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Regulatory Challenges of Next Generation Networks NGN

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Title: Regulatory Challenges of Next Generation Networks NGN


1
Regulatory Challenges of Next Generation
Networks (NGN)
  • Dieter ElixmannScott Marcus
  • Presentation at the 2nd Black Sea and Caspian
    Regulatory Conference
  • Istanbul, 22 23 June 2007

2
Overview
  • NGN Technological background
  • Migration of networks Examples
  • Regulatory challenges

3
NGN Technological background (1)Evolution of
networks
  • The old world
  • The new world

MGW Media Gateway MRFP Multimedia Resource
Function Processor BGCF Breakout Gateway Control
Function MGCF Media Gateway Control Function SLF
Subscriber Location Function
MRFC Multimedia Resource Function Controller
S-CSCF Serving Call State Control
Function P-CSCF Proxy Call State Control
Function I-CSCP Interrogation Call State Control
Function HSS Home Subscriber Server
Source Zuidweg, J. (2005) IMS for Fixed and
Mobile Convergence
4
NGN Technological background (2)Clarifying
terms NGN, IMS, NGI
  • The NGN is
  • A Next Generation Network (NGN) is a packet-based
    network able to provide services including
    Telecommunication Services and able to make use
    of multiple broadband, QoS-enabled transport
    technologies and in which service-related
    functions are independent from underlying
    transport-related technologies. (Adapted from
    ITU-T ITU_1-2004 )
  • The IMS is
  • IP Multimedia Subsystem (IMS) is a standarized
    access independent IP based architecture that
    interworks with existing voice and data networks
    for both fixed and mobile users. (Adapted from
    3GPP 3GPP_1-2006)
  • The NGI is
  • It is an initiative to empower the current
    Internet using IPv6 protocol to obtain high speed
    networks fulfilling QoS and reliable
    communication services (Adapted from the
    Internet2 Network I2-2007)

5
NGN Technological background (3) Evolution
NGN, IMS and NGI
  • Evolution towards a unified service delivery
    plattform

Source WIK-Consult
6
NGN Technological background (4) Access NGN
The local loop today
  • The traditional local loop Stylized facts

Source WIK-Consult
7
NGN Technological background (5) FTTx
architectures (1)
  • FTTN Fiber-To-The-Node usually MDF
  • FTTC
  • Fiber-To-The-Cabinet usually Street Cabinet
    (SC)
  • Fiber-To-The-Curb
  • FTTP Fiber-To-The-Premise
  • FTTB Fiber-To-The-Building
  • also Fiber-To-The-Basement
  • also FTTM Fiber-To-The-MDU (MDU
    Multi-Dwelling-Unit)
  • FTTH Fiber-To-The-Home

8
NGN Technological background (6) FTTx
architectures (2)
Source G. Gauthey, presentation at WIK VDSL
Conference March 22,.2007
9
NGN Technological background (7) Distance and
Bitrate
Datenrate (kbit/s)
Länge TAL (m)
Cable 0,5mm Loop, 12 self Xtalk Disturbers 2x
SDSL 1024 Kb/s, 4x SDSL 2304 Kb/s, 1x 2-pair HDSL
2B1Q, 10x ADSL2, Annex B, 41x ISDN 4B3T
Source A.H. Wulf presentation at WIK VDSL
Conference March 22,.2007
10
NGN Technological background (8) Distribution
of local loop lengths
Lenght local loop
Source A.H. Wulf presentation at WIK VDSL
Conference March 22,.2007
11
NGN Technological background (9)Wrap-up
  • Term NGN used as meta-category covers all
    other related terms
  • Characteristics NGN
  • Logical separation of the transport, control and
    service layer
  • Differentiated network access
  • Unique IP transport network in the core
  • Application of open protocols (ITU,ETSI, IETF) to
    integrate different services, transport and
    system providers
  • Thus, a-priori far-reaching potentials for
    competitors compared to PSTN/ISDN world
  • Migration of networks Core NGN, access NGN
    (local loop, backhaul)
  • In many countries network migration is already
    underway

12
Overview
  • NGN Technological background
  • Migration of networks Examples
  • Regulatory challenges

13
Migration of networks Examples (1) BT (1)
  • PSTN network infrastructure
  • About 80,000 SCs
  • About 6,000 MDFS
  • Relatively outdated network infrastructure
    (primarily analogue)
  • Future 21st Century Network (21CN)
  • ALL-IP network, complete migration to VoIP
  • Focus primarily on core network no(t yet) FTTx
  • No phasing out of MDF locations (up until now)
    envisaged
  • Overall investment outlays till 2010 about 10
    bill.
  • Expected decrease OPEX 1 bill. p. a. till 2008

14
Migration of networks Examples (2) BT (2)
  • Comparison of the current voice network and 21CN

Source Ofcom (2005), Next Generation
NetworksFuture arrangements for access and
interconnection Figure 1, page 11
15
Migration of networks Examples (3) BT (3)
  • BT plans to implement 100-120 Points of
    Interconnection (POI) in their 21CN compared to
    about 3,000 in the existing network
  • Open Reach organisational divestiture of the
    wholesale business from the rest of the company
    (structural separation light in cooperation
    with OFCOM)

16
Migration of networks Examples (4) KPN (1)
  • PSTN network infrastructure
  • About 28,000 SCs
  • About 1,350 MDFs
  • Future
  • FTTC (SC), VDSL relatively short sub-loops
  • Objective ALL-IP closing down of PSTN by
    2010 entirely new access and core network
  • Substantial diminution of MDF locations
  • Essential contribution to overall investment
    financing of about 1 bill. Euro through sale of
    MDF real estate

17
Migration of networks Examples (5) KPN (2)
  • The envisaged ALL-IP network of KPN (stylized
    facts)

Source OPTA (2006) KPNs Next Generation
Network All-IP, Positionpaper,
OPTA/BO/2006/202771 October 2
18
Migration of networks Examples (6) France
Telecom (1)
  • Current PSTN network infrastructure
  • About 13,500 MDFs
  • About 120,000 SCs
  • Average length of the sub-loop about 750 m
  • Theoretical coverage ADSL2
  • 30 of the population could get 15 Mbit/s
  • 55 of the population could get 10 Mbit/s
  • 76 of the population could get 5 Mbit/s
  • In the summer of 2006 France Télécom launched a
    FTTH pilot in 6 arrondissements of Paris and
    cities in the Hauts-de-Seine. This network
    upgrading affects several thousand households.
  • Since March 2007 FT offers a total of 2.5 Gbps
    (each 1.2 Gbps download und upload) (per tree)
    in Paris.
  • Summer 2007 Launch of FTTH activities also in
    Marseille

19
Migration of networks Examples (7) France
Telecom (2)
  • Inhouse cabling by FT

FT deploys fiber up to the apartment in which a
Boîtier optique (electrical-optical interface)
changes the optical signal into anelectrical
signal. Each customer receives such a device in
his/her apartment.
Source pcimpact 2006
20
Migration of networks Examples (8) Wrap-up
  • British Telecom
  • NGN core only, little emphasis on NGN access
  • Operational savings, faster time-to-market
  • Structural separation light undertakings with
    OFCOM
  • KPN Comprehensive revamping of both access and
    core networks
  • VDSL for the access network, relatively short
    loops
  • Funded by sale of real estate no longer needed
  • Challenges to sub-loop unbundling high density
    needed
  • FT
  • FTTB/FTTH in dense metropolitan areas
  • Many unresolved challenges as regards unbundling

21
Overview
  • NGN Technological background
  • Migration of networks Examples
  • Regulatory challenges

22
Regulatory challenges (1) The NGN layered model
  • NGN carries further the separation of the service
    from the network.

23
Regulatory challenges (2) Potential layers for
regulatory intervention
  • Physical layer
  • IP-based network layer
  • Interconnection
  • Assured Quality of Service (QoS)
  • Application layer

24
Regulatory challenges (3) The Physical Layer
  • NGN can support many kinds of physical and
    logical transmission media
  • Fixed versus mobile
  • Cable television
  • ADSL
  • VDSL
  • FTTB/FTTH
  • Some operators will not offer their own access at
    all (the provider operates a NGN core, but does
    not offer its own access)
  • Many operators will offer a hybrid of two or more
    of the above
  • Special regulatory challenges emerging with
  • VDSL
  • FTTH/FTTB

25
Regulatory challenges (4) Physical layer Access
issues VDSL/SC (1)
  • DSLAMs at the MDF likely to support only a (very)
    limited fraction of the user base
  • VDSL at the SC reasonable in case of relatively
    short sub-loops
  • Sub-loop unbundling (SLU) requires the
    enlargement of the backhaul network (between
    MDF and core) up to the SC

26
Regulatory challenges (5) Physical layer
Access issues VDSL/SC (2)
  • Co-location options regarding SLU at the SC
  • Installation of a second (or third) SC next to
    the SC of the incumbent ( virtual co-location),
    i.e. competitor establishes own DSLAM in the
    vicinity of the incumbent SC
  • Non trivial (perhaps not possible)
  • Physical co-location
  • Competitor installs own DSLAM at incumbent SC
  • Competitor installs own line card at incumbent SC
  • Challenges Space, management of access, heat
    dissipation
  • Bitstream access Where should traffic exchange
    take place?
  • At current PoPs
  • At current MDF locations

27
Regulatory challenges (5a)Scenario 1 Sub-Loop
Unbundling/Bitstream in the cable distribution
cabinet (1/2)
Cable Distribution Cabinet
Central Office
Home
SLU with additional Outdoor Cabinet
DSLAM
MDF
PSTN
Aggregation
BRAS
CPE
Backbone Operator A
DSLAM
MDF
Backbone Operator B
SLU over DSLAM/Bitstream to 2nd Operators Network
  • SLU with additional Outdoor Cabinet
  • Redundancy of Cabinets
  • SLU over DSLAM (Line Card Leasing Model)
  • Requires multi-tenant functionality in theDSLAM

CPE Customer Premise EquipmentBRAS Broadband
Remote Access ServerMDF Main Distribution
FrameSLU Sub-Loop Unbundling
Source A.H. Wulf presentation at WIK VDSL
Conference March 22,.2007
28
Regulatory challenges (5b)Scenario 1 Sub-Loop
Unbundling/Bitstream in cable distribution
cabinet (2/2)
Cable Distribution Cabinet
Central Office
Home
DSLAM
Aggregation
PSTN
BRAS
CPE
Backbone Operator A
DSLAM
MDF
SLU using collocated space in Cable Distribution
Cabinet
  • SLU using collocated space in Cable Distribution
    Cabinet
  • Limited by size of cabinets
  • Potential heat dissipation problems

Source A.H. Wulf presentation at WIK VDSL
Conference March 22,.2007
29
Regulatory challenges (5c)Scenario 2 Unbundled
Local Loop (ULL)/Bitstream in central office
Home
Cable Distribution Cabinet
Central Office
  • Bitstream via Aggregation
  • Possible at any point in the network
  • Limited control for 2nd operator
  • ULL
  • Limited reach

Source A.H. Wulf presentation at WIK VDSL
Conference March 22,.2007
30
Regulatory challenges (6) Physical layer
Phasing out of MDFs
  • MDF access today very important for broadband
    competition
  • Investment outlays of competitors regarding MDF
    access deployment are on their balance sheet for
    8 years or more (depreciation)
  • Key issues from a regulatory perspective
  • How to handle the risk of stranded investments?
  • How to preserve and stimulate effective and
    enduring (infrastructure) competition if MDFs are
    phased out?
  • How many (parallel) infrastructures are necessary
    for effective competition in a NGN world?

31
Regulatory challenges (7) Physical layer
Access issues FTTB/FTTH
  • FTTH/FTTB will tend to be preferred
  • Where loop lengths are longer
  • Steady state for the broad broadband world
  • Substantial civil engineering costs
  • Key issues from a regulatory perspective
  • Access to intra-building wiring for multiple
    dwelling units (new last mile)
  • House owners will presumably not accept a second
    set of fiber infrastructure
  • Implies huge first mover advantage
  • Unbundled access, in particular regarding PON
    architecture
  • Ducts are again important
  • France is currently coordinating discussions with
    industry

32
Regulatory challenges (8) IP Network Layer
Interconnection (1)
  • Traditional telephony Billing approaches
  • Wholesale level
  • Calling Partys Network Pays (CPNP)
  • Private negotiated arrangements (à la Coase),
    often Bill and Keep
  • Retail level
  • Often Calling Party Pays (CPP)
  • Often flat rate ((banded) flat rate, minute
    contingents)
  • Internet
  • Wholesale level
  • Private negotiated arrangements (à la Coase) with
    peers, often with no charges
  • Usually banded flat rate to transit customers
  • Retail level diverse, often flat rate

33
Regulatory challenges (9) IP Network Layer
Interconnection (2)
  • CPNP wholesale arrangements will be difficult to
    sustain in their current form in an NGN world.
  • Competitive pressure from service providers who
    do not operate networks
  • Difficulty or impossibility to use a surcharge on
    the service to pay for costs of the network when
    these are not necessarily provided by the same
    integrated firm
  • Current metrics (minutes of use) correlate only
    weakly with real usage-based marginal costs
  • The attribution of cost causation to the party
    placing the call was always questionable, and
    much more so in an NGN world
  • Substantial challenges with measurement and
    accounting, especially where the service provider
    and the network operator are distinct entities

34
Regulatory challenges (10) IP Network Layer
Interconnection (3)
  • The inherent IP-based nature of the NGN
    potentially opens the network to third party
    applications, including VoIP
  • Will best-efforts IP be fully open to
    competitors, or will incumbents with SMP prefer
    their own services?
  • Will IP with assured Quality of Service (QoS) be
    fully open to competitors, or will incumbents
    with SMP prefer their own services?
  • Best-efforts IP-based services could, in most
    cases, enable effective competition to the
    incumbents own QoS-enhanced applications
  • Network operators may prefer a closed environment
    (walled garden)

35
Regulatory challenges (11) IP Network Layer
Interconnection (4)
  • Will the incumbent attempt to impact performance
    of best-efforts IP (QoS degradation)?
  • Intentional degradation
  • Failure to upgrade infrastructure as needed
    (equivalent)
  • Regulatory remedies to QoS degradation
  • Ex ante nondiscrimination obligations
  • Obligation to publish QoS under Article 22 USD
  • Competition law (foreclosure)

36
Regulatory challenges (12) IP Network Layer
Transition period concerns
  • How long should operators be required to provide
    SMP remedies?
  • Incumbent should be able to upgrade its network
  • Guideline Preserve competition, not individual
    competitors
  • If POIs for access and interconnection are
    unilaterally discontinued, what is the impact on
    competition?
  • Incumbent should be able to upgrade its network
  • Risk of stranded investments with competitors
  • Guideline Preserve competition, not individual
    competitors
  • Suggestion Reliance on consultative mechanisms
    and on notice

37
Regulatory challenges (13) Application Layer
  • Will the migration to NGN facilitate or hinder
    competition with providers of application
    services?
  • Each layer of the NGN architecture is in
    principle open to competition
  • IMS/NGN is well-suited to either enabling or
    inhibiting third party access at the Application
    Layer
  • Operators with market power will likely prefer to
    maintain a closed walled garden rather than an
    open competitive environment
  • The degree to which this is a concern is unclear
    competition at the IP-based Network Layer might
    mitigate concerns with bottlenecks at the
    Application Layer

38
Dieter ElixmannWIK-Consult GmbHPostfach
200053588 Bad HonnefGermanyTel 49 (0)
2224-9225-43Fax 49 (0) 2224-9225-69Mobile 49
175 521 2571eMail d.elixmann_at_wik-consult.comwww.
wik-consult.com
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