NGN-based competition:
An Ofcom perspective
Dr Stephen Unger
Director of Telecoms Technology
24 March 2005
©Ofcom
Wireless PSTN
BB
xDSL
Leased
Line
Mobile
Today’s Telecom Networks
– Multiple service-specific access nodes
– Multiple service-specific core networks
©Ofcom
Ethernet backhaul
Wireless PSTN
BB
xDSL
Fibre
Aggregation
Copper
…
IP
IP core
Copper
ATM
Fibre
SDH
…
IP
Access Metro & Core
ATM
Copper
Access
PDH
SDH
Copper
PSTN
Metro
Core
What is a Next Generation Network ?
Leased
Line
Mobile
Next Generation Networks
– Converged access nodes aggregate traffic
from multiple access services
– A converged IP-based core network
carries this traffic
– Service intelligence is decoupled from
network transmission
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Contrast with Next Generation Access
Next generation access network
Next generation core network
Next Generation Access Network
Next Generation Core Network
• Next Generation Access would provide
• The deployment of Next Generation Core
much higher bandwidths to consumers
• This would enable the supply of rich (but
currently unspecified) multimedia content
• Disruptive change to existing services and
existing business models
• Investment risk driven by uncertainty as to
consumers’ willingness to pay
Networks is driven by potential efficiencies
in the supply of existing services.
• The ability to deliver new services is also
important, but is a potential upside, rather
than core to the business case
• Continuity of existing services is key.
Existing PSTN services emulated by NGN.
• Investment risk is mainly associated with
implementation, supplier management
©Ofcom
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A case study – BTs ’21st Century Network’
CORE
DWDM
4/4/3
SDXC
P
Core nodes provide a
resilient national
transmission backbone
Core Node
Router
~20 Sites
Metro Node
Metro Node
Voice/P
C
PE
Edge
~WDM
Edge
~WDM
P
Router
4/4/3
SDXC
Legacy
switch
function
s
Ethernet
PE
4/4/3
SDXC
Legacy
switch
function
s
~110 Sites
CORE
DWDM
BRAS
Voice
Voice/P
C
PE
CORE
DWDM
Ethernet
PE
Voice
P
Router
Intra Metro Ethernet
Network
Intra Metro Ethernet
Network
Tier 1 MSAN Node
Tier 1 MSAN Node
Edge
WDM
FMSAN
T
A
M
T
A
M
Edge
WDM
CMSAN
FMSAN
CMSAN
Lega
cy
Lega
cy
~1100 Sites
Metro nodes define the
service edge of the
network
BRAS
MSAN Node
MSAN Node
FMSAN
T
A
M
MSAN Node
FMSAN
FMSAN
CMSAN
T
A
M
Legacy
CMSAN
T
A
M
CMSAN
Legacy
Legacy
~4500 Sites
Multi-service access
nodes (MSANs)
aggregate customer
traffic
MSAN Node
CMSAN
~5500 Sites
©Ofcom
T
A
M
CMSAN
Legacy
T
A
M
Legacy
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Ofcom’s approach to NGN regulation
Industry
interaction
Competition
framework
Consumer
protection
©Ofcom
•
•
•
•
•
Consultation on principles and process (June 2005)
‘NGN UK’ now established to develop commercial vision
And ensure detailed regulation follows rather than leads the market
But within a clear regulatory framework (i.e. not forbearance)
Continued support for technical work of NICC on interoperability
• BT Undertakings to protect against foreclosure (Sept 2005)
• We now need to apply the ex ante competition framework to NGNs
• Market review programme published (March 2006)
– Converged backhaul
– IP-based voice origination / conveyance
– Converged copper-based access
• Additional study on charging structures (Dotecon - end March 2006)
• Co-regulatory solutions preferred
• Review of general conditions of entitlement (end 2006)
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BT Undertakings regarding NGN deployment
• No foreclosure of network access
– BT to provide unbundled network access in SMP markets
– In a manner that permits competition with downstream end-to-end services
– Full consultation before any network design decisions which might prevent this
– Efficient design to deliver these requirements, or BT pays the costs of retro-fitting
• Equivalence of Inputs (EoI)
– EoI means that BT and altnets buy exactly the same SMP products
– Using exactly the same systems and processes (subject only to agreed exemptions)
– BT will design 21CN to support EoI where SMP may ‘reasonably be expected’
– Subject to the condition that provision of EoI is ‘reasonably practical’
• Availability of network access
– Network access to be made available in advance of any new downstream service
– Lead time must be sufficient to permit simultaneous launch of competing products
©Ofcom
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NGN UK
• The creation of NGN UK
– NGN UK will be operational from the beginning of April
– Eight companies have committed to joining the NGN UK executive: BT Group plc;
Cable & Wireless; Easynet; Kingston Communications; NTL; Thus; Vodafone;
Wanadoo UK. A number of other companies have expressed interest in participating
in the work programme.
– Ofcom has observer status on the NGN UK executive committee
• Priorities for the NGN UK work programme
– IP interconnect architecture. A reference architecture for IP interconnection, covering
such matters as service characteristics and interoperability standards.
– IP interconnect commercial model. Commercial principles in relation to charging
(e.g. distance dependence, definition of grades of services) and contractual terms
and conditions. Actual charges are out of scope for this body.
– Network intelligence interoperability. There is a need to understand the types of
network intelligence which need to be exchanged between NGNs, the commercial
basis for such exchange, and technical interoperability issues.
©Ofcom
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Wholesale
markets
Retail
markets
Application of the ex ante competition framework
Service specific retail markets
Residential
voice
Residential
broadband
Business
services
Authentication
Authorisation
Accounting
PSTN
Ethernet
/ WDM
xDSL
SDH
Ethernet
Service specific
access markets
Session
control
Metro
node
MSAN
©Ofcom
Convergence of retail markets depends
on purchasing behaviour, bundling, etc.
These may be affected by changes in the
underlying network, but not necessarily
Bandwidth
control
Converged backhaul
conveyance markets
Converged core
conveyance markets
Service specific
network intelligence
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Investment and innovation
“The national regulatory authorities shall promote competition by … encouraging efficient
investment in infrastructure, and promoting innovation (Art 8(2c), Framework Directive)”
• Forbearance vs Certainty
– We believe that the appropriate means for regulators to encourage investment and
innovation is by minimising regulatory risk. We need to achieve this for both
incumbents and altnets. This is not achieved through ‘regulatory holidays’.
• Minimising regulatory risk for incumbents
– Delivery of efficiency savings: The NGN business case depends on the ability to
deliver efficiency savings, so anything which prevents this (e.g. a regulatory
requirement to maintain legacy services) puts the business case at risk.
– Recognition of investment risk: Incumbents require certainty that any efficiency
savings that are delivered are not treated as some form of risk-free windfall.
• Minimising regulatory risk for altnets
– Efficient access and interconnection: Altnets investing in NGNs will be dependent on
access to economic bottenecks controlled by incumbents. They therefore need
certainty that efficient access and interconnection arrangements will be provided, so
that they can compete with services provided end-to-end over incumbents NGNs.
©Ofcom
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Protecting consumers
• The deployment of NGNs raises a variety of consumer protection issues, for
example:
–
–
–
–
–
–
–
Potential service disruption during network migration
Management of end-to-end QOS over interconnected NGNs
Network resilience for lifeline services
Provision of emergency call location data
Numbering transparency
Number portability
New forms of abuse (SPIT, identity theft…)
• Which of these can be left to operators to resolve, and which require formal
regulatory intervention ?
©Ofcom
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Questions ?
Steve.Unger@ofcom.org.uk
©Ofcom
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