- 0 - Dead Sea November 2008 Regulatory Enablers of Convergence and NGN Presentation by: Eng. Khaled Al Twergi Convergence to Jordan 2008

- 1 - Table of Contents  Definitions (Convergence & NGN)  General regulation of Convergence & NGN  Specific regulation of Convergence & NGN  Conclusion

- 2 - The common understanding of convergence in the telecom industry is when media and telecom services overlap Convergence Definition Fixed Networks Data Networks Mobile Networks Next Generation Networks Satellite Transmission Voice Calls Data Transmission (internet content, , picture, SMS, MMS, special data, etc…) Media (Radio, TV, etc…)

- 3 - Key convergence enablers are Next Generation Networks which will replace the legacy core network with an all-IP based core Definition of NGN Core 1 Metro 2 Access Network 3 CopperFibreWireless IP Core 1 Aggregation Access Network 2 NGN From 3 to 2 layers

- 4 - PoliciesGovernanceRegulations Convergence and NGN could impact the regulatory value chain from policy making to regulatory levers Impact of Convergence and NGN on Regulations Impact on Regulations Light Heavy  Media vs Telecom Regulators  Industry led (NGNuK) versus Authority-led  Spectrum  Numbering  Interconnection  QoS  Content regulation  Access  Market definition  Sector Objectives: –Economic –Social  Policy Impact NON EXHAUSTIVE

- 5 - The OECD provides eight key policy making recommendations to support the emergence of NGN OECD Policy Challenges for NGN  Addressing Significant Market Power (SMP) issues and promoting fair competition  Maintaining and open and competitive market in infrastructure and services  Encouraging innovation and long-term investment  Removing barriers to the development of emerging markets  Ensuring proportionality of regulation, including forbearance  Ensuring technologically neutral regulatory framework, allowing market players freedom of choice  Ensuring the optimal balance in spectrum management  Ensuring consumer protection and QoS

- 6 - While media and telecom regulation are typically separate functions, the Trends: Governments will unify their regulators Governance Setup Benchmarks Separate Telecom and Media Regulators Integrated (Converged) Regulatory Bodies Australia Canada France Germany Hungary Italy Jordan Malaysia Morocco Singapore Turkey UK USA Lebanon South Africa  One-stop-shop leading to greater regulatory consistency  Easier compliance models  Better reflection of the market place  Operational efficiencies for regulators Saudi Arabia SELECTION Key Migration Drivers

- 7 - To regulate NGN, the most favorable model is one where the industry regulates itself Evaluation of the Regulatory Management Models  Industry could lead the development of NGN and come to a consensus on key issues affecting interaction  Industry knows better how is it evolving and can better determine its future  Governments are not able to pre-determine consumer needs  Market-led initiatives are more responsive and efficient  Government participation should only be a last resort where the market has demonstrated it cannot meet consumer needs  No action might hinder development specially if no collaboration between industry stakeholders is triggered  Given the scope and impact of NGN, no consensus among stakeholders might lead to misaligned technical solutions Industry-led: United Kingdom Authority-led: Singapore Wait-and-See: Hong Kong Evaluation Model Favorable LowHigh

- 8 - Defining markets & SMP in converged markets will be challenging given the vertical integration SMP and Dominance in a Converged Environment PSTN Cable TV ISP Existing Independent Markets Typically Regulated Typically Partially Regulated Typically Not Regulated PSTN Cable TV ISP Vertically Integrated Markets  Integrated service providers will surely impact market definition  Legacy definitions should be reviewed in light of convergence and vertical integration Comments

- 9 - With convergence and NGN, new interconnection obligations could arise to address new bottlenecks Interconnection under NGN Interconnection Routes NGN Legacy Network NGN NGN Interconnection Bottlenecks  Network capabilities (block, delay or degrade service)  Elementary services (use of proprietary standards)  Service access (Walled Gardens: restricting access to certain addresses and services)  Control and user information (user authentication, location data, and other data to help resolve naming and numbers)

NGN and convergence will put even more strain on spectrum availability forcing regulators to optimize spectrum use Spectrum Management Requirements and Initiatives  Adopting technology development, i.e. smart radios  Allowing primary licensees or spectrum brokers to lease spectrum rights to secondary users  Registering the use of license- exempt spectrum such as WiFi to avoid overrunning capacity  Re-farming spectrum held by users such as governments  Trading spectrum (as per the EU Regulatory Package for Electronic Communications of March 2002) EU Spectrum Management Initiatives Spectrum Requirements Wimax Microwave links Satellite links WifiBroadcasting Mobile 2G and 3G Convergence and NGN Spectrum Requirements

Other regulatory dimensions would be impacted with the advent of convergence and NGN Additional Regulatory Dimensions Numbering  Regulators should be ready for ENUM  It will allow even more convergence and should be encouraged QoS  NGN will allow more flexibility when defining quality of service parameters per client  QoS obligations need to be revisited in light of this flexibility Access  Access networks are evolving  Legacy regulations might prohibit investments and hence delay faster networks Content  Convergence and NGN will enable a wider and richer delivery of content over telecom infrastructures  Content regulation will soon become quite relevant to telcos and hence need to be properly adapted

Conclusion :  Messages to the policy makers & Regulators to enable Convergence & NGN: –Pay attention to Convergence & NGN Economic and Market potential to develop the telecom industry & remove hesitation from large scale investments due to regulators uncertainties. –Avoid unexpected regulatory changes due to its impact on long term investment plans. –Remove regulatory barriers & encourage the development of convergence and NGN. –The scope of competition policy will shift from competition among networks to service competition. –To harness the potential of convergence & NGN, is to leave the market to find solutions and not to regulate up-front.

Thank You for Your Kind Attention