Industry requirements for a regulatory environment for Next Generation Networks

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• Industry requirements for a regulatory
  environment for Next Generation Networks

Wolfgang Reichl, Telekom Austria, Chair of WG on
NGN at European Telecommunications Platform,
Brussels, Belgium
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ETP

• The European Telecommunications Platform (ETP) is
  a consultative body which was formed in Brussels
  on 4th February 1998, following the opening of
  the European telecommunications market on 1st
  January of that year.
• It combines the Open Network Provision
  Co-ordination and Consultation Platform
  (ONP-CCP), founded in 1991, and the European
  Interconnect Forum (EIF), which during the run-up
  to liberalisation had both been advising the
  European Commission as representatives of the
  telecommunications industry.
• The ETP deals with the needs of the European
  telecommunications market from the point of view
  of industry. Its remit includes the European
  regulatory framework, its implementation, the
  converging communications sector, and the global
  information society.
• What are its goals?
• promote self-regulation by the industry
• encourage the ongoing development of competition
• clarify operational and strategic business issues
  

www.etp-online.org
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ETP Members

• Lucent Technologies
• Magyar Telecom
• Nokia
• Nortel
• Omnitel
• ONE
• OTE
• PT Luxemburg
• Siemens
• Slovak Telecom
• Swisscom
• TDC
• Telekom Italia
• Telecom Italia Mobile
• Telefonica
• Telekom Austria
• Telekom Slovenije
• Telenor
• Tele.ring

• Agoria ICT
• Amena
• Arcome
• BITKOM
• BT
• Cegetel
• Cesky Telecom
• Cisco Systems
• Cullen International
• Deutsche Telekom
• ECCA
• ERA
• Ericsson
• ETNO
• FiCOM
• Finnet
• France Telecom
• Global Crossing
• Interconnect Communications

14. November 2005
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Report on NGN - released 20 January 2006
Real world implementations of NGN

• Next Generation Core
• Next Generation Access
• Next Generation Service Control

Regulatory implications of NGN evolution
focus of this talk
High level requirements for a positive
environment for NGNs
the report can be dowloaded from
www.etp-online.org
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Next Generation Networks
Applications
Next Generation Service Control
Next Generation Access
Customer PremesisEquipment
Next Generation Core
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Core, Access, Services
The Next Generation CoreThe next generation core
network is a single converged fixed network,
which can carry voice and data. The network
technology of choice will be IP/MPLS and all
traffic is transported as IP. This core networks
evolves from a complex environment of different
boxes in todays core networks. The evolution to a
next generation core network promises significant
savings in the long run and a stable platform for
converged services.
The Next Generation AccessThe next generation
access is a large digital bitpipe. The next
generation access is service independent and
allows triple play (TV broadcast, high speed
internet access and telephony). There will not
be a single platform to deliver next generation
access. Platform competition is expected between
copper lines, cable networks, mobile networks as
well as satellite and fibre access.
The Next Generation Service ControlTodays
service control is service specific. In a next
generation network rapid service development and
delivery is paramount. The next generation
service control will provide a toolbox for
operators, where converged service can be brought
to market flexibly and quickly. Certain
challenges arise regarding interoperability of
services and service components.
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Existing legislation and NGNs

• Policy makers should carefully evaluate if
  existing legislation is suited for NGNs, e.g.
• legal intercept
• emergency services
• universal service
• Disclaimer
• ETPs NGN Paper has the intent to highlight
  challenges in applying regulatory and legislative
  measures in NGNs
• Does not attempt thorough investigation

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Regulatory Implications of NGNs

• New technologies raise policy issues
• Transition phase existing regulatory framework
  needs to be evaluated with regard to
• Changing technology
• Changing market structure
• Vision one network many services -gt underlines
  necessity for technology neutral approach.
• Reflection on boundaries between networks and
  services is needed.

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Today two sets of regulation

• Regulation imposed on everyone
• Regulation applied in case of significant market
  power
• the first set of regulation
• Legal requirements
• Security requirements
• Consumer protection

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Reacting to concerns

• New technological possibilities lead to
  additional privacy concerns
• Legislators may be tempted to intervene
• Challenge for industry to respond to concerns
• Conduct educated and informed discussion
• Leave it to industry to give consumers real
  choice and protection incl. data security and
  opt-out privacy protection!

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Economic regulation

• Technologies for NGNs are mature and available
  but business models arent
• Market analysis/Art. 7 procedures process still
  not completed within various EU25 Member States
• Todays 18 markets and SMP remedies are very much
  connected to legacy infrastructure and services
• Not evident whether NGNs will fit into existing
  markets or will generate new unregulated markets.
• NGN itself is not a market! NGNs lead to new
  markets and changing market structures.
• General competition law may be sufficient to deal
  with NGNs!

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NGN in the UK

• BT has made plans to introduce a NGN over the
  next 5 years
• BT has made formal commitments to Ofcom such as
• grant access to other network operators
• Not make any network design decisions that would
  prevent supply of network access
• Set charges based on costs (for most efficient
  network that could reasonably be built)

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High level requirements

• for a positive regulatory environment for NGNs
• For Europes information society and media
  policies, the Commission proposes in I2010
• the completion of a Single European Information
  Space which promotes an open and competitive
  internal market for information society and
  media
• strengthening Innovation and Investment in ICT
  research to promote growth and more and better
  jobs
• achieving an Inclusive European Information
  Society that promotes growth and jobs in a manner
  that is consistent with sustainable development
  and that prioritizes better public services and
  quality of life.
• NGNs will contribute significantly to these
  goals!
• Policy has to be decoupled from technology!

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The new regulatory environment ...

• should be based on technology-neutral and
  provider-neutral regulatory criteria

Regulatory asymmetry leads to competitive
asymmetry and creates the incentive and the
opportunity for artificial competition, which is
not based on market demands. It is of utmost
importance to find a proper and workable
definition of technological neutrality.
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The new regulatory environment ...

• must be based on legal principles drawn largely
  from competition law

Current and likely marketplace developments
demand a statutory structure, which makes
regulation dependent upon a finding of lack of
effective competition. Although reliance on
competition law is a long term goal, ex-ante
regulation is likely to be needed for some time
if some foreclosure of markets occur, which can
not be solved with other instruments.
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The new regulatory environment ...

• non-economic regulation should be hands-off
  regulation

The societal regulatory regime ought to pursue a
regulatory hands-off approach with as light a
touch as possible. This hands-off approach should
not only apply to the European level but also to
the national level. However, harmonisation on a
European level (e.g. regarding EMC or terminal
equipment) remains necessary to gain the benefits
from a European market and to achieve user
protection.
The societal regulatory regime ought to pursue a
regulatory hands-off approach with as light a
touch as possible. This hands-off approach should
not only apply to the European level but also to
the national level. However, harmonisation on a
European level (e.g. regarding EMC or terminal
equipment) remains necessary to gain the benefits
from a European market and to achieve user
protection.
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The new regulatory environment ...

• economic regulation (if required) should focus on
  enduring bottlenecks

Although it would be desirable eventually to base
economic regulation entirely on competition law,
it might be necessary to deal with network
bottlenecks while they still exist. These
bottlenecks are likely but not exclusively to be
found in the access network.
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The new regulatory environment ...

• should allow for innovation and investment

There needs to be a favourable regulatory
environment for investment and innovation in Next
Generation Networks. This is a necessary
precondition for the achievement of the goals set
in i2010, which was announced by the Commission
on 1 June, 2005. It promotes an open and
competitive digital economy and emphasises ICT as
a driver of inclusion and quality of life. NGN
can become a means to achieve the policy goals of
the Commission.
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The new regulatory environment ...

• should provide legal certainty

For investment in telecommunications legal
certainty is a necessary prerequisite. The
current regulatory framework does not provide
this certainty (e.g. the definitions of PATS and
ECS do not reflect some technological
evolutions).
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The new regulatory environment ...

• should focus on services not on technology

Every asymmetry in technology triggered by
regulation can potentially distort the market.
Therefore technology decisions should be left to
the market. Regulators should not interfere by
promoting one or the other technology. It is
therefore necessary to define the boundary
between technology and service. The Next
Generation Core itself falls out of the
regulatory scope. It is the services that are
subject to possible regulation.
Every asymmetry in technology triggered by
regulation can potentially distort the market.
Therefore technology decisions should be left to
the market. Regulators should not interfere by
promoting one or the other technology. It is
therefore necessary to define the boundary
between technology and service. The Next
Generation Core itself falls out of the
regulatory scope. It is the services that are
subject to possible regulation.
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The new regulatory environment ...

• should avoid fragmentation of markets

A common market allows the competitive provision
of services and products. Fragmentation could
endanger the position of the European industry
and operators and has therefore to be avoided.
NGN interconnection will be based on standards
voluntarily agreed upon by industry in standards
bodies. That does not imply that standards need
to be imposed.
Every asymmetry in technology triggered by
regulation can potentially distort the market.
Therefore technology decisions should be left to
the market. Regulators should not interfere by
promoting one or the other technology. It is
therefore necessary to define the boundary
between technology and service. The Next
Generation Core itself falls out of the
regulatory scope. It is the services that are
subject to possible regulation.
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The new regulatory environment ...

• should balance harmonisation and innovation

Harmonisation is certainly necessary to avoid
fragmentation and to allow for interoperability
of services. It has however to be recognized that
harmonisation in an early stage could stifle
innovation by favouring a possibly suboptimal
solution. Priority should be given to market
forces which will lead to harmonised solutions at
the right time. This is probably different for
different layers. Innovation at service level is
much more important.
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The new regulatory environment ...

• should address the question of cross-border
  services

In a next generation network the possibility for
cross-border services exists. It has to be
assured that national operators are no worse off
than competitors from abroad. Therefore the EU
should try to accede to agreements with other
parts of the world. NGN has a global focus.
That's the reason for global standards.
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Conclusion

• The new regulatory environment should rely on
  market forces and competition.
• Non-economic regulatory goals should be pursued
  with as light a regulatory touch as possible.
• In that way next generation networks will
  significantly contribute to the political goals
  set out in i2010.

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THANK YOU!
www.etp-online.org