Quale futuro per il sistema delle telecomunicazioni europee ed italiane Lesperienza britannica: lezi

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Quale futuro per il sistema delle
telecomunicazioni europee ed italianeLesperien
za britannica lezioni e direzioni per
lItalia?Tommaso Vallettiwww.imperial.ac.uk/peo
ple/tommaso

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Keypoints

• Telecoms
• Fixed
• Mobile
• Spectrum
• (TV Digital switchover from 2008)

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Fixed telecoms broadband getting faster and
cheaper
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Internet
Figure 2 UK Internet connections (millions)
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Fixed telecoms

• Merger NTL/Telewest. Then NTL buys Virgin Mobile
• BSkyB buys Easynet (LLU operator)
• CW buys Energis
• Telefonica buys O2
• Consolidation but also multiple platforms.
• Lots of bundled services now.

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BTs situation
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Openreach

• Undertaking offered by BT aimed at delivering
  equality of access to BTs bottlenecks.
• Openreach new business unit with 30,000
  employees.
• Operational separation. Separation of IS systems.
• There are still problems, but seems to be working
  (e.g. LLU investment in exchanges).

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Mobile telecoms

• ARPU constant (voice down, data up)
• Call termination -24 in 2005 (now 5.5 p/min and
  falling)
• Off-net prices falling steeply compared to on-net
  prices

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Spectrum

• Spectrum trading (14 applications received in
  2005, 8 already completed)
• Audit
• Spectrum auctions
• In 2006 12 licences at 1781.7-1785 MHz paired
  with 1876.7-1880 MHz (technology neutral, but low
  power)
• Next 2010-2025 MHz, 2290-2300 MHz and 2500-2690
  MHz. And others
• Digital dividend
• 112 MHz (switchover)
• Extra 128 MHz
• Interleaved spectrum within the 256 MHz used for
  existing digital channels
• Auctioned in 2008 no restrictions on use,
  technology, number of licences.
• That is Mobile, Mobile multimedia, DTT,
  Broadband wireless access, Low-power
  applications, Satellite can all participate in
  the auction!

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Externalities and market failures

• Controlling the use of spectrum by imposing
  constraints is a very poor way of responding to
  the problem of externalities.
• Better to ensure that all uses and users can
  acquire spectrum at auction or through the
  market.
• Other types of interventions are matters for
  Government, not regulators (regulators can
  assist).

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Do we need to support to investments?

• In general no.
• Where is the market failure?
• Other tools
• Local authorities subsidising deployment of NGN
  in North Yorkshire and parts of Scotland - both
  approved by the EC Commission.
• Direct PSB instead of spectrum subsidies.

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Product market regulation and investments

• Traditional view market power encourages
  investments as it offers higher return to
  innovator.
• Modern research suggests the opposite may be the
  case.
• Entry threats stimulate innovation as a means of
  escaping from competition.
• Key incentive depends on the difference between
  post- and pre-innovation rents.
• (Alesina et al., Blundell et al.)

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The financial markets

• Vodafone effect in telecoms (largest component in
  UK telecoms index)

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Challenges ahead

• NGN access and NGN core
• Convergence changes the game
• Converged networks like NGNs will make services
  available across a range of devices. Regulators
  currently regulate many services based on
  networks that deliver them.
• Will be difficult (impossible?) to assume
  distinct services running over distinct
  technologies and networks.
• Not tenable to continue to distinguish voice
  (including VoIP) as a service needing to be
  treated with a distinct set of policy,
  legislative and regulatory provisions.

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Regulatory forbearance?

• Incumbent carriers evolutionary phase.
• Too too early to discuss open access or wholesale
  mandated interconnection.
• Massive investments national regulatory
  moratoria are appropriate.
• Capital markets appear to agree. Also want
  regulatory certainty for access network
  infrastructure build-out.
• Others say not so fast Competitive providers
  argue the opposite
• Regulators need to ask whether, in the absence of
  wholesale regulation, market dynamics will be
  sufficient to ensure a competitive environment.
• Without immediate attention by regulators to
  NGNs, carriers will rapidly vertically integrate
  services and that bottlenecks will emerge.
• But is it just the traditional carriers that we
  need to be worried about? What about these
  players?
• Mega-internet service providers like Google, MSN,
  eBay and Yahoo strong brands, deep pockets
  entering audiovisual content business.

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Déjà vu all over again

• Telecommunications sector has always had a
  variety of interest groups who have clashed over
  its rules.
• Little surprise there are strongly held views on
  how to address numerous policy and regulatory
  issues that emerge with new technologies.
• Thats why establishment of independent
  regulators is a necessity!

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So its arguably back to basics

• Why do we regulate?
• Manage limited resources (spectrum)
• Market failures Market power
• Market failures Desirable capabilities that
  would not be deployed without intervention.

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Market power and interconnection

• Migration to NGN will not eliminate Significant
  Market Power.
• Where operators possess SMP, they tend to have
  ability and incentive to exploit it to detriment
  of consumers. In the absence of regulation,
  interconnection seen as locus for exploitation of
  SMP .
• Market power associated with last mile
  bottlenecks will continue to be a significant
  regulatory concern for foreseeable future.
• Still, one size does not fit all across different
  economies.
• E.g., is there facilities-based infrastructure
  competition?
• U.S. regulator end-to-end competition in access
  -gt yes to forbearance.
• U.K. cable covers only 45 of households -gt no.