PART I 59 Regulatory Reporting Requirements  Interconnection Arrangements  The Telecommunications Act requires that a Type I service provider, including one who concurrently offers  Type II services, separately calculate the profits and losses for its different services and prohibits any cross- subsidization among services that will impede fair competition.  The Telecommunications Act requires all Type I service providers to allow other Type I service providers  access to their networks. It further requires Type I service providers, within three months upon request by the  other Type I service provider, to reach an agreement on the relevant terms for the interconnection. Prices charged  for interconnection must be based on cost. If the parties fail to reach an agreement within three months, the  National Communications Commission may, either at the request of the parties or on its own accord, arbitrate  and determine the interconnection terms for the parties. The Telecommunications Act authorizes the Directorate  General of Telecommunications or, from March 1, 2006, the National Communications Commission to issue  rules and regulations pertaining to interconnection.  When a Type I service provider leases unbundled network components to another Type I service provider,  the parties are required to negotiate the rental fee. Unbundled network components include:  •  local loops;  •  local switch transmission equipment;  • local trunks;  •  toll switch transmission equipment;  • long distance trunks;  •  international switch transmission equipment;  • network interfaces;  •  directory equipment and services; and  • signaling network equipment.  Under the Administrative Rules for Network Interconnection, we, as a dominant telecommunication  service provider for fixed line and mobile services, are required to unbundle our network and provide cost- based interconnection charges calculated with reference to the total element long-run incremental cost incurred  by us. We are required to submit our proposed calculations of the total element long-run incremental cost to the  National Communications Commission, for its approval each year. Local loop unbundling for both voice and  data have been completed.  The Administrative Rules for Network Interconnection Between Telecommunication Service Providers was  further amended by the National Communications Commission on November 2011 specifying the charges for  network interconnection among Type I service providers as follow:  •  Before January 1, 2011, except for international communications, tariffs for communications  between a mobile telecommunications network and a fixed-line network were collected from the call- originating subscribers by the call-originating service provider pursuant to the tariff schedules set by  the mobile communication service provider, and revenues or any uncollectible accounts from such  tariffs went to the mobile service provider. However, from January 1, 2011, although the tariffs shall  still be paid by the call-originating subscribers, the tariff schedules are set by the call-originating  network service provider, and revenues or any uncollectible accounts from such tariff shall go to the  call-originating service provider. During the transition period from January 1, 2011 to December 31,  2016, we, as a dominant Type I fixed-line service provider, shall pay extra transition fee in addition  to access charges to the mobile communications service providers. 