NGN and core-IP networks regulation (sorry if most has already been said)

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NGN and core-IP networks regulation(sorry if
most has already been said)
ITU Geneva
M. François Varloot
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Agenda

• Core and access NGN definitions
• Migration towards core NGN strategies and
  actors
• NGN and symmetrical regulation
• NGN and asymmetrical regulation
• Example of NGN potential impact on regulation
  fixed-mobile convergence

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I. Core and access NGN definitions
Core NGN planes
Source OVUM
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I. Core and access NGN definitions

• NGN access layer
• DSLAM/MSAN
• Access itself
• NGN core network
• Transport layer
• Control layer
• Services layer
• NGN applications layer
• Key components
• Media gateway (transport layer)
• To ensure control of the physical layer of the
  network
• Converts an incoming TDM signals into an outgoing
  IP signal
• Not an intelligent component
• Softswitch (control layer)
• Switching function
• But contrary to TDM networks, not associated to
  any physical point in the network and no longer
  controls the physical links of the network

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I. Core and access NGN definitions

• NGN main justifications
• Incumbents revenues loss with traditional voice
  services
• Need development of new services bundles,
  convergent and nomadic services
• Obsolescence and increase of maintenance costs of
  the actual networks
• Benefits of NGN core networks
• Independent layers -gt NGN-core is independent of
  access
• Better flexibility multi accesses and adaptable
  to new services
• New services convergent services, nomadic
  services, profile and presence management
• Costs reductions (?)
• NGN Access networks
• NGN access and core NGN develop independently
• Access networks upgrading of the local loop with
  FTTH, FTTC VDSL, Wimax/wifi
• Other issue multi-service terminal equipment

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Agenda

• Core and access NGN definitions
• Migration towards core NGN strategies and
  actors
• NGN and symmetrical regulation
• NGN and asymmetrical regulation
• Example of NGN potential impact on regulation
  fixed-mobile convergence

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II. Migration towards core NGN strategies and
actors

• Strategies to migrate towards core NGN
• Overlay strategy
• Breakdown strategy deploying a NGN network in
  parallel with the existing switched network
• Can be costly during the migration
• Example BT
• Replacement strategy
• Gradually replacing traditional equipment
  (switches and others) as they come to the end of
  their life with NGN equipment (softswitches,
  MSAN, application servers, IP/IP gateways)
• Offers operators a more immediate return
• Different scenarios depending which part you
  start replacing from
• Not that clear on interconnection and
  interoperability (solo-strategies)
• Services not really part of the strategy yet
  (with the sole exception of convergence)

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II. Migration towards core NGN strategies and
actors

• Strategies to migrate towards core NGN
• Time schedule among European Member States
• Incumbents decision to migrate depends on
• Characteristics of the fixed national market
• Involvement in the mobile market
• Competition pressure
• Obsolescence of the actual network
• Between 2010 and 2020

• NGN emergence will differ among Europe
• Impact in terms of developing common rules for
  interconnection, interoperability and quality of
  services
• Regulators will need flexibility to adapt to
  national circumstances

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II. Migration towards core NGN strategies and
actors

• Several types of actors concerned by migration
  towards core NGN
• Fixed incumbents
• To address new services data, voice, convergence
  mobile/fixed
• To replace traditional network soon becoming
  obsolete
• Challengers
• Already develop pre NGN networks
• Will have to adapt to incumbents NGN migration
• Mobile operators
• NGN needed for data transmission
• Networks progressively upgraded in the past -gt
  Less need for replacement
• Cable operators
• To develop telecommunication services
• Software actors

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II. Migration towards core NGN strategies and
actors

• French market situation Broadband access
• More than 9 million of broadband access at the
  end of 2005, with 8,9 million for ADSL
• In a one-year period, broadband access growth
  reaches 44,1

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II. Migration towards core NGN strategies and
actors

• French market situation Triple play success
• More than 2 millions VoB users, not counting
  VoInternet
• 30 of the DSL users
• More than 2 millions of home gateways in the
  French market
• 300 000 subscribers to Pay TV on DSL offers (end
  2005)

Subscribers distribution within the ADSL market
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II. Migration towards core NGN strategies and
actors
French market situation

• TV is becoming mobile
• Mobile TV is provided with EDGE - 3G networks
• DVB-H and DMB T tests are under process
• Infrastructures continue to develop
• ADSL 2 (up to 20 Mbps) rolling-out
• Large scale tests underway for VDSL and FTTx
• Licensing under process for Wireless Local Loops
  / Wimax over the territory
• PLC not that successful yet
• Cable operators strengthen their position
• Investments from local public authorities (new
  role as operators)

NGN de facto driven by market and competition
pressure in France
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Agenda

• Core and access NGN definitions
• Migration towards core NGN strategies and
  actors
• NGN and symmetrical regulation
• NGN and asymmetrical regulation
• Example of NGN potential impact on regulation
  fixed-mobile convergence

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III. Symmetrical regulation issues

• End users issues
• Quality of services (availability, security) for
  
• Voice services
• TV services
• Internet services
• New terminal equipment required (proprietary
  today)
• Emergency calls, localization, profile, rights
  and presence management, DQ services,
  portability, operators liability
• Operators issues
• Costs of NGN migration
• Transitional issues between PSTN and IP networks
• Interconnection, interoperability and dependency
  from others migration
• New interconnection points for the challengers
• Technical standards (codecs, SIP, taxation info,
  DB sharing)
• Routing issues lost packages and interrupted
  communications for subscribers
• Integrity and security of the network
• Number portability and resources

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III. Symmetrical regulation issues

• Symmetrical regulation and auto regulation
• IP/PSTN and IP/IP interoperability is the current
  driver of the industry in the standardisation
  process market players will act to promote it
• Regulation could nevertheless be pro active
• In order to speed up the process or to correct it
  if it detects failures of the market
• By identifying relevant services where
  interoperability needs to be achieved
• In the field of quality of service to end users
• To allocate scare resources for example, ARCEP
  has defined new number resources beginning by
   09  and dedicated to VoIP, VoB, convergent
  services (multi access services, fixed mobile
  services)
• To ensure that third party service providers and
  virtual networks can fully benefit
• Such issues required European discussions ERG is
  currently working on common rules regarding NGN
  networks\
• Leaving it to the industry did not work for the
  Internet (freedom vs. security)

• Regulatory challenges
• To promote investments
• To act together with market players to guaranty
  open rules and standardisation for the benefits
  of consumers

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Agenda

• Core and access NGN definitions
• Migration towards core NGN strategies and
  actors
• NGN and symmetrical regulation
• NGN and asymmetrical regulation
• Example of NGN potential impact on regulation
  fixed-mobile convergence

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IV. Asymmetrical regulation issues

• Cornerstone principle technology neutrality
• NGN networks do not modify as such operators
  positioning
• Market analysis and today practice regarding VoB
• ARCEP decision relating to fixed telephony
  (decision n05-0571 27/09/05)
• Wholesale markets
• Include IP interconnection
• Obligation imposed to France Telecom to meet
  reasonable requests for access to new
  interconnection infrastructures
• Retail markets
• Include VoB and exclude VoIP from the market
  definition
• Contrary to traditional voice services, no
  remedies imposed on VoB
• Commission Communication on VoB (13/09/05) case
  by case analysis
• Distinction between managed VoB and unmanaged VoB
• VoB can be a substitute for retail calls
  depending on several criteria among which
• Evidence of switching between the products
• Broadband penetration rate and proportion of
  broadband houses that currently use VoB
• Responsiveness of PSTN prices to VoB prices and
  vice-versa

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IV. Asymmetrical regulation issues

• NGN and the review of the regulatory framework
  (see IRG/ERG answer to the call for inputs of the
  European Commission)
• Actual framework is flexible and sound
• Regulatory holidays or loopholes cannot be agreed
  with but regulation must take into account high
  investments at remedies stage
• Some concepts should be adjusted
• Remedies to deal with issues that transcend a
  number of services markets, especially accounting
  separation
• Non discrimination to allow replicability and
  equality of access
• Joint dominance to allow regulation of
  oligopolistic markets where competition is not
  effective

Actual framework has already been applied to new
services thanks to its flexibility But as far as
NGN are regarded, it needs adjustments to address
specific issues relating to integrated operators
and oligopolistic markets
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Agenda

• Core and access NGN definitions
• Migration towards core NGN strategies and
  actors
• NGN and symmetrical regulation
• NGN and asymmetrical regulation
• Example of NGN potential impact on regulation
  fixed-mobile convergence

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V. Example of NGN potential impact on regulation
fixed-mobile convergence
Potential impact on retail markets definition
Depending on national time schedule

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Development of convergence offers
Autonomous uses for F and M telephony
Large development
Few offers
Triple play (fixed voice, data, broadcasting)
becoming quadruple play with fixed/mobile
convergence
Three markets (fixed retail market, mobile retail
market and F/M market
Two distinct markets (fixed and mobile markets)
A single retail market
IMPACT
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V. Example of NGN potential impact on regulation
fixed-mobile convergence
Potential impact on wholesale markets
New entrants Fixed operators
Mobile operators
Have both networks No need of access to another
network
Need access to fixed network

• Need access to
• fixed local loop
• mobile network (through MVNO offers)

Competition through access regulation of the
essential fixed local loop
Fixed market
Potential competition IF Market 15 (MVNO) is
competitive
Oligopoly
Mobile market
Oligopoly through access regulation of the
essential fixed local loop
Potential competition IF Market 15 (MVNO) is
competitive
Convergence market
IMPACT
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V. Example of NGN potential impact on regulation
fixed-mobile convergence

• Potential impact in terms of remedies
• Does the actual framework allow to deal
  efficiently with integrated operators and cross
  markets issues ?
• Actual market by market approach could be too
  segmented to address such issues
• Does the actual framework allow to deal
  efficiently with oligopolistic markets ?
• The joint dominance SMP test can be not efficient
  enough to address oligopolistic markets

• Convergence market will develop differently in
  different countries, this required
• Flexibility in market definition and analysis
• Flexibility of remedies depending on the
  seriousness of the bottlenecks identified

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Thank you for your attention