Maak breedbandmarkt innovatiever

In Dutch an opinion piece I wrote was published in "Het Financieele Dagblad". It is based on my Ecomm presentation, where I explain Free.fr's business model and philosophy. The point in the article is that Dutch broadband providers haven't innovated in the last 10 years and need to look at France to see how having only 1 product can lead to simplicity and alot of innovation. (Google Translate)


Maak breedbandmarkt innovatiever


De consument heeft genoeg van al die tientallen combinaties op het thema internet, tv en telefoon

Rudolf van der Berg



De triple play-strategie is aan een nieuwe impuls toe. Nederlandse aanbieders blijven steken in een verouderd model dat weinig zicht op vooruitgang biedt. De Franse markt toont dat het anders en goedkoper kan. Daar krijgt de klant een Mercedes voor de prijs van een Golf. Volgende week maandag 30 november is het tien jaar geleden dat KPN ADSL aankondigde in Nederland. Kabelaanbieders leverden al sinds 1995  internet zonder telefoontikken. Snel internet werd zo voor iedereen bereikbaar.
Qua internetpenetratie staat Nederland in de wereldtop. Maar het is verbazingwekkend te constateren dat in de afgelopen tien tot vijftien jaar de klant eigenlijk niets nieuws gekregen heeft. Iedere aanbieder komt met hetzelfde: internet, telefoon en televisie voor €20 tot €70. UPC heeft er 80 combinaties voor. Concurrentie tussen de twee infrastructuren leverde vooral meer bandbreedte en lagere prijzen op. Maar van echte innovatie is geen sprake.

Daar zijn twee oorzaken voor. Ten eerste ligt de nadruk op de verkeerde innovatie. Vol afgunst kijkt iedereen naar de marges van Google, Apple en Skype. Maar ondertussen vergeten ze dat die ene andere marktgigant Microsoft $4 mrd verloor op haar online diensten en de wereldwijde infrastructuur die daarvoor benodigd is.

Het succes van Google kopiëren zal niemand lukken. Een tweede fout is dat ze hun eigen bedrijfsvoering te complex maken door honderden combinaties van internet, telefonie en televisie aan te bieden. Vernieuwing is alleen al onbetaalbaar omdat het wijzigen van de systemen voor factureren en het onderhouden van klantenrelaties te complex is geworden.

Dat het ook anders kan bewijst de Franse breedbandmarkt. Deze is veel innovatiever. Alle aanbieders proberen er iedere paar maanden met iets nieuws te komen. Geen wereldschokkende diensten als Youtube,
maar wel innovaties waar de klant blij van wordt.

De aanstichter hiervoor is de nummer twee in de Franse markt: Free.fr . Dit bedrijf reduceerde alle complexiteit tot maar één aanbod en dat kost €30. De klant krijgt standaard de hoogste internetsnelheid, gratis bellen naar 100 landen en een uitgebreid pakket hd-tv.

De concurrentie vindt plaats op de gratis opties, zoals back-up, beveiligde toegang tot de wifi-verbinding van de 3 miljoen andere klanten van Free.Fr, spelletjes op de tv en zelfs voor iedere klant een eigen live tv-kanaal om wat dan ook uit te zenden. Concurrent SFR biedt vergelijkbare diensten en kwam met een gratis jukebox van 250.000 muzieknummers.

Vanuit het oogpunt van marketing kun je zeggen dat men in Frankrijk de T-Ford herontdekt heeft: Hij komt in alle kleuren als ie maar zwart is. Maar je zou ook kunnen zeggen dat ze je in Frankrijk een Mercedes met alle opties leveren voor de prijs van een Volkswagen Golf. Als de klant dan niet de stoelverwarming wil gebruiken, dan is dat zijn keuze, maar het zit er wel op en het kost niets meer.

Deze manier van concurrentie heeft als bijkomend voordeel dat de interne organisatie kan worden vereenvoudigd en gestroomlijnd. Zowel de IT-als de Sales-en Marketingafdelingen hoeven veel minder
complexiteit te managen. De gerealiseerde besparingen vinden hun weg terug in diensteninnovatie en ook in aandeelhouderswaarde. Wie is de eerste in Nederland die durft?

Rudolf van der Berg is Management Consultant van Logica Management Consulting.

Nederland staat met zijn internetpenetratie in de wereldtop, maar de klant heeft verder niets nieuws gekregen

In Frankrijk vindt concurrentie plaats op gratis opties zoals back-up en beveiligde toegang tot wifi

Pissing off the Peering Guru's.

This is one of the most hilarious threads on Gigaom for a long while. Richard Bennett (a guy who writes anything you pay him for) tried to bring paid peering into the net neutrality debate. It seems everybody is weighing in: Vijay Gill (Google), Patrick Gilmore (Akamai), Richard Steenbergen (nLayer) etc.

http://gigaom.com/2009/11/22/how-video-is-changing-the-internet/

Andrew Odlyzko should also have a look as his MINTS institute is given a snide remark as well.

All of it seems to have been the result of Bill Norton writing as Dr. Peering
http://drpeering.net/a/Ask_DrPeering/Entries/2009/11/5_Paid_Peering_and_Net_Neutrality.html

I respected Bill alot, but this piece is just off the mark. There seems no basis for it whatsoever.

and of course the obligatory link to my Peering and Transit introduction.

Update: CircleID also weighs in with: Dr. Peering commits malpractice on Net Neutrality.
http://www.circleid.com/posts/dr_peering_commits_malpractice_on_net_neutrality/

The Future of VoIP interconnection (or buy an ENUM-based number portability system now)

Last week I attended the ITU GSR09 in Lebanon as you might have guessed from previous posts. I presented a discussion paper there on the future of VoIP interconnection. I didn't like my paper too much as I thought I could have written down the point a lot more poignantly and used less deductive reasoning, however other people disagree. The presentation is now embedded below and the paper is available here.

The main point I think you should take away is that interconnection isn't that hard. It is made difficult by lawyers and weird business models, but it is quite simple. The second point is that regulators should have a look at ENUM for a national number database, with number portability attached to it. They shouldn't care about Public ENUM that much as it mixes technology and policy in standard. The policy who can change and add what in the national number database is the domain of the national regulators and not of the IETF or the ITU. BTW it turns out Bahrain is going to build a national number portability solution based on ENUM.

(And yes, Logica makes number portability systems, but that wasn't the reason why I came to my conclusion) 

The Future Of VoIP Interconnection

View more presentations from Raindeer.

A quick write up of the Dutch meeting on Net Neutrality

Two weeks ago the Dutch Ministry of Economic Affairs organized a meeting on Net Neutrality. It was the third one already all presentations are now online. The first one was a more closed affair with economic thinktank Encore in 2006 (and a presentaton by moi)  and a more open meeting in 2007 similar to the one of Thursday. This time the occasion was the publication of a report by Dialogic on the topic. It's a very good report on net neutrality and worth the read. (It is in Dutch though)

The speakers at the meeting were:

• Frank Heemskerk, deputy minister of Economic Affairs, (speech in English)
  
• Taylor Reynolds, OECD
• Rudi Bekkers, Dialogic, lead researcher for the report;
• Michel van Eeten, professor TUDelft and Next Generation Infrastructures,
• Alex Blowers, Ofcom, UK
  
• Frode Sorensen, NPT, Norway 
• Martijn van Dam, Member of Parliament for the Dutch Labour Party 

The speakers all had their interesting bits. Heemskerk was very polically vague about the topic, but not vague enough to not make sure everybody knew he wouldn't allow blatant violations of netneutrality, but where the line is is difficult. Rudi Bekkers gave a good overview of how it is very difficult to distinguish from an act that may harm netneutrality to derive the intent. Michel van Eeten was interesting as it showed how net neutrality was just a vague term that gives you a warm and fuzzy feeling. Martijn van Dam was excellent as a politician. He had a great opinion how everything should be open and freedom of speech etc. which is bound to be a press pleaser, but doesn't give you anything else. He also was of the opinion that the iPhone should be open and that companies should be barred from meddling with users rights (at which point Michel van Eeten pointed out that Van Dam is using an iPhone, hypocritical fool). Tad Reynolds showed how the debate was as much about competition as anything else. Frode Sorensen demonstrated the Norwegians ability to talk themselves out of any problem, just like the Dutch Poldermodel

I twittered the entire meeting, thanks to Swisscom who left a port open for free tweeting on their otherwise paid for wifi network.Unfortunately it seems that all is now lost as I didn't save them from Twitter.

In love with the Lebanese people (at least with the TRA)

Sitting at Istanbul Airport, I have to get online to put this in my blog. I'm in love with the Lebanese. What a fantastic people. I can't say anything else than that the Lebanese are now among my favorite people in the world. I don't know enough about the country, the culture, music etc to declare my love, but the people they are amazing.

Truely you will be hard pressed to find people so open and welcoming to weird foreigeners who fly in for 4 days to give a 15 minute speech. We were welcomed by the staff of the Lebanese TRA like we were new friends. The staff of the Lebanese TRA are an extraordinary mix of people. Imagine a regulator with 65% women, most under 35 (30 I would even think and gorgeous). And they are eager, they are knowledgeable, open, they challenge you, but can think for themselves as well. And they are diverse as well. Everything is included from western educated to local educated and even daughters of the Hezbollah clan (who know how to party)

Yes, the Lebanese know how to party too. This night we (ITU staff and this lonely Dutchman) were taken to the Music Hall club by the TRA staff. Here we were treated by live performances of traditional Arabic and modern western music. Amy Winehouse really has a problem if anyone ever discovers Lebanon. It was a full blown party. The whole Music Hall was popping. The booze was (too) richly flowing. I had a blast.

Kind words also should go to the heads of the TRA. Though I didn't see them partying, they do rock. Haven't ever seen such knowledgeable management of telecoms regulators. People who really understand technology, business and regulation. I am almost afraid they are too ambitious for their political situation. I hope it all turns out for the best.

(My love is even extended to such people as a taxi driver who refuses a tip, because we agreed on a fixed price, though there are many stereo typical taxi drivers as well) 

I am still proud to be Dutch, but I like the Lebanese alot. I can only say to the Lebanese: Shukran.

SESSION 8: A VoIP WORLD

Moderator: Mr. P. Masambu, Executive Director, Uganda Communications Commission (UCC), Uganda

GSR Discussion Paper on Voice over Internet Protocol (VoIP): Enemy or Ally, [presentation]
Ms. Phillippa Biggs, Economist, ITU/SPM

GSR Discussion Paper on The Future of VoIP Interconnection, [presentation]
Mr. Rudolf Van der Berg, Management Consultant, Logica Management Consulting

Interactive panel discussion:

• VoIP worldwide and regulatory approaches: an update
• Evolution of VoIP interconnection
• What can regulators do to prevent operators from blocking access to VoIP services?

Panelists:

• Mr. W. Dorji, Head, Telecommunications, Bhutan InfoComm and Media Authority (BICMA), Bhutan
• Mr. P. Eid, Board Member and Head of Market and Competition Unit, TRA, Lebanon
• Dr. M. Jankovic, Executive Director, Republic Telecommunication Agency (RATEL), Serbia

Bhutan: We have moved to a converged regulation. We are now responsible for telecoms and content, even print. We have rules that say technological neutrality. Being a mountainous country we didn’t want to exclude any technology. It is about whether it works. VoIP is therefore allowed. For VoIP we did have the discussion on the numbering plan. We went for a non-geographic numbering plan, but we are still consulting. We don’t have a big VoIP operator yet. We are having international VoIP service by the two networks our country has.

Lebanon: Despite the similarity for VOIP to PSTN there are also differences. A customer using the PSTN doesn’t have a backup network. It only works with complicated technology. A VoIP user can use any network that is available. With numbering the PSTN only uses the rigid E.164 numbering plan. VoIP can be more flexible and use all kinds of identifiers. VoIP can offer more codecs with better quality.

Interconnection differs a lot. This is mostly because of the high termination rates. VoIP can rely onder internet exchanges and peering. The incumbent will miss income, but can make that up in different areas. The regulator will have to remove all the barriers and make sure that it all works with simple market entry. The TRA will allow licenses for managed VoIP services. For now we tolerate VoIP, it’s not legal, but we will allow it. It will only be regulated for Lawful Intercept and emergency calls.

Serbia; We have a very competitive market, with lots of ISP’s and Cable companies (around 100). VoIP operators may not circumvent international VoIP termination and will need a transit provider on the public network (PSTN). VoIP will be one of the services on the broadband network. VoIP is not an interesting service anymore, its just data.

Middle East: We believe the customer comes first. So the incumbent may not like this, but it is our position. We believe that we should be technological neutral. VoIP providers do need a license. We don’t have licenses for skype. We have confiscated devices that came with a subscription in high street shops. Even though we allowed skype international revenues grew for the incumbent, so there was no reason to spread fear.

Middle East: The lack of definition for VoIP is a real problem. There are now different approaches for VoIP, like Google Voice and it causes all kinds of regulatory problems how do we deal with it.

Australasia: Congratulations to mrs. Biggs. How are we going to collect data in the future. It will become increasingly hard to tell what VoIP is. So how are we getting the stats. Your challenge was provide data and my answer is what the

Interconnection with VoIP for emergency services. How do you think we can work with location services.

West Africa: If we do not regulate VoIP how do we know it meets certain standards.

Answer Lebanon: Google Voice if we see it as a service that is dependent upon a true broadband connection. The user will be aware that the quality isn’t always perfect.

Answer mrs. Biggs: it’s difficult to collect the stats. Even the commercial organisations have this problem.

Question West Africa: I find it a problem that Africa doesn’t have any statistics. Because you don’t have the stats, you can’t make proper comments. Mrs. Biggs said there were only 20 countries were using VoIP. Is this the incumbents. Or is this done by bypassing the traditional operators. Do these operators have licenses then? We have a problem that the rest of the world isn’t paying for our international connectivity. This is unfair.

Answer we have analyzed the situation in all. I do recognize the problem. We have stats on Africa and we will work with any nations.

Question West Africa: mr. Van der Berg is ENUM necessary for number portability.

Answer: No its not.

Answer Rudolf to West Africa: It is your country who wants to be connected to the internet. It are your people who download stuff from the internet. Not the world dumping it on you. The costs therefore should be born by you.

Serbia: Customers need to know what they get.

Bhutan: ISP’s were using Calling Cards to bypass the incumbent. We now need to deal with that. You cannot ride on someone’s network without investing.

MOBILE TERMINATION: TO REGULATE OR NOT TO REGULATE?

SESSION 6: MOBILE TERMINATION: TO REGULATE OR NOT TO REGULATE?

Moderator: Dr. M. Treschow, Director General, National Post and Telecom Agency, Sweden

GSR Discussion Paper on Mobile termination: to regulate or not? [presentation]
Dr. Vaiva Lazauskaite, Economic Analyst, ITU/RME

Interactive panel discussion:

• Should mobile termination rates be regulated or left to the market? What regulatory approach to choose?
• Symmetric regulation to promote investment and competition: can the EC approach be replicated in other parts of the world?
• How are convergence, NGNs and the transition to all-IP networks changing the situation?

Panelists:

• Mr. A. Alfehaid, Deputy Governor, Communications and Information Technology Commission (CITC), Saudi Arabia
• Mr. A. Haire, Deputy Director General (Telecoms & Post), InfoComm Development Authority of Singapore (IDA)
• Mr. J. Salvat, CEO, Servei de Telecomunicaciones d’Andorra (STA)

Mod: is there a need for regulation of MTR’s. I think we need to look at the consumer to answer this question.

Singapore: I view as regulation any decision made by the regulation. This also is not making a decision. It is necessary to understand when you are not going to make a decision. We do regulate parties with Significant Market Power. We do make decisions on someone who has control over a bottleneck. Communication is about three things: It is about getting on the network, going across and getting off the network (to another network). In Singapore we have noticed that when getting off the network onto a mobile network, we know that the Mobile companies have an incentive to raise prices. And the nice thing is they can tax someone who isn’t their customer. We have set our termination rate at zero therefore. At the retail layer we have a called party pays layer. At the wholesale layer we have a mobile network party pays. We did get a problem with arbitrage so we did get involved here (No explanation on what the problem was and how they did it)

Saudi Arabia: I would like to see more comparisons between nations. We need to know whether we should regulate or not. The question is when we can get rid of MTR. It is only when we have a mature market, with a fair spread of customers and traffic between networks.

Andorra: In our region the market is very mature. We should look at how many users there are and how they are using it. We  have a mature market. We should get rid of regulation of MTR;s and leave it to the market. If we regulate MTR’s we might see operators loosing interest in the pre-paid market.

Singapore: I belief that MTR rates are part of a big Mosaic. What we have done is create a highly competitive market. It is ruthlessly competitive. Maybe HongKong is more competitive. It is not just MTR’s. We have also prevented the use of SIM-Locks. These came on the market with the iPhone. We think that the services and handset market should be separate. We have repeatedly said no. Before the iPhone came on the market we warned the operators we wouldn’t allow SIM-locks. We now have an extremely vibrant market. When the third marketplayer came in the market. This guy was certifiably mad. He started to give away free incoming calls. His marketshare rose to 15%. Than the other two did the same and this madman again did something. He started with free international calls to seven nations.

We now have 6 pure VoIP play. The mobile players didn’t want to interconnect with them. They didn’t even answer a phonecall. In the end we put them in a room and got them discussion going. By 2007 we had worked out something.

Mod: What do you think of next generation networks

Andorra: We only have one operator. In our case we are unsure about NGN. We don’t have a peering point in Andorra. We assume that the costs will be the same because we will pay more on transit.

Saudi Arabia: In my opinion we are all going to review the existing systems and regulations. We think the existing system can’t be maintained.

Singapore: We are almost finished with our national broadband network. We are finished with all the interconnection stuff. It is all an open interconnection framework. We have based open access. We now have to mesh that with the traditional models. We are bringing three models into one, the new NGN, the old internet and the mobile network.

Gentleman from Africa: We didn’t have MTR’s between mobile operators and we did have fixed mobile termination termination at 0.30 US dollar. We are now regulating them and they fell 0.15 US dollar. Most mobile operators are not necessary even though  they are 0.09 USD now.

Lebanon: in Lebanon we have a kind of Bill and Keep regime between fixed and mobile. (than he quotes some of my paper and its statements, which you can find online. Much thanks for that!)

Mod: in the EC we are currently discussing this. We are discussing how we are going to get to Bill and Keep.

Question asked on termination rate to Wimax. Nobody comes up with a good answer it seems.

African nation asked what should be done when operators don’t want to negotiate a termining rate.

Singapore answers that they will revoke the license of the party not willing to interconnect.

African Nation answers that the impact will be much larger than if they let it continue. Singapore answers that they give fair warning. This is also a signal to the customers to leave the  network or other ways they are in trouble. This is enough to push telco’s in the right direction.

Saudi: We give parties 60 days to agree and if they don’t we set the prices for them.

North African nation. We had two mobile networks. When the third one came into the market we noticed that the two started an interconnection regime that favors big parties from small ones. Than we noticed that onnet charges were lower than off-net charges. Than we put the termination charge at 65% of the on-net charge.

Himalayan nation: To Singapore, is it fair to have a termination rate at zero. Isn’t it harsh to those parties. Because to terminate a call some resources are used.  I would like your opinion.

Moderator: Thanks audience and forgets to ask Singapore to answer the question. 
Later Singapore answered that the telco's do get their money, but from their own customers. Not from someone elses customers

IP AND TRADITIONAL TELECOM (VOICE) INTERCONNECTION - A WORLD OF DIVERGENCE

10:45 - 12:15          SESSION 5: IP AND TRADITIONAL TELECOM (VOICE) INTERCONNECTION - A WORLD OF DIVERGENCE

Moderator: Mr. A. Horne, General Director, Telecommunications Regulatory Authority (TRA), Bahrain

GSR Discussion Paper on Coexistence of traditional and IP interconnection, [presentation]
Ms. Natalija Gelvanovska, Head, Network and Access Division, Communications Regulatory Authority, Lithuania

Interactive panel discussion:

• Coexistence of both worlds: how can traditional strongly regulated interconnection coexist with self-regulated IP interconnection?
• Data transport/interconnection: who pays for what?
• Net neutrality: what does it mean? Is it a developed country issue? How will it affect developing countries?

Panelist:

• Mr. C. Lizcano Ortiz, Executive Director, Comisión de Regulación de Comunicaciones (CRC), Colombia
• Mr. Hirohisa Furuichi, Director, Tariff Division, Telecommunication Business Department, Telecommunication Bureau, Ministry of Internal Affairs and Communications(MIC), Japan
• Mr. S. A. M’Poue, Secretary General, Agence des Télécommunications de Côte d'Ivoire (ATCI), Côte d’Ivoire
• Mr. E. Ndukwe, Executive Vice Chairman and Chief Executive Officer, Nigerian Communications Commission (NCC), Nigeria

In the internet world they use a completely different model. In the PSTN they now move to a different network. The IP-world has now come to telephony. The dilemma is what the new model will be.

Colombia:  We got a regulatory framework that looks in a converged way at markets. Colombia focuses on QoS, Content, Effectiveness and Efficiency, renumeration for the networks. The role of the regulator is critical.  

Ivory Coast: Our laws don’t look at IP. Nationally we can’t do IP interconnection. Internationally we can. We all know what regulation is for. But IP interconnection is not an issue yet in our country

Japan: We use interconnection mosty for traditional networks. We do unbundling in Japan. We have changed our interconnection rules to fit with the new networks like mobile and broadband. We think that it has had a good effect. NTT is now rolling out an ALL-IP FTTH network. For us the problem is how to separate the pricing for different services. We need a different accounting system for NGN Services. It was very difficult to calculate this well. It was also difficult to convince NTT to open up more Points of Interconnection.

Mediteranean country: we are struggling with the same problems as Japan. We are going to hybrid networks with IP in the core and all other technologies go to the edge. We are very interested to see how QoS is introduced and how it is costed.

Answer Japan: In Japan we have discussed Bill and Keep we have discovered it is too early to move to Bill and Keep. One of the problems is to end up with a transparent system. Secondly we see that it will have great impact on the User Tariff. It would allow the dominant carrier to do something …. (don’t know what)

Middle East country: The main problem with IP interconnection is Quality of Service. In order to solve this we need to monitor QoS

Japan: we have monitored the network congestion. And we look at traffic imbalance. We have promoted Internet Exchange Points. We further try to do practical experiments with QoS.

Moderator: with deep packet inspection we can monitor the Quality of Service statistics. It is more than solveable.

Question: how to deal with a transition phase.

Answer: it is an issue… needs to be solved when time is right. It is necessary to open up forums and to discuss openly.

Moderator: In Bahrain we have a full-IP network. The incumbent hasn’t put forward an Wholesale IP interconnect. We think this is because it is more expensive and we won’t accept it.

Question: I have comment. In the internet networks it wasn’t about termination. It was about peering. From the basic model of the internet it was hard to do regulation and we don’t regulation we think. We don’t need to regulate the interent. We need to move to peering and transit.

Answer: In Lithuania the incumbent doesn’t want to peer anymore. But how do I deal with that. I found that I have no real tools for that.

European nation: how do you do the costing in NGN?

Japan: The basic approach to calculate network costs is similar. We did a basic calculation and then modified it by a QoS factor.

Mod: It would be good to have a forum on this topic.

Middle East: The ITU is already dealing with questions regarding interconnection and the Hybrid networks. I do think the ITU can deal with this very well and we don’t need an extra forum on this subject.

Colombia: complements the ITU on its work on interconnection already.

Middle East: I would like to ask about the question on interconnection on symmetrical and asymmetrical network. The size of the networks is very important. Large operators and smallers have different traffic load.

Japan: we implement both symmetrical and asymmetrical interconnection. We do pay attention to net neutrality as well as not to have anyone block content of others. So there are rules for packet shaping.

Question: How does Japan deal with the numbering in NGN network

Mod: We’re all looking at how to deal with this problem in the future. The thing was that incumbents weren’t present in the IP world. In Bahrain we’re now looking at the costing of IP-services. Fundamentally there shouldn’t be a difference between the IP world and the old-world. But we should move to IP fast as the hybrid model is causing more problems than solving them.

Presentations on Internet Exchanges and the Middle East

In preparation for this week's ITU Global Symposium for Regulators, Beirut I looked at the presentations of MENOG5 which was held in Lebanon 2 weeks ago.There are some excellent presentations there on how internet exchanges were established, what their impact was etc. It ranges from Beirut, Amsterdam, Enschede to Nepal. Also there is a presentation by the head of the Lebanese Regulator,  Kamal Shedadi on IPv6. One important item I hadn't ever seen before was the effects IPv6 may have to facilitate lawful interception. Even though I worked on LI for 3 years in The Netherlands, I had never really considered it in this way, but I do think it's a fair assessment.
http://www.menog.net/meetings/menog5/presentations/index.php

Also have a look at the discussion papers and the presentations which will be given at the ITU GSR (one of them is mine) . http://www.itu.int/ITU-D/treg/Events/Seminars/GSR/GSR09/papers.html

UNIVERSAL ACCESS POLICIES IN THE 21ST CENTURY

Moderator: Ms S. Scholze, Executive Superintendent, Agência Nacional de Telecomunicações (ANATEL), Brazil

Background Paper on Bringing broadband to rural areas: a step-by-step approach, the experience of the Dominican Republic, [presentation]
Mr. Edwin San Roman, Senior Telecom Expert, Peru

Interactive panel discussion:

• Are Universal Access and Service (UAS) policies stuck in the 20th Century?
• Is the time right for innovative approaches?
• Public-private partnerships, what role for the government in funding UAS?

Panelists:

• Prof. I. Kadi, Senior Advisor, Communications and Information Technology Commission (CITC), Saudi Arabia
• Dr. E. Spio-Garbrah, CEO, Commonwealth Telecommunications Organisation (CTO)
• Mr. Mohsen Jaziri, Vice-President, Instance Nationale des Télécommunications (INTT), Tunisia

For information:

Background Paper on Trends in Universal Access and Service Policies, Ms. Sofie Maddens, Senior International Expert for the ITU-EC Project to Provide Support for the Establishment of Harmonized Policies for the ICT Market in the ACP (HIPCAR)

Very good presentation on broadband in Rural areas and then inventiveness of people to get broadband.

Panel discussion: One of the panellists mentions that bringing broadband access in his country to rural areas has had very positive effects on social indicators like crime and other elements. He mentions the price of the use of mobile telecommunications as very detrimental. Mr. Pena from Brazil: most countries have now voice access via mobile almost everywhere. Internet is much less prevalent and broadband even more so. We’ve done a survey of the all of South America and this is the case everywhere.

In Tunisia we used fixed numbering to extend telephony to rural areas over mobile telephony. With the privatization we’ve had to revert this because it was anti-competitive. A compromise was made to allow new operators to enter the market and still get universal access. Tunisia is also trying to get the handicapped online, like the blind. This leads to some problems as they are often charged more for specific services.

Gentleman from the Commonwealth: We shouldn’t think of rural as anything other than a geographic designation. These areas are not necessarily poor. There are often companies in those areas that need connectivity and often realize their own connectivity. Sometimes we need to convince them to share that connectivity with local schools and communities. Microfinancing helps bring telecommunications out into rural areas. Even banks are interested as they can expand banking into rural areas by using mobile payments and other forms of telecommunications. Local savings informal savings initiatives are also very good in promoting savings and investments in rural areas. It is important to get the women involved, because educating a woman educates an entire village.

Discussion from the floor:

West African country: Of course we can roll out in rural areas, but how do we deal with maintenance? What if stuff breaks down? Could the panellists explain what they do to stimulate maintenance?

Answer: In the Dominican republic we have the Digital Room project. More than 80% are functioning well. The reason for the success is that we provide the computers and the backup power. But we also establish a local management team that is responsible and we get everyone involved up to the church and local social clubs. The community is made responsible and signs a contract. If the community doesn’t do adequate maintenance we take away the equipment and we give it to someone more deserving.

Answer Saudi Arabia: We set up a fund that is responsible for financing our Universal Access and this includes maintenance. 

Answer Commonwealth: Make sure that the locals are responsible by giving them ownership

Question from Mediterranean: the title of the session implies we need to enrich USF. I would caution to enlarge broadband to USF, because of the cost involved. We need a sustainable environment for investment and market forces should be at the forefront. Broadband services are generally available to those that can pay. Those that aren’t served are not rich enough. What we see is also that people are willing to pay only a fixed amount of their income to telecommunications.

Question from Uruguay: In Uruguay we have provided a laptop for every child (600.000) We also got all schools connected and through the schools we get the kids connected at home as well. We think that this experience can be copied in other countries as well. The logisitical problem was the biggest, but we got it solved through a special fund and it took us only two years to roll out the program. We now want to extend it to secondary schools.

Question from West Africa: In our country we found that if you build it they will come. People in the towns made it possible to bring affordable connections in the rural areas.

Answer Tunisia: In Tunisia we found that in the framework of the Family Computer programme we were able to distribute 50.000 computers, with maintenance included. On the question of universal access there are different ways of financing this.

Question Himalayan nation: We know that Broadband is good for rural areas. But we already are having problems with narrowband. So how are we going to Broadband. Is it worthwhile to leapfrog and go to broadband.

Answer Speaker: In the domincan republic we try to get everyone connected. That is why we establish Computer Rooms, where you can use the internet cheaply or even freely. You should be able to use it regardless of whether you have money. In my country we’re talking about wireless technologies, so we try to get the wifi that uses as much broadband as possible. The macro economic situation is such that we can go to 3G.

CONSUMER PROTECTION - MEETING THE EXPECTATIONS OF THE CONNECTED

Moderator: Mr. C. Cheah, Deputy Chair, Australian Communications and Media Authority (ACMA), Australia

GSR Discussion Paper on Consumer protection: meeting the expectations of the connected, [presentation]
Ms. Rosalind Stevens, Senior Telecom Expert

Interactive panel discussion:

• 
  
  Educated ICT consumers call for clear information on what they get for their money: are market players playing the game?
  
  
  
• 
  
  Protecting the rights of the 21st Century consumer: privacy and online protection issues
  
  
  
• 
  
  Strengthening ICT consumers’ rights and empowering consumers
  
  
  
  

Panelists:

• 
  
  Ms. M. Ajam, Board Member and Head of Information and Consumer Affairs Unit, TRA, Lebanon
  
  
  
• 
  
  Mr. D. Gross, Partner, Wiley Rein LLP
  
  
  
• 
  
  Mr. Md. Mahbubor Rahman, Commissioner, Bangladesh Telecommunications Regulatory Commission (BTRC), Bangladesh
  
  
  
• 
  
  Mr. C. Njoroge, Director General, Communications Commission of Kenya (CCK), Kenya
    
  

mr. Njoroge: The biggest challenge to regulators in developing nations is the underdevelopment of the nation. For instance how do you warn for scams if your population can't read or write.
ms. Ajam: Consumer Affairs regulation is important in our country. It takes quite a while to be agreed in parliament, but we're almost ready. We're also launching a code of practice on Value Added Services. We work on customer complaints as well. We're working with the Ministry of Trade to create a synergy with the general consumer fair trade organisation. They already had a hotline and we worked with them on the problems they encountered with telecom operators. We're hesitating to launch a national campaign until the new consumer laws are in force. But if they are next year, we will start this campaign.
mr. Gross: Talks about the situation in the USA. The USA has a very difficult legaslative situation with regards to consumer protection. Everyone tries to balance the interests of the consumers with the interests of others. Competition is best to serve consumer protection. Doesn't believe that the complaints are rising as quickly as the amount of subscriber. Only 3 per million mobile subs complain to the FCC and 7 per 1 million wireline subs complain the to the FCC. He praises the telecom industry for its efforts to protect consumers. (I wonder who is normally paying his fee, it can't be consumer advocacy groups)
mr. Rahman: Explains all the laws regarding consumer protection in Bangladesh.

Question from the floor weren't really interesting or wildly exciting. yes you need to protect the customer. Competition helps. Tunisia just checks all offers to consumers before they get on the market , to see if they aren't too difficult for consumers.

SESSION 2: IMPACT OF THE FINANCIAL CRISIS ON REGULATION - LESSONS LEARNED

14:00 - 15:30          SESSION 2: IMPACT OF THE FINANCIAL CRISIS ON REGULATION - LESSONS LEARNED

Moderator: Mr. J. Genachowski, Chairman, Federal Communications Commission (FCC), United States

GSR Discussion Paper on Impact of effective regulation on investment: an investor’s perspective,
Ms. Lynne Dorward, CRO, Zain Group

GSR Discussion Paper on Effective regulation: the “stimulus plan” for the ICT sector, [presentation]
Ms. Mandla Msimang, Managing Director, Pygma Consulting

Interactive panel discussion:

• The importance of effective regulation in light of the global economic downturn and the financial crisis
• What regulators can do to attract and secure investment in the sector: hands on or hands off?
• The crisis: a call for government intervention and more public-private partnerships?
• Who will pay for NGN infrastructure now?

Panelists:

• Dr. A. Hiasat, Chairman of the Board and CEO, Telecommunications Regulatory Commission (TRC), Jordan
• Mr. M. Kurth, President, Federal Network Agency, Germany
• Mr. C. Lopez-Blanco, Director of International Office, Telefonica, Spain 

I won't type everything being said here. The presentations will be up later or are up now. So I'll save my wrists and type only the discussions and maybe some original things I hadn't heard yet.

Mod: How can we not let this crisis go to waste?
BNetzA: This industry has already survived one crisis. so I am optimistic. Also if you look at innovation in the industry, it is amazing to see how much there is going on. the Smartphone is a good example. People want to use it and want to use it more. But it is about getting more access to it. Wireless in my opinion is a good solution for many places in the world. Stability of regulation is also important it is not about light touch or even a regulatory holiday. Countries are different, so we will have different regulatory regimes here and there. We should only regulate where market forces work. We must be aware that heavy competition stimulates investment and then we can step away as a regulator. PPP is good but only in areas where there are areas where competition and private investment doesn't work. And we do have to realize that we have intermodal competition. We learned our lessen in the last 15 year. We need to have open access, legal content should be accessible. The openness of networks and interconnection is of great importance.

TRC Jordan: Thanks the writers for the papers. Crisises don't last. They generally take some years, but regulation is for 10 -15 years. Licenses are there for 10-20 years. We can have a look at some exemptions so to encourage investment. Awarding spectrum maybe even for free might stimulate growth too. In the third world we should couple investment in spectrum with the investment in broadband. So that if you get a spectrum license you will also invest in Broadband

Telefonica: One of the central beliefs is that the crisis is the result of a lack of regulation. I cannot agree with that. More regulation by itself is not an advantage. We need to understand the big difference between the financial sector and the telecom sector. The telecom sector is suffering less, probably because we suffered a crisis a few years ago. We know regulation well. We think that regulation must and will play a critical role. We know as both an incumbent and new entrant the role of regulation. We are resilient, but not immune to the crisis. I think the question is how the telecom sector can promote recovery. There are four questions:
- What is the role of the telecom sector. How do we promote new services in the IP world
- How to build the new infrastructures of the 21st century.
- What is the social responsibility of this sector
-the roll of the public sector in the roll out of new networks. There is no one size fits all roll for the government. We think the public sector can play a role, but governments shouldn't violate the traditions of this sector. We as Telefonica have rolled out new networks in Latin America. It was the private sector that delivered that.

The delegate from Cyprus: I agree with Telefonica. I can see the regulator as a facilitator to investment. But I don't see a role for the regulator in investing. Also if we see that a lack of broadband access is a social problem, than that shouldn't be impacted by the regulator. Gentleman from South Asia going on for 5 minutes. Other gentleman: disagrees with the idea that the financial crisis isn't a problem for the telecom sector. Gentleman from Sierra Leone. Would the stimulus not need to go directly to the consumer. Saudi Arabia: It seems to us the wireless industry is making the same mistake as with 3G. They are over investing and they are paying huge amounts of money for buckets of air and I would like your comments on that. Lady asking question on in country consolidations.

Answer Ms. Msimang, the biggest problem is that regulators are not consistent in their approach and are changing regulations half way through an investment. Also I would encourage regulators to do a cost benefit analysis.
Answer ms. Dorward: I had to smile about the statement by Saudi Arabia. the regulator is as much responsible for the high price as the telco. They set floor prices too high and already book the profits in their budgets. We're collectively involved in this.
Answer Telefonica: Regarding the role of public investment I would point to the European Commission who has a balanced approach to public investment in new networks. Furthermore it is about transparancy. It is a good approach. another aspect is that we are resillient sector, but that doesn't mean we don't feel the crisis. For us it is important to look at the new services. Mobile broadband is hit by the crisis. For us it is important that we are facilitated in getting as low as possible costs for investing in new netowrks through co-investment and shared infrastructure.
Answer Jordan: There is no one solution. We could agree to revenue sharing or retail price caps for certain offers. There is not one kind of support a regulator can give to the industry.
Answer BNetzA: Mobile services is growing strong and it is affordable. Just look at China and Africa. How do we guarantee that it will be affordable. If we study it, I think that we can't conclude that free licenses give cheap mobile access. It is about competition. We made 50 billion from the spectrum sale, but we won't from the new spectrum sale. But the German consumers haven't paid for this high investment in spectrum. They have some of the lowest prices in Europe. (OH YEAHH??? Rudolf)

Moderator Julius Genachowski: there is a crisis, but there is also an apportunity. We see examples from all over the world of innovation. We heard about the importance of a good regulatory regime. We heard about the importance of the private sector, of openness and transparancy and technological neutrality. There were many more themes to digest.

Presentation by Rory Macmillan at GSR09

Moderator: Dr. K. Shehadi, Chairman and CEO, Telecommunications Regulatory Authority (TRA), Lebanon

GSR Discussion Paper on Connectivity, Openness and Vulnerability: Challenges facing Regulators, [presentation]
Mr. Rory Macmillan, Founding Partner, Macmillan Keck

Interactive panel discussion:

• Competition, consumers and content: time for converged regulators or greater cooperation?
• Balancing expectations of various stakeholders
• Understanding market transformation to cope with convergence, addressing new regulatory challenges

Three elements

Connectivity We have almost 100% penetration globally with mobile. This is one to one connectivity. The internet is increasing as well and it is many to many communication. 10% increase in broadband equals a 1.3% growth in GDP.

Openness What does it mean, ducts, LLU, Net Neutrlaity. All in all not an easy element

Vulnerability

Revolutions in Network archintecture. We now see telecoms as platforms and the end-to-end argument. You have the IP-hourglass where IP goes over everything and everything over IP. We see a wider range of technologies both in the fixed and in the wireless networks. We have more and more global competition and all kinds of services and applications companies competing with even more problems emerging when content is included. Regulators will have to deal with this.

Competition is the most important element. Regulators need to stimulate this. Regulators need to reduce the costs of physical elements of networks. One of the most important one is spectrum. Coase has argued that we should introduce more trading in spectrum and make it a tradable commodity. It shouldn’t be monopolized by the state or the military. The challenges are to identify what bands and how. But in order to do so Regulators will have to wrestle with broadcasters and military.

Regulators can assist in reducing the costs of building out new physical networks. The Lebanese TRA is an example where it tried to simplify the application for permits. In West Africa we’re using high voltage electricity networks to guide fiber past. Portugal has a reference duct powers.

Soft regulations works as well. For instance rules on how indoor wiring needs to be done.

We also see a change of the role of government where it is a seed investor in new networks. It used to get out of investment, but now it is back again and this creates new problems for regulators. Regulators have already problems with regulators and this may be more in the future.

How open should governments be. How many spectrum licenses. Do we have natural monopolies? How to regulate competition. Focus on the backhaul, how to regulate non-dominant and dominant operators symmetric and asymmetric. Tricky discussions on what to do with the opening up of fixed networks as it may be good business. Both KPN and Benoit Felten of the Yankee Group have argued in this favour

Key issues in vulnerability. Regulators often have no legal powers in many cases to deal with these issues. SIM card registration. Lots of soft power. Lawful interception.

All in all we can say that regulators are faced with a myriad of problems that go up and down the network stack, where it is hard for them to find their role. They have to deal with the wider ICT Ecosystem. It is necessary to identify durable regulatory principles. Regulatory process in a contentious environment.  Regulation is preemptive dispute regulation.

Panel

Panelists:

• Dr. A. Badawi, President, National Telecom Regulatory Authority of Egypt (NTRA), Egypt
• Mr. N. Curien, Autorité de Régulation des Communications Electroniques et des Postes (ARCEP), France (presentation)
• Mr. H. Osuna, President, Comisión Federal de Telecomunicaciones (COFETEL), Mexico
• Mr. R. Mangtani, Director of Regulation, GSM Association

Mod: Do you still see a split between content and networks or is it coming together.

Mex: We are very much up with convergence and want a free flow of content. We need to be forward looking and the changes in the technology sector. This sector comes up with new ideas continuously.

Mod: Do you think that opening up the network is bad for investment? Like some incumbents say.

Mex: If you start with an open mind as an investor you may see that open networks may deliver a higher yield than if you have a closed mind.

Mod: How do you see the benefits of Converence

Egyptian Regulator: (reads a pre-preapared statement that doesn’t really answer anything) Technology and convergence offer new opportunities. And with that there will be new problems and regulatory will often not be able to keep up. New laws need to be technology neutral.

Mod: Maybe France can tell us if it is good to regulate content en telecoms by two different different regulates

ARCEP: we will defend the French language and switch to French. The telecom regulator is more an economic regulator. The content regulator is traditionally more political working on the importance of the role of the French content etc. Maybe in the future we will be integrated as things do change. New laws do dictate that we cooperate as regulators in France. Another element is frequencies and that is where we meet more. It is clear with the Digital dividends and here we have a digital coordination council. So there we meet. Third element is that content isn’t traditional audio visual content any more. It is now on the internet. It may not be wise any more to have regulators who are focussing on different networks.

Mod: What do you think of Next Generation Access. Can the Mobile networks get access and promote this?

GSMA: First I want to correct mr. MacMillan, intelligence needs to be in the network as well as in the edge. For instance we need Session Border controllers. Now, going on we need the new networks based on 3G and 4G and we will be competing with the fixed network

Mod: Mob providers have had a privileged relationship with the customer. Do you see it as a problem that the customer is becoming more liberated

GSMA: well we are opening up a lot more. Walled Garden’s are going away.

Mod: Rory what do you think? Are mobile operators doing enough?

Rory: well it all depends on the audience here… are the operators, or regulators… (laughter). But coming back to the edge and center debate. It is now about doing things in the right place in the network. This may be in the core, but also in the edge. It is about where competition can be usefully supported. The judgement regulators have to make is whether it should allow some control. You can look at Carterphone, but also at iPhone. It is a difficult question.

Mod: I do feel that mobile operators hate to loose their control of the customer.

GSMA: Just look at the iPhone. 2 billion itunes downloads without the operator being involved.

Egypt: Openness increases traffic and increased traffic creates revenues for operators. However we haven’t heard much from mobile operators about this yet as mobile data isn’t that popular yet in my country.

Mexico: we’re in much the same situation as Egypt, though maybe a different phase. More and more companies are understanding that the increase in usage is the result of openness. Consumers will choose the network is the most open.

France: Convergence is a win-win for all. It fills the networks, fixed and mobile. It is a win for consumer if they get more free access. If they get richer access. We need to find a balance so that disputes between stakeholders don’t destroy what we have. We have two large integrated operators in France SFR and France Telecom. Their long time survival depends on their integration. We are very fortunate in France to have effective competition. We do see that all operators are investing in France in new network. The incumbent as well as the challengers. The incumbent may threaten not to , but the challengers make sure they need to.

Mod: on the aspect of vulnerability to what extend have regulators failed until now. We do see a bit of self-regulation.

Rory: the whole control issue has flipped. The customer is now in charge. It used to be the telecomprovider. Customer demand is also firing the innovation in dealing with the vulnerability issue. It is an open question if they regulator should be involved. It is about trust in the end. I wonder if trust is a currency. Trust has to be earned. The more competition the more possibility to earn trust. So regulation may not be.

Comments from the floor:

Gentleman: Licensing is itself very restrictive. We should open it up. Also we should look at our billing structure. Billing is now voice and time based. Data is not really part of it. We need to change our billing relationship in order to make clear that the future lies in data. Gentleman from Middle East. We have this vision as a regulator that the customer will own its own terminal and than choose its own network. We have new building developments where we have convinced the facility provider and the builder to build in the fibre networks from day one and to open this up to all networks. Gentleman from Africa: we agree that competition stimulates development. But competition also brings risks. So what should the regulator do on tarrif structures as there is now risk. Secondly convergence has effect on QoS. What should the regulator do to stimulate QoS. Gentleman from the middle east: I think that IMS will deliver a solution to the vulnerability problems. Operators will need to implement this and deliver the future fixed mobile integration. The next generation IMS will deliver also many controls for content players in the network. Gentleman from Wimax forum: reads a prepared statement. Next generation mobile is here already. Countries can benefit from this technology as soon as regulators assign 2.3Ghz and 2.5Ghz to Wimax operators. Gentleman from the Middle East: We don’t know where convergence is now. We should question the role of the regulator. The regulator is often required to negotiate with the government for instance to get military frequencies. On the other hand we have to be scary enough to the private sector. We have to be multiple things. Technology Neutral is not the answer when it means technology ignorant. Regulators should look like the government, but they should consist of ex-private sector people. They should understand the technology and business well.

ARCEP: Two comments… what the consumer want is to have everything and for a low price (all you can eat) The network also doesn’t care anymore what the content costs. The big issue is therefore to look at the cost of connectivity.

Mexico: We need to change our frame of mind on how to deliver connectivity and not just voice.

Egypt: Convergence is necessary for developing nations. Escpecially if they hope to leap frog.

GSMA: We need convergence, but we need to be aware of the regulatory problems that for instance cloud services bring.

My notes on the report on the GILF 2009.

Dr. Saad Al Barrak CEOof ZAIN was the chairman for yesterdays GILF and he reports back on the forum. I just heard that he became chairman because he has a tendency to ask difficult questions and be direct. Chairman's have to be polite ;-) There are BTW over 900 registered attendants

Some of the results were:

With regards to the Financial Crisis there needs to be investment in broadband for economic recovery and growth. Need for predictable stable regulation. Harmonisation of regulatory frmaeworks regionally, where beneficial. Leverage harmonized radio-frequency spectrum and refarm it as there are many places where the military has too much spectrum and some other entities think they have divine rights on spectrum. Which is an outdated concept belonging in the 18th century. He also asks for light touch regulation and not too heavy handed taxation as some regulators even tax when someone sneezes.

Universal Access. USF is good concept. need more industry role in implementation. Also need to release funds for network roll-out. Technological neutrality - allow investors to choose to reach under/unserved populations. To be very specific or technology biased. Regulators shouldn't copy the mistakes of mobile companies. Mobile companies for a long time forgot they were a service company and not a technological engineering firm, where the customer wasn't at the center. And of course Sustainable business models are needed.

On IP/Telecom Convergence: Need long term horizon view. Set aside significant spectum to support future growth convergence and new services. Experiment with innovation zones of spectrum to test new technologies and approaches. Lighter regulation and flexibility to allow for tech/market evolution. Avoid prescribing specific buisness model. ITU needs to assist member with spectrum, including with white spaces.

Conclusions:  Industry ready and willing to work with regulators and ministries. Seeking collaborative engagement, identify areas of common interests. In Zain we say that collaboration is like a romance. We need to have a romantic relation with our regulators. The aim is for a very vibrant sector to help connect the unconnected.

 There are some remarks from the room. I'll try not to identify the speakers.
A gentleman from south Asia uses quite alot of time to say not too much except that we need investment in underserved areas. A gentleman from the middle east seems not to be to much in agreement with some of the conclusions. Another gentleman from the middle east asks for more coopetition between companies. Another gentleman doesn't want to subsidize as it doesn't enable people to become more capable themselves. It has a parasitic effect in the long term. A representative of a big telco in the Middle East talks about the need for regulation but also a need for some regulators to back off. He says he won't name which regulators because he wants to remain good friends. The Chair of the Lebanese Regulators who is chairing, mr. Kamal Shedadi, says he sees the best regulator as one that doesn't need to be too visible, but that is also dependent upon the companies playing by the rules. This also goes for mobile companies who once were new entrants, but now act like incumbents. The president of one of the largest Sub Saharan African telco's talks about how mobile are the new competitors and then quickly questions whether it is good to local loop unbundling as the mobile operators don't need to unbundle.

Blogging from the ITU's Global Symposium for Regulators

I have arrived at the Global Symposium for Regulators 2009. It is a yearly conference organised by the ITU. I'll try to update you on what is going on here and what is being discussed. It is definitely a different conference. Let me give you some first impressions.

I don't have an opinion on Lebanon yet as I arrived at midnight and my hotel is a short walk from the conference hotel. The conference hotel is an oppulent affair called the Habtoor. They have a $25000 a night penthouse. So, a serious hotel, which was seriously out of my ITU daily allowance. Despite the opulence, there was no coffee for those arriving.

The swag bag was good: the usual memory stick, a book and a DVD on Lebanon and an umbrella. This last bit surprises me as the weather is supposed to be very good for the coming days.

The setup of the room is definitely different than what I am used to from the internet meetings like RIPE or last weeks Ecomm09 in Amsterdam. The seating is arranged with ITU- countries and other members in the front. AT&T is right up front. . I have to sit in the back as I am an observer. There are certain people who have VIP on their badge, which is probably very important for some reason or another. Translation is provided in 5 languages and of course the first speaker spoke Arabic so we do use it.

Interesting news was that yesterdays session of the GILF was opened by the minister of telecoms of Lebanon who wasn't a minister any more by the evening. There is a new minister now in Lebanon.