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