Barriers to Progress in Converged Network and Services Development

William H. MelodyManaging Director, LIRNE.NET

Melody@Lirne.net, www.lirne.net

Presentation at Workshop

Convergence of Media and ICT in Egypt:Challenges, Policies and Regulation

Cairo, 3 May 2006

INFORMATION INFRASTRUCTURE

Regional Development

Finance/ Banking

Disaster Management

Travel & Tourism ManufacturingMedia & Cultural Sectors

Health/Medical Government Services Education/Training

Applications

Electronic Services(Pay TV, VAS, Internet)

Multimedia, etc.(Public, User group, Private)

ContentBroadcast

MediaFilm

LibrariesSoftware

etc

Interactivity(Instant & Delayed)

VoiceData

SoundGraphics

VideoTelecommunication

Facilities Network(Information Superhighway)

Computing / Information Technology

Telecommunication Equipment Manufacturing

Significance of Network Unbundling

• Industry Sectors - Equipment, Operator Networks, Services

• Fixed and Mobile

• Basic Network Layers

• *Content *Communication Services *Network Protocols, OSS & Management *Equipment & Facility Capability

Convergence Sectors Drivers of Convergence

•Technology

• Industry-Supply

• Market-Demand

• Policies/Regulation

•Industry Specific

•Convergent

Applications

• Finance

• Commerce

• Education

• Health

• Publishing

• Manufacturing

• etc.

Content

Telecom

Computing

The Dimensions of Convergence on the Information Infrastructure

From Vertical to Horizontal Markets

Layer 4: INFORMATION SERVICES

Provision of Content

Layer 3: COMMUNICATION SERVICES

Basic, value-added & access to information services

Layer 2: NETWORK MANAGEMENT

Protocols and standards for routing & service quality

Layer 1:INFRASTRUCTURE FACILITIES

Transmission capacity and interfaces to terminals

Steps Toward ICT Convergence

• Digitalization of the network

• Mobility

• Next Generation Internet (Broadband)

• Media integration (Internet Protocol)

• E-commerce (QoS)

• Restructuring of industries

• Reshaping Policy and Regulation

Infrastructure For Digital Economies

• Higher Capacity Facilities - Broadband?• Access to High Speed Networks?• Access to Minimal Level of Universal

Services? • Access to Minimal Levels of Information?

VoIP or Everything Over IP?

• The gradual digitalization of the network has been a steady march to providing all forms of electronic communication over a compatible set of protocols, now called IP

• From terminals to transmission, switching and local distribution. Network protocols applicable to data, graphics, music, video and finally voice

• Why are we surprised and poorly prepared for VOIP?

ICT Convergence Regulation

• Access to communication channels and access to content

• New issues of competition and monopoly• Privacy, security, IPR• Reducing digital divides?• Can content regulation be avoided?• The most effective role for national telecom

regulators?

Entry Points in Converging Markets

IT Data Internet Content Entertainment EoIP

Information Services

Communication Services

Network Management

Infrastructure Facilities

Telephone

From Regulating Competitors to Opening Markets

Restricted Infrastructure Rights

International

Traffic Termina

tor

Network Inte-

grator“ISPs”

Fixed Ser-vices

Mobile Ser-vices

Mobile Ser-vices

Trans-mission

Infra-struc-ture

Transmission Infrastructure

VSAT Opera-

tors

Trun-king

Opera-tors

Restricted Services (e.g. excluding Voice or Roaming)

Vertically Integrated Incumbent

Second Cellular

Ope-rator

ProtectionProtection

Open Playing Field Regulation

• A transition from monopoly/oligopoly direction to maximizing participation via open access

• Target is not technological neutrality, but maximum development of all technology & services advantages

• Maximum opportunities for competing firms to achieve public interest goals

• Maximum stimulation to market development through both private and public participation

Policy/Regulation Reassessment to Create Investment Opportunities (1)

• Structural Adjustment, Phase 2 - empowering regulator as change agent• Horizontal Market Definitions - unbundling layers; monopoly nodes• Reassessing Licenses - what needs licensing, why, how? - removing service restrictions• Application of Competition Principles - from regulating firms to regulating markets

Policy/Regulation Reassessment to Create Investment Opportunities (2)

• Interconnection/Access in Converged Markets - from minutes to Gbits• Pricing and Revenue Settlement Standards - wholesale/retail; origination/termination• Allocation/Use of Public Resources – spectrum, numbers, names, right of way• Public Service Requirements – emergency, security, QoS• Social Subsidy Mechanisms – USO, ADC, etc.

World Dialogue on Regulation for Network Economies

• Participate in the Dialogue; review and comment on the research, www.regulateonline.org

LIRNE.NET, www.lirne.net • A Strategic Collaboration for applied research, training, policy

and regulation support, relating to information infrastructure and new network economy development

• Center for Tele-Information (CTI), TU Denmark• Economics of Infrastructures, TU Delft, Netherlands• LINK Centre, Wits University, South Africa• LIRNEasia, Colombo, Sri Lanka• LIRNEamericas, Montevideo, Uruguay• Media@lse, London School of Economics, UK