0 “Next Generation Networks“ and challenges for future regulatory policy to be presented at ITS Conference, Helsinki, August 2003 Dieter Elixmann

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

2 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

3 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

4 Features of NGNs Access Network Media Gateway Call Server Messaging Server Packet Network Application Creation Environment Application Server Media Server NGN reference model

5 Features of NGNs Access and Transport Layer Media Layer Network Service Layer Contol Layer Enterprise Customers Remote Office / Small Office / Home Office Residential Users Mobile Users Softswitch Media Gateway The NGN layered structure

6 Features of NGNs Softswitch Packet Network BRAS TGW AGWMGW PSTN TGW PSTN Telephone UMTS, GPRS PSTN Telephone SIP Telephone PC DSL AGW PSTN Telephone PBX RGW Interplay of different access alternatives with a softswitch based NGN architecture

7 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

8 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 application on top of this Service provider 4 sets up e.g. mailing lists or enables setting up working groups. Example

9 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

10 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

11 NGNs and challenges for telecommunications policy and regulation 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. Network Element User Domain, e.g. corporate network User Domain, e.g. end- customer Service Provider Domain INTI at RPI-S UNI at RPI-N NNI at RPI-N UNI at RPI-N UNI/NNI at RPI-N INTI at RPI-S Network and service related interfaces: functional view

12 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

13 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

14 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

15 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

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

17 NGNs and challenges for telecommunications policy and regulation 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 Interconnection and interoperability (IO)

18 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

19 Annex

20 Features of NGNs PROPRIETARYPROPRIETARY Services & Applications Call Control & Switching Transport Hardware Services, Applications & Features (Management, Provisioning and Back Office) Softswitch Call Control Transport Hardware Circuit-Switched Soft-Switched Open Protocols APIs Solutions are bundled (hardware, software and applications) and are proprietary to vendors Customers are locked-in to their vendor - innovation is more difficult; solutions can be expensive to implement and maintain Customers are free to choose best-in-class products to build their network. Open standards enable innovation and reduce costs. Solutions can come from multiple vendors, at all levels who supply open standards-based products. Concept of the softswitch approach

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