ITU Americas Regional Office Bureau for Telecommunication Development

1. PREPARATORY CONFERENCE ON NATIONAL COMMUNICATIONBrasilia, Brazil – 17 – 19 September 2007Communication Policies in the technological Convergence Environment.The impact of new technologies on an international perspective18 September 2007 ITU Americas Regional Office Bureau for Telecommunication Development

2. The Impact of New Communications Technologies • Technology-driven industries like the communications sector have historically been characterized by steady growth punctuated by “giant leaps” forward, usually when “new” technology is introduced • “Technology is not kind. It does not wait. It does not say please. It slams into existing systems. Often destroying them, while creating new ones” • Joseph Alois Schumpeter (1937)

3. Networks in Transition: Big picture trends • Birth of Broadband • Growth in wireless networks and mobile data services • Mobile overtakes fixed • Convergence of IP-based networks with telephone & mobile networks • End game: towards ubiquitous, pervasive, grid, mesh, wireless networks • anywhere, anytime, anything

4. Factors that underlie the changing environment • Technological change: is a very significant driving force. All networks in the telecommunications, computing and broadcasting sector are shifting on to an all-digital,all IP Platform. • Market change: in particular the liberalization of infrastructure competition encouraging the rapid deployment of new and upgraded networks. • Availability of digital content:in terms of demand for it and its supply. Involvement by users in the supply of their own content – on websites such as YouTube, Wikipedia or MySpace and a huge increase in the consumption of such content, over broadband networks.

5. Today we have a choice between two or more different networks platforms: • Fixed-line, mobile and voice-over-IP for Telephone calls. • Fibre optics, DSL, cable modems or Wi-fi for Broadband Internet Access. • Cable satellite, over-the-air or IPTV for Broadcast Environment.

6. Drivers Affecting Network Change • Lower service charges • Multimedia services • Increasing data traffic • Mobility End User • Network simplification • Lower start-up and operating costs • Competition • Fast service introduction and customization • New service revenue Network Convergence; Distributed Intelligence; New Competitive Landscape Vendors • New products • New markets • New revenues Service Provider • Policies • Regulation • Strategies to stimulate competition Government The communications network is undergoing extensive changes to meet new market and service demands

7. Academic 1G-2G CATV IP IP Corporate Services Corporate GSM Wireless IP Core Voice WWW CDMA PSTN WWW Video Broadband MPEG IP Broadcast Network Evolution Lower cost and innovative services drives network convergence

8. Wireless IP Core PSTN Services Voice Video Corporate WWW Broadcast Implications of Convergence • New and innovative applications and services • New revenues available to application and service providers • Same services are being offered using different means of access • Service providers can compete with other service providers without competing against other forms of providers (network or access providers) • A converged network with IP core and access simplifies network operations • Costs of operating a converged network are lower • New policy and regulatory frameworks • Need coherent regulation of communications infrastructure to deal with the fact that content can be delivered over all networks, network-dependent rules are being overtaken by technology, and markets are merging • Promote competition, protect consumers, and encourage efficient investment

9. Next Generation Network (NGN) • The ITU-T has defined a framework for network evolution, called the Next Generation Network (NGN) • Key Characteristics (Recommendation Y.2001) • Packet-based network • Independence of service-related functions from underlying transport technologies • Interworking with legacy networks via open interfaces • Generalized mobility • Unrestricted access by users to different services and/or service providers [http://www.itu.int/ITU-T/ngn/] NGN is not only a network evolutionary transformation, but also a radical overhaul of the telecommunications environment

10. Convergence of IP-based networks with telephone & mobile networks (NGNs) • Faced with separate infrastructures for voice and data businesses, convergence and growing competition, almost all telecommunication operators and equipment manufacturers are making substantial investments in what can be referred to as IP-Enabled Next Generation Networks (NGNs). • IP‑enabled NGNs can be seen as a logical progression from separate PSTN, mobile and IP-network infrastructures to unified networks for electronic communications based on IP • an extensive area of standardization within ITU • In the coming years, IP‑enabled NGNs will be deployed by numerous service providers around the globe

11. IPTV emerging as part of NGN vision • IPTV is a Content Delivery Service • IP Broadcasting Service: Scheduled Programs delivered by IP-multicast streaming • Video-on-Demand Service: On-demand videos delivered by unicast streaming • Near Video On Demand Service: Programs delivered by IP-multicast in a carrousel manner. • Download Service: Content streamed or downloaded to a storage device on the terminal for later consumption. Source: The IPTV concept model discussed in Japan, contribution from Japan IPTV companies to ITU standardization efforts on IPTV at http://www.itu.int/ITU-T/IPTV/docs/iptv006e.doc

12. What is Content? Popular use: material prepared/ packaged by professionals to be disseminated to large numbers of consumers, such as movies, videos/DVDs, books, newspapers, among others

13. “Content Characteristics” • Until now, typically distributed by mass distribution or broadcast systems; • Often packaged around geographical boundaries (e.g., DVD zones) • Typically bound by national/regional licensing regimes • Often timed release in different geographical markets • Culturally embedded (more on this later)

14. Content Regulatory Issues • Convergence is setting two very different regulatory cultures on a rapid collision course: the highly-interventionist regulatory culture of broadcasting and less interventionist (at least with regard to content) culture of telecommunications • Particularly sensitive topic as the regulation of audiovisual content industries is culturally embedded and tied to national regulatory regimes consistent with cultural and religious values

15. But will Content be King? Running the Numbers • Content: • Hollywood box office revenues (2003): ~ 11 billion (Global 25-30 billion) • Global music industry revenues ~ 35 billion • Videogaming and all software ~ 40 billion • Telecoms: • US only telecom revenues (2003): 348.0 billion! • Global text messaging revenues for 2005: ~ 75 billion

16. So will content be a major economic driver for carriers? • Probably not… We tend to glamorize “content” and underestimate value of core business of point-to-point communications • The “killer application” of communications is person to person (voice, email, messaging, chat) • People are more willing to pay for point-to-point communications than “content” • Not as glamorous as Hollywood but it pays the bills!

17. International Telecommunication Union