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ITU Geneva
NGN and core-IP networks regulation
(sorry if most has already been said)
M. François Varloot
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Agenda
I. Core and access NGN: definitions
II. Migration towards core NGN: strategies and actors
III. NGN and symmetrical regulation
IV. NGN and asymmetrical regulation
V. Example of NGN potential impact on regulation: fixedmobile 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
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NGN access layer
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NGN core network
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NGN applications layer
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Key components
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DSLAM/MSAN
Access itself
Transport layer
Control layer
Services layer
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
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NGN main justifications
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Benefits of NGN core networks
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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
Independent layers -> 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
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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
I. Core and access NGN: definitions
II. Migration towards core NGN: strategies and actors
III. NGN and symmetrical regulation
IV. NGN and asymmetrical regulation
V. Example
of NGN potential impact on regulation: fixedmobile convergence
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
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– 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 -> Less need for replacement
• Cable operators
– To develop telecommunication services
• Software actors
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User of IP connectivity without financing networks
Contract with telecom operators for new convergent services
Full nomadic usage
NGN-core operator independency
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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
8,9 million for ADSL
2005, with
• 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
Subscribers distribution within the ADSL market
30%
70%
• More than 2 millions of home gateways in the French market
• 300 000 subscribers to Pay TV on DSL offers (end 2005)
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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
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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
I. Core and access NGN: definitions
II. Migration towards core NGN: strategies and actors
III. NGN and symmetrical regulation
IV. NGN and asymmetrical regulation
V. Example of NGN potential impact on regulation: fixedmobile convergence
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III. Symmetrical regulation issues
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End users issues
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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
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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
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Symmetrical regulation and auto regulation
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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
I. Core and access NGN: definitions
II. Migration towards core NGN: strategies and actors
III. NGN and symmetrical regulation
IV. NGN and asymmetrical regulation
V. Example of NGN potential impact on regulation: fixedmobile convergence
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IV. Asymmetrical regulation issues
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Cornerstone principle: technology neutrality
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Market analysis and today practice regarding VoB
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NGN networks do not modify as such operators positioning
ARCEP decision relating to fixed telephony (decision n°05-0571 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
• Extent of the PSTN incumbent in VoB markets…
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IV. Asymmetrical regulation issues
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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
I. Core and access NGN: definitions
II. Migration towards core NGN: strategies and actors
III. NGN and symmetrical regulation
IV. NGN and asymmetrical regulation
V. Example of NGN potential impact on regulation: fixedmobile 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
Few
offers
Two
distinct
markets
(fixed and
mobile
markets)
Autonomous
uses for F and M
telephony
Three
markets
(fixed retail
market,
mobile retail
market and
F/M market
IMPACT
Market definition should be flexible in order to take
into account differences over time and in the pace
of convergence offers development in each
European country.
Large
development
A single
retail
market
+
Triple play
(fixed voice,
data,
broadcasting)
becoming
quadruple play
with
fixed/mobile
convergence
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V. Example of NGN potential impact on regulation :
fixed-mobile convergence
Potential impact on wholesale markets
Integrated operators
New entrants
Fixed operators
Need access to :
fixed local loop
Have both networks
Mobile market
Convergence
market
IMPACT
Need access
to fixed
network
No need of access to
another network
mobile network
(through MVNO offers)
Fixed market
Mobile operators
Most relevant structure to
provide F/M Convergence
Competition through access regulation of the essential
fixed local loop
Potential competition IF
Market 15 (MVNO) is competitive
Potential competition IF
Market 15 (MVNO) is competitive
Oligopoly
Oligopoly through access regulation of the essential
fixed local loop
The success of convergence offers could reduce the number of
market players if appropriate access to fixed and mobile networks
are not satisfactorily provided.
Risks : possible extended dominance of the integrated operator and
extension of the mobile oligopoly to F/M convergence market and
then to the whole electronic communications sector
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V. Example of NGN potential impact on regulation:
fixed-mobile convergence
Potential impact in terms of remedies
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Does the actual framework allow to deal efficiently with
integrated operators and cross markets issues ?
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Actual market by market approach could be too segmented to address such issues
Does the actual framework allow to deal efficiently with
oligopolistic markets ?
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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