1. Regulation of NGN New Approaches to Interconnection John Horrocks ECC TRIS Chairman, Consultant to DTI +44 1483 797807 john@horrocks.co.uk

2. Regulatory concepts Technology independence Cost based termination Only regulate where there is significant market power BUT………..

3. 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?

4. 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

5. 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!

6. Costs old and new Terminal ATerminal B Access Backbone Old Terminal ATerminal B Access Backbone New Line rental Distance and time dependent call charges Carrier selection Freephone Line rental Regulation is based on this!

7. Three questions How should the telco world change now? Where should the telcos go? What are the telcos thinking about now?

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

9. 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)

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

11. 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)

12. The new model Terminal ATerminal BAccess TransitAccess Retail subscription or usage SP Capacity charge Sender keeps all Transit SP Access subscription or usage Capacity charge Peering Access subscription or usage

13. ……….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

14. 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

15. Calls to the old model Terminal AAccess Transit Retail subscription or usage SP Capacity charge Transit Access subscription or usage Capacity charge Peering Old model Gateway Retail subscription or usage Interconnection Call charge

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

17. NGN Interconnection parameters ParameterOptions IP LayerOpen (common IP addresses) Closed (isolated IP addresses) Service LayerSender Keeps All Keep some and pass some AgreementsMultiple bilateral, Centralised hub, or none DNS/ENUMPublic Internet, shared private, or internal only

18. 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)

19. Public Internet NGN-1NGN-2NGN-3NGN-4 LAN NAT DNS (ENUM) Network termination point (Gateway) Session Border Controllers Private IP Public (User ENUM) DNS (ENUM) DNS (ENUM) DNS (ENUM) DNS (ENUM) Walled gardens - copying PSTN Call Server

20. Public Internet NGN-1 Backbone NGN-4 LAN NAT Network termination point (Gateway) Private IP Public IP Private IP DNS (ENUM) Public (User ENUM) GSMA - IPX (private IP) DNS (ENUM) NGN (Carrier ENUM) Call Server Number  SIP of serving network server SIP  public IP NB: Preliminary option only, not confirmed

21. Public Internet NGN-1 Backbone NGN-4 LAN NAT Network termination point (Gateway) Private IP Public IPPrivate IP Call Server (with barrier) Call Server (with barrier) DNS (ENUM) GSMA - IPX (private IP) + public DNS/ENUM Number  SIP of serving network server SIP  public IP Public (Carrier ENUM) SIP: @

22. Public Internet NGN-1 Backbone NGN-4 LAN NAT Network termination point (Gateway) Private IP Public IP Private IP DNS (ENUM) Public (User ENUM) GSMA - IPX (private IP) + Hubs DNS (ENUM) NGN (Carrier ENUM) Call Server Number  SIP of serving network server SIP  public IP SIP: @ NB: Preliminary option only, not confirmed Hub

23. 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