Interconnection in an IP-Based NGN Environment

1
Interconnection in anIP-Based NGN Environment

• J. Scott Marcus, Senior Consultant
• ITU Workshop What rules for IP-enabled NGNs?
• Geneva, March 23-24, 2006

2
Interconnection in anIP-Based NGN Environment

• Introduction
• The economics of interconnection
• Fixed, mobile, Internet
• Retail and wholesale arrangements
• Quality of Service
• Market power and interconnection
• Interconnection and universal service
• Billing and accounting challenges
• A hypothetical scenario
• Summary

3
Introduction

• IP-based NGNs represent the marriage of the
  Public Switched Telephone Network (PSTN) with the
  world of the Internet
• Very different interconnection arrangements
  prevail in these two worlds.
• Different technology.
• Different regulatory history.
• Different industry structure.
• What should happen when worlds collide?

4
Introduction

• Why do we regulate?
• Market failures Market power
• Market failures Desirable capabilities that
  would not deploy without help (some of which
  constitute public goods)
• Manage limited resources (spectrum, numbers)

5
Introduction

• What role for regulation in the world of the
  IP-based NGN?
• Where service providers possess Significant
  Market Power (SMP), they will tend to have both
  the ability and the incentive to exploit that
  market power, to the detriment of consumers. In
  the absence of regulation, interconnection often
  serves as a locus for the exploitation of SMP.
• Coase Theorem (1959) private parties can
  often negotiate arrangements more efficiently
  than government regulators, provided that
  necessary preconditions have been met.
• In markets where competition is fully effective
  (no SMP exists), competitive forces will
  generally make regulation unnecessary.
• Things should be as simple as they can be, but
  no simpler. - EInstein

6
Introduction

• NGN access versus NGN core (source ECTA)
• NGN access the deployment of fibre into the
  local loop, either to the incumbents street
  cabinet or the deployment of fibre all the way
  to customer premises (typically apartment blocks
  rather than individual houses).
• NGN access the replacement of legacy
  transmission and switching equipment by IP
  technology in the core, or backbone, network.
  This involves changing telephony switches and
  installing routers and Voice over IP equipment.
• Significantly different regulatory implications.
• My primary focus in this talk is on the NGN core,
  but broadband deployment generally and NGN access
  in particular interact with these issues.

7
Introduction

• My history
• Senior Consultant, WIK-Consult (Germany)
• Senior Advisor for Internet Technology, FCC (USA)
• Chief Technology Officer, GTE Internetworking
  (USA)
• Engineer by training
• My approach to these interconnection issues is
  primarily through economics rather than
  engineering.

8
The economics of interconnection retail

• Calling party pays (CPP) the party that
  initiates the call pays for the call, usually
  based on the duration of the call generally, the
  party that receives (terminates) the call pays
  nothing.
• Receiving party pays (RPP) or Mobile Party Pays
  (MPP) the originating and terminating parties
  each pay a share for the call. In North America,
  where this system historically has been used,
  mobile receiving parties paid but fixed receiving
  parties did not.
• Flat rate the consumer pays a fixed (monthly)
  fee for unlimited domestic calls.
• The buckets of minutes plan the consumer pays
  a fixed (monthly) fee for some number of minutes
  of domestic calls, but pays a per-minute fee for
  minutes in excess of those in the bucket.

9
The economics of interconnection retail

• CPP arrangements reflected the historical
  perception that the caller is the primary
  beneficiary of the call, and also the main
  cost-causer.
• This concept has been challenged in recent years
• Clearly, the receiver also benefits.
• If the receiver saw no merit in the call, he or
  she could simply hang up thus, after the first
  minute, caller and called party can be viewed as
  (equal) partners in the call. (Cf. Jeon et. al.)
• In the world of the IP-based NGN, origination and
  termination are likely to become less relevant
  over time. (Cf. de Graba)

10
The economics of interconnection retail

• Consumers tend to grealy prefer flat rate (or
  buckets) plans over usage-based plans (Cf.
  Odlyzko)
• ATT Wirelesss offer of Digital One Rate (1998)
• America Onlines flat rate Internet access (1995)
• In the United States, flat rate / bucket plans
  are increasingly prevalent at all levels
• Mobile services
• Fixed services, including long distance
• Internet access

11
The economics of interconnection wholesale

• Calling Partys Network Pays (CPNP) the calling
  partys network (the originating operator) makes
  a wholesale payment to the receiving partys
  network (the terminating operator).
• Bill and Keep a U.S. term of art denoting the
  absence of any regulatory obligation for payments
  between the networks.

12
The economics of interconnection wholesale

• In an unregulated CPNP system, carriers will tend
  to establish very high termination charge levels.
  Normal economic forces provide an inadequate
  brake on this practice, because the terminating
  operator is imposing the charges indirectly on
  another carriers customer. The terminating
  operator does not bear the full burden of
  suppressing demand through a price that is
  arguably too high.
• These high prices impact consumer welfare in a
  number of ways. This problem is general referred
  to as the termination monopoly.
• Paradoxically, small operators will be motivated
  to set termination charges to even higher levels
  than will larger operators. (Cf. Laffont and
  Tirole (2001) Haucap and Dewenter)
• Regulatory asymmetries for example, between
  regulated fixed operators and unregulated mobile
  operators can exacerbate this problem.

13
The economics of interconnection

• Termination charges at the wholesale level
  interact with retail pricing arrangements.
• The termination fee generally sets a floor on the
  retail price.
• Where termination fees are high, they generally
  prevent flat rate or buckets plans from
  emerging.
• This is true even where payments between the
  operators are in rough balance, such that little
  money changes hands.
• Each operator will tend to view the termination
  charge as a component of its marginal cost. (Cf.
  Laffont and Tirole)
• If an operator chooses to ignore this wholesale
  cost in the hope that the payments will balance
  anyway, that operator risks attracting customers
  who place disproportionately many calls to
  customers of other providers (adverse
  selection).

14
The economics of interconnection

• Mobile operators that implement CPP/CPNP tend to
  have the following characteristics at the retail
  level
• Low or zero initial cost
• Low or zero monthly cost
• High usage (per minute) cost
• Mobile operators (U.S.) that implement buckets
  plans and Bill and Keep tend to have the
  following characteristics at the retail level
• Higher initial cost
• Higher monthly cost
• Low or zero effective usage (per minute) cost
• These differences tend to lead to faster adoption
  of the mobile service in CPP/CPNP systems, but
  much lower rates of utilization.

15
The economics of interconnection
Source of data U.S. FCC, 10th CMRS Report, July
2005, Table 10, based on Glen Campbell et al.,
Global Wireless Matrix 4Q04, Merrill Lynch, Apr.
13, 2005.
16
The economics of interconnection

• In the U.S., the FCC has been attempting for
  years to migrate their interconnection
  arrangements to a Bill and Keep basis for all
  services. (Cf. de Graba (2000), Atkinson and
  Barnekov (2000)).
• The FCCs sense has been that
• Bill and Keep simplifies regulatory rate-setting
  or avoids it altogether.
• Bill and Keep already works well in many settings
  in the U.S.
• Bill and Keep will be easier to apply to the
  IP-based networks of the future.
• To date, the U.S. has been unable to forge a
  political consensus to move forward on this issue.

17
Peering economic models

• An extensive economics literature exists about
  interconnection in the traditional PSTN world.
• An emerging literature deals with interconnection
  in the world of the Internet.
• We are in the early stages of understanding the
  relationships between the two.

18
Peering and Transit

• Peering is an agreement between ISPs to carry
  traffic for each other and for their respective
  customers. Peering does not include the
  obligation to carry traffic to third parties.
  Peering is usually a bilateral business and
  technical arrangement, where two providers agree
  to accept traffic from one another, and from one
  anothers customers (and thus from their
  customers customers).
• Transit is an agreement where an ISP agrees to
  carry traffic on behalf of another ISP or end
  user. In most cases transit will include an
  obligation to carry traffic to third parties.
  Transit is usually a bilateral business and
  technical arrangement, where one provider (the
  transit provider) agrees to carry traffic to
  third parties on behalf of another provider or an
  end user (the customer). In most cases, the
  transit provider carries traffic to and from its
  other customers, and to and from every
  destination on the Internet, as part of the
  transit arrangement. In a transit agreement, the
  ISP often also provides ancillary services, such
  as Service Level Agreements, installation
  support, local telecom provisioning, and Network
  Operations Center (NOC) support.
• Peering thus offers a provider access only to a
  single providers customers. Transit, by
  contrast, usually provides access at a
  predictable price to the entire Internet.
• Historically, peering has often been done on a
  bill-and-keep basis, without cash payments.
  Peering where there is no explicit exchange of
  money between parties, and where each party
  supports part of the cost of the interconnect,
  is typically used where both parties perceive a
  roughly equal exchange of value. Peering
  therefore is fundamentally a barter
  relationship.
• - NRIC V (advisory council to FCC)

19
Peering and Transit
Transit Connection
Larger ISP or Backbone
Regional or Local ISP
Many remote locations connect to a regional or
local ISP with individual, low bandwidth
connections
Concentration to a larger ISP or backbone
provider with global connectivity by means of
a concentrated, high bandwidth connection
20
Peering and Transit
Transit Connection
Larger ISP or Backbone
Regional or Local ISP
This peering connection will tend to exist if the
cost of the connection to each ISP is less
than the money each saves due to reduced transit
traffic.
Transit Connection
Larger ISP or Backbone
Regional or Local ISP
21
Peering and Transit
Cf. Lixin Gao (2000)

• In general, money flows upstream, while
  obligations flow downstream.
• Transit agreements are vastly simpler than
  peering agreements.
• In general, peering is a bilateral technical and
  commercial arrangement.

22
Peering economic models

• Define
• co as cost of origination
• ct as cost of termination
• a as an access charge levied on the sender
• Due to shortest exit, ct gt co
• Then
• cost for the originating network is co a
• cost for the terminating network is ct a
• The model extends in a straightforward way to
  accommodate multiple levels of quality of service
  (QoS).

Network i
Network j
Source Laffont et. al., Internet
Interconnection and the Off-Net-Cost Pricing
Principle
23
Peering economic models

• A key difference with this telecommunications
  literature is that in the latter there is a
  missing price receivers do not pay for receiving
  calls The missing price has important
  implications
• The operators optimal usage price reflects
  their perceived marginal cost. But when operators
  do not charge their customers for the traffic
  they receive, operator i s perceived marginal
  cost of outgoing traffic is the unit cost of
  traffic is the on-net cost c, augmented by the
  expected off-net markup.
• Comparing the two perceived marginal costs of
  outgoing traffic with and without receiver
  charge, for given access charge and market
  shares, the price for sending traffic is higher
  (lower) than in the presence of reception charges
  if and only if there is a termination discount
  (markup).
• In sum, the missing payment affects the
  backbones perceived costs, and it reallocates
  costs between origination and reception.

Source Laffont et. al., Internet
Interconnection and the Off-Net-Cost Pricing
Principle
24
Market power and interconnection

• Regulators continue to find it necessary to
  intervene where an operator has Significant
  Market Power (SMP).
• The migration to NGN will not necessarily
  eliminate SMP. Notably, market power associated
  with last mile bottlenecks will continue to be a
  significant regulatory concern for the
  foreseeable future.
• A new market power challenge has appeared,
  primarily in the U.S. the network neutrality
  issue.

25
Market power and interconnection

• Network neutrality means different things to
  different people
• The possibility that an integrated ISP might
  offer better performance to some Internet sites
  than to others
• The possibility that an integrated ISP might
  assess a surcharge where a customer wants
  better-than-standard performance to certain
  Internet sites
• The fear that the integrated ISP might permit
  access only to affiliated sites, and block access
  to unaffiliated sites
• The fear that the integrated ISP might assess
  surcharges for the use of certain applications,
  or of certain devices
• The fear that the integrated ISP might disallow
  outright the use of certain applications, or of
  certain devices, especially where those
  applications or devices compete with services
  that the integrated ISP offers and for which it
  charges and
• The fear that the integrated ISP might erect
  tollgates in order to collect unwarranted
  charges from unaffiliated content providers who
  need to reach the integrated ISPs customers.

26
Market power and interconnection

• The chief executive of ATT, Edward Whitacre,
  told Business Week last year that his company
  (then called SBC Communications) wanted some way
  to charge major Internet concerns like Google and
  Vonage for the bandwidth they use. "What they
  would like to do is use my pipes free, but I
  ain't going to let them do that because we have
  spent this capital and we have to have a return
  on it," he said. NY Times, March 8, 2006

27
Market power and interconnection

• Many of the concerns that have been raised in
  regard to network neutrality relate to behaviors
  that, in the absence of market power, would tend
  to enhance consumer welfare.
• Some would appear to represent legitimate price
  discrimination.
• Others enforce the economic property of
  excludability (the ability to prevent someone
  from using a service that he did not pay for) in
  support of price discrimination.
• The form of market power that could potentially
  be exploited in anticompetitive ways in
  connection with network neutrality relates to
  network externalities (where the value of a
  service depends on the number of users of the
  service). (Cf. Katz and Shapiro (1985)).
• The degree to which this issue has heated up
  recently in the U.S. probably reflects increasing
  concentration in the relevant markets.

28
Market power and interconnection

• Trying to address these network neutrality
  challenges through regulation ex ante (in
  advance) is likely to prove extremely difficult.
• A first line of defense for regulatory
  authorities should instead be to maintain the
  competitiveness of the underlying markets,
  especially as regards broadband Internet access
  and as regards high capacity Internet transit.
  Service-based competition (rather than
  facilities-based competition) would be sufficient
  for this purpose.
• In countries where competition law provides an ex
  post (after the fact) complement to regulation,
  it might be most appropriate to deal with
  occasional or sporadic problems related to
  network neutrality through the exercise of
  competition law.

29
Differentiated Quality of Service (QoS)

• A series of initiatives to implement
  inter-provider QoS on an inter-provider basis
  have generated scant results.
• Early Nineties RSVP
• Late Nineties - DiffServ
• Backbone peering attempts especially circa 2000
  - 2001

30
Differentiated Quality of Service (QoS)

• Early Nineties Integrated Services Architecture
  (RSVP)
• Comprehensive system of prioritized delivery.
• Required significant soft state in the routers.
• Perceived as too difficult to deploy.
• Not entirely true BBN (my former employer) had
  working RSVP-capable production networks from the
  mid-Nineties.
• Technical success.
• Market failure.
• No customer willingness to pay a significant
  premium for on-net differentiated service.

31
Differentiated Quality of Service (QoS)

• Traffic is classified on entry to a network
• Metered
• Marked
• Policed
• Shaped
• Services implemented based on defined Per-Hop
  Behaviors (PHBs)
• Queue processing (prioritization)
• Queue management (drops)

32
Differentiated Quality of Service (QoS)

• At a technical level, QoS is not fundamentally
  hard.
• DiffServ is technically trivial.
• MPLS in a single network is technically trivial.
• Cross-provider MPLS is only marginally harder.
• Even RSVP is not that hard. My company, BBN, had
  working production RSVP-compliant networks in
  1995!
• In terms of the basic economics, QoS is not
  fundamentally hard.
• Nonetheless, there is no significant
  cross-provider roll-out to date.
• WHY NOT?

33
Differentiated Quality of Service (QoS)

• M/G/1 queueing analysis of link performance
• (with clocking delay of 50 µsecs (284 byte
  packets) and a 155 Mbps link)

34
Differentiated Quality of Service (QoS)

• For real time services such as voice telephony
  traffic, it is important that mean delay and
  variability of delay be held to low values.
• Delay in excess of about 150 milliseconds causes
  collisions.
• Buffering can address variability as long as the
  mean and variance are not too great.
• The buffer then represents a fixed increment to
  the propagation delay.
• For circuit speeds of T-3 and up, queuing delays
  in a properly designed network will generally be
  less than 1 millisecond per hop under normal
  operating conditions.
• Propagation delay (speed of light) will tend to
  dominate any variable queuing delays under normal
  operating conditions.

35
Differentiated Quality of Service (QoS)

• IMPLICATION Most of the time, and under normal
  conditions, variable delay in the core of the
  network(s) is unlikely to be perceptible to the
  VoIP user.
• FURTHER IMPLICATION Consumers will not willingly
  pay a large premium for a performance difference
  that they cannot perceive.
• Packet delay is more likely to be an issue
• For slower circuits at the edge of the network
• For shared circuits (e.g. cable modem services)
• When one or more circuits are saturated
• When one or more components have failed
• When a force majeure incident has occurred

36
Differentiated Quality of Service (QoS)

• Technical challenges, or economic challenges?
• Revenues
• Limited customer willingness to pay a substantial
  premium.
• Limited benefits until widely deployed (network
  effects).
• Costs
• Agreements needed with many peering partners.
• Economic transaction costs to negotiate each
  agreement.
• Measurement, management and dispute resolution
  challenges.
• The business case is difficult to prove in.
• Implies difficulties in getting past the initial
  adoption hump.

37
Interconnection and universal service

• Most countries seek to ensure that all can afford
  basic communication services. This often implies
  some degree of subsidy support to areas that are
  remote or that have low teledensity.
• There is some economic basis for this, grounded
  again in the theory of network externalities. The
  communications network is worth more to everyone
  if nearly everyone is reachable through it.
• At the same time, economists worry about the
  economic distortions implicit in any system of
  universal service. Universal service implies that
  service will be deployed to areas where rational
  economic judgment alone would not lead to
  deployment.
• In many countries, interconnection charges are
  used to provide implicit or explicit funding
  support for universal service programs.

38
Interconnection and universal service

• Some developing countries (and also some
  developed countries, including the U.S.) permit
  rural operators to assess higher termination fees
  than urban operators, presumably reflecting
  higher unit costs (due to lower density of
  consumers, and possibly to more challenging
  geography). This effectively subsidizes the rural
  operator. Organizations such as the World Bank
  have tended to be supportive of such practices.
• International termination charges have also
  tended to generate subsidies from developed
  countries to developing countries, even if the
  rates are symmetric. Far more calls are placed
  from developed countries to developing countries
  than vice versa. This asymmetry generates an
  effective subsidy to the developing world, which
  could be used to support universal service
  programs.

39
Interconnection and universal service

• The migration to IP-based NGNs will tend to put
  pressure on any interconnection arrangements that
  are widely at variance with cost. It will,
  moreover, tend to expand opportunities to bypass
  inefficient interconnection arrangements.
• There are many, obvious problems associated with
  using termination charges to subsidize universal
  service. Nonetheless, the concern that must be
  raised is that it is not clear what developing
  countries might do if these subsidies were to
  disappear over the next few years.

40
Billing and accounting

• Billing/accounting systems must enable a service
  or network provider to reliably charge for the
  service.
• Both parties must ultimately agree on the
  correctness of the charge. To the extent that
  charges are not predetermined, this implies
• Clear documentation of the basis for the bill.
• Data capture (accounting) to create and
  substantiate the bill.
• Dispute resolution / reconciliation procedures.

41
Billing and accounting requirements

• In a DiffServ environment, billing and accounting
  systems would likely need to
• Enable the sending provider to mark the DS
  codepoint required for a particular IP datagram.
• Enable the receiving provider to accept or
  decline the request, remarking the IP datagram if
  necessary.
• Authorize one provider to apply a surcharge to
  the other's traffic in exchange for respecting
  its request for differentiated handling.
• Enable both providers to verify that the service
  that was delivered conformed to their service
  level specification commitments to one another.
• Facilitate trouble-shooting across multiple
  provider networks.
• The providers could, instead, choose to waive
  payments (Bill and Keep).

42
Billing and accounting challenges

• In an NGN world, the network service provider
  (the ISP) will not necessarily be the application
  service provider. A VoIP service or an IPTV
  provider will not necessarily be a network
  provider.
• The network provider will have only limited
  visibility into third party applications running
  over its network (and the user could further
  reduce visibility by encrypting the data).
• The unaffiliated application provider may have
  extensive visibility into the application that it
  provides, but only limited visibility into the
  use of network resources.
• Usage-based billing will be possible only to the
  extent that the usage can be rigorously and
  unambiguously measured.

43
Billing and accounting challenges

• How will providers and customers ensure that
  service commitments are met? Whose statistics
  will govern?
• Competitive providers are reluctant to share
  statistics about their respective networks with
  one another, and peering agreements typically
  restrict the ability of the providers to disclose
  information about one anothers networks to third
  parties. Can sufficient information be disclosed
  to customers?
• How will responsibility be allocated if a
  customers traffic fails to achieve its committed
  service level specification? Traffic data can
  legitimately be interpreted in more than one way.
  Will it be possible to administer payments and
  penalties rigorously and fairly?
• How can providers prevent fraud? How can they
  distinguish between fraud and legitimate use?

44
A Hypothetical Scenario

• Consider a migration to an IP-based NGN in a
  European country.
• Prior to migration, the country has
• an incumbent wired and wireless operator that had
  previously been the countrys PTT (BigCo), and
  that still has substantial market share and
  market power
• various wired and wireless competitive operators
  
• various independent providers of broadband
  Internet services, some facilities-based, some
  providing service competition based on
  procompetitive regulation (LLU, bitstream, and
  shared access)
• several independent providers of VoIP and
• a number of local providers of Internet content,
  both web and video.

45
A Hypothetical Scenario

• BigCo chooses to migrate
• To achieve economies of scope through improved
  integration
• To achieve faster time-to-market for new
  services.
• Competitors may feel pressure to migrate to
  maintain competitiveness with BigCo.
• BigCo would likely continue to be subject to
  procompetitive regulatory obligations for
  competitive access to last mile facilities (e.g.
  local loop unbundling LLU, shared access and
  bitstream access), until and unless three or more
  effective competitors were to emerge for the last
  mile.
• Interconnection obligations would likely remain
  in place as long as traditional interconnection
  is offered.

46
A Hypothetical Scenario

• Would it be necessary to impose interconnection
  obligations for IP-based interconnection? Assume
  arguendo that obligations are not imposed.
• Extrapolating from todays experience, BigCo
  would likely be motivated to implemented
  (settlement-free) IP-based peering arrangements
  with large international operators, and probably
  with a small number of its largest domestic
  competitors.
• If BigCo were not motivated to peer with any
  domestic competitors, regulatory action might
  possibly be appropriate. (Cf. Telstra in
  Australia)
• Smaller competitors could purchase transit from
  BigCo, or from one or more of its competitors.

47
A Hypothetical Scenario
ForeignCo
48
A Hypothetical Scenario

• Assume that key underlying markets (including
  broadband access, and leased lines) are subject
  either to (1) effective competition, or (2)
  effective regulation.
• Under these various assumptions, BigCos
  competitors should be able to reach BigCo
  customers with unit costs that are not greatly
  different from those of BigCo itself. This would
  appear to imply that a competitive market should
  emerge, with prices not greatly in excess of
  marginal cost.
• ForeignCo would be able to reach BigCo customers
  with unit costs that exceed those of BigCo
  primarily by the incremental costs imposed by
  ForeignCo operating from outside the national
  territory. If BigCo were to price excessively,
  doing so might encourage a ForeignCo to attempt
  entry. This implicit threat also serves to
  constrain BigCos behavior.

49
A Hypothetical Scenario

• BigCo should be able to charge a premium for
  better-than-best efforts service under these
  assumptions, but its ability to charge a premium
  will be limited to the willingness of consumers
  to pay, given that they have meaningful
  competitive alternatives.
• BigCo should be able to sell application services
  (VoIP, IPTV and more) to its broadband customers,
  and there is no obvious reason why this should
  not be profitable however, their price will tend
  to be constrained by the ability of independent
  service providers (e.g. Skype) to offer services
  directly to BigCos broadband customers.
• Again, all of this seems to imply the likely
  emergence of an appropriately competitive market,
  as long as underlying facilities (broadband
  access, leased lines and so on) are subject
  either to effective competition or to effective
  regulation.

50
A Hypothetical Scenario

• This scenario did not assume a regulatory
  obligation to interconnect at the IP level.
• The apparent implication is that a Coasian
  solution letting the providers determine their
  own interconnection arrangements through private
  arrangements should continue to function well
  in an NGN world (much as it does today), as long
  as regulators are careful to prevent exploitation
  of market power in regard to underlying
  facilities.

51
A Hypothetical Scenario

• Implementation of differentiated QoS among peers
  is likely to develop only slowly, for reasons
  previously explained.
• Differentiated QoS among transit customers of
  BigCo, and those of its larger competitors, might
  turn out to be a more tractable problem. In
  countries where much of the traffic tends to
  remain within the country (e.g. due to language
  affinity effects), it might be possible to
  achieve critical mass in this way, and then to
  link islands of QoS-capable connectivity.

52
Summary

• Provided that underlying markets for Internet
  transit and for consumer broadband Internet
  access are effectively competitive (or
  effectively regulated), a Coasian NGN
  interconnection regime of private unregulated
  arrangements is likely to be more efficient, and
  more consistent with consumer welfare, than a
  regulated regime.
• Conversely, where these markets are not
  effectively competitive, mandates for
  interconnection at the IP level and/or network
  neutrality may prove to be unavoidable,
  particularly once existing PSTN interconnection
  is withdrawn. The migration to NGN potentially
  creates new sources of market power, at the same
  time that it creates new possibilities for
  competition.
• Policymakers might consequently be well advised
  to focus their attention first on ensuring
  competitive markets, and only secondarily on NGN
  interconnection.

53
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