INTUG

An Update on Global Communications Issues

Common Themes in Telecommunications Globally – Universal Access is the Key

Whilst local issues with regulation and telecom developments may seem to be unique in national markets, very similar topics are being debated throughout the world as countries struggle to emerge from deep recession, whilst trying to build a more inclusive society in which all can participate fairly and effectively.

The phrase “next generation” is often used in politics as well as in telecommunications, and there is a strong drive universally to use the next generation of services as an economic and social lever. As a result, in order to do so, fair and competitive universal access to services and information becomes critical.

User considerations must be taken into account wherever regulatory policy and standards are being decided for these common themes. Consistency of outcome internationally is an additional need for businesses connecting to supply chain partners and customers.

Some of today’s hot topics have been around for many years, e.g. roaming, termination rates and universal “service”, although in the latter case, it is now more accurate to talk about universal “access” enabling full use of services and information, without restrictions related to the supplier of the access, through closely coupled or integrated delivery.

The use of state aid is being reviewed to avoid damaging emerging competition. Given the need to connect rural areas, the role of wireless and associated decisions on spectrum allocation, plus the use of satellite to fill some gaps of coverage, are also common themes.

Another common theme is debate over how best to balance consumer rights of access with pressure to protect intellectual property rights, in the face of widespread illicit file sharing and downloading.

New business models and changed consumer attitudes may be more effective in striking the right balance, rather than imposing intrusive indiscriminate regulatory penalties, which may well do more harm than good. Decoupling of access and service which also offers “network neutrality”, is a reasonable underlying principle to adopt.

Universal Access is Becoming the New Universal Service “Obligation”

Bringing ever increasing broadband speeds to all continues to pose difficulties in reaching communities where fiber installation costs exceed likely resultant revenue from customers. State aid deriving funds from general taxation in one form or another is generally accepted as more appropriate than a telecommunications tax, although some countries do use this mechanism to a degree and some seem to actually prefer this approach.

However the subsidy is funded, there is still the task of determining who should provide the service and how. In Europe, the view is that 80% of the population can be connected by fiber, 15% by wireless and 5% by satellite, which still has a role in some geographies, and is relatively consistent in cost per customer.

Elsewhere, the percentages vary. In the US, Verizon is turning its focus from FttH to LTE 4G using the technology in 18 states already. Chile recently became the first country in Latin America, and only the fifth in the world to test LTE technology. Japan will soon be 100% 3G and are moving rapidly to 4G.

In some countries, the majority of the population will have to rely on a wireless connection for the foreseeable future. Many countries today, e.g., in Eastern Europe, have more than 50% of the population with a wireless/mobile telephone connection only.

The ITU is actively addressing the issue of universal access, and the Body of European Regulators (BEREC) is consulting on Universal “service”. The OECD is also addressing the topic to compare how countries generate and allocate funding. There can be significant benefits to the supplier of universal access extending beyond the basic customer revenue, e.g. brand awareness and connectivity that drives up revenue from profitable connections.

These should not be overlooked in assessing what subsidy (if any) is necessary in order to grant a universal access status to one operator. Reverse auctions may reduce the cost to already stretched national budgets and produce a more realistic approach to provision.

One further measure to reduce cost which is being considered in some countries, e.g. the UK, is to change planning regulation to allow fiber networks to be installed overhead rather than insisting on underground installation. Whilst this reduces cost, it has to be balanced with “loss of amenity” concerns resulting from such installation.

Given the rapid growth of wind farms, the existing use of electricity overhead wires (some of which have been used to carry cables) and the lack of concern about visual amenity in some countries, this could produce some changes in the relative cost of “broadband for all” between countries.

Optical Network Terminal (ONT) location is key to open access FttH Networks

INTUG Member Paul Budde has highlighted the potential disruption to competitive models arising from inappropriate location of the ONT to deliver Fiber to the Home (FttH) services.

The ONT is the piece of equipment connecting the network to local premises. It operates as a demarcation point between the local carrier and the user premise wiring. The issue is in some ways analogous to Local Loop Unbundling debates about access to exchanges to enable connection of competing networks, street cabinet access for competitive sharing of cable networks, and sharing of poles and masts and aerials.

The underlying principle of ensuring that customers retain choice at all points in the value chain, without risk of denial of access to the services and information they require, must guide resolution of this issue.

It is important that the issue of ONT location is addressed early before roll-out gets too far.

Trans-Sector Joined-up Government Thinking on ICT Grows

INTUG Member Paul Budde met the ITU Secretary General Hamadoun Touré last October to discuss trans-sector ICT. The Secretary General was very enthusiastic about the trans-sector concept and progress by governments in Australia, New Zealand, America and the Netherlands. He is now passionately advocating the concept, and the ITU has made this a spearhead policy with full backing by the United Nations Secretary-General Ban Ki-moon.

A Commission on the topic will be chaired by Rwanda’s President Paul Kagame, with ITU Secretary-General Hamadoun Touré and UNESCO’s Director-General Irina Bokova holding the vice-chairmanship. The Commission will be made up of a group of eminent global leaders from government, business, civil society and international organizations.

Roaming and Termination Rates Remain a Major Problem for Customers

Despite progress in many geographies, and multinational offers from some operators, the exorbitant non-cost-related price paid for the privilege of connecting between two different operators’ networks remains a major concern for customers. The absence of any market forces to exert downward pressure on prices means only regulatory action can succeed. The industry will simply not take adequate action voluntarily.

Following the decisions in Europe on both roaming and termination rates, EU national regulators are beginning to implement regulation to reduce pricing in both these areas.

Elsewhere in the world, the problem continues to manifest itself in different ways. At a national level, New Zealand is still campaigning to see charges for calls between networks to be reduced radically. The high price charged by mobile operators to terminate calls from fixed networks are also being addressed, given that many customers are mobile only.

These issues prompt the thought that if the access element of mobile operators’ networks (the wireless bit) was functionally, or even structurally, separated, this could lead to a win-win-win situation, where coverage for customers would be the best available everywhere, with far fewer notspots, call completion would rise giving operators more revenue, and new market entrants would not face a heavy penalty for having a smaller market share.

Whether this topic is addressed from the point of view of national roaming, or termination rates, the customers’ argument is the same – maximize connectivity to increase utilization of expensive access infrastructure, and to encourage usage, and everyone (including the economy) will gain. In a competitive market with business customers regularly changing the composition of their corporate scope, all inter-operator tariffs must be minimized.

Internet Service Providers Resist Responsibility for Protecting Copyright

The political stalemate which threatened final agreement of the EU Telecommunications Framework remains an issue of controversy, not just in Europe. At the heart of the issue is a conflict between two “rights” – the right of access, and the intellectual property right (often copyrighted). Given the widespread prevalence of illicit file sharing, the copyright owners have rightly argued that it damages their intellectual capital and deprives them of revenue.

There has been pressure to force internet service providers to take action against, and ultimately to disconnect, persistent offenders. Unfortunately, the identification of the actual offenders cannot by simply achieved, given the mechanisms for address allocation and the business models of ISPs themselves.

This means that there is serious danger of inflicting greater damage on another innocent community of businesses and individuals, since their disconnection from the Internet prevents business operations and imposes exclusion from vital social and welfare services. ISPs cannot be forced to take such action against users.

The emerging remedy of threatening ISPs with legal action if they do not disconnect is also unacceptable, since smaller ISPs are feeling that in order to defend themselves they must pay to settle out of court, to avoid being bankrupted by lengthy court proceedings.

In some countries, hastily devised and ill-thought out regulation is creating an environment where such events will be encouraged. Users are concerned that this valid debate should not be subjected to dangerous and ineffective remedies. Much more thought is needed.

Postscript: Number portability is still being used as an anti-competitive weapon

It may seem amazing that after so many years, in which this old trick of making customer change of networks unpleasant seemed firmly eliminated, it still remains on the agenda of mobile operators in some countries as a defense of last resort to fair competition. The Thailand regulator has threatened postponement of the country’s 3G spectrum auction this year, if mobile operators do not implement number portability by the August deadline.

The principle of number portability is fundamental to establishing a competitive market.

INTUG Cloud Computing Position Paper Finished

This position paper addresses the broader ICT issues involved with the various flavors of off-site computing including managed services, software as a service (SaaS) and service oriented architectures (SOA), all using unified collaboration and communications (UCC). It produces a checklist of best practice actions for any enterprises planning for clouds.

INTUG has continued its discussions with the Open Computing Alliance (OCA) on the topic of cloud computing, and ensuring full interoperability of services for customers.

Regulatory Best Practice Position Paper Update

INTUG is planning a position paper for national associations to use in discussions with NRAs, not just in Europe, although it will cover the key elements for transposition of the new EU Telecommunications Framework. The aim is to facilitate sharing of best practice and to encourage international competition via more consistent ex-ante sector regulation.

CoCom and BEREC have both established project teams for tracking and monitoring the transposition in each member state. INTUG plans to provide members with a checklist of topics for review in their local discussions with their national regulator.

INTUG Attends Workshops on Universal Service and Mobile Roaming

INTUG participated in a workshop in Brussels as part of the EU consultation on universal service and presented its position on behalf of customers. It will be making a formal response to the consultation questionnaire shortly. INTUG also took part in an event focusing on developments in mobile roaming.

INTUG is Meeting in Madrid on 12-13 May

Detailed arrangements are now in place for INTUG’s first 2010 meeting in Madrid, Spain, hosted by AUTELSI, INTUG’s Spanish member. This takes place during the Spanish EU Presidency and the first day agenda includes presentations from the Spanish Presidency, the Spanish Ministry, the Spanish regulator CMT, Telefonica, Colt and Microsoft, as well as contributions from INTUG and AUTELSI.

The second day includes a brief internal AGM, followed by an open meeting where the INTUG strategy for user representation will be agreed for priority topics, which are largely those referenced in this news update. Details of the meeting, including how to register can be found here.

The second INTUG meeting of 2010 will also be in Europe, in late November/early December.

INTUG Has a Busy Representational Calendar for 2010

Representatives from INTUG will participate in international fora during 2010. It is hoped to include APECTEL in Chinese Taipei in May, in Brunei in August and Japan in October, ICANN in Brussels in June, IGF in Lithuania in September, OECD CISP in Paris in June and December, ECTA in Brussels in June and December, and CITEL In Mexico in March, as well as other ad hoc events including public hearings on EU Regulatory matters.

This newsletter was coordinated by Nick White, Executive Vice President, INTUG

This entry was posted on 20 April 2010 at 2:47 PM and is filed under International Insights, INTUG. Tagged: INTUG newsletter. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are closed.