train arbitrators and mediators in telecom policy • Train telecom veterans to be arbitrators or mediators • Develop standards of review of ADR processes

18. For further information • “Dispute Resolution in the Telecommunications Sector: Current Practices and Future Directions”, Robert Bruce, Rory Macmillan et al: http://www.itu.int/ITU-D/treg/Events/Seminars/2003/GSR/Documents/DRS_Final_GSR_5.pdf • ITU Case Studies in interconnection dispute resolution, Robert R. Bruce & Rory Macmillan: http://www.itu.int/ITU-D/treg/Case_Studies/index.html • ITU web pages on dispute resolution: http://www.itu.int/ITU-D/treg/related-links/links-docs/dispute.html • Contact Rory Macmillan directly on +41 79 752 3622 or at rory@rorymacmillan.com