What regulatory paradigm for What regulatory paradigm for IP-enabled NGNs? IP-enabled NGNs?

Jaroslaw K. PonderJaroslaw K. PonderStrategy and Policy Unit

International Telecommunication Union

The 1st Southeastern Europe Broadband 2006 Conference & Expo (http://seebb2006.tninternational.com/ )

10-12 April 2006, Belgrade, Serbia and Montenegro

Note: The views expressed in this presentation are those of the author and do not necessarily reflect the opinions of the ITU. Jaroslaw K. Ponder can be contacted at Jaroslaw.Ponder@itu.int

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AgendaAgenda

• TeleCommunications in Transition • What are IP-enabled NGNs? • Different Visions - Common Goals• National, Regional and

International Proceedings• New and Emerging Markets • Interconnection in IP Environment• Open Character and Reality• Next Generation Universal Service

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TeleCommunications in TransitionTeleCommunications in Transition

We all build the Information We all build the Information Society togetherSociety together!!

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TeleCommunication Sector in TeleCommunication Sector in Transition Transition

• Migration to the IP-environment Fixed telecommunications

Incumbents: British Telecom, DT AG, KPN Newcomers: Dialog, Metropolitan Networks

Wireless communications Mobile telecommunications: from 2G to 4G WiFi, MiMax

Cable TV Broadcasting Service and content providers

• Strengthened process of convergence Technology Market Services Institutional

FMC?Regulatory Implications

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cilit

y co

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Servicecompet.

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TeleCommunication Sector in TeleCommunication Sector in TransitionTransition

• Meaning and character of communications Voice, Video, Data, SoD

• New sell and prices strategies coming from IP-enabled flexibility on operational level NGS: N-play services Falling prices of communication services and

access Traditional services lose strategic meaning Personalization and customization

• Regulation Less regulation / blurred boundaries Migration from vertical to horizontal approach Technological neutrality becomes meaningful

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NGNs as a global issue NGNs as a global issue Technical aspects Technical aspects

ITU-T SG 13: Rec. Y.2001ITU-T SG 13: Rec. Y.2001A NGN is a packet-based networkpacket-based network able to provide telecommunication services and able to make use of multiple broadbandmultiple broadband, QoS-QoS-enabledenabled transport technologies and in which service-relatedservice-related functionsfunctions are independentindependent from underlying transport-related technologiestransport-related technologies. It enables unfettered accessunfettered access for users to networks and to competing service providers and/or services of their choice. It supports generalized mobilitygeneralized mobility which will allow consistent and ubiquitous provision of services to users.

ChallengesChallenges Multimedia Generalized mobility Convergence Integrity Multi-layer orientation Open character

FG NGN

SG: 11, 13, 19, 2, 12, 16, 17

AsiaAmerica

Europe

ITUNGN

Africa

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IP-enabled NGNsIP-enabled NGNsA global issueA global issue

Regulatory considerations • Three background papers

Rulling new and emerging marekts Interconnection in an IP-enabled NGN

Environment Universal Service in an IP-enabled NGN

Environment

• Regulatory proceedings National, Regional, International level

http://www.itu.int/osg/spu/ngn/http://www.itu.int/osg/spu/ngn/

AsiaAmericas

Europe

ITUNGN

Africa

Study Group 1

• Tariff policies, tariff models and methods of determining the costs of services on national telecommunication networks, including next-generation networks

• Regulatory impact of next generation networks on interconnection

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NGNs as a national issue NGNs as a national issue Technical aspectsTechnical aspects

• Broad framework on interconnections and general regulatory framework United Kingdom: Interconnection and Developing India: Recommendations on Issues pertaining to Next

Generation Networks USA: Hearing on network neutrality

• Selected issues Germany: e.g. IP Interconnection Netherlands: e.g. Emerging markets

• Advisory forums Australia: Industry Forum to Advise on

Convergence Issues Japan: Next Generation Network promotion forum UK: NGN Industry Body India: Joint Consultative Committee &

NGN Coordination Committee

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Needs for a new regulatory paradigm Needs for a new regulatory paradigm under regional and intl. discussionunder regional and intl. discussion

• ERG: 2006 Common Positions Principles for IP interconnection Regulatory principles for NGNs

• CEPT Consultations on interconnection model Many activities related to non-economic regulation

• CITEL and APEC-TEL Convergence, NGN, VoIP

• OECD Studies on IP related issues

• WTO First considerations on Agreement on Basic

telecommunications • ITU

Global discussion What rules on the IP-enabled NGNs? (March 2006)

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New and Emerging marketsNew and Emerging markets

• SMP concept Fundamental regulatory questions

confronted with long term goals of the economic and industrial policy

Discussion on implications of the regulatory holidays

• Relevant markets Wholesale – New access technologies do

influence in particular broadband definitions Retail – all market may be redefined

• New balance between ex-ante regulations and ex post remedies

• Effectiveness of self correcting forces in a competitive marketplace

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Interconnection in IP environmentInterconnection in IP environment

• Distinctions in periods Transitional and mature

• Competition oriented regulation It is possible that in NGN environment the

intervention in setting the interconnection agreements will be smaller

• New model? Conflict between technology independence,

cost based regulation, and significant market power. For the migration phase zero or low rate model for call termination may be advantageous. In the long term new model (see ECC 2005) with full separation of services provision and connectivity.

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Open character and realityOpen character and reality

• Telco Model versus Internet Model • Similar to the internet

NGN offers horizontally integrated model with separated NGN services and NGN Transport layer

• Market structure Very different

• Who determines the openness Vertically integrated services and network

operators together with regulatory obligations

• Meaning of the contnet providers still underestimated in the discussion

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Next Generation Universal ServiceNext Generation Universal Service

• Definition of the universal service and the scope of the services to be included Inclusion of the broadband in Europe

triggered very difficult debate • Possible change of approach

Migration to the universal access approach • Unified prices and affordability• NGN is much more efficient

CAPEX and OPEX up to 40% lower More services on the network

• Universal service funds Possible sources of financing

• Customer protection

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Customer interests protectionCustomer interests protection

• Universal service and access • Consumer emergency calls (E112/E911)• Consumer protection and privacy (e.g.

SPAM, SPIM)• Quality of services• Authenticated caller or sender

identification• Disability assistance• Data protection and privacy issues

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ConclusionsConclusions

We all build the Information We all build the Information Society togetherSociety together!!

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ConclusionsConclusions

• NGN will bring significant changes for the regulatory framework

• The changes will be implemented rather in a way of natural evolution then drastic revolution

• Competition is key to the NGN; on the other hand NGN fosters competition new entrance opportunities for operating

companies as well as newcomers / NGN creates new markets and reinforce position of some market players

• New balance between ex-ante regulations and ex post remedies

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ConclusionsConclusions

• Effectiveness of self correcting forces in a competitive marketplace

• The tempo of the NGN deployment depends on the effective regulation

• Regulatory proceeding determine incentives to invest for both new entrants and incumbents

• Regulatory policy should take into account the dynamic efficiencies dynamic efficiencies to be achieved in the ICT sector

• BalanceBalance between facility based competition and service based competition should be preserved

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Implications for SEEImplications for SEE

• NGNs may develop much faster develop much faster in countries with poor infrastructure

• Regulatory harmonization harmonization and pro-active pro-active participation participation in the debate on the future regulatory paradigme is crucial

• It diminishes investment risk that is very high in transition economies anyway

Please do not wait and give your voice to this debate!

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Thank you very much Thank you very much for your attention!for your attention!

Jaroslaw K. Ponder International Telecommunication UnionStrategy and Policy Unit E-mail: Jaroslaw.Ponder@itu.int http://www.itu.int/spu Tel: 00 41 22 730 60 65

We all build the global knowledge-We all build the global knowledge-based information society!based information society!

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Resources Resources

• Full version of this presentation and others focusing on NGN: www.itu.int/osg/spu/presentations/

• NGN regulatory and policy resources:http://www.itu.int/osg/spu/ngn/ngn-policy-regulatory-resources.html

• ITU activities on NGN:www.itu.int/spu/ngn

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International International Telecommunication Telecommunication

UnionUnion

We all build the Information We all build the Information Society togetherSociety together!!

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ITU - International ITU - International Telecommunication UnionTelecommunication Union

• The oldest specialized UN agency with more than 140 years of experience in communication sector

• Headquarters in Geneva plus regional offices

• ITU staff: more than 750 from more than 80 countries

• 189 member states, more than 640 sector members

• ITU Agenda for Change• Structure of the ITU

ITU-T – Telecom Standardization ITU-R – Radio-communications ITU-D – Development Bureau

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ITU – InternationalITU – InternationalTelecommunication UnionTelecommunication Union

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ITU’s Strategy and ITU’s Strategy and Policy Unit (SPU)Policy Unit (SPU)

http://www.itu.int/spuhttp://www.itu.int/spu

• New Initiatives Programme Digital Bridges (2005) Ubiquitous Network Societies (2005) Today’s Networks Tomorrow (2005) What Rules for IP-enabled NGNs? (2006) Digital Transformations in the Information

Society (2006) Regulatory Environment for Future Mobile

Multimedia Services (2006)• Many other activities…