Wholesale regulation of fiber and 5G networks...Based on market analysis for 3a, 3b and 4 Obligation...

Wholesale

regulation of fiber

and 5G networks

Detecon International,

Amman, 18. June 2019

Funded by the European Union

2

01 EU policy objectives

02 Regulation of fixed networks

03 Regulation of mobile networks

04 Conclusion

Table of Contents


3Funded by the European UnionFunded by the European UnionFunded by the European Union

Fibre

Backhaul

Core

Backbone

High Speed Broadband is expected to be delivered over FTTH/P, Coax and

5G. The EU started with three broadband targets in 2010.

Internet

Satellite

Mobile & Fixed Wireless

Copper

Coaxial

FTTH/P

Bring Basic Broadband (

30Mbps) to all Europeans by

2013.

To provide all Europeans

with access to Fast

Broadband (> 30Mbps) by

2020.

To ensure 50% take-up of

European households to

Ultra-Fast Broadband (>

100Mbps) by 2020.

EU Policy Objectives


EU “Provision of Broadband” 2020 targets


Progress is being made towards the 2020 targets, however most will not be

met. The Gigabit Society vision sets 2025 as the new horizon.


Rural problematic. By mid-2017

14 states had < 50% coverage

with at least 30 Mbps

Only 15% of households had

subscribed to Ultra Fast

Broadband by mid-2017 despite

a much larger availability

Although many states had

broadband strategies, there were

deficiencies in financing the

implementation

Not all states had addressed the

challenge of legacy infrastructure

Connectivity of at least 1 gigabit/s for all main socio-economic drivers (such as schools, transport hubs and the main providers of public services);

02

03

01

Uninterrupted 5G coverage for all urban areas and major terrestrial transport paths;

Access to connectivity offering of at least 100 Mbps for all European households.


Digital Agenda 2020 targets observation Gigabit Society by 2025 vision


Both the EU and NRAs in individual countries have engaged in broadband

mapping and QoS regulation is becoming increasingly consumer focused.


https://www.broadband-mapping.eu/public-portal/%

ofh

ou

se

hold

s


Download speed > 30 Mbps in EU countries Germany: Broadband availability for all technologies 2018

6

02Regulation of fixed

networks


7

Very High Capacity Networks will be deployed by 3 types of players, starting in Metropolitan areas but not commercially covering rural areas.

VHCN Incentive Regulation

Existing Telcos

Evolution of copper

networks via FTTC to

FTTB/H

Existing Cable TV Co.

Evolution of Coax networks

via Docsis 3.x to FTTB/H

New Telco Players

Municipalities, utilities,

investors etc. will build new

regional FTTB/H networks


Regulatory actions to incentivize Investments into FTTB/H

Class licenses for new investors in fiber access networks, where business case is not

burdened by legacy networks

Allow or enable low cost deployment of last-mile fiber

Standards for in-building cabling infrastructure

Symmetric open access obligations to in-building and other passive infrastructure also for non-

Telcos

Regulations to foster low-cost construction (trenching, poles, utility duct usage,…) in co-

operation with municipalities and utilities (e.g. empty ducts in any road/rail construction,…)

Subsidies in low density areas

Co-operation models (multi-fiber deployment, wholesale infrastructure company, leasing models

with municipalities or pension funds,…)

Regulatory “holidays” for first mover during start period (no re-selling obligation, no LRIC based

wholesale pricing, ex-post rather than ex-ante regulation,…)


CATV companies will not contribute much to the expansion of VHCNs

in Europe, however their share in video content will remain high.

Fiber Network Forecast

Source: ETNO, Analysis Mason 2018 Source: ETNO, Analysis Mason 2018

Forecast of households passed by Fiber in EU 32 Pay TV and OTT Video Revenue Forecast (m €)

9Funded by the European UnionFunded by the European Union

Metro

Network

There are different technical access options, with VULA providing access to PON networks, dark fibre unbundling on Active Ethernet networks.

Technical Access Options

FTTB/H

FTTH

Central Office Street Cabinet Distribution Point (Street)

CopperFiber

App 1

App 2

DP

Fiber to the Home

In-house cabling: Cu or fiber

Fiber to the Building

mini-DSLAM or MSAN in the building

FTTB

FTTH

End users

OLO equipment / Point of Handover

Main exchanges

Core

Network

VULA

Optical Distribution Frame & Tie cables

GPON

AE, ME, et cet.

Splitter/

Multiplexer

Full Fiber Loop


Fibre

Technology Neutral

Copper

Copper & Fibre

Products on same

level are equivalent

degrees of unbundling

Ma

rke

t 3a

Whole

sale

Local A

ccess

Resale

IP BitStream

Full Local Loop

Unbundling

Shared Cu Loop

Unbundling

Sub-Loop

Unbundling

VULA

Physical Infrastructure Access (Ducts, Poles, Masts, etc.)

Fibre Loop

Unbundling

DWDM

unbundling

L2 Bitstream

Core

exchange

Local

exchange

In-door cabling

Ma

rke

t 3b

(4)

Wh

ole

sale

Ce

ntra

l Acce

ss

The focus in fixed broadband is Market 3a “Wholesale Local Access” which

includes Copper LLU, Dark Fibre and VULA as potential access remedies.

Wholesale Access Products


Since 2014 an EC Directive is regulating that VHCN civil works (the largest

contributor to costs) should not be duplicated.

Directive 2014/61/CE on broadband cost reduction through coordination of civil works

Symmetric access to

physical infrastructure

• Network operators, energy, water transport & utilities obligation to meet reasonable request for access for deploying High Speed BB.

• Consent to on-site surveys.

• Information on contact point.

• Access granted on commercial bases, under fair terms &conditions

• Any network operator has the right to negotiate coordination of civil works with fellow operators.

• Publically financed civil works, have to meet any reasonable request, provide additional cost covered by network operator.

• Planned civil works information made available 6 months in advance.

• Grant or refuse permits by a motivated decision within 4 month by default

• Appoint or ore more independent Single Information Points re. physical infrastructure & permits

• Equip building within in-building physical infrastructure & access point

• The holder of the right of use, must meet reasonable request for access from a provider of public networks

• Appoint or ore more independent dispute resolution bodies.

Coordination & transparency

of planned civil worksPermit granting In-building infrastructure


The passive infrastructure of many operators in the EU is being opened up, incentivizing fibre last-mile based competition.

Physical Infrastructure Access

Obliged Access to Infrastructure Type Transparency Obligations Market 3a Access Obligations

Based on market analysis for 3a, 3b and 4 Obligation for ducts and pipe access Access obligation of SMP operator to ducts

26

18

12

Chambers,

Manholes

Ducts, Pipes

no

. o

f co

un

trie

s

Poles

24

11

7

11

Web-

interface

(wholesale

requests)

Occupation

Database

Reference

Offer

Location

Database

no

. o

f co

un

trie

s

13

5

8

11

7

no

. o

f co

un

trie

s

Cable

Removal

Feasibility

Analysis

Unblock

Infra-

structure

Cable

Installa-

tion

Certificat

for ANO

personnel


Vectoring is a VHCN technique offering data rates up to 200 Mbps via Fiber-to-the-Curb access networks and saving incumbents huge investments.

Wholesale Access to FTTC

Who is allowed to deploy Vectoring in EU countries? Regulatory Challenges

Vectoring is an engineering technique that enables copper lines to

achieve speeds near to their theoretical maximum download

speeds. Usually it is implemented in the street cabinet (DSLAM).

Vectoring requires to have control over the whole copper cable

bundle of a DSLAM to be effective. Local-loop-unbundling and

sub-loop unbundling are therefore difficult or impossible to

realize.

Even if technically possible, sub-loop unbundling is usually

commercially not viable for competitive network operators.

EU member states have taken different views on how to

implement vectoring.


In many EU countries wholesale access to fiber access networks is mandatory, either by unbundling or passive access obligations.

Wholesale Access to Fiber

Countries with wholesale access to Fiber networks Regulatory Challenges

Depending on the fiber access network topology some countries

have obliged fiber operators to unbundle P2P (e.g. Active

Ethernet, Metro Ethernet, DWDM) networks at the ODF level, or

to unbundle the PON terminating segment.

Currently only Belgium has obliged the operators to offer

wavelength division multiplexing (DWDM unbundling).

Spain introduced obligatory access to in-building fiber at

commercial prices.

France and Italy have introduced an end-to-end passive

infrastructure access, however with complicated conditions.

In 17 countries operators with SMP have published reference

access offers.


The EU (shared networks) and US (intermodal competition) have followed

differed regulatory models and arrive at similar FTTB/H outcomes.

Fiber Coverage and Speed

Source: ETNO, Analysis Mason 2019 Source: ETNO, Analysis Mason 2019

NGA and FTTB/H coverage in the EU32 and the USA Average fixed broadband downlink speed (2018)


Despite its large role to serve EU households with high-speed internet, cable networks access for Telcos is regulated in 4 EU countries, only.

Wholesale Access to CATV

Countries with wholesale access regulation for CATV Regulatory Challenges

In many countries cable TV networks have upgraded to Data-Over-

Cable-Service-Interface-Specification (DOCSIS 3.1) allowing very

high data rates to be transmitted (~400 Mbps).

Coaxial cable in 2018 is expected to serve 37m (20%) of EU32’s

186m fixed broadband connections and is hence not an

insignificant contributor to the goal of broadband access. The

technology is regarded as competitive with xDSL.

However, 17 of 28 EU countries have not included cable

networks in the definition of Market 3a or 3b because of limited

geographical coverage or see it as a limited substitute to classical

telecom networks.

Therefore very few NRAs (e.g. Belgium, Denmark 2009-17

thereafter commercial) have obliged CATV operators to offer

wholesale access to the network.

The degree to which retail broadband and pay-tv is bundled is

also a significant consideration in a market reviews.


Regulators have to prepare for the shutdown of the PSTN and the phase out of legacy copper once the transition to all-IP and fiber is going to end.

Decommissioning PSTN

EU Countries with plans to shutdown PSDN and MDFs European Electronic Communications Code Guidelines

6 incumbents plan to decommission copper access networks

7 incumbents stopped to sell PSTN services or plan shutdown

Article 81 of the EECC sets out that:

SMP operators shall “notify the NRAs in advance and in a

timely manner when they plan to decommission or replace with a

new infrastructure parts of the network…” (including legacy

infrastructure necessary to operate a copper network);

NRAs shall ensure that the decommissioning or replacement

process includes “… transparent timetable and conditions,

including an appropriate notice period for transition…”; and

NRAs should be empowered to withdraw access obligations

relating to copper networks when “...an adequate migration

process has been established and compliance with conditions for

migrations from legacy infrastructure is ensured…”.Source: Cullen International 11.June 2019

Finnland

France

Germany

Portugal

Greece

Italy

Switzer/land

Irelnd

Great Britain

NorwaySweden

Malta

Spain

Belgium


Could regulators do more to accelerate copper to fiber migration by

declaring a sunset period on copper wholesale access?

Copper based broadband in decline

Source: ETNO, Analysis Mason 2018

19Funded by the European Union

20

2G 3G LTE-A LTA-A Pro Video path

IoT in Wifi spectrum MulteFire

Vehicles to anything C-V2X

5G Standards are effectively split into two paths: one trying to address IoTand the other Massive Broadband.

5G Regulation – The split in the 5G standards part

Technical Standards Roadmap

3 GPP rel. ver Rel. 10/11/12 Rel.13 Rel. 14 Rel.15 NSA Rel15 SA Rel.16

2010 2015 2016 June 2017 Dec 2017 Jun 2018 Nov/ Dec 2019

5G Phase 2mmWawe/5G spectrum (ITU WRC)

Source: Qualcomm, DTC Analysis November 2018

eMBB

eMTC &

NB-IoT

IoT path

URLCC

mMTC

Critical

Communications(low/managed Latency,

reliability)

Massive IoT (billions of connected devices)

Enhanced Mobile

Broadband (up to tens of Gbps)

Vehicle to

Anything

5G Phase 1

5G-NR

(New Radio)

21

5G becoming a VHCN

5G has a much higher performance than 4G, but only if NRAs provide large amounts of spectrum (e.g. 100Mhz in 3.5GHz band) and fiber access.

1ms RTT for User Plane

(applicable in Dense Urban areas)Ultra low

latency

10ms to 100ms RTT for User Plane

(depending on the area)

800 Mbps in DL - Average

>10 Gbps in DL - Peak:Ultra high

data rate

100 Mbps in DL - Average

600 Mbps in DL - Peak:

>200,000 end user devices per km2Massive

connectivity

2,000 end user devices per km2

Support up to 1000 km/hUltra high

Mobility

Support up to 350 km/h

Up to ten year battery life for low power,

machine-type devicesUltra low energy

consumption

90% more in network energy usage to 5G

(including today NB-IoT)

1

2

3

4

5

Selected Features


Some governments give the spectrum away for free, as per their 5G policy

Usually spectrum is auctioned, but some countries have taken the route of not charging for 5G spectrum, instead adopting administrative processes.

Spectrum is not always auctioned

Qatar 2018

3.3-3.8GHz

Administrative

Thailand 2019

2.6GHz, 26GHz & 28GHz

Hybrid

Hong Kong 2019

26GHz & 28GHz

Administrative

Japan 2019

3.6-4.2 GHz

Administrative

China 2019

3.3-3.6GHz & 4.8GHz

Administrative

Oman 2018

3.3-3.8GHz

Administrative post auction

Russia 2019

2.6GHz, 3.6GHz & 26GHz

Consortium mooted

UAE 2019

3.3-3.8GHz

Administrative

23

Auction Spectrum Usage Obligations

5G Auction Germany: The policy goal behind the 5G auction is to provide connectivity to roads, rails and waterways in support of M2M and IoT.

Speed & Coverage Obligations

3400 - 3700MHz (300MHz in TDD configuration)

20 year licences

28 lots of 10MHz and 1 of 20MHz

3.5GHz and lower half of 3.7GHz (75% of Band n78)

98% of national and state-level HH coverage by end 2022

Coverage of at least 100Mbps and max. latency of 10ms for all German

motorways by end of 2022

Coverage of at least 100Mbps and max. latency of 10ms for all federal

roads by end of 2022

Coverage of at least 50Mbps and max. latency of 10ms for all state roads

by end of 2024

Operation of 1,000 5G base stations, and 500 base stations with a

transmission rate of at least 100Mbps in not-spots by 2020

Federal Roads Waterways core All rail Rail > 2000Auction Format: SMRA (487 rounds)

Telekom Deutschland: 90 MHz for €1.323m

Vodafone: 90 MHz for €1.043m

Telefonica Germany: 70 MHz for € 735m

Drillisch: 50 MHz for € 735m

Average Price/MHz/Pop: €0.1659



3.5GHz & 3.7GHz, being the primary 5G bands have set-asides for campus

networks in some countries. mmWave is the other alternative e.g. 60GHz.

3.3 3.4 3.5 3.6 3.7 3.8 3.9 4.0 4.1 4.2 4.3 4.4 4.5 4.6 4.7 4.8 4.9

Africe (ATU)

China

Japan

India

MENA (ASMG)

LATAM (CITEl)

Europe

GHz

Russia

Korea

USA

Already available for IMT/official plans

Considered for IMT by regulators

3.3 3.4 3.5 3.6 3.7 3.8 3.9 4.0 4.1 4.2 4.3 4.4 4.5 4.6 4.7 4.8 4.9 5.0GHz

3GPP 5G NR specification (n78)

Different LATAM countries have identified different blocks within the range

Potential for future IMT use (band n77 3.3 – 4.2GHz)

indoor

CBRS

campus

Campus, Indoor and CBRS in the 3.5GHz bands


• In the case of campus network regulators will need to:

• Set-rules on the definition of campus & multiple licenses

• Receive, evaluation & pronounce upon applications (online?)

• Manage interference cases between campuses and operators

• Collect appropriate administrative fees

The digital economy with networked robotic plants will need Campus

Networks, where private companies are using licenced spectrum.

50%

31%

19%

Traditional Telco

Private NetworkOperator

Owner operated inUnlicenced Spectrum

• If operators are paying Billions for the adjacent spectrum, how to prevent unfair competition?

• How to ensure the efficient use of spectrum by MNOs outside of Campuses?

• Bring your own spectrum to operators for B2B?

Campus networks

Originating mobile traffic shares 2018

(Security, reliability, independence

as main drivers)

26

5G, especially using mmWaves spectrum, requires the densification of networks, where FTTH/B is a prerequisite for backhauling the antennas.

Source: METIS

Generic 5G Physical Topology towards Ultra Dense HetNet

Low Density

Small Cells

Medium Density

Dense

Ultra High Density

(Hyperdense)

27

Municipalities need to work with telco’s to build integrated street lamp/ bus-stop cellular networks. Who owns the network in this case?

Refitting streetlights is the most elegant solution.

Source: ZDNet

Philips Smartpole Street Lighting

Los Angeles

Ericsson Streetlight Zero Site

Santander

Source: Ericsson Source: ZTE

ZTE BluePillar Streetlamp


28

5G roaming

5G roaming is a possible solution for ubiquitous coverage. However it is not standardized and certainly too nascent for cost-based regulation.

5G roaming architectures

Home

Network

Visitor

Network

HSS nPCRF

nPCRFMME

LTE

eNBgNB

5GW PGW

PGW

Control

Data packets

Source: GSMA, 5G implementation Guidelines, March 2019

Should roaming be regulated

• Obligation to enter into negotiations

• Margin squeeze test

• Cost-based regulation

Should selected types be regulated?

• 2G/ 3G voice & data

• 4G data

• 5G?

What should be the scope or roaming ?

• National

• Rural/ Obligation areas

• Street level (if technically possible)



04

Summary


Key considerations in High Speed Broadband policy and regulation

Key Take-Aways

Fiber, Mobile and Cable networks are converging and all 3 networks will contribute to a future VHCN.

NRAs have to prepare for the shutdown of legacy platforms like the PSTN, ATM etc. and adapt regulatory remedies.

Economies of scale of future VHCN are stronger than for legacy networks, - network competition istherefore less viable. Regulation of wholesale access, shared use and/or exclusive wholesale-only networks is important for the viability of high coverage VHCNs.

5G will become the universal network layer (IT, OT, TK) for all digital Industries. Regulators have to decide, which part of the licensed spectrum goes to Telcos and which part to private companies to digitize production.

5G systems with high performance will require large spectrum blocks and FTTB/H in every city.Regulators have to provide the resources and accelerate fiber roll-out. Have a spectrum (income usage) policy.

Understand the critical role of local government in implementation of small cells (integrated infrastructure?).

Market reviews should take account of regional differences. A city may be a market. Nationally classification into black/grey/white remains important to align with universal service funding.

Symmetric regulation (i.e. not only SMP) particularly at the passive level is important for fiber networks.

31Funded by the Europan Union

Your contact!

Dr. Arnulf HeuermannDetecon International GmbHManaging Partner

Sternengasse 14-1650676 Cologne (Germany)Phone+49 221 9161 1550Mobile: +49 171 2254217

e-Mail: [email protected]

Wholesale regulation of fiber and 5G networks...Based on market analysis for 3a, 3b and 4 Obligation...

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Transcript of Wholesale regulation of fiber and 5G networks...Based on market analysis for 3a, 3b and 4 Obligation...