Interconnection Agreement

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Interconnection Agreement

An interconnection agreement or an interconnection security agreement is being entered into by the telecommunication businesses for exchanging telecommunication traffic and interconnecting networks. They are used in both the internet and the public switched telephone networks.

In public switched telephone networks, the interconnection agreements basically provide for settlement fees which are determined based on  the source of call and destination of same, the time of day and call duration. 

Parties Involved in the Interconnection Agreement

Following parties are involved in an interconnection agreement:

  1. Transmission Provider
  2. Interconnection Customer

Purpose of Interconnection Agreement

Following is the purpose of Interconnection Agreement:

  1. It facilitates the telecommunications to connect networks with each other.
  2. It helps in achieving operational efficiency. 
  3. The agreement provides precise details of all the rights and responsibilities of the parties, thereby preventing any future conflict between them.

Contents of Interconnection Agreement

Following are the contents of interconnection agreements:

  1. Inter-connection definition: What is inter-connection, inter-connection meaning should be included.
  2. Rights and Responsibilities of parties: The Agreement should further specify the rights and responsibilities of each party to the agreement.
  3. Effective Date of Agreement: The Agreement should also contain the date on which the terms of the agreement will become effective.
  4. Term of Agreement: The Agreement should also specify the term for which the agreement between the parties is valid.
  5. Termination of Agreement: The Agreement should also provide for ways and situations which will lead to termination of Agreement.
  6. Confidentiality: The Agreement should provide for the confidentiality clause and the remedy available for the breach of such contract.

How to Draft Interconnection Agreement- Points to Consider

Following points are to be kept in mind while drafting an interconnection agreement:

  1. Details of Parties: The Agreement should also provide for details of all the parties to the agreement.
  2. Confidentiality Clause: The Agreement should necessarily contain a confidentiality clause and the relief to be resorted to in case of breach of such confidentiality clause.
  3. Dispute Settlement: The Agreement should also clearly specify the mode and venue of dispute settlement.
  4. Clearly defined Rights and Responsibilities: The Agreement should also clearly provides for all the rights and responsibilities that parties have towards one another.
  5. Duration of Agreement: The Agreement should clearly define the duration for which the contract entered upon is valid.

Negotiation Strategies:

  1. Payment schemes and schedules: The parties should negotiate about the payment schemes and schedules connected with the agreement. They should clearly decide the payment to be made and the time or occasion on which payment needs to be made.
  2. Coordination of routing policies: The parties should also decide in prior to how the routing policy will be coordinated between parties.

Benefits and Drawbacks of Interconnection Agreement

Following are the advantages of Interconnected Agreement:

  1. Reliable: Since the network is shared among a lot of sources, the failure of one source won’t hamper the entire network sharing. Hence, it is a reliable source.
  2. Economical: Since the wok is shared between a lot of networks and all networks work efficiently, the ones not working correctly can be used only during emergencies. This leads to the economical operation of interconnection and interconnection agreement facilitates the same.
  3. Reduced Capital and Operating Costs: Interconnected network helps to increase cost efficiency as the performance of the networks increased. hey perform efficiently thereby reducing capital and operational Costs. 

Following are the disadvantages of Interconnection Agreement:

  1. Lacks stability: It becomes difficult to maintain stability in a massively connected internet system.
  2. Integrity: In case any disturbance happens in one system, it propagates through another, thereby leading to loss of integrity of other systems.
  3. Damage: Damage to one system may lead to damage to another. It generally happens when the head system is damaged; then the other connected system can also get damaged.
  4. Cyber Attacks: Interconnected systems lead to all the system being vulnerable to cyber attacks.

What Happens in Case of Violation of Interconnection Agreement

Following remedies are available in case of violation of Interconnection Agreement:

  1. Suit for damages: The party may raise a civil lawsuit  to claim damages because of the breach of contract.
  2. Suit for specific performance: The party may bring an action for specific performance of a contract in case the loss suffered is irreparable.
  3. Recession: The parties may rescind the contract if the other party breaches the contract.

An Interconnection Agreement helps the telecom business to share the benefits of interconnected networks and work along with each other in providing better services rather than competing with each other. The interconnecting agreement helps in achieving operational efficiency between connecting networks. It also helps to achieve cost and operational efficiency. Above all the important information of agreeing parties is also safe because a recourse is taken to a confidentiality clause

The parties along with the support of each other try to achieve efficiency and provide better customer services even if one of the systems got damaged. An interconnection network further provides for all the rights and responsibilities of the parties and also help in achieving a better quality of work and provide the customer with better satisfaction. The parties can decide priory as to how the dispute will be resolved between parties and what is the venue or mode of dispute settlement. 

The parties can also fix the damages to be paid or recovered in case of breach of contract. The interconnection agreement helps the host computer and the connected computer to function in an effective manner and provide functional stability in case damage is suffered by one computer. An interconnecting agreement is binding upon all the parties to the agreement.

Sample for Interconnection Agreement

A sample of the Interconnection agreement can be downloaded from below.

Download Interconnection Agreement Template

Interconnection Agreement

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