We are in the Network Economy
Information and Communications
Technologies (ICTs)
• are pervasive in our society
• are critical to business success
• boost SME productivity and revenue
growth
• are critical to Canada’s competitiveness
Policy and Regulatory
Challenges Facing the NGN
Workshop on Interconnection and Next Generation Networks
Addressing the Regulatory Challenges
Buenos Aires, Argentina
September 11, 2006
Bill McCrum
Deputy Director General Spectrum Engineering
Industry Canada
The communications infrastructure is the
foundation of Canada’s network economy
mccrum.william@ic.gc.ca
IX PCC.I 11.09.06 - 2
The network infrastructure powers the
network economy
Modern society is dependent on
communications infrastructure
Sizing the Network Infrastructure
Retail
Finance
Mfg.
Transport
Public
Safety
Energy
Communications Infrastructure
• 972 million users on the internet today (Nov 2005)
• 360 million internet hosts (July 2005)
• Internet usage (July 2005):
Canada 63%; UK 63%;
e-government
USA 68%;
e-learning
Australia 68% ;
e-business
Korea 65%
e-health
• 2 billion mobiles in
e-content
the world today
Network
and counting
Economy
e-research
IX PCC.I 11.09.06 - 3
In Canada, are moving online and
are demanding high-speed
Canadian Residential Broadband
Subscribers, 2002-2009
Num ber of
Subscribers
(m illions)
% of Canadian
Households
8
DSL Subscribers
7
6
Broadband Penetration
4
3
4.2
3.3
2.2
3.5
3.4
3.2
51%
50%
50%
47%
43%
37%
1.4
2.0
2.4
2.8
• New service revenue
50%
40%
2.9
3.1
3.3
3.4
3.5
0%
2003
2004
2005
2006E
2007E
2008E
2009E
Source: Yankee Group, North America Consumer Fixed-Line & Media Forecast
(December 2005)
IX PCC.I 11.09.06 - 5
• Multimedia services
• Increasing data traffic
• Mobility
Network Convergence;
Distributed Intelligence;
New Competitive
Landscape
20%
10%
0
2002
Service Provider
End User
30%
29%
27%
60%
80%
2.9
2.5
1.8
2
1
6.0
• Lower service charges
70%
90%
5.3
5.0
5
6.8
6.5
Cable Modem Subscribers
Drivers Affecting Network Change
• Network simplification
• Lower start-up and operating
costs
• Leap frog competition
• Fast service introduction and
customization
100%
7.0
e-meetings
IX PCC.I 11.09.06 - 4
Government
Vendors
• Policies
• Regulation
• Strategies to stimulate
competition
• New products
• New markets
• New revenues
The communications network is undergoing extensive
changes to meet new market and service demands
IX PCC.I 11.09.06 - 6
1
Network Evolution
Implications of Convergence
PSTN
CATV
•
PSTN
MPEG
Broadband
Academic
Voice
IP
•
IP Core
Wireless
WWW
Broadcast
1G-2G
IP
IP Core
Wireless
Voice
Broadcast
Video
Services
– Service providers can compete with other service
providers without competing against other forms
of providers (network or access providers)
•
A converged network with IP core and access simplifies
network operations
•
New policy and regulatory frameworks
CDMA
WWW
Corporate
Same services are being offered using different
means of access
Video
Services
Corporate
– New revenues available to application and
service providers
WWW
Corporate
IP
New and innovative applications and services
– Costs of operating a converged network are lower
– Need coherent regulation of communications infrastructure
to deal with the fact that content can be delivered over all
networks, network-dependent rules are being overtaken by
technology, and markets are merging
– Promote competition, protect consumers, and encourage
efficient investment
GSM
Lower cost and innovative services drives network convergence
IX PCC.I 11.09.06 - 7
IX PCC.I 11.09.06 - 8
Government in action
Next Generation Network (NGN)
• The ITU-T has defined a a framework for network
evolution, called the Next Generation Network
(NGN)
• Key Characteristics (Recommendation Y.2001)
Many challenges lie ahead…
• VoIP
• Telecom Review Panel
– Packet-based network
– Independence of service-related functions from underlying
transport technologies
– Interworking with legacy networks via open interfaces
– Generalized mobility
– Unrestricted access by users to different services and/or
service providers
• Spectrum Management
• Accessible Technology
• Timely Standards
• Emergency Preparedness
• Cyber Security
[http://www.itu.int/ITU-T/ngn/]
• Spam
NGN is not only a network evolutionary transformation, but
also a radical overhaul of the telecommunications environment
IX PCC.I 11.09.06 - 9
IX PCC.I 11.09.06 - 10
VoIP Challenge
A changing industrial structure
$40
$35
$30
$25
$20
$15
$10
$5
$0
• Voice over Internet Protocol (VoIP)
separates access from service
Communications Service Revenues by
Segment*, 2002-2009
Revenues
($ billions)
$29.6
$31.3
$33.2
$34.7
$36.2
$37.6
$40.0
$38.9
$10.1
Data/Broadband**
$5.0
$4.5
$6.3
Broadcast Distribution
$6.6
Wireless Voice
$11.1
$8.7
Wired Local Voice
$7.8
$5.0
Wired Long Distance
$4.4
2002
2002-09
CAGR
2003
2004
2005
2006E
2007E
2008E
• No longer need to own telephone
network to offer phone service
4.4%
10%
• Surge of new competition coming:
5.4%
8.3%
•
•
•
•
-1.5%
-1.8%
2009E
*Graphic depicts only selected industry segments and does not constitute the entire telecommunications industry.
**Includes retail DSL, cable modem, corporate data and wireless data. Numbers may not add up due to rounding.
Source: Yankee Group, North America Consumer Fixed-Line & Media, Business Fixed-Line,
and Wireless/Mobile Forecasts (June 2005).
IX PCC.I 11.09.06
- 11
Skype (eBay)
Vonage
Cable Companies
Microsoft, Yahoo, AOL, Google, IBM,
EDS?
IX PCC.I 11.09.06 - 12
2
VoIP is beginning to make a difference
Market Share of Residential
Telephone Lines for Competitors, 2000-2010
29%
25%
% Residential T elephone Lines
21%
Post VoIP
Pre VoIP
• Quality of Service is important
• Electronic Numbering / Telephone Number Mapping
6.6%
2000
0.6%
2001
1.4%
2002
2.0%
2003
3.2%
2004
2005
2006
Actual
• CRTC decision on VoIP
• Difficult to achieve interoperability
between VoIP service providers.
• Standards can help achieve this goal.
• Development ongoing in ITU-T, IETF
and others.
17%
12%
0.3%
VoIP Standards & Technical Issues
2007
2008
2009
2010
Estimated
Source: CRTC Monitoring Report, November, 2005, and Merrill
Lynch, 2006: The Year Ahead, January 11, 2006
• Discussions in Canada to implement ENUM services
• Canada has indicated its support for ENUM trials in North
America – country code 1
• US trial to be launched shortly
• Emergency Services
• Consumer emergency call with caller location E9-1-1
• Priority access during or after disasters
IX PCC.I 11.09.06 - 13
IX PCC.I 11.09.06 - 14
Telecom Policy Review Panel
• Independent panel of experts appointed
by Minister of Industry April 2005
• Report issued on March 22, 2006
provides 127 recommendations for
ensuring Canada’s competitiveness in
the Network Economy
• Panel’s mandate had three central
themes:
Spectrum Management Challenges
• Modernizing Spectrum Policy and Management
• Global and Regional Harmonization
• Opening new bands, accommodating new services
• RFID
• Ultra Wide Band (UWB)
• Software Defined Radio (SDR)
• Broadband over Power Lines (BPL)
– setting the appropriate regulatory framework
– encouraging adoption of ICTs
– access to advanced telecommunication
networks and services
• Unlicensed Bands
www.telecomreview.ca
IX PCC.I 11.09.06 - 15
Challenges for Persons with Disabilities
IX PCC.I 11.09.06 - 16
Content challenge
Emerging digital copyright issues:
• P2P networks
• 5.7 million Canadians have downloaded
music files (Ipsos-Reid, May 2004)
• More than 44 million full-length movie files
and 1.3 billion songs available
• 15% of Canadians have
disabilities (Statistics Canada)
• 32% of Canadians
between age 64 and
75 have disabilities
(BigChampagne LLC, Reported In Kansas City Star, October 2004)
• 31% of Aboriginal
Peoples have disabilities
...the Government of Canada is helping through
accessible technology
IX PCC.I 11.09.06 - 17
• ISP liability
• Fair usage
Advancing technology is threatening cultural policy:
• Satellite TV
• Black Market/Grey Market
• Access to foreign and ethnic programming
• Satellite Radio
• Internet - movies, music, videos on demand
• IPTV (content-based or usage-based charging)
IX PCC.I 11.09.06 - 18
3
Maintaining the trust and confidence
in our networks is critical
Illegal and Offensive Content
• Growing socio-economic dependence on
communications technology infrastructure
• As with previous networks (electricity,
telephone, railways, airlines), users must
have confidence that the networks are
reliable and can be trusted
• Confidence will be lost if:
Child pornography, online luring, child
prostitution, child sex tourism and other
activities are of growing concern
• Cyberwise Strategy
• Agenda for confronting illegal
and offensive content
• Multi-stakeholder partnership
• Cybertip.ca
• Networks cannot be protected from attacks
• Services cannot be protected from abuses
• Quality of communications services cannot
be assured
• Communication sessions are insecure and
private information is compromised
• Initiated by Child Find Manitoba
and Industry Canada
• Canada'
s national tipline
• Analyzing tips from public
• Referrals to law enforcement
IX PCC.I 11.09.06 - 19
IX PCC.I 11.09.06 - 20
Ongoing concerns about privacy
and security
Crumbling Confidence*
% of total respondents (4 ctys)
90%
79%
80%
Confident
Not confident
74%
68%
70%
40%
30%
26%
21%
32%
80000
Windows Pop-up Spam
Attacks Against CanCERT™ Networks
January 1999 - February 2006
70000
62%
58%
60%
50%
Malicious attacks continue to menace
43%
38%
Blaster/Nachi
60000
Agobot/Gaobot
/Phatbot
50000
40000
20%
30000
Slammer
10%
20000
0%
Identity theft
Unsolicited
email/spam
credit card
fraud
Computer
virus
Source: Understanding Consumer’s Needs for Internet Security, Forrester Custom
Consumer Research and Business Software Alliance, November 2005
*Survey of respondents in Canada, USA, UK and Germany
IX PCC.I 11.09.06 - 21
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0
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Ju
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Personal
Information
Q: How confident are you in your ability to protect yourself from
the following threats online?
CanCERT™ is Canada’s first national Computer Emergency Response Team (CERT) operated 24/7
by EWA-Canada since 1998. The above graph depicts the number of attacks per month against
CanCERT™ networks during the period January 1999 to February 2006.
IX PCC.I 11.09.06 - 22
Driven by internet threats…
More alarmingly, cybercrime is growing
Online identity theft growing
• Phishing attacks aimed at identity theft now affect roughly 1 in
4 Americans (23%) each month emails (AOL/National Cyber Security
Alliance (NCSA) Online Safety Study – December 2005)
• Cost in the last 5 years in the U.S. was $60 billion (FTC)
• In Canada, 13,000 cases reported (ComputerWorld Canada)
E-mail fraud
• High profile attacks include Visa, Bank of America, Bank of Montreal,
eBay, Best Buy, Yahoo, MSNTV... (Symantec)
• 1.78 million have fallen victim to online fraud (Symantec)
• U.S. banks and credit card companies have paid almost $1.2 billion in
damages (Symantec)
E-commerce attacks & extortion
• Almost 16% of attackers targeted e-commerce organizations,
compared to 4% during the last six months of 2003 (Symantec)
IX PCC.I 11.09.06 - 23
Privacy fears discouraging e-commerce in Canada
• 40% of Canadians avoid online shopping over security concerns, compared
to 24% of Americans (Canadian Alliance Against Software Theft (CAAST) November 2005)
Users changing their online behaviour due to security concerns
• Majority (91%) of Internet users in the US have altered online behaviour
(Pew Internet and American Life Project – June 2005)
• 40% of Canadians said they would not do any shopping online due to
concerns about internet security (Forrester and Business Software Alliance November 2005)
Consumers losing trust in online banking
• 74% of Canadian online consumers have concerns about email fraud which
are affecting their online financial behavior (Forrester – April 2005)
• 80% of consumers in the USA, Canada, Germany & U.K are concerned about
someone stealing their on-line identity and using it to access their on-line bank
accounts (2004 Entrust Internet Security Survey)
… contributing to a loss of trust
IX PCC.I 11.09.06 - 24
4
Report of the Task Force on Spam
What are the NGN Challenges ahead?
• Timeliness to meet new technology needs
• Solving the Interoperability issues
• Robustness of standards and immunity
to attack
Task Force made 22 recommendations to address spam,
spyware and emerging online threats, including:
• New legislation
• Effective enforcement
• Policy leadership and coordination
• Public education and awareness
• IPR policies for SDOs that inhibit IPR ambushing
• Cross pollination of standards activities e.g.
• Strengthened international cooperation
Task Force reported on action to date:
• Analysis of gaps in legal ground rules and enforcement;
• between IETF & ITU on Internet standards
• Developed network management practices to combat spam;
• Developed electronic marketing guidelines;
• Established public awareness “Stop Spam Here” campaign
(Icon, website and messages to consumers);
• between ISO & ITU on Security standards
• between ISO & GS-1 on Bar Code standards
• between SDOs and CITEL PCC.I on NGN standards
• Inclusion of the User and needs of the Disabled
• Active participation in international efforts – OECD etc.
• Security, protection and privacy
IX PCC.I 11.09.06 - 25
IX PCC.I 11.09.06 - 26
Contact
Bill McCrum
Deputy Director General Spectrum Engineering
Industry Canada
(v) +1 (613) 990-4493
mccrum.william@ic.gc.ca
5