Rory Macmillan

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 Associations 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
Determinative?
Consensual?
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 UKs local loop unbundling adjudicator
scheme illustrates the hybrid possibilities

• Telecom adjudicator appointed by OFCOM
• But adjudicator is to be independent of OCFOM
• Adjudicators 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.h
  tml
• 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_at_rorymacmillan.com