Trends in Telecommunication Reform 2010-11 non-discriminatory basis to competitors and ultimately to end users. In some cases, regulators have required carriers to separate their backbone operations from their access network (or retail) operations on either a functional or structural basis. To support this expected increase in demand, regu-lators should implement policies that promote the most efficient and effective use of spectrum resources. Such policies include making sufficient spectrum avail-able for broadband by freeing up spectrum bands that are either unused or underutilized. Policies for assign-ing 3.3.1.3 Backhaul networks spectrum should feature mechanisms that guaran-tee both that the resource will be held by the parties that will use it more efficiently and that important so-cial Backhaul refers to the links used to transport traffic objectives are achieved, such as the provision of from a geographically distant point, such as a wireless base station, to a significant aggregation point in the network, such as a mobile telephone switching office.25 Since backhaul costs often constitute a significant por-tion connections to schools, hospitals and government of-fices and coverage of unserved or underserved areas. Similarly, flexible use of current and future commercial assignments should be considered as a means to facili-tate of a network’s operating costs, particularly for mo-bile operators, competitive and well-functioning technological evolution. wholesale markets for backhaul capacity are a critical component for broadband diffusion and ICT services deployment and take-up. Targeted ex ante regulation may therefore focus on establishing a framework for backhaul network sharing to ensure that competitors have wholesale access to backhaul capacity while guarding against possible anti-competitive conduct that can occur when operators share facilities. Backhaul network sharing can be achieved either through fibre cables or microwave links. 3.3.1.2 Backbone networks Backbone networks refer to the high capacity communications facilities that carry traffic between at least two major nodes, and may consist of fibre optic, satellite or terrestrial wireless systems.21 High capacity backbone networks are essential for broadband con-nectivity since they link access networks and ultimately end users. However, they require heavy investments. For example, the backbone of a typical mobile voice network represents approximately 10-15 per cent of the total network costs, with the costs of providing broadband substantially higher.22 Increasing the num-ber Developing countries are beginning to focus on core backbone and backhaul networks as a means to increase broadband deployment. South Africa, for ex-ample, established a state-owned, fibre-based infra-structure provider, Broadband Infraco, to provide of users purchasing network service is one key way to defray the costs of deploying and operating a back-bone national backhaul connections on a wholesale basis.26 Brazil has also begun to focus on backhaul; it struck an agreement with five fixed-line operators to build out broadband backhaul networks to 3,439 unserved mu-nicipalities network. This is typically accomplished by resel-ling capacity on backbone networks on a wholesale, non-discriminatory basis to downstream providers, which helps to establish competition across multiple tiers of service.23 in exchange for being relieved of existing ob-ligations to install 8,000 dial-up equipped telecentres.27 One important issue that many regulators will have 3.3.1.4 International connectivity to address is related to vertical integration, where the backbone network providers are vertically integrated with the network operators, which results in a single end-to-end provider that can wield great market power. This is the case in many developing countries.The first step towards facilitating competition in vertically inte-grated International bandwidth demand has increased significantly as ICTs, particularly the Internet, have been adopted more widely. Between 2002 and 2009, inter-national bandwidth usage increased by 60 per cent, networks is to ensure a liberalized market. In with the strongest demand growth taking place on links to Africa, Latin America and Middle Eastern countries. Countries in these regions saw annual growth rates of over 74 per cent in this period.28 However, adequate international connectivity is limited by gateways that can act as bottlenecks by restricting traffic flows and artificially increasing prices. some countries in Sub-Saharan Africa, for example, mobile operators are prohibited from using the incum-bent’s network for backbone services, resulting in slow growth in broadband infrastructure.24 The second step towards increasing competition may entail targeted, ex ante regulations requiring the backbone network pro-vider to vertically disaggregate to various extents and offer network capacity on a wholesale, open access and Chapter 3 93