Regulation of NGN
New Approaches to Interconnection
John Horrocks
ECC TRIS Chairman, Consultant to DTI
+44 1483 797807
john@horrocks.co.uk
Regulatory concepts
• Technology independence
• Cost based termination
• Only regulate where there is significant
market power
• BUT………..
The regulatory problems are…
• Costs are technology dependent so cost
based termination conflicts with technology
independence
• The significant market power doctrine is too
hard to apply as there are many micromarkets like termination
• No theoretical justification for cost based
termination
• Current approaches are inevitably technology
based eg emergency access
• New wine in old bottles?
Where is the market now?
• Confused - crossing a discontinuity conflicting and different models
• Internet has separated services and
connectivity and so leapfrogged
developments by 20 years
• Users can self-provide services - peering
• Telcos want to preserve service revenue and
are fighting a rear-guard action
Why do we need a new model?
•
•
•
•
We need to accommodate new services
We need to simplify interconnection
We need to reduce charging costs
The cost basis has changed and the existing model
was designed for expensive core networks
• The retail market is changing with subscriptions and
bundled calls and is now out of line with
interconnection
• Running a service-aware backbone for multiple
services will be organisationally complex
It is time to change!
Costs old and new
Old
Carrier selection
Freephone
Distance and time
dependent call charges
Regulation is based on this!
Backbone
Terminal A
Access
Access
Line rental
Line rental
Terminal B
New
Terminal A
Access
Line rental
Backbone
Access
Line rental
Terminal B
Three questions
• How should the telco world change
now?
• Where should the telcos go?
• What are the telcos thinking about now?
Three answers
• The case for zero/low rate termination
• ECC Ideas on a new model for
interconnection - ECC Report 75
• Current NGN options/intentions
Zero/low termination rates
• Maximises competition - all revenue from own
subscribers
• Regulators no longer need to control the
market - they can withdraw
• Interconnection becomes simpler
• Promotes fixed-mobile convergence and
portability
• More incentives to invest in new technology
as full benefit from cost reductions
• Achieves technology neutrality
• ….but need to adjust call origination (~*2)
Three answers
• The case for zero/low rate termination
• ECC Ideas on a new model for
interconnection - ECC Report 75
• Current NGN options/intentions
ECC Report 75: A long term model
• High quality interconnected service platform a new utility
• Full separation of transport and services
• Transport consists of access and backbone
• Interconnection charging based on capacity
and quality - not service
• Uncontrolled service creation from the normal
customer interface (friendly to 3rd parties and
innovation)
The new model
Retail subscription or usage
SP
Sender keeps all
SP
Access subscription or usage
Terminal A
Access subscription or usage
Access
Access
Terminal B
Capacity charge
Capacity charge
Transit
Transit
Peering
Transit
Peering
……….but
• There are still some very expensive
calls, eg premium rate, non-liberalised
countries and mobile
• We need a smooth migration for any
changes
• So we cannot avoid a system of parallel
running
The Migration Concept
• A growing area with the new
interconnection model
• Operators can join at any time
• Gateways to the old model
• Allows parallel operation of old and new
models and overlays
• The old model will continue but diminish
indefinitely
Calls to the old model
Retail subscription or usage
Interconnection
Call charge
Retail subscription or usage
SP
Access subscription or usage
Gateway
Terminal A
Old
model
Access
Capacity charge
Capacity charge
Transit
Transit
Peering
Transit
Peering
Three answers
• The case for zero/low rate termination
• ECC Ideas on a new model for
interconnection - ECC Report 75
• Current NGN options
NGN Interconnection parameters
Parameter
IP Layer
Options
Open (common IP addresses)
Closed (isolated IP addresses)
Service Layer Sender Keeps All
Keep some and pass some
Agreements
Multiple bilateral,
Centralised hub, or none
DNS/ENUM
Public Internet, shared private, or
internal only
NGN Interconnection options
• Circuit switched only
• All walled gardens
• Private IP domain with own DNS/ENUM
(GSMA IPX)
• Private IP domain with public
DNS/ENUM
• Add service hubbing (GSMA)
Walled gardens - copying PSTN
DNS
(ENUM)
Public (User ENUM)
Public Internet
NAT
LAN
Private IP
Call Server
Call Server
Call Server
Call Server
NGN-1
NGN-2
NGN-3
NGN-4
Private IP
Private IP
Private IP
Private IP
DNS
(ENUM)
DNS
(ENUM)
DNS
(ENUM)
DNS
(ENUM)
Network
termination point
(Gateway)
Session Border
Controllers
GSMA - IPX (private IP)
DNS
(ENUM)
Public (User ENUM)
Public Internet
NAT
LAN
Private IP
Call Server
NGN-1
Private IP
Call Server
Backbone
Public IP
Private IP
DNS
(ENUM)
Network
termination point
(Gateway)
NGN-4
NGN (Carrier ENUM)
Number  SIP of serving network server
SIP  public IP
NB: Preliminary option only, not confirmed
GSMA - IPX (private IP) +
public DNS/ENUM
Public (Carrier ENUM)
DNS
Number  SIP of serving network server
(ENUM)
SIP  public IP
Public Internet
NAT
Call Server
(with barrier)
Call Server
(with barrier)
LAN
Private IP
Backbone
NGN-1
Private IP
Public IP
SIP:<E164>@<serving
network server>
Network
termination point
(Gateway)
NGN-4
Private IP
GSMA - IPX (private IP) + Hubs
DNS
(ENUM)
Public (User ENUM)
Public Internet
NAT
LAN
Private IP
Call Server
Hub
Backbone
NGN-1
Public IP
Private IP
SIP:<E164>@<serving
network server>
Network
termination point
(Gateway)
Hub
Call Server
NGN-4
Private IP
DNS
(ENUM)
NGN (Carrier ENUM)
Number  SIP of serving network server
SIP  public IP
NB: Preliminary option only, not confirmed
Intermediate thoughts
• No clear direction yet, telcos only doing
"PSTN on IP" + TV delivery
• Beyond E.164, relationship to Internet needs
much thought as the Internet controls user
names
• Users only need connectivity + software +
DNS/ENUM, they do not really need service
providers, service provision is in decline
• If users self provide, NGN becomes "Internet
overflow network"
• Telcos cannot compete with their customers