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Communications Regulation in the US and Europe

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International Institute of Communications

Gabrielle Gauthey of Alcatel-Lucent reviews and compares regulatory initiatives and experiences concerned with broadband deployments around the world and particularly between the US and Europe and predicts outcomes

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Gabrielle Gauthey SVP Public Affairs Communications and regulation Time to start over? IIC annual Conference Montreal – October 27, 2009
Agenda Broadcast vs. Telecoms Multimedia content delivery : telcos vs traditional broadcasters Linear / Non linear content : which will prevail? IPTV/triple play : the spearhead of this evolution The role of LTE for mobile multimedia content distribution Regulatory issues Compared regulatory background US vs. EU Regulation effects reality check : Broadband French case Need for regulators cooperation : NGA example Challenges for the future How to combine publi c & private investments Net Neutrality Security and privacy
Broadcast vs. Telecoms
More people watching video on mobile and Internet +70% mobile video users yr to yr +46% online video consumption per user yr to yr The new multimedia service landscape Time shifted TV consumption growing +20% yr to yr Networks Devices End-users & Key enablers Multi tasking becomes common 57% watch TV and go online simultaneously End users want access to their favorite multimedia content over any device, at any time Source: Nielsen – three screen report, Sept 2009 Explosion of user generated content
Media capable Networks and Devices will become ubiquitous Main drivers for online mass media Media is getting personal Source: ALU analysis
Industry anticipates bandwidth needs to grow Example with Ofcom perspective More bandwidth = HDTV + better customer experience + content upload
Very High Speed is both fixed and mobile Stimulated by permanent technology improvement Mb/s [Mbps by subscribers] 0,5 4 8 10 24 100 1 000 500 1 2000 ‘ 02 ‘ 04 ‘ 06 ‘ 08 ‘ 10 2012 GPRS UMTS Fixed HSPA+ WiMAX HSPA ADSL ADSL2 ADSL2+ VDSL2 10 000 Femto Mobile GPON P2P - FE LTE WiMAX P2P – GE NG PON
Wireless data traffic is also exploding IP traffic will increase by 5x by 2013; 90% of all traffic will be video 36% 30.4% 20% 49.7% 30.9% % of users 1.5% Facebook 1% YouTube 4% Social network access 2.6% 4.6% All phones Google Maps Mobile video iPhone Source: MMetrics, March 2008 7x more video consumption on Smartphones, compared to all phones  65% of mobile data traffic will be video by 2013 (150% CAGR) Source: Cisco VNI
Spectrum CAPEX for investment is frequency dependant Relative CAPEX Relative Cell Cellradius defines amount of base-stations / MHz Frequencies / MHz 700 850 2100 2500 3500 5800 700 850 2100 2500 3500 5800 Capex /%:= Capex /%:= Invest in new network 100% 126% 328% 455% 675% 1230% 100% 126% 328% 455% 675% 1230% 1400% 600% 200% 1000% 1200% 1400% 600% 200% 1000% 1200% 12 10 8 6 4 2 0 Radius / Km 12 10 8 6 4 2 0 Radius / Km 4.7 10 km 10 km 2.9 2.9 8.9 8.9 5.5 5.5 4.7 3.9 3.9 700 850 2100 2500 3500 5800 100% 126% 328% 455% 675% 1230% 10 km 2.9 8.9 5.5 4.7 3.9 10 km 2.9 8.9 5.5 4.7 3.9 10 km 2.9 8.9 5.5 3.9 Quelle : SCF Studie ( www.digitaldividend.eu ) T - Mobile Quelle : SCF Studie ( www.digitaldividend.eu ) T - Mobile
Regulatory issues
European Union United States Broadband Access fully Regulated Newly Revised Regulatory Framework Policy & Regulatory Frameworks CompetitiveTelco vs. Cable Access Infras Net Neutrality Debate Broadband Access NOT regulated Why are the US and EU approaches to broadband so different? Lower Density, Aerial fibre Newly Revised Regulatory Framework Only one Access Infra High density, Buried fibre
EU electronic communications regulatory framework Goals Tools Phase out dominance of historical state-owned telecommunications monopolies Foster competition, investments and innovation in EU markets Improve EU economies productivity and growth What is regulated? Market analysis procedure – 7 relevant markets Identification of bottlenecks and players with Significant Market Power – SMP – remedies proposal Remedies (e.g. asymmetric, ex-ante regulations) notified to EU Commission through art 7 procedure – EU Comm can vetoe remedies National Regulatory Authorities coordination (ERG) Market analysis and remedies : Copper :LLU (market n° 11) , bitstream wholesale (market n° 12) NGA : access to passive infra (market n°4), bitstream wholesale (market 5) Mobile Termination rates (market n° 7), call origination (mvno)
Broadband regulation in the US 2003 Triennial Review Order FCC determined that unbundling should not apply to broadband. For all intents and purposes broadband unbundling via regulatory mandate does not exist. 2005 FCC eliminating most regulation from the broadband marketplace, by finding that all broadband services – wireline, wireless, and satellite – were exclusively “information services.” This series of proceedings ensured all broadband service providers operated on a level playing field, and created regulatory symmetry with cable modem service, which had previously been identified by the Commission as an information service (i.e. no “open access,” or forced wholesaling of the telecommunications component of a broadband service to competitive ISPs).
Dynamic of the french broadband market 2002 2003 2004 2005 2006 24Mb/s 8Mb/s 1Mb/s 512kb/s 1st TV/DSL offer 1st telephony /DSL offer 1st fixed-mobile Convergent offer ADSL ADSL2+ Evolution of broadband technologies and services 1st broadband/ DSL offer 1999 … DSL coverage as of June 30 2009 2007 2008/2009 FTTH 100 Mb/s 1st Very high speed FTTH offer Growth of the broadband access base
Impact on unbundling 37% of French central offices are unbundled through Local Communities backhaul networks 913 773 988 CO unbundling : alternative carriers backhaul networks CO unbundlig : alternative carriers backhaul networks + France Telecom dark fiber rental CO unbunling : local community bakchaul network 14,4 M households 2,4 M households 4,0 M households 20,9 M households Number of unbundled CO’s according to backhaul network ownership
NGA: Why « ex-ante » regulation is necessary? Risk of an irreversible situation Huge investment (250 B€ - 350 B€) Competitive advantage to historical players Market share Infrastructure ownership No spontaneous infrasharing agreements/coinvestment by operators Need to grant access to essential infrastructures Ducts Last Drop Regulatory Debates Last drop sharing Flexibility point implementation Backhaul openness Competition model (active infrastructure based vs services) Need to have a coordinated approach among european regulatory bodies Article 7 procedure ERG common positions
Reality check : regulated duct sharing and Wholesale Bitstream Access Under consideration MDF to cabinet (Proposal) MDF to cabinet Not yet. Following an appeal, implementation deadline postponed by court Research under way Up to 30 Mbps Trials only FTTC+VDSL2; Research under way for other FTTx VDSL2 Duct Sharing : technology neutral WBA : technology neutral
Reality check : FTTH last drop sharing including in-house wiring France - Sharing of the terminating segment (from the mutualisation or handover point) - Model agreement between landlord and the operator deploying in-building fibre (“the building operator”) - Obligations of the building operator to the property owner to equip the building and to 3rd-party operators to provide access to its network - New buildings will have to be prewired with fibre starting in 2010 Spain Draft decision: symmetrical obligation for first operator to deploy fibre within a building to share network elements and equipment on reasonable request. Portugal Draft proposals for legislation expected in 2009 Finland Draft decision + in-building wiring is the property of the building owners/housing associations Italy Installation of in-building fibre does not require property owner's prior permission
Challenges for the future
How to combine public and private investments? Transition from broadband to Next Generation Access networks is a revolution which represents a dramatic change in the level of investments: 250 to 300 B€ will be required to roll-out NGA in the EU, 23 B€ in Australia Risk of broadening the digital gap between regions is high and this is why many nations have decided to put this issue high on their recovery agenda and digital economy plans From a policy perspective the key driver of NGA success is a close collaboration between all stakeholders -incumbents and new entrants, national and local government, vendors and users From an NGA investment perspective, Public Private Partnerships are gaining worldwide traction both at national and local level as they allow : Anticipation of the future by rolling-out of backhaul capacities Cost-effective roll-outs in lowering market entry barriers, preserving diversity and innovation More competition and differentiation Acceleration of NGA coverage in grey and white areas
Recovery & Digital Economy plans – How to combine public and private investments? Public initiatives are emerging worldwide Greek FTTH Public-Private Partnership 2.1 B € investment Target : 2 million homes passed by 2012 Digital Britain 2 Mb/s universal broadband access service in 2012 200 M £ NGA fund is created to speed-up deployments Local Communities involvement in low density areas Italian broadband plan 800 M € to be allocated to achieve broadband coverage in Italy French digital plan 750 M€ will be invested by Caisse des Dépôts et Consignations to roll-out shared optical loops + Coming broadband and digital plans in Germany, Poland, Russia,... China’s recovery plan 4 Trillion RMB 09-10 ICT included in pillar industries program Australian National Broadband Network 100 MB/s to 90% of subscribers 43 B A$ ( 23 B €) New Zealand “Broadband Investment Initiative” 1.5 B NZ $ investment plan announced March 09 American Recovery and Reinvestment Act 4.7 B $ to provide broadband to underserved areas 2.5 B $ to fund broadband infrastrusture in rural areas 4.5 B$ for electric grid modernization (“smart grids”) 2 B $ for health IT programs 29 B $ for transportation programs (highways safety, fraffic monitoring,...) EU recovery plan Achieve 100% broadband coverage in EU by 2010 1 B € earmarked for rural broadband Creation and/or upgrade of access, backhaul and passive infrastructure
Net Neutrality United States vs. Europe Consumers are entitled to Access to lawful Internet content of their choice; Run applications and use services of their choice, subject to the needs of law enforcement; Connect their choice of legal devices that do not harm the network; Competition among network providers, applications and service providers, and content providers. Broadband providers ( Sept 15th 09 proposal) cannot discriminate against particular Internet content or applications - Non discrimination must be transparent about their network management practices - Transparency; Deceptive consumer practice New regulatory framework Transparent discrimination allowed Minimum set of Quality of Service requirements Information about any traffic monitoring or shaping and their impact on service quality.” Freedom of expression, access to information European Convention for the Protection of Human Rights and Fundamental Freedoms Antitrust aspect and abuse of market power Non-discrimination of information and service conditions provided to other providers In the new regulatory framework, power is given to the NRA to resolve dispute between “content providers” and undertakings providing electronic communications networks or services FCC: 6 principles Treaty and Directives
Security is a complex puzzle of legislative, regulatory & data protection policy Security Regulation Personal Data Protection Privacy Protection Network Integrity Legal Interception Content Protection Access to data: Always conditional Prior notice & consent before usage Protection of critical assets, NP obligations NGN interoperability with Authorities Internet rights & Status of IP Addresses
www.alcatel-lucent.com Thank you!

More Related Content

Communications Regulation in the US and Europe

  • 1. Gabrielle Gauthey SVP Public Affairs Communications and regulation Time to start over? IIC annual Conference Montreal – October 27, 2009
  • 2. Agenda Broadcast vs. Telecoms Multimedia content delivery : telcos vs traditional broadcasters Linear / Non linear content : which will prevail? IPTV/triple play : the spearhead of this evolution The role of LTE for mobile multimedia content distribution Regulatory issues Compared regulatory background US vs. EU Regulation effects reality check : Broadband French case Need for regulators cooperation : NGA example Challenges for the future How to combine publi c & private investments Net Neutrality Security and privacy
  • 4. More people watching video on mobile and Internet +70% mobile video users yr to yr +46% online video consumption per user yr to yr The new multimedia service landscape Time shifted TV consumption growing +20% yr to yr Networks Devices End-users & Key enablers Multi tasking becomes common 57% watch TV and go online simultaneously End users want access to their favorite multimedia content over any device, at any time Source: Nielsen – three screen report, Sept 2009 Explosion of user generated content
  • 5. Media capable Networks and Devices will become ubiquitous Main drivers for online mass media Media is getting personal Source: ALU analysis
  • 6. Industry anticipates bandwidth needs to grow Example with Ofcom perspective More bandwidth = HDTV + better customer experience + content upload
  • 7. Very High Speed is both fixed and mobile Stimulated by permanent technology improvement Mb/s [Mbps by subscribers] 0,5 4 8 10 24 100 1 000 500 1 2000 ‘ 02 ‘ 04 ‘ 06 ‘ 08 ‘ 10 2012 GPRS UMTS Fixed HSPA+ WiMAX HSPA ADSL ADSL2 ADSL2+ VDSL2 10 000 Femto Mobile GPON P2P - FE LTE WiMAX P2P – GE NG PON
  • 8. Wireless data traffic is also exploding IP traffic will increase by 5x by 2013; 90% of all traffic will be video 36% 30.4% 20% 49.7% 30.9% % of users 1.5% Facebook 1% YouTube 4% Social network access 2.6% 4.6% All phones Google Maps Mobile video iPhone Source: MMetrics, March 2008 7x more video consumption on Smartphones, compared to all phones  65% of mobile data traffic will be video by 2013 (150% CAGR) Source: Cisco VNI
  • 9. Spectrum CAPEX for investment is frequency dependant Relative CAPEX Relative Cell Cellradius defines amount of base-stations / MHz Frequencies / MHz 700 850 2100 2500 3500 5800 700 850 2100 2500 3500 5800 Capex /%:= Capex /%:= Invest in new network 100% 126% 328% 455% 675% 1230% 100% 126% 328% 455% 675% 1230% 1400% 600% 200% 1000% 1200% 1400% 600% 200% 1000% 1200% 12 10 8 6 4 2 0 Radius / Km 12 10 8 6 4 2 0 Radius / Km 4.7 10 km 10 km 2.9 2.9 8.9 8.9 5.5 5.5 4.7 3.9 3.9 700 850 2100 2500 3500 5800 100% 126% 328% 455% 675% 1230% 10 km 2.9 8.9 5.5 4.7 3.9 10 km 2.9 8.9 5.5 4.7 3.9 10 km 2.9 8.9 5.5 3.9 Quelle : SCF Studie ( www.digitaldividend.eu ) T - Mobile Quelle : SCF Studie ( www.digitaldividend.eu ) T - Mobile
  • 11. European Union United States Broadband Access fully Regulated Newly Revised Regulatory Framework Policy & Regulatory Frameworks CompetitiveTelco vs. Cable Access Infras Net Neutrality Debate Broadband Access NOT regulated Why are the US and EU approaches to broadband so different? Lower Density, Aerial fibre Newly Revised Regulatory Framework Only one Access Infra High density, Buried fibre
  • 12. EU electronic communications regulatory framework Goals Tools Phase out dominance of historical state-owned telecommunications monopolies Foster competition, investments and innovation in EU markets Improve EU economies productivity and growth What is regulated? Market analysis procedure – 7 relevant markets Identification of bottlenecks and players with Significant Market Power – SMP – remedies proposal Remedies (e.g. asymmetric, ex-ante regulations) notified to EU Commission through art 7 procedure – EU Comm can vetoe remedies National Regulatory Authorities coordination (ERG) Market analysis and remedies : Copper :LLU (market n° 11) , bitstream wholesale (market n° 12) NGA : access to passive infra (market n°4), bitstream wholesale (market 5) Mobile Termination rates (market n° 7), call origination (mvno)
  • 13. Broadband regulation in the US 2003 Triennial Review Order FCC determined that unbundling should not apply to broadband. For all intents and purposes broadband unbundling via regulatory mandate does not exist. 2005 FCC eliminating most regulation from the broadband marketplace, by finding that all broadband services – wireline, wireless, and satellite – were exclusively “information services.” This series of proceedings ensured all broadband service providers operated on a level playing field, and created regulatory symmetry with cable modem service, which had previously been identified by the Commission as an information service (i.e. no “open access,” or forced wholesaling of the telecommunications component of a broadband service to competitive ISPs).
  • 14. Dynamic of the french broadband market 2002 2003 2004 2005 2006 24Mb/s 8Mb/s 1Mb/s 512kb/s 1st TV/DSL offer 1st telephony /DSL offer 1st fixed-mobile Convergent offer ADSL ADSL2+ Evolution of broadband technologies and services 1st broadband/ DSL offer 1999 … DSL coverage as of June 30 2009 2007 2008/2009 FTTH 100 Mb/s 1st Very high speed FTTH offer Growth of the broadband access base
  • 15. Impact on unbundling 37% of French central offices are unbundled through Local Communities backhaul networks 913 773 988 CO unbundling : alternative carriers backhaul networks CO unbundlig : alternative carriers backhaul networks + France Telecom dark fiber rental CO unbunling : local community bakchaul network 14,4 M households 2,4 M households 4,0 M households 20,9 M households Number of unbundled CO’s according to backhaul network ownership
  • 16. NGA: Why « ex-ante » regulation is necessary? Risk of an irreversible situation Huge investment (250 B€ - 350 B€) Competitive advantage to historical players Market share Infrastructure ownership No spontaneous infrasharing agreements/coinvestment by operators Need to grant access to essential infrastructures Ducts Last Drop Regulatory Debates Last drop sharing Flexibility point implementation Backhaul openness Competition model (active infrastructure based vs services) Need to have a coordinated approach among european regulatory bodies Article 7 procedure ERG common positions
  • 17. Reality check : regulated duct sharing and Wholesale Bitstream Access Under consideration MDF to cabinet (Proposal) MDF to cabinet Not yet. Following an appeal, implementation deadline postponed by court Research under way Up to 30 Mbps Trials only FTTC+VDSL2; Research under way for other FTTx VDSL2 Duct Sharing : technology neutral WBA : technology neutral
  • 18. Reality check : FTTH last drop sharing including in-house wiring France - Sharing of the terminating segment (from the mutualisation or handover point) - Model agreement between landlord and the operator deploying in-building fibre (“the building operator”) - Obligations of the building operator to the property owner to equip the building and to 3rd-party operators to provide access to its network - New buildings will have to be prewired with fibre starting in 2010 Spain Draft decision: symmetrical obligation for first operator to deploy fibre within a building to share network elements and equipment on reasonable request. Portugal Draft proposals for legislation expected in 2009 Finland Draft decision + in-building wiring is the property of the building owners/housing associations Italy Installation of in-building fibre does not require property owner's prior permission
  • 20. How to combine public and private investments? Transition from broadband to Next Generation Access networks is a revolution which represents a dramatic change in the level of investments: 250 to 300 B€ will be required to roll-out NGA in the EU, 23 B€ in Australia Risk of broadening the digital gap between regions is high and this is why many nations have decided to put this issue high on their recovery agenda and digital economy plans From a policy perspective the key driver of NGA success is a close collaboration between all stakeholders -incumbents and new entrants, national and local government, vendors and users From an NGA investment perspective, Public Private Partnerships are gaining worldwide traction both at national and local level as they allow : Anticipation of the future by rolling-out of backhaul capacities Cost-effective roll-outs in lowering market entry barriers, preserving diversity and innovation More competition and differentiation Acceleration of NGA coverage in grey and white areas
  • 21. Recovery & Digital Economy plans – How to combine public and private investments? Public initiatives are emerging worldwide Greek FTTH Public-Private Partnership 2.1 B € investment Target : 2 million homes passed by 2012 Digital Britain 2 Mb/s universal broadband access service in 2012 200 M £ NGA fund is created to speed-up deployments Local Communities involvement in low density areas Italian broadband plan 800 M € to be allocated to achieve broadband coverage in Italy French digital plan 750 M€ will be invested by Caisse des Dépôts et Consignations to roll-out shared optical loops + Coming broadband and digital plans in Germany, Poland, Russia,... China’s recovery plan 4 Trillion RMB 09-10 ICT included in pillar industries program Australian National Broadband Network 100 MB/s to 90% of subscribers 43 B A$ ( 23 B €) New Zealand “Broadband Investment Initiative” 1.5 B NZ $ investment plan announced March 09 American Recovery and Reinvestment Act 4.7 B $ to provide broadband to underserved areas 2.5 B $ to fund broadband infrastrusture in rural areas 4.5 B$ for electric grid modernization (“smart grids”) 2 B $ for health IT programs 29 B $ for transportation programs (highways safety, fraffic monitoring,...) EU recovery plan Achieve 100% broadband coverage in EU by 2010 1 B € earmarked for rural broadband Creation and/or upgrade of access, backhaul and passive infrastructure
  • 22. Net Neutrality United States vs. Europe Consumers are entitled to Access to lawful Internet content of their choice; Run applications and use services of their choice, subject to the needs of law enforcement; Connect their choice of legal devices that do not harm the network; Competition among network providers, applications and service providers, and content providers. Broadband providers ( Sept 15th 09 proposal) cannot discriminate against particular Internet content or applications - Non discrimination must be transparent about their network management practices - Transparency; Deceptive consumer practice New regulatory framework Transparent discrimination allowed Minimum set of Quality of Service requirements Information about any traffic monitoring or shaping and their impact on service quality.” Freedom of expression, access to information European Convention for the Protection of Human Rights and Fundamental Freedoms Antitrust aspect and abuse of market power Non-discrimination of information and service conditions provided to other providers In the new regulatory framework, power is given to the NRA to resolve dispute between “content providers” and undertakings providing electronic communications networks or services FCC: 6 principles Treaty and Directives
  • 23. Security is a complex puzzle of legislative, regulatory & data protection policy Security Regulation Personal Data Protection Privacy Protection Network Integrity Legal Interception Content Protection Access to data: Always conditional Prior notice & consent before usage Protection of critical assets, NP obligations NGN interoperability with Authorities Internet rights & Status of IP Addresses

Editor's Notes

  1. Agenda Pages This page allows for the listing of the sections within a presentation.
  2. Europe – Fortement régulé Directives Access, Universal Services, Market Definitions – Market 4 and 5 Needs for regulation; SMP regulation US Dérégulation progressive since there is only 1,5 platform – Cable network being partially deployed
  3. Scalability : GPON = distributed ethernet switch with strong shared fiber advantages Passive Outside plant – optimized fiber management 3. Cost optimized FTTH technolology: ducts & fiber, CO handling 4. Optimised open access with GPON: sharing of dark fiber without the need of collocating Active equipment.
  4. Example of BB market in France. Pour commencer, rappel Marché du haut débit reste dynamique Croissance soutenue : + 30% en un an Concurrence soutenue environ 50% parts de marché opérateurs alternatifs (stable) dégroupage 3,5 M au 01/10 (+ 1 M en un an) câble : 6% du marché Couverture quasi complète du territoire : 98% en fin d’année [WiMax arrive pour le reste] 55% zone concurrence [70% en 2008 avec RIP et LFO] (se préparer à répondre LFO, consultation en cours)
  5. American Recovery and Reinvestment Act 4.7 B $ to provide broadband to underserved areas 2.5 B $ to fund broadband infrastrusture in rural areas 4.5 B$ for electric grid modernization (“smart grids”) 2 B $ for health IT programs 29 B $ for transportation programs (highways safety, fraffic monitoring,...) EU recovery plan Achieve 100% broadband coverage in EU by 2010 1 B € earmarked for rural broadband Creation and/or upgrade of access NATIONAL PLANS IN EUROPE: Greek FTTH Public-Private Partnership 2.1 B € investment Target : 2 million homes passed by 2012 Digital Britain 2 Mb/s universal broadband access service in 2012 200 M £ NGA fund is created to speed-up deployments Local Communities involvement in low density areas Italian broadband plan 800 M € to be allocated to achieve broadband coverage in Italy French digital plan 750 M€ will be invested by Caisse des Dépôts et Consignations to roll-out shared optical loops + Coming broadband and digital plans in Germany, Poland and also from Russia,... China’s recovery plan 4 Trillion RMB 09-10 ICT included in pillar industries program Australian National Broadband Network 100 MB/s to 90% of subscribers 43 B A$ ( 23 B €) New Zealand “Broadband Investment Initiative” 1.5 B NZ $ investment plan announced March 09