Regulation of NGN New Approaches to Interconnection

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Regulation of NGNNew Approaches to
Interconnection

• John Horrocks
• ECC TRIS Chairman, Consultant to DTI
• 44 1483 797807
• john_at_horrocks.co.uk

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Regulatory concepts

• Technology independence
• Cost based termination
• Only regulate where there is significant market
  power
• BUT..

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The regulatory problems are

• Costs are technology dependent so cost based
  termination conflicts with technology
  independence
• The significant market power doctrine is too hard
  to apply as there are many micro-markets like
  termination
• No theoretical justification for cost based
  termination
• Current approaches are inevitably technology
  based eg emergency access
• New wine in old bottles?

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Where is the market now?

• Confused - crossing a discontinuity - conflicting
  and different models
• Internet has separated services and connectivity
  and so leapfrogged developments by 20 years
• Users can self-provide services - peering
• Telcos want to preserve service revenue and are
  fighting a rear-guard action

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Why do we need a new model?

• We need to accommodate new services
• We need to simplify interconnection
• We need to reduce charging costs
• The cost basis has changed and the existing model
  was designed for expensive core networks
• The retail market is changing with subscriptions
  and bundled calls and is now out of line with
  interconnection
• Running a service-aware backbone for multiple
  services will be organisationally complex

It is time to change!
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Costs old and new
Distance and time dependent call charges
Old
Carrier selection Freephone
Regulation is based on this!
Backbone
Access
Access
Line rental
New
Access
Access
Backbone
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Three questions

• How should the telco world change now?
• Where should the telcos go?
• What are the telcos thinking about now?

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Three answers

• The case for zero/low rate termination
• ECC Ideas on a new model for interconnection -
  ECC Report 75
• Current NGN options/intentions

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Zero/low termination rates

• Maximises competition - all revenue from own
  subscribers
• Regulators no longer need to control the market -
  they can withdraw
• Interconnection becomes simpler
• Promotes fixed-mobile convergence and portability
• More incentives to invest in new technology as
  full benefit from cost reductions
• Achieves technology neutrality
• .but need to adjust call origination (2)

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Three answers

• The case for zero/low rate termination
• ECC Ideas on a new model for interconnection -
  ECC Report 75
• Current NGN options/intentions

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ECC Report 75 A long term model

• High quality interconnected service platform - a
  new utility
• Full separation of transport and services
• Transport consists of access and backbone
• Interconnection charging based on capacity and
  quality - not service
• Uncontrolled service creation from the normal
  customer interface (friendly to 3rd parties and
  innovation)

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The new model
Retail subscription or usage
SP
Sender keeps all
SP
Access subscription or usage
Access subscription or usage
Access
Capacity charge
Capacity charge
Peering
Peering
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.but

• There are still some very expensive calls, eg
  premium rate, non-liberalised countries and
  mobile
• We need a smooth migration for any changes
• So we cannot avoid a system of parallel running

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The Migration Concept

• A growing area with the new interconnection model
• Operators can join at any time
• Gateways to the old model
• Allows parallel operation of old and new models
  and overlays
• The old model will continue but diminish
  indefinitely

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Calls to the old model
Interconnection Call charge
Retail subscription or usage
Retail subscription or usage
SP
Access subscription or usage
Gateway
Old model
Access
Capacity charge
Capacity charge
Peering
Peering
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Three answers

• The case for zero/low rate termination
• ECC Ideas on a new model for interconnection -
  ECC Report 75
• Current NGN options

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NGN Interconnection parameters
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NGN Interconnection options

• Circuit switched only
• All walled gardens
• Private IP domain with own DNS/ENUM (GSMA IPX)
• Private IP domain with public DNS/ENUM
• Add service hubbing (GSMA)

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Walled gardens - copying PSTN
Public (User ENUM)
DNS (ENUM)
Public Internet
NAT
LAN
Call Server
Call Server
Call Server
Call Server
NGN-1
NGN-2
NGN-3
NGN-4
Private IP
Private IP
Private IP
Private IP
Private IP
Network termination point (Gateway)
Session BorderControllers
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GSMA - IPX (private IP)
Public (User ENUM)
Public Internet
NAT
LAN
Call Server
Call Server
Backbone
NGN-1
NGN-4
Private IP
Public IP
Private IP
Private IP
NGN (Carrier ENUM)
Network termination point (Gateway)
Number ? SIP of serving network server SIP ?
public IP
NB Preliminary option only, not confirmed
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GSMA - IPX (private IP) public DNS/ENUM
Public (Carrier ENUM)
DNS (ENUM)
Number ? SIP of serving network server SIP ?
public IP
Public Internet
NAT
Call Server (with barrier)
Call Server (with barrier)
LAN
Backbone
NGN-1
NGN-4
Private IP
Private IP
Public IP
Private IP
SIPltE164gt_at_ltservingnetwork servergt
Network termination point (Gateway)
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GSMA - IPX (private IP) Hubs
Public (User ENUM)
Public Internet
NAT
Hub
Hub
LAN
Call Server
Call Server
Backbone
NGN-1
NGN-4
Private IP
Public IP
Private IP
Private IP
SIPltE164gt_at_ltservingnetwork servergt
NGN (Carrier ENUM)
Network termination point (Gateway)
Number ? SIP of serving network server SIP ?
public IP
NB Preliminary option only, not confirmed
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Intermediate thoughts

• No clear direction yet, telcos only doing "PSTN
  on IP" TV delivery
• Beyond E.164, relationship to Internet needs much
  thought as the Internet controls user names
• Users only need connectivity software
  DNS/ENUM, they do not really need service
  providers, service provision is in decline
• If users self provide, NGN becomes "Internet
  overflow network"
• Telcos cannot compete with their customers