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Barriers to Progress in Converged Network and Services Development William H. Melody Managing Director, LIRNE.NET [email protected], www.lirne.net Presentation at Workshop Convergence of Media and ICT in Egypt: Challenges, Policies and Regulation Cairo, 3 May 2006 Finance/ Banking Regional Development Travel & Tourism Manufacturing Health/Medical Government Services Content Broadcast Media Film Libraries Software etc Disaster Management Media & Cultural Sectors Education/Training Applications Electronic Services (Pay TV, VAS, Internet) Multimedia, etc. (Public, User group, Private) Telecommunication Facilities Network (Information Superhighway) Computing / Information Technology Interactivity (Instant & Delayed) Voice Data Sound Graphics Video Telecommunication Equipment Manufacturing INFORMATION INFRASTRUCTURE Significance of Network Unbundling • Industry Sectors - Equipment, Operator Networks, Services • Fixed and Mobile • Basic Network Layers • *Content *Communication Services *Network Protocols, OSS & Management *Equipment & Facility Capability The Dimensions of Convergence on the Information Infrastructure Convergence Sectors Computing Content Telecom Drivers of Convergence •Technology • Industry-Supply • Market-Demand • Policies/Regulation •Industry Specific •Convergent Applications • Finance • Commerce • Education • Health • Publishing • Manufacturing • etc. From Vertical to Horizontal Markets Layer 4: INFORMATION SERVICES Provision of Content Layer 3: COMMUNICATION SERVICES Basic, value-added & access to information services Layer 2: NETWORK MANAGEMENT Protocols and standards for routing & service quality Layer 1:INFRASTRUCTURE FACILITIES Transmission capacity and interfaces to terminals Steps Toward ICT Convergence • • • • • • • Digitalization of the network Mobility Next Generation Internet (Broadband) Media integration (Internet Protocol) E-commerce (QoS) Restructuring of industries Reshaping Policy and Regulation Infrastructure For Digital Economies • Higher Capacity Facilities - Broadband? • Access to High Speed Networks? • Access to Minimal Level of Universal Services? • Access to Minimal Levels of Information? VoIP or Everything Over IP? • The gradual digitalization of the network has been a steady march to providing all forms of electronic communication over a compatible set of protocols, now called IP • From terminals to transmission, switching and local distribution. Network protocols applicable to data, graphics, music, video and finally voice • Why are we surprised and poorly prepared for VOIP? ICT Convergence Regulation • Access to communication channels and access to content • New issues of competition and monopoly • Privacy, security, IPR • Reducing digital divides? • Can content regulation be avoided? • The most effective role for national telecom regulators? Entry Points in Converging Markets IT Data Information Services Communication Services Network Management Infrastructure Facilities Telephone Internet Content Entertainment EoIP From Regulating Competitors to Opening Markets Protection Internati onal Traffic Termina tor Network Integrator “ISPs” Vertically Integrated Incumbent Fixed Services Mobile Services Second Cellular Operator Mobile Services Restricted Infrastructure Rights Transmission Transmission Infrastructure Infrastructure Protection Restricted Services (e.g. excluding Voice or Roaming) VSAT Operators Trunking Operators Open Playing Field Regulation • A transition from monopoly/oligopoly direction to maximizing participation via open access • Target is not technological neutrality, but maximum development of all technology & services advantages • Maximum opportunities for competing firms to achieve public interest goals • Maximum stimulation to market development through both private and public participation Policy/Regulation Reassessment to Create Investment Opportunities (1) • Structural Adjustment, Phase 2 - empowering regulator as change agent • Horizontal Market Definitions - unbundling layers; monopoly nodes • Reassessing Licenses - what needs licensing, why, how? - removing service restrictions • Application of Competition Principles - from regulating firms to regulating markets Policy/Regulation Reassessment to Create Investment Opportunities (2) • Interconnection/Access in Converged Markets - from minutes to Gbits • Pricing and Revenue Settlement Standards - wholesale/retail; origination/termination • Allocation/Use of Public Resources – spectrum, numbers, names, right of way • Public Service Requirements – emergency, security, QoS • Social Subsidy Mechanisms – USO, ADC, etc. World Dialogue on Regulation for Network Economies • Participate in the Dialogue; review and comment on the research, www.regulateonline.org LIRNE.NET, www.lirne.net • A Strategic Collaboration for applied research, training, policy and regulation support, relating to information infrastructure and new network economy development • Center for Tele-Information (CTI), TU Denmark • Economics of Infrastructures, TU Delft, Netherlands • LINK Centre, Wits University, South Africa • LIRNEasia, Colombo, Sri Lanka • LIRNEamericas, Montevideo, Uruguay • Media@lse, London School of Economics, UK