“Next Generation Networks“ and challenges for future regulatory policy

1. “Next Generation Networks“ and challenges for futureregulatory policy to be presented at ITS Conference,Helsinki, August 2003 Dieter Elixmann

2. Outline of the paper 1 Introduction 2 Characteristics of traditional voice telephony networks 3 Characteristic features of NGNs 4 Actual solutions to get interoperability of circuit-switched and packet-switched networks in NGNs 5 NGNs and their implications for provision of services and applications 6 Directions of deployment of NGN architectures 7 Challenges for telecommunications policy and regulation 8 Conclusions

3. Objectives • Technical developments regarding telecommunications networks • Economic implications of NGNs • Challenges for telecommunications policy in particular w.r.t. network access, interconnection and unbundling regimes

4. Circuit switched networks • Transport layer; control (signalling) layer • Different networks, however, deep integration • Conveyance of voice information linked to transport of signalling information • Intelligence within the network • Central control • Provision of new services requires the support of standards in all interfaces as well as in all central control units The functions that may be added to the network are defined by the owners of the network and limited by the nature of the network

5. ApplicationServer MessagingServer Call Server ApplicationCreationEnvironment Access Network Media Gateway Packet Network Features of NGNs NGN reference model MediaServer

6. Features of NGNs The NGN layered structure Network ServiceLayer Softswitch Contol Layer Media Gateway Media Layer Access and Transport Layer EnterpriseCustomers Remote Office / Small Office /Home Office ResidentialUsers MobileUsers

7. RGW Softswitch PacketNetwork TGW TGW DSL UMTS,GPRS PSTN PSTN PSTN Telephone SIP Telephone PSTN Telephone PSTN Telephone PSTN Telephone AGW AGW MGW PC BRAS PBX Features of NGNs Interplay of different access alternatives with a softswitch basedNGN architecture

8. NGNs and implications for service provision • Very different features compared to PSTN/ISDN... • ...in particular, separation of transport and control/signalling function • Separation of service and transport • A variety of new market opportunities, e.g. • Operation of specific network elements/services • Specification of services independent from the operator of the transport network • Services can be created “at the edge” of the network • Break-up of value chain, potential for disintegration of service provision

9. Disintegration of service provision • Service provider 1 is responsible for the transport from sender to receiver • Service provider 2 additionally carries out an error correction. • Service provider 3 puts an e-mail application on top of this • Service provider 4 sets up e.g. mailing lists or enables setting up working groups. Example

10. NGNs and challenges for telecommunications policy and regulation • Access to and interconnection of networks, network functions • Relevant markets, vertical integration • Essential facilities • Unbundling policy • Mandated interconnection arrangements • Interconnection and interoperability Issues analysed in the paper

11. NGNs and challenges for telecommunications policy and regulation • A multitude of Interconnection Points (RPIs) • Location of interfaces: „within“ the network, close to the user, within terminal devices • New RPIs because Service Providers need specific access to and interconnection of control or management functions of the network • Interconnection will be demanded by a far more differentiated number of entities • Network related RPI components... • ...but also service related Access to and interconnection of networks, network functions: a-priori

12. INTIat RPI-S INTIat RPI-S INTIat RPI-S Network Element Network Element UserDomain,e.g. corporatenetwork UserDomain,e.g. end-customer UNIat RPI-N UNIat RPI-N NNIat RPI-N ServiceProviderDomain INTIat RPI-S UNI/NNI at RPI-N NGNs and challenges for telecommunications policy and regulation Network and service related interfaces: functional view Provided a RPI-N has a real standardised interconnection interface associated with it carrying higher layer interface protocols for a RPI-S, the provider of the interface associated with the RPI-N is not necessarily responsible for the corresponding interface associated with the RPI-S.

13. NGNs and challenges for telecommunications policy and regulation • New „relevant markets“ may arise • Layers • Hierarchical structure within a layer • Vertical integration: dominant firm may • restrict access • offer unfavourable terms • degrade QoS

14. NGNs and challenges for telecommunications policy and regulation • Access to IP transport platform and transport of IP packets (potentially yes) • Termination of IP traffic to an end user (probably yes) • Call servers and gateways (probably no) • Network and service related interfaces ? • Access to locations of facilities necessary • Numbers and addresses (probably no) Essential facilities: agenda for examination

15. NGNs and challenges for telecommunications policy and regulation • Integrity of the network, data security • Technical neutrality in an environment with vendor specificity, short technological life cycles • Number of entities involved in particular hardware/network functions/services to be unbundled potentially greater than 2 • Incentives to invest Frame of an unbundling policy

16. NGNs and challenges for telecommunications policy and regulation • IP-Backbone interconnection • no distortions to be expected... • ...unless there is a dominant market position Mandated interconnection arrangements? • National - national ISPs: no bottleneck to be expected • Regional/local - Regional/local ISPs: no bottleneck to be expected

17. NGNs and challenges for telecommunications policy and regulation • National - Regional/local ISPs • :unlikely • Customers have high preference for universal connectivity • (Usually) customers have choice • Technically, discrimination among packets difficult “ ” • :possible • Transit may be unfavourable for small ISP • Degradation of QoS “ ”

18. NGNs and challenges for telecommunications policy and regulation Interconnection and interoperability (IO) • Presumably no problem in a competitive market • If dominant market position exists incentives to enforce particular norms and standards • Ex-ante imposition of broad IO requirements may impede market development • Role of regulation: • organisation and monitoring of standard setting • development of conflict resolution mechanisms • If standard industry protocols exist: who should be responsible for protocol conversions? • Originating provider... • ...s.t. both are using a standard industry protocol

19. Conclusions • Technically, fundamental differences between NGNs and traditional telecommunications networks • A multi-operator, multi-service provider and multi-vendor environment • Presumable long transition period, i.e. co-existence of “old” and “new” networks • New essential facilities? • Complex access, interconnection and unbundling issues, especially in the case of market dominance

20. Annex

21. Circuit-Switched Soft-Switched Solutions are bundled(hardware, softwareand applications)and are proprietaryto vendors Services, Applications & Features (Management,Provisioning andBack Office) Solutions can come from multiple vendors,at all levels who supply open standards-based products. PROPRIETARY Services &Applications Open Protocols APIs SoftswitchCall Control Call Control &Switching Customers arelocked-in to theirvendor - innovationis more difficult;solutions can beexpensive to implement and maintain Customers are free tochoose best-in-class products to buildtheir network. Open standards enable innovation and reduce costs. Open Protocols APIs TransportHardware TransportHardware Features of NGNs Concept of the softswitch approach

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