Convergence and Regulation

STUDY ABOUT AN INSTITUTIONAL REFERENCE MODEL FOR REGULATION IN CONVERGENCE
August 2010
CONTENT
ABSTRACT ...................................................................................................................................................... 7 ACRONYMS AND GLOSSARY OF TERMS .............................................................................................. 8 FOREWORD .................................................................................................................................................. 16 CHAPTER 1 PRESENT SITUATION OF COMMUNICATIONS REGULATION IN EUROPE, THE UNITED STATES OF AMERICA, ASIA-PACIFIC AND LATIN AMERICA, IN AN ENVIRONMENT OF TECHNOLOGICAL CONVERGENCE ............................................................... 17 1.1 CONVERGENCE AND REGULATION IN THE TELECOMMUNICATIONS SECTOR........... 18 1.1.1 What is understood by Convergence? ...................................................................................... 18
1.1.1.1 1.1.1.2 1.1.1.3 1.1.1.4 Convergence in Networks and Services. ...............................................................................................19 Device Convergence..............................................................................................................................20 Fixed-Mobile Convergence. ..................................................................................................................21 Regulatory Convergence. ......................................................................................................................22
1.1.2
1.1.2.1 1.1.2.2 1.1.2.3
Technological Changes which foster Convergence. ................................................................. 23

Next Generation Networks. ...................................................................................................................23 Moores Law. ........................................................................................................................................24 Mobility and Ubiquity. ..........................................................................................................................25
1.1.3 Principles of Regulation in Convergence. ................................................................................ 26 1.2 TELECOMMUNICATIONS REGULATION IN EUROPE, UNITED STATES OF AMERICA AND ASIA-PACIFIC .................................................................................................................................. 30 1.2.1 Telecommunications Sector Government Agencies. ................................................................. 30 1.2.2 Present Situation of Legislation................................................................................................ 32
1.2.2.1 1.2.2.2 1.2.2.3 1.2.2.4 European Community Directives. .........................................................................................................32 Convergence..........................................................................................................................................34 Spectrum Assignment............................................................................................................................37 Access and Interconnection...................................................................................................................39
1.2.3
1.2.3.1 1.2.3.2
Sectoral Regulation. ................................................................................................................. 41

Audiovisual Sector and Contents. .........................................................................................................41 Telecommunications. ............................................................................................................................42
1.2.4
1.2.4.1 1.2.4.2
Structure of the Regulatory Body. ............................................................................................ 43

Report and Appointment. ......................................................................................................................43 Term of Appointment............................................................................................................................44
1.2.5
1.2.5.1 1.2.5.2 1.2.5.3 1.2.5.4 1.2.5.5
Distribution of Roles and Responsibilities for Regulators........................................................ 45

Market Entry. ........................................................................................................................................45 Interconnection......................................................................................................................................46 Spectrum Management..........................................................................................................................47 Numbering.............................................................................................................................................47 Tariff Regulation. ..................................................................................................................................48
1.2.6 Role and Interaction with Academic Networks......................................................................... 49 1.3 PRESENT SITUATION OF TELECOMMUNICATIONS REGULATION IN LATIN AMERICA 56 1.3.1 Telecommunications Sector Government Agencies. ................................................................. 56 1.3.2 Present Situation of Legislation................................................................................................ 57
1.3.2.1 1.3.2.2 1.3.2.3 Convergence..........................................................................................................................................58 Spectrum Assignment............................................................................................................................59 Access and Interconnection...................................................................................................................62
1.3.3
1.3.3.1 1.3.3.2
Sectoral Regulation. ................................................................................................................. 65

Audiovisual Sector and Contents. .........................................................................................................65 Telecommunications. ............................................................................................................................66
1.3.4
1.3.4.1 1.3.4.2
Structure of the Regulatory Body. ............................................................................................ 66

Report and Appointment. ......................................................................................................................67 Term of Appointment............................................................................................................................67
1.3.5
Distribution of Roles and Responsibilities for Regulators........................................................ 68 Page 1 of 248
Study about an Institutional Reference Model for Regulation in Convergence
1.3.5.1 1.3.5.2 1.3.5.3 1.3.5.4 1.3.5.5 1.3.5.6
Market Entry. ........................................................................................................................................68 Interconnection......................................................................................................................................69 Spectrum Management..........................................................................................................................70 Numbering.............................................................................................................................................70 Tariff Regulation. ..................................................................................................................................71 Universal Service. .................................................................................................................................72
1.3.6
1.3.6.1 1.3.6.2
Steps towards Convergence...................................................................................................... 73

Next Generation Networks Convergence. .............................................................................................73 Convergence of Voice, Data and Video. ...............................................................................................74
1.3.7 1.3.8
Role and Interaction with Academic Networks......................................................................... 75 Comparison of Government Agencies. ..................................................................................... 82 TECHNOLOGICAL CONVERGENCE AND REGULATORY CONVERGENCE84
CHAPTER 2 -
2.1 THE TECHNOLOGICAL CONVERGENCE IN THE TELECOMMUNICATIONS SECTOR.... 85 2.1.1 From the Public Switched Telephone Network to Convergence............................................... 86 2.1.2 Technological Changes that Promote Convergence................................................................. 88
2.1.2.1 2.1.2.2 2.1.2.3 2.1.2.4 2.1.2.5 Digitalization.........................................................................................................................................89 Broadband Development. ......................................................................................................................89 Internet and the IP Protocol...................................................................................................................90 Access Diversity....................................................................................................................................91 Mobility and Ubiquity. ..........................................................................................................................92
2.1.3
2.1.3.1 2.1.3.2 2.1.3.3
Next Generation Networks (NGNs). ......................................................................................... 93

NGN Structure. .....................................................................................................................................93 Emerging Scenario. ...............................................................................................................................95 Convergence and the Internet Protocol..................................................................................................95
2.1.4 Impact of Convergence............................................................................................................. 96 2.1.5 Benefits and Challenges of Technological Convergence.......................................................... 97 2.2 REGULATORY CONVERGENCE IN THE TELECOMMUNICATIONS SECTOR................... 98 2.2.1 Convergence Impact Key Issues. ........................................................................................... 98 2.2.2 Policy and Regulation Issues.................................................................................................... 99 2.2.3 Licensing Trends. ................................................................................................................... 100 2.2.4 Interconnection in Convergence............................................................................................. 101 2.2.5 Adapting Interconnection Charges Regulation. ..................................................................... 103 2.3 PROBLEMS THAT REGULATION OF CONVERGENCE HAS TO SOLVE ........................... 105 2.3.1 Market Development............................................................................................................... 105 2.3.2 Impact on Costs and Prices. ................................................................................................... 107
2.3.2.1 2.3.2.2 How do Prices Relate to Costs in an Environment of Convergence? ..................................................107 Options for Tariffs in Convergence.....................................................................................................108
2.3.3 2.3.4 2.3.5

2.3.5.1 2.3.5.2 2.3.5.3
Bundling of Services. .............................................................................................................. 109 Fixed-Mobile Convergence (FMC). ....................................................................................... 110 Interconnection, a Burning Issue............................................................................................ 111
Bill & Keep. ........................................................................................................................................111 Charges for Connectivity and for Services. .........................................................................................113 A new Model Based on Report ECC 75..............................................................................................113
2.3.6 Spectrum Management. .......................................................................................................... 114 2.3.7 Numbering. ............................................................................................................................. 116 2.3.8 Universal Access/Service........................................................................................................ 118 2.3.9 User Protection. ..................................................................................................................... 119 2.3.10 Audiovisual: Separation of Content from Transmission......................................................... 120 2.3.11 Rule of Law and Vested Rights. .............................................................................................. 122 2.4 CONCLUSIONS ............................................................................................................................ 124 CHAPTER 3 FUNCTIONS OF A CONVERGENT REGULATOR IN THE MARKETS OF VOICE, DATA AND AUDIOVISUAL....................................................................................................... 128 3.1 FUNCTIONS OF REGULATION IN CONVERGENCE ............................................................. 129 3.1.1 Competition Promotion and Defense...................................................................................... 131
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3.1.2 3.1.3 3.1.4 3.1.5

3.1.5.1 3.1.5.2 3.1.5.3
Numbering, Naming and Addressing...................................................................................... 133 Service Availability and Continuity. ....................................................................................... 135 Licensing Regime.................................................................................................................... 136 Spectrum. ................................................................................................................................ 138
Spectrum Assignment..........................................................................................................................138 Spectrum Management........................................................................................................................139 Spectrum Control. ...............................................................................................................................140
3.1.6 3.1.7 3.1.8 3.1.9 3.1.10 3.1.11

3.1.11.1 3.1.11.2
Network Neutrality. ................................................................................................................ 141 Interconnection Regime. ......................................................................................................... 142 Passive Infrastructure Access................................................................................................. 144 Tariff Regulation..................................................................................................................... 145 Content Regulation. ................................................................................................................ 146 Universal Access/Service........................................................................................................ 146
Gap Reduction. ...............................................................................................................................147 Foster to Broadband........................................................................................................................148
3.1.12
3.1.12.1 3.1.12.2 3.1.12.3 3.1.12.4 3.1.12.5
User Protection. ..................................................................................................................... 149

Information Asymmetry..................................................................................................................150 Quality of Service. ..........................................................................................................................150 Spam............................................................................................................................................151 Data Protection. ..............................................................................................................................151 Privacy. ...........................................................................................................................................152
3.2 REGULATION IN CONVERGENCE........................................................................................... 154 3.2.1 Regulation by Sectors. ............................................................................................................ 156 3.2.2 Multi-sector Regulation. ......................................................................................................... 156 3.2.3 Convergent Regulator............................................................................................................. 158 3.3 REGULATORS IN CONVERGENCE AND RESULTS .............................................................. 160 3.3.1 United Kingdom...................................................................................................................... 160 3.3.2 Australia. ................................................................................................................................ 163 3.3.3 Malaysia. ................................................................................................................................ 166 3.4 HOMOGENIZATION OF SECTORAL REGULATION IN LATIN AMERICA ........................ 170 3.5 CONCLUSIONS ............................................................................................................................ 173 CHAPTER 4 INSTITUTIONAL ORGANIZATIONAL MODEL FOR THE CONVERGENT REGULATOR IN THE MARKETS OF VOICE, DATA AND AUDIOVISUAL.................................. 176 4.1 THE REGULATOR IN CONVERGENCE ................................................................................... 177 4.1.1 Convergent Regulator............................................................................................................. 177 4.1.2 Preparing for Transition. ....................................................................................................... 179 4.2 STRUCTURE AND FUNCTIONS OF CONVERGENT REGULATOR..................................... 181 4.2.1 Structure of the Convergent Regulator................................................................................... 182 4.2.2 Organization Manual. ............................................................................................................ 183
4.2.2.1 4.2.2.2 4.2.2.3 4.2.2.4 4.2.2.5 4.2.2.6 4.2.2.7 Legal Affairs. ......................................................................................................................................184 Spectrum Management and Control. ...................................................................................................186 Universal Access and Service. ............................................................................................................187 User Protection....................................................................................................................................188 Market and Competition Analysis.......................................................................................................189 Licenses and Scarce Resources. ..........................................................................................................190 Convergence Control and Oversight. ..................................................................................................190
4.3 NORMATIVE PROPOSALS......................................................................................................... 192 4.3.1 Convergence in General. ........................................................................................................ 192 4.3.2 Competition. ........................................................................................................................... 194 4.3.3 Numbering. ............................................................................................................................. 195 4.3.4 Service Continuity and Availability. ....................................................................................... 195 4.3.5 Licences. ................................................................................................................................. 196 4.3.6 Spectrum. ................................................................................................................................ 196 4.3.7 Network Neutrality. ................................................................................................................ 197 4.3.8 Interconnection....................................................................................................................... 198
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4.3.9 Access to Passive Infrastructure............................................................................................. 198 4.3.10 Content. .................................................................................................................................. 199 4.3.11 Universal Access/Service........................................................................................................ 199 4.3.12 User Protection. ..................................................................................................................... 200 4.4 RECOMMENDATIONS................................................................................................................ 202 ANNEXES..................................................................................................................................................... 205 ANNEX A. SECTORAL DATA FOR LATIN AMERICA ...................................................................... 205 SECTORAL DATA OF ARGENTINA ..................................................................................................... 205 SECTORAL DATA OF BOLIVIA............................................................................................................ 206 SECTORAL DATA OF BRAZIL.............................................................................................................. 207 SECTORAL DATA OF CHILE................................................................................................................. 208 SECTORAL DATA OF COLOMBIA ....................................................................................................... 209 SECTORAL DATA OF COSTA RICA..................................................................................................... 210 SECTORAL DATA OF CUBA ................................................................................................................. 211 SECTORAL DATA OF ECUADOR ......................................................................................................... 212 SECTORAL DATA OF EL SALVADOR................................................................................................. 213 SECTORAL DATA OF GUATEMALA ................................................................................................... 214 SECTORAL DATA OF HAITI ................................................................................................................. 215 SECTORAL DATA OF HONDURAS ...................................................................................................... 216 SECTORAL DATA OF MEXICO............................................................................................................. 217 SECTORAL DATA OF NICARAGUA .................................................................................................... 218 SECTORAL DATA OF PANAMA ........................................................................................................... 219 SECTORAL DATA OF PARAGUAY ...................................................................................................... 220 SECTORAL DATA OF PERU .................................................................................................................. 221 SECTORAL DATA OF DOMINICAN REPUBLIC................................................................................. 222 SECTORAL DATA OF URUGUAY ........................................................................................................ 223 SECTORAL DATA OF VENEZUELA..................................................................................................... 224 ANNEX B. TYPICAL PSTN-IP CALL FLOWS USING SESSION INITIATION PROTOCOL (SIP) ........................................................................................................................................................................ 225 ANNEX C. DOMAIN NAMES AND NATIONAL ADMINISTRATORS.............................................. 227 ANNEX D. STRUCTURE OF OFCOM..................................................................................................... 239 ANNEX E. STRUCTURE OF ACMA........................................................................................................ 240 ANNEX F. STRUCTURE OF THE MCMC.............................................................................................. 241 BIBLIOGRAPHY ........................................................................................................................................ 242
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INDEX OF FIGURES
Figure 1 - Perception of Convergence by the User .................................................................................. 19 Figure 2 - Convergence through Multiservice ........................................................................................... 20 Figure 3 - Multiservice Terminal Equipment (SmartPhones) .................................................................. 21 Figure 4 NGNs Plane Distribution............................................................................................................ 24 Figure 5 - Scenario Change with Convergence ......................................................................................... 87 Figure 6 - Convergent Device ...................................................................................................................... 88 Figure 7 - Spectrum freed by Migration to Digital Television in the U.S. ............................................ 89 Figure 8 - Broadband Development Worldwide ........................................................................................ 90 Figure 9 - IP Protocol .................................................................................................................................... 91 Figure 10 - NGN Reference Model............................................................................................................... 94 Figure 11 - Network Evolution to NGN with IP ......................................................................................... 96 Figure 12 - Circuit-Switching vs. Packet-Switching ............................................................................... 102 Figure 13 - Complete vs. Hierarchical Interconnection ........................................................................ 104 Figure 14 - Mobile Telephony Penetration in some Latin American Countries ................................. 106 Figure 15 - Percentage of Prepaid Plans in Latin America and the Caribbean ................................. 108 Figure 16 - International Number Structure for Global Services ......................................................... 116 Figure 17 - Possible Applications Associated with E.164 Numbers...................................................... 118 Figure 18 - End-to-End Security Architecture for NGN Communications ........................................... 120 Figure 19 - Years for Technology Adoption ............................................................................................. 129 Figure 20 - Internet Domains in Countries of the World ....................................................................... 134 Figure 21 - Evolution of Universal Access Programs .............................................................................. 147 Figure 22 - Average Broadband Speed in Some Countries .................................................................... 149 Figure 23 - Security Architecture for NGN end-to-end Communications ........................................... 152 Figure 24 - Alternative Models for Regulation........................................................................................ 155 Figure 25 - Four Scenarios for Telecommunications in Latin America ............................................... 171 Figure 26 Transition towards a Convergent Regulator ....................................................................... 178 Figure 27 Transition Stages towards a Convergent Regulator........................................................... 180 Figure 28 Structure Proposal for Convergent Regulator..................................................................... 182
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INDEX OF TABLES
Table 1 - Telecommunications Sector Government Agencies in Europe, USA, and Asia-Pacific...... 30 Table 2 - Convergence Legislation in Europe, USA and Asia-Pacific..................................................... 34 Table 3 - Spectrum Assignment Legislation in Europe, USA and Asia-Pacific ..................................... 37 Table 4 - Access and Interconnection Legislation in Europe, USA and Asia-Pacific........................... 39 Table 5 - Audiovisual Sector and Content Regulation in Europe, USA and Asia-Pacific .................... 41 Table 6 - Telecommunications Regulation in Europe, USA and Asia-Pacific ....................................... 42 Table 7 - Report and Appointment of the Regulatory Body in Europe, USA and Asia-Pacific .......... 44 Table 8 - Term of Appointment for the Regulatory Body in Europe, USA and Asia-Pacific .............. 44 Table 9 Regulators Responsibilities for Market entry in Europe, USA and Asia-Pacific................. 45 Table 10 - Regulators Responsibilities for Interconnection in Europe, USA and Asia-Pacific ......... 46 Table 11 - Regulators Responsibilities for Spectrum Management in Europe, USA and Asia-Pacific .......................................................................................................................................................................... 47 Table 12 - Regulators Responsibilities for Numbering in Europe, USA and Asia-Pacific .................. 48 Table 13 - Regulators Responsibilities for Tariff Regulation in Europe, USA and Asia-Pacific ....... 48 Table 14 - Role and Interaction with Academic Networks in Europe, USA and Asia-Pacific ............ 50 Table 15 - Telecommunications Sector Government Agencies in Latin America ............................... 56 Table 16 - Present Situation of Legislation for Convergence in Latin America .................................. 58 Table 17 - Present Situation on Legislation for Spectrum Assignment in Latin America .................. 59 Table 18 - Present Situation of Access and Interconnection Legislation in Latin America ............... 62 Table 19 - Audiovisual Sector and Content Regulation in Latin America............................................. 65 Table 20 - Telecommunications Sector Regulation in Latin America ................................................... 66 Table 21 - Report and Appointment of the Regulatory Body in Latin America................................... 67 Table 22 - Term of Appointment for the Regulatory Body in Latin America....................................... 67 Table 23 - Regulators Responsibilitiesy for Market Entry in Latin America ....................................... 68 Table 24 - Regulators Responsibilities for Interconnection in Latin America.................................... 69 Table 25 - Regulators Responsibilities for Spectrum Management in Latin America ....................... 70 Table 26 - Regulators Responsibilities for Numbering in Latin America............................................. 70 Table 27 - Regulators Responsibilities for Tariff Regulation ................................................................ 71 Table 28 - Regulators Responsibilities for Universal Service in Latin America.................................. 72 Table 29 - Measures to Implement Next-Generation Networks Convergence in Latin America....... 74 Table 30 - Measures for Convergence of Voice, Data and Video in Latin America ............................ 75 Table 31 - Role and Interaction with Academic Networks in Latin America ....................................... 77 Table 32 - Comparison of Countries regarding Fitness for Convergence ............................................. 82 Table 33 - Actual Examples of Access and Services................................................................................. 92 Table 34 - An IP-based Converged Environment ...................................................................................... 95 Table 35 - Regulatory Functions Intensity Before, in Transition to and in Convergence................ 130 Table 36 - Guidelines for Regulation Before and Towards Convergence ........................................... 155 Table 37 - Basic Configuration of Ofcom................................................................................................. 162
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ABSTRACT This study analyses the situation of the telecommunications regulators facing an environment of technological convergence where services of voice, data and audiovisual cease to be provided to the user in a traditional manner, to be transported all via a single network. We take as a reference the present situation in Europe, USA and Asia Pacific of legacy models for legislation, sectoral regulation (audiovisual, applications/content, telecommunications) and structures of regulatory agencies involved and their responsibilities, as well as the role and interaction with the academic networks in these countries. The current situation in Latin America is described, where differences and similarities between the institutions of various countries are analyzed, along with tasks allocation and how they are reacting to changes that involve convergence with next-generation networks (NGNs) and video, voice and data convergence. On a second phase technological and regulatory convergence are investigated, looking for relationships between them, as well as possible regulatory asymmetries, technological neutrality, competition and NGN. What we understand today as technological convergence is described, along with different manifestations of it in the telecommunications and audiovisual sectors. The meaning of regulatory convergence and the different ways in which it is materialized is developed. The interrelationship between both types of convergence and the way in which one affects the other is explained; to study afterwards the possible regulatory asymmetries that can occur in a next-generation world with the widespread introduction of NGNs, as well as technological neutrality and aspects related to competition that must be taken into account by the regulator. The functions of a convergent regulator in the markets of voice, data and audiovisual are analyzed, with the purpose of assessing the homogenization of regulation in all three areas. We explore different regulation schemes which may occur in convergence, including regulation by sectors, multisector and convergent regulator, analyzing advantages and disadvantages of each scheme. Some regulators in convergence in different parts of the world and the results attained by them are selected, to propose afterwards methods and ways in which regulation of different sectors in Latin America could be homogenized. Finally, a model of regulatory institutional organization for Latin American countries is presented, which includes a structure model that incorporates best practices, functions performed by each unit within the structure and a proposal of normative for the establishment of functions within the sectors included in regulatory convergence.
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ACRONYMS AND GLOSSARY OF TERMS 3G 4G AARNet ABA ACA ACCC ACMA ADSIB Agcom AHCIET 3rd Generation Mobile Services 4th Generation Mobile Services Australian Academic and Research Network; Australia Australian Broadcasting Authority; Australia Australian Communications Authority; Australia Australian Competition and Consumer Commission; Australia Australian Communications and Media Authority; Australia Agencia para el Desarrollo de la Sociedad de la Informacin en Bolivia (Agency for the Development of the Information Society in Bolivia); Bolivia Autorit per le Garanzie nelle Comunicazioni (Authority for Guarantee of Communications); Italy Asociacin Iberoamericana de Centros de Investigacin y Empresas de Telecomunicaciones (Iberoamerican association of research centers and telecommunication companies) Arbeitsgemeinschaft der Landesmedienanstalten (Association of authorities for Government audiovisual media); Germany Autoridade Nacional de Comunicaes (National Communications Authority); Portugal Agncia Nacional de Telecomunicaes; (National Telecommunications Agency); Brazil Asia-Pacific Advanced Network Proyecto de interconexin de Universidades y Centros de Investigacin (universities and research centers Interconnection Project); Paraguay Autorit de Rgulation des Communications Electroniques et des Postes (Regulatory authority of electronic and postal communications); Francia Autoridad Nacional de los Servicios Pblicos (National authority of public services); Panama Asynchronous Transfer Mode Autoridad de Fiscalizacin y Control Social de Telecomunicaciones y Transportes (Authority of telecommunications and transport oversight and social control); Bolivia Advanced Wireless Services Broadcasting Commission of Ireland; Ireland Body of European Regulators for Electronic Communications Bundesministerium fr Wirtschaft und Arbeit (Ministry of Economy and Labor); Germany
ALM ANACOM ANATEL APAN Arandu ARCEP ASEP ATM ATT
AWS BCI BEREC BMWA
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BNetzA
Bundesnetzagentur fr Elektrizitt, Gas, Telekommunikation, Post und Eisenbahnen (Federal Network Agency for Electricity, Gas, Telecommunications, Postal Service and Railways); Germany Broadband over Power Lines Basic Public Switched Telephony Broadcasting Standards Authority; New Zealand Comunidad Andina de Naciones (Andean Community of Nations) CAPital EXpenditures Centre for Development of Advanced Computing; India Consorcio Ecuatoriano para el Desarrollo de Internet Avanzado (Ecuadorian Consortium for development of advanced Internet); Ecuador Ministerio de Comunicaciones, Infraestructura y Vivienda (Ministry of communications, infrastructure and housing); Guatemala Cooperacin Latino Americana de Redes Avanzadas (Latin American cooperation of advanced Networks) Comisin del Mercado de Telecomunicaciones (telecommunications market commission); Spain Comisin Nacional de Comunicaciones (National Communications Commission); Argentina Centro Nacional de Tecnologas de Informacin (National Center of information technology); Venezuela Consejo Nacional de Televisin (National Council of televisin); Chile Comisin Nacional de Televisin (National television Commission); Colombia Comisin Federal de Telecomunicaciones (Federal Telecommunications Commission); Mexico Comit Federal de Radiodifusin (Federal Broadcasting Committee); Argentina Commission for Communications Regulation (Comisin para Regulacin de Comunicaciones); Irlanda Consejo Nacional de Telecomunicaciones (National telecommunications Council); Ecuador Conseil National des Tlcommunications (National telecommunications Council); Hait Comisin Nacional de Telecomunicaciones (National Telecommunications Commission); Honduras Comisin Nacional de Telecomunicaciones (National Telecommunications Commission); Paraguay
BPL BPST BSA CAN CAPEX C-DAC CEDIA CIV CLARA CMT CNC CNTI CNTV CNTV Cofetel COMFER ComReg CONATEL CONATEL CONATEL CONATEL
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CONATEL CONICET CPNP CPP CR2Net CRC CSC IT CUDI DFN DSL DTI DTT EC ECC ECLAC eLAC ENUM ERC EU EURID FCC FCCN FICORA FMC FTTx FUNET FUNREDES GARR GATS
Comisin Nacional de Telecomunicaciones (National Telecommunications Commission); Venezuela Consejo Nacional de Investigaciones Cientficas y Tcnicas (National Council of scientific and technical research); Argentina Calling Partys Network Pays Calling Party Pays Red Nacional de Investigacin (National Research Network); Costa Rica Comisin de Regulacin de Comunicaciones (Communications Regulation Commission); Colombia Finnish IT Center for Science Ltd.; Finland Corporacin Universitaria para el Desarrollo de Internet (University Corporation for the development of Internet); Mexico Deutsches Forschungsnetz (German research network); Germany Digital Subscriber Line Department of Trade & Industry; United Kingdom Digital Terrestrial Television European Community Electronic Communications Committee Economic Commission for Latin America and the Caribbean Estrategia para la sociedad de la informacin en Amrica Latina y el Caribe (Latin America and the Caribbean information society strategy) E.164 NUmber Mapping Entidade Reguladora para a Comunicao Social (Social communications regulatory authority); Portugal European Union European Registry for Internet Domains Federal Communications Commission; USA Fundao para a Computao Cientfica Nacional; Portugal Finnish Communications Regulatory Authority; Finland Fixed-Mobile Convergence Fiber to the x Finnish University and Research Network; Finland Fundacin Redes y Desarrollo (Networks and development Foundation) Gestione Ampliamento Rete Ricerca (Administration of the research networks expansion); Italy General Agreement on Trade in Services
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GEANT GPRS GRX GSM HEAnet IANA IBA ICANN ICT IDA IETF IM IMS IMT-2000 Indotel INNOVA IP IPTV IPv6 ISDN ISP ITA ITC ITU ITU-T JANET KCC KEK KREONET LLU LTE
European multi-Gigabit network for research and education General Packet Radio Services GPRS/3G Roaming eXchange Global System for Mobile Communications Irelands National Education & Research Network; Ireland Internet Assigned Numbers Authority Independent Broadcasting Authority; United Kingdom Internet Corporation for Assigned Names and Numbers Information and Communication Technologies Infocomm Development Authority of Singapore; Singapore Internet Engineering Task Force Internet Messaging IP Multimedia Subsystem International Mobile Telecommunications-2000 Instituto Dominicano de las Telecomunicaciones (Telecommunications Dominican Institute; Dominican Republic Red Nacional de Investigacin y Educacin de Argentina (National network of research and education in Argentina); Argentina Internet Protocol Internet Protocol Television Internet Protocol version 6 Integrated Services Digital Network Internet Service Provider Independent Television Authority; United Kingdom Independent Television Commission; United Kingdom International Telecommunication Union ITU Telecommunication Standardization Sector British computation network for education and research Korean Communications Commision; South Korea Kommission zur Ermittlung der Konzentration im Medienbereich (German Commission for concentration in the media); Germany Korea Research Environment Open NETwork; South Korea Local Loop Unbundling Long Term Evolution
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MC MCMC MCS MDA MDG MEST MIC MIC Minaet MINEFI MINFRA MinTIC MITYC MOPC MOPSV MOPTC MTC MTT MyREN NGI-NZ NGN NRAs NREN NTIA OECD Ofcom
Ministrio das Comunicaes; Brazil Malaysian Communications and Multimedia Commission; Malaysia Multimedia Communications Service Media Development Authority of Singapore; Singapore Millennium Development Goals Ministry of Education, Science and Technology; South Korea Ministry of Internal Affairs and Communications; Japan Ministerio de la Informtica y las Comunicaciones (Ministry of Informatics and Communications); Cuba Ministerio de Ambiente, Energa y Telecomunicaciones (Ministry of environment, energy and telecommunications); Costa Rica Ministre de lconomie, des finances et de lindustrie (Ministry of economy, finance and industry); France Ministerio del Poder Popular para la Infraestructura (Ministry of peoples power for infrastructure); Venezuela Ministerio de Tecnologas de la Informacin y las Comunicaciones (Ministry of information and communications Technologies); Colombia Ministerio de Industria, Turismo y Comercio (Ministry of industry, tourism and trade); Spain Ministerio de Obras Pblicas y Comunicaciones (Ministry of public works and Communications); Paraguay Ministerio de Obras Pblicas, Servicios y Vivienda (Ministry of public works, services and housing); Bolivia Ministrio das Obras Pblicas, Transportes e Comunicaes (Ministry of public works, transport and communications); Portugal Ministerio de Transportes y Comunicaciones (Ministry of transport and Communications); Peru Ministerio de Transportes y Telecomunicaciones (Ministry of transport and telecommunications); Chile Malaysian Research and Education Network; Malaysia Next Generation Internet; New Zealand Next-Generation Network National Regulatory Agencies National Research and Education Network National Telecommunications and Information Administration; USA Organisation for Economic Co-operation and Development Office of Communications; United Kingdom
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OPEX OPTA OSIPTEL PLC PSTN PSTN PTS QoS RAAP RAGIE RAICES
OPerational EXpenditure Onafhankelijke Post en Telecommunicatie Autoriteit (Independent postal and telecommunications authority); Netherlands Organismo Supervisor de la Inversin Privada en Telecomunicaciones (Supervising Agency of telecommunications private investment); Peru Power Line Communications Public-Switched Telephone Network Public-Switched Telephone Network Kommunikationsmyndighete (National postal and Telecom Agency); Sweden Quality of Service Red Acadmica Peruana (Academic Peruvian Network); Peru Red Avanzada Guatemalteca para la Investigacin y Educacin (Advanced Guatemaltecan network for research and education); Guatemala Red Avanzada de Investigacin, Ciencia y Educacin Salvadorea (Advanced research, science and education Salvadoran network); El Salvador Red Acadmica Uruguaya (Academic Uruguayan Network); Uruguay Red Acadmica de Centros de Investigacin y Universidades Nacionales (Research centers and national universities Academic Network); Venezuela Red Cientfica y Tecnolgica (Science and technology Network); Panama Interconexin de los Recursos InformticoS de las universidades y centros de investigacin (Interconnection of of universities and research centers computer resources) Red Universitaria (University Network); Cuba Foro Latinoamericano de Entes Reguladores de Telecomunicaciones Reseau Telematique Haitien pour la Recherche et le Developpement; Haiti Red Nacional Acadmica de Tecnologa Avanzada (Advanced technology national academic network); Colombia Rseau national de tlcommunications pour la technologie, lenseignement et la recherche; France Red Nicaragense de Internet Avanzada (Nicaraguan advanced Internet network); Nicaragua Red Universitaria Nacional (National University Network); Chile Rede Nacional de Ensino e Pesquisa (National education and research network); Brazil
RAU REACCIUN
RedCyT RedIRIS
RedUniv REGULATEL REHRED RENATA Renater RENIA REUNA RNP
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RUDAC SCT SECOM SEFIN SENATEL SETSI
Red Universitaria Dominicana Acadmica y Cientfica (Dominican academic and scientific university network); Dominican Republic Secretara de Comunicaciones y Transportes (Secretariat of communications and transport); Mexico Secretara de Comunicaciones (Secretariat of Communications); Argentina Secretara de Finanzas (Secretariat of Finance); Honduras Secretara Nacional de Telecomunicaciones (National Secretariat of telecommunications); Ecuador Secretara de Estado de Telecomunicaciones y para la Sociedad de la Informacin (Secretary of State of telecommunications and the information society); Spain Service for French INternet Exchange Superintendencia General de Electricidad y Telecomunicaciones (Superintendence General of electricity and telecommunications); El Salvador National Internet academic network; Japan Singapore Advanced Research and Education Network; Singapore Superintendencia de Telecomunicaciones (Superintendence of Telecommunications); Guatemala Subsecretara de Telecomunicaciones (Subsecretariat of telecommunications); Chile Swedish University Computer Network; Sweden Network connecting education and research institutions; Netherlands Superintendencia de Telecomunicaciones (Superintendence of Telecommunications); Costa Rica Transmission Control Protocol/Internet Protocol Instituto Nicaragense de Telecomunicaciones y Correos (Nicaraguan Institute of telecommunications and postal services); Nicaragua Ministre des Travaux Publics, Transports et Communications; Haiti Telecom Regulatory Authority of India; India Universal Access Universidad Tecnolgica Centroamericana (Centro American Technological University); Honduras Uniform Resource Identifier Unidad Reguladora de Servicios de Comunicaciones (Regulatory communications services unit); Uruguay Universal Service
SFINX SIGET
SINET SingAREN SIT Subtel SUNET SURFnet SUTEL TCP/IP TELCOR TPTC TRAI UA UNITEC URI URSEC US
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VOD VoIP Wi-Fi WiMax WTO xDSL
Video on Demand Voice-Over-Internet Protocol Wireless Fidelity Worldwide Interoperability for Microwave Access World Trade Organization DSL technologies
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FOREWORD The study carried out jointly between the Latin American Forum of Telecommunications Regulatory Authorities (REGULATEL) and the Ibero-American Association of Telecommunications Research Centers and Companies (AHCIET) on convergence and regulatory harmonization resulted in the need to evaluate the structure of regulators under new conditions of convergence, in order to avoid possible restrictions on the development of ICT due to outdated institutional structures. This relevant aspect was debated in the Regulatory Forum for June 2008 in Barcelona by representatives of both organizations. The results of the discussion were materialized in the decision on the 11th Summit of Operators and Regulators carried out in July 2008 in Sao Paulo, which aims at developing a study to help evaluating the need for an institutional model for a Regulator in an Environment of Convergence. To this effect, both organizations agreed to a set of Terms of Reference, establishing the minimum contents of the study. Several meetings were held during the 12th Summit of Operators and Regulators between officials of the Economic Commission for Latin America (ECLAC), Clara network and REGULATEL, with the aim of advancing in the development of the project. They agreed to start working jointly, leveraging the synergy of all three organizations in order to fill a gap effectively existing in the sector. To this effect, ECLAC hired a consultant to undertake the work of the above-mentioned study. The consultant tasks include: i. Review and update the relevant information for this study, in the following reports: Regulators in Latin America, 2004 and New Models for Universal Access for Telecommunications Services in Latin America: Countries Report, May 2007 Review and report on regulatory agencies which have undergone restructuring with an aim to convergence, evaluating their success by the definition of quantifiable indicators. Identify the best regulatory practices for an efficient introduction of state-ofthe-art and innovative technologies, including standards and regulations. Reference should be made to the treatment given to the main regulatory tools such as license award, spectrum frequency awards, numbering, service classification and digital dividend, among others. Evaluate the differences and similarities between the regulatory bodies of diverse countries in the region. Investigate to what extent technological convergence is accompanied by regulatory convergence. Analyze the trend towards a convergent regulator, instead of multiplying the number of agencies at charge of sector regulatory tasks. Establish and propose measures or indicators of regulatory efficiency related to the regulators structure and compare through its application the regulators set out in (ii).
ii.
iii.
iv. v. vi. vii.
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CHAPTER 1 - PRESENT SITUATION OF COMMUNICATIONS REGULATION IN EUROPE, THE UNITED STATES OF AMERICA, ASIA-PACIFIC AND LATIN AMERICA, IN AN ENVIRONMENT OF TECHNOLOGICAL CONVERGENCE This first chapter contains the analysis of the current situation in Europe, USA and Asia-Pacific legacy models from the present legislation, regulation by sectors (audiovisual, applications/content, telecommunications) and structures of the regulatory agencies involved and their responsibilities, as well as the role and interaction with the academic networks in these countries. It also contains a description of the present regional situation, where analysis is done on: differences and similarities between the institutions of various countries, function allocation and how they are reacting to changes that involve convergence in New Generation Networks (NGN) and the convergence of video, voice and data. The structure of this chapter includes a general overview of convergence and its impact on the regulation of the telecommunications sector, followed by an analysis of the present situation in Europe, USA and Asia-Pacific, of the current models of regulation by sectors and the structures of the regulatory agencies and their responsibilities, along with interaction with the academic networks. At the end, the current regional situation is described, along with an analysis of differences and similarities between the institutions of REGULATELs countries, assignment of duties and how they are reacting to changes which imply networks and services convergence.
Present Situation of Communications Regulation in Europe, United States, Asia-Pacific, and Latin America
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1.1 CONVERGENCE AND REGULATION IN THE TELECOMMUNICATIONS SECTOR Globally, telecommunications have evolved into one of the fastest growing sectors and one of the major drivers of economic growth. This sector presently faces a stage of transition towards convergence, by effect of different initiatives of technological solutions and the improvement in standards of quality and the satisfaction of specific requirements from the users. Convergence has not only transformed the way telecommunications services are provided and how business are conducted in the sector, but also the quality users receive and perceive on these type of services. Convergence carries a number of challenges which include, among other aspects: sustainability and scalability of networks and services provided by operators, innovation management, new competitive dynamics, network security, coherence in regulation and consumer protection. The advance of Information and Communications Technologies (ICT) has led to different Governments making modifications to their internal policies to include their application in every topic related to society. In line with the above, the regulatory bodies have to develop a series of actions aimed at structuring of new regulations, taking into account the rapid evolution of markets, services and technological changes, in order to attract investment and innovation that fosters competition and access to the Information Society. Likewise, facing the phenomenon of convergence, the regulator should aim at grasping the main effects and challenges it poses in the telecommunications sector. Nowadays, however, the legal regimes continue to be oriented towards a regulation by services, which does not fully adapts to the needs of the convergent technologies necessarily. For this reason, this problem can only be solved if regulatory modifications are made that address telecommunications services globally, so that no separate measures are established that could cause imbalances and regulatory distortions. Since telecommunications technological development has been accelerated, it is also necessary that regulation be flexible to be able to permanently adapt to context, so that regulatory standards are less rigid and more consistent with the changing reality, allowing the development of new services and markets. In turn, it has to be structured so as to provide investors with guarantees of security and stability, in search of continue encouraging investment in the convergent industry. In this respect, regulation should facilitate an efficient transition from current networks to NGN, in an orderly and gradual manner, according to the technical and economic characteristics of each of the operators and each countrys reality. Similarly, it has to encourage new investments, fostering competition and users protection, without losing sight of the fact that this analysis should conclude identifying, proposing and performing the necessary reforms to existing regulatory frameworks. 1.1.1 What is understood by Convergence? Convergence has many definitions, referring to the mix of technologies, networks, services and traditionally different industries in new combined forms. In the world of telecommunications, it refers either to the ability of one or more networks to provide different services, or to the conjunction of industries in the sector of communications that were previously viewed as separate and different in the commercial and
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technological sense.1 This convergence is motivated by technological advances that make more efficient use of unique platforms to provide traditional services (voice, data, video and broadcasting) and other nontraditional (web applications, geopositioning, telesurveillance) simultaneously. Manifestation of convergence occurs in several ways and affects traditional forms in which the telecommunications sector has provided services for decades. Figure 1 shows how the user perceives convergence, when services traditionally obtained through different networks and terminal equipment, become consolidated within a single access network as well as at the multiservice terminal equipment level.
Figure 1 - Perception of Convergence by the User
1.1.1.1 Convergence in Networks and Services. Convergence in networks and services enables consumers access to multiple services within a single platform. For example, cable television networks allow the provision of services such as Internet and telephony besides its original core business, which is the distribution of audiovisual signals. Services integration in telecommunications
Cases in Market Reform The Impact of Convergence on the Regulatory Framework; Judith Hellerstein; Hellerstein & Associates; PURC/WORLD BANK INTERNATIONAL TRAINING PROGRAM January 14-25, 2008 - Gainesville, Florida
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networks allows nowadays video distribution, in addition to traditional telephony and Internet services. Mobile networks follow a similar trend. As shown in Figure 2, a multiservice operator is nowadays in the possibility of providing full range of voice, data and audiovisual services, thanks to the ability to access the core of an integrated network through an access network and one or more carriers providing transit to digital traffic. The wide range of advantages offered by this scheme in relation to the current of multiple networks and multiple services becomes evident by means of greater flexibility, lower rates and affordable service anytime and anyplace.
Figure 2 - Convergence through Multiservice Source: Jos Manuel Huidobro
1.1.1.2 Device Convergence. Device Convergence allows users to access different services from a single device or terminal even if they are offered on different platforms (a cell phone to listen radio, for example). Given the rapid technological developments in this field, in the short and medium term it is predictable that an overlap of functions in new generation devices will take place, in which all of them (or at least certain number) originally offered individually will converge. On the other hand, the need to access and transmit growing volumes of information continuously between different types of networks, in situations of mobility and in a fully transparent mode to the user, requires the availability of mobile terminals which can operate with various standards and technological platforms (Bluetooth, UMTS, Wi-Fi, WiMAX, DVB-H and others).
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The best examples of this device convergence are observed in the mobile services industry, where in less than a decade we moved from second-generation (2G) equipment, with functions essentially from analog telephony, to 2.5G data-enabled equipment, to 3G (multimedia computers) and 3.5 (high-speed multimedia). Some models of mobile terminals or smartphones can be seen in Figure 3 which allow us to appreciate the degree of sophistication achieved on terminal equipment, which from simple devices to communicate in analog voice, became tools that enable us to receive, store and play music, watch videos stored or online, navigate the web, receive and send e-mail messages, manage geopositioning through GPS, communicate with computers or notebooks and (without detracting the service for which they were originally designed) deliver real-time voice communications.
Figure 3 - Multiservice Terminal Equipment (SmartPhones)
1.1.1.3 Fixed-Mobile Convergence. Fixed-Mobile convergence is the transition to a future in which distinctions between fixed and mobile networks will disappear. Fixed-Mobile convergence has several facets. From the viewpoint of technology it refers to the use of technologies with ability to provide access (Broadband) to residential users and business (fixed), as well as those delocalized in mobility (mobile users). Possible technologies for Fixed-Mobile convergence are numerous and depend on the point of departure for the operator that uses them. They can be 3G mobile technologies and higher, xDSL and FTTx supplemented by wireless solutions (WiFi or WiMax, for example), satellite technologies, or any mix or evolution of the above. The femtocells are used as an effective solution to increase internal coverage for existing voice and high-speed data mobile services, but also represent a base for the development of Fixed-Mobile
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convergence services (a femtocell is a small cellular base station that provides wireless access with limited coverage and user capacity).2 From the business viewpoint, Fixed-Mobile convergence can be identified with quadruple-play and aims to provide users all information and communications services in an integrated manner and through a single bill. From the users (or market) viewpoint, Fixed-Mobile convergence is the search of a single platform for Broadband connection, independently from the type of location and user access (residence, work, or delocalized).
1.1.1.4 Regulatory Convergence. Most regulatory normative is based on the idea that broadcasting, information technology and telecommunications are different industries from the commercial viewpoint and must therefore, be subject to independent regulatory regimes. However, reality is different: convergent services blur the boundaries between these industries, leading to overlap of telecommunications and content regulation. Therefore, new regulatory considerations are required. According to the International Telecommunications Union (ITU), regulation of convergence has three stages:3 a. Legislative Reform: Legislative reforms have taken place in the telecommunications sector in more than 150 countries, which pursue, fundamentally, to enable a solid legal framework which fosters stability in order to make the sector attractive for investors. b. Establishment of the Regulatory Body: Regulation of Convergence requires a new philosophy from the Regulatory Body, which comprises the following characteristics: Independence from Government and Industry for the decision-taking. Ample technical capacity. Formulation of regulation supported on active participation of all shareholders from the infocommunications sector. A regulatory intervention style oriented to supervision. Transparency, flexibility and participation in the regulatory decision-taking. c. Institutional Convergence. The convergence of services and markets requires convergence of different laws, which at the same time implies that measures have to be taken at the regulatory bodies level; such measures could be: Incorporation of convergent functions in the regulatory body for telecommunications: integrate to the telecommunications regulator the regulatory functions which originally were jurisdiction of other regulators,
Report on Fixed-Mobile Convergence: Implications on Competition and Regulatory Aspects; ERG (09) 06; March 2009 3 Book about Information Infrastructure in the Americas; CITEL/CCP-IXV Permanent Consulting Committee Meeting I Page 22 of 248
such as: areas of broadcasting, information technology, content, etc., as appropriate. Creation of new converged regulators: involves elimination of old regulatory bodies, in order to replace them with a new body that centralizes all related functions within the framework of the convergence process. Cooperation between regulators: in case existing regulatory bodies are maintained, smooth cooperation between them must be guaranteed, ensuring that all areas of interest are covered and there are no legal gaps. Also, this cooperation should ensure the necessary coordination for those areas that overlap, in order to complement both regulatory aspects and supervision. The difference between countries in relation to their stage regarding regulatory convergence is quite large. In many cases, the necessary legislative reforms needed by the telecommunications sector in order to attain a favorable development for the introduction of new technologies have not even started.
1.1.2 Technological Changes which foster Convergence. All these advancements in convergence have been taking place thanks to the combination of different factors. They have allowed to a large extent more sector evolution in a decade, than what has been observed in telecommunications in the last century. These accelerated changes are surprising and allow that an ever increasing number of people benefit from the benefits provides by equipment and networks that simplify their work, or allow them to enjoy a better standard of living. 1.1.2.1 Next Generation Networks. There is a still not complete agreement on a specific definition of NGNs. The term is generally used to depict the shift to higher network speeds using Broadband, the migration from the PSTN to an IP-network and a greater integration of services on a single network and often is representative of a vision and a market concept.4 NGN is defined by the ITU as a packet based network able to provide services including telecommunication services and able to make use of multiple Broadband, QoS-enabled transport technologies and in which service related functions are independent from underlying transport-related technologies. NGN offers access by users to different service providers and supports generalized mobility which will allow consistent and ubiquitous provision of services to users. NGNs, also defined as Broadband managed IP networks, include next generation core networks, which evolve towards a converged IP infrastructure capable of carrying a multitude of services, such as voice, video and data services, and next generation access networks, i.e. the development of high-speed local loop networks that will guarantee the delivery of innovative services.
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Convergence and Next Generation Networks; Claudia Sarrocco y Dimitri Ypsilanti; Organization for Economic Co-Operation and Development (OECD); DSTI/ICCP/CISP(2007)2/FINAL Page 23 of 248
The key for NGN networks to provide this range of services dissimilar in appearance lies in its architecture known as multilevel or several levels. Figure 4 shows the four planes into which a typical NGN is divided: 1. Access Plane, a level at which networks connect between them. 2. Transport Plane, which serves to globally transmit communications, based on the IP protocol. 3. Control Plane, used to manage the interaction between signal transport and services which will be provided through the network. 4. Service and Applications Plane, which manages the human-terminal interface and allows the end-user to enjoy the communication. Horizontally, several types of services that can be provided through the NGN can be observed, which range from mobile services, pure data and fixed-line services.
Figure 4 NGNs Plane Distribution Source: Jos Manuel Prez Marzabal
1.1.2.2 Moores Law. Moores law states that approximately every 18 months the number of transistors on an integrated circuit doubles. It is an empirical law formulated by the co-founder of
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Intel, Gordon E. Moore on 19 April 1965, whose compliance has been verified to date. In 1965, Gordon Moore stated that technology had a future; that the number of transistors per inch in integrated circuits was doubling every year and that the trend would continue during the next two decades.5 Later, in 1975, Moore amended his own law to say that the rate would fall and that integration capacity would be duplicated approximately every 24 months. This progression of exponential growth, doubling the capacity of circuits integrated every two years, is deemed Moores law. However, Moore himself has placed an expiration date to his law: My law will no longer be met in 10 or 15 years - since 2007-. As stated during the conference in which he made his prediction; nonetheless, he stated that a new technology would come to replace the current one. The direct consequence of Moores law is that prices sink at the same time performance rises: the computer worth today 3000 dollars will cost half of that next year and will be obsolete in two years. In 26 years the number of transistors on a chip has increased 3200 times. Nowadays this applies to personal computers. Nonetheless, when it was formulated, processors (invented in 1971) did not exist, nor desktops, popularized in the 80s. 1.1.2.3 Mobility and Ubiquity. Mobile computing and communications technologies are attaining great worldwide acceptance. They are becoming integrated in our work and at home, turning into a lifestyle deemed impossible some years ago; everything seems to indicate that we are moving towards a new paradigm which can be termed the Mobile Revolution.6 All in all, the phone withstood our voice communications over the past century, and the Internet took us to the information revolution, but neither of these technologies (handheld calculators, laptops, etc.) progressed as fast as mobile devices. Obviously, this goes beyond the comfort and freedom offered by mobile computing and communications technologies. Key factors of this mobile revolution might be the huge convergence of the computing power and communications in a small device, wireless connectivity with other devices and the Internet, as well as the ability to integrate voice, data and multimedia. Voice and data communication now integrates with value-added functions and applications that increase productivity, in a compact and stylish device that also serves as a powerful computer. But beyond our view, the necessary computing elements and networks needed to support infrastructure which enables mobile computing are there. Everything that is wired today, including the Internet and the web, is becoming wireless. Wireless networks are not confined to offices or homes and are emerging as Hot Spots in hotels, cafes, airports and universities, as well as in metropolitan wireless networks. In some cities, we can go from home to the office, to visit a client, and then to a restaurant, maintaining our Wi-Fi connection all the time. The convergence of computing and communications with mobility and ubiquity of mobile devices is creating a greater use of computers and information access paradigm
5 6
Cramming more components onto integrated circuits; Moore, Gordon E. (1965). Mobile and Wireless Computing: the quality of ubiquity; Murugesan, San; Publication: E Semanal; Date: Sunday, March 11 2007 Page 25 of 248
shift. Various types of data and digital information (personal, business, health, finance, tourism, environmental) are available online, and we can perform transactions while moving. With so much computing and communications power in the hands of so many people around the world, mobile versions of existing applications (as well as a whole new range of personalized mobile services) are beginning to emerge. Ubiquitous connectivity also allows new ways to interact and collaborate with co-workers, partners, friends and family. Interesting services include the exchange of message text and multimedia, information and search services dependent on the place where we are and mobile phones that function as electronic portfolios.
1.1.3 Principles of Regulation in Convergence. Convergence poses several challenges regarding regulation, because very rarely the legal framework will be able to reflect technological changes that foster it. However, some institutions have compiled and suggested some principles applicable for regulation in convergence.7 These are: 1. Market Developments. Encouraging Investment, Competition and Growth: Policy makers should aim to create a favorable environment for investment and innovation and ensure a predictable legal and regulatory environment for market participants. In this context, they may want to consider a series of possible barriers to competition and investment that may arise following the deployment of NGN. There are a number of instruments to help adequately address these barriers. In particular, policy makers should: a. Recognize that policy and regulatory measures to foster competition in a next generation environment should be based on a sound economic assessment of specific market conditions and local factors. b. Recognize the need for regulators to consider possible market dominance resulting from the bundling of services. In addition, if adequate facility-based competition does not develop, where Local-Loop Unbundling (LLU) has been mandated, policy makers should: a. Consider difficulties that may arise in replicating next generation access networks which could lead to the creation of new bottlenecks for competition, which may require policy makers to take appropriate steps to ensure there is no undue discrimination in access to these networks. This is particularly relevant in countries relying on unbundling to foster competition since it may be more difficult to meaningfully unbundle next generation access networks. b. Recognize that in certain circumstances service-based competition may provide an important first step to encourage competition in the market and investment by new entrants.
OECD Policy Guidance on Convergence and Next Generation Networks; Organization for Economic Co-Operation and Development (OECD); OECD Ministerial Meeting on the Future of the Internet Economy; Seoul, Korea, 17-18 June 2008
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c. Consider the need to ensure that service and application providers have non-discriminatory access to network resources where there are limited choices for network access. 2. Access to passive infrastructure. It should be recognized that as a large part of the cost of deploying fiber networks is in civil works, appropriate policies should be in place to ensure fair and non-discriminatory access to ducts, poles and rights of way. Regulatory action such as sub-loop unbundling and sharing of optical line termination equipment points at apartments/buildings may be required. 3. Technology neutral regulation. Following the convergence of network and services, it is important to ensure that the market is open for different technologies to compete on equal terms. In this context: a. Governments should encourage, to the extent possible, the development of technologically neutral regulation, particularly in converged areas. b. In the cable and mobile sectors, regulators should consider where the move from technology-specific licenses to service-neutral authorization frameworks would be beneficial in terms of efficient management of scarce resources, spectrum allocation and achievement of relevant public interest objectives. 4. Interconnection. Interconnection also plays an important role in a NGN environment because it needs to take place at all functional levels in order for all service providers to be able to access the new networks and provide their content, service and applications to end-users. Commercial markets for the exchange of IP traffic have developed well without regulatory intervention. Policy makers should therefore: a. Monitor the future development of NGN markets to encourage seamless and non-discriminatory exchange of traffic between networks and consider where regulatory intervention is still necessary. b. Re-examine the functioning and evolution of the existing interconnection system and the evolution in the transition to NGNs through industry and user consultations. 5. Numbering, Naming and Addressing. IP addresses, telephone numbers and other addresses are crucial resources for communication and access to the market. In particular, the availability of new address space is necessary for the growth of the Internet. Governments should: a. Encourage the adoption of the new version of the Internet protocol (IPv6), in particular through its timely adoption by governments as well as important private sector users of IPv4 addresses, in view of the impending IPv4 depletion. b. Review numbering plans to increase flexibility, facilitate new converged services and improve the nomadicity of persons.
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c. Monitor the use of E.164 NUmber Mapping (ENUM) as a routing and interconnection mechanism between networks. 6. Spectrum Allocation. Wireless technologies, including those using unlicensed spectrum, are becoming an important part of the telecommunications landscape. Effective spectrum management is becoming a key policy issue as the range of technologies making demands on spectrum is growing rapidly. This may require policy makers to: a. Encourage the rapid transition to digital broadcasting and make parts of the released spectrum (digital dividend) available for new and innovative wireless communication and broadcasting services. b. Reform spectrum allocation and use market mechanisms and other schemes that reflect the economic value of spectrum in spectrum markets, where feasible taking into account public interest objectives such as interoperability, promotion of cultural and linguistic diversity and media pluralism. c. Review institutional structures for spectrum planning and allocation to ensure that they are better coordinated with the needs of the market and with the requirements of efficient regulation. 7. Universal Service. Universal service is an evolving concept that may change over the years to reflect advances in technologies and usage. Policy makers may need to review definitions of universal service to determine whether changes need to be made and, if so, what services and access would be required. They must also decide whether funding mechanisms should change. 8. Digital Divide: The deployment of NGN may create new asymmetries in access in areas not reached by high-speed Broadband infrastructures. This can raise new concerns about regional competitiveness and economic growth. Governments should encourage the development of nation-wide high-speed Broadband networks to avoid the creation of access asymmetries within countries, which can be particularly pronounced between urban and rural areas. 9. Emergency Services. There is an increased risk of confusion as to whether or not users have access to emergency call services with the convergence of platforms and devices, increased mobility and the shift to IP-based communication. It should be ensured that users of innovative voice services are appropriately informed regarding access to emergency services and that some kind of access to emergency services is guaranteed to users of VoIP services. 10. Quality of Service. Quality of service remains important in a converged next generation environment where information travels across multiple networks. In this context, policy makers should ensure that convergence benefits consumers and businesses, providing them sufficient choices with respect to connectivity, access and use of Internet applications, terminal devices and content, as well as clear and accurate information about the quality and costs of services to enable them to make informed choices.
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11. Telecommunication and Broadcasting Convergence. Convergence allows different types of content and communication services to be delivered through the same network and consumed over a variety of platforms and user devices. The evolution of technology does not necessarily change many of the underlying social and cultural objectives but may change the way these objectives are achieved. The evolution of technology may also allow for increased market liberalization, while maintaining core policy goals. To this end governments should: a. Reconsider existing platform-specific obligations in light of the convergence of telecommunication and broadcasting and develop crossmedia policies for a multi-platform environment so as to ensure consistency of regulation. b. Facilitate the diffusion of content through different devices. 12. Cross-Border Issues. Governments may need to address cross-border issues as services are increasingly geographically and network independent. This creates significant challenges for policy makers. In particular, they might need to review consumer protection frameworks, content regulation measures, the protection of intellectual property rights, the protection of privacy and personal data and legal interception.
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1.2
TELECOMMUNICATIONS REGULATION IN EUROPE, UNITED STATES OF AMERICA AND ASIA-PACIFIC To perform an analysis on the situation of the telecommunications sector regulation in an environment of convergence, we need to examine the situation of those countries that have had more contact with it. European countries, the United States of America and Asia-Pacific countries are probably good examples of how the national legislation has sought to incorporate aspects of convergence in all its facets. The countries surveyed are: Australia Finland France Germany India Ireland Italy Japan Malaysia Netherlands New Zealand Portugal Singapore South Korea Spain Sweden United Kingdom United States of America It should be pointed out that many of the selected countries, notably Finland, Malaysia and India (which does not belong to the Asia-Pacific group) have developed specific normative for convergence. 1.2.1 Telecommunications Sector Government Agencies. Telecommunications sector government agencies in selected countries entities are shown on Table 1. In some cases the functions of the regulatory body are distributed between two agencies. The government agency that defines the sector policy is also indicated, which is normally the Ministry or a government agency of similar rank.
Table 1 - Telecommunications Sector Government Agencies in Europe, USA, and AsiaPacific Source: OECD Data and Regulators
Country Australia
Finland
Regulatory Body Australian Communications and Media Authority (ACMA); Australian Competition and Consumer Commission (ACCC) National Communications Regulatory Authority of Finland (FICORA)
Agency that Defines Sector Policy Department of Broadband, Communications and the Digital Economy (DBCDE) Ministry of Transport and Communications
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Country France Germany
India Ireland Italy Japan
Regulatory Body French Telecommunications and Postal Regulatory Authority (ARCEP) German Regulatory Authority for Industries: Telecommunications, Postal Services, Railways, Electricity (BNetzA) Telecom Regulatory Authority of India (TRAI) Commission for Communications Regulation (ComReg) Communications Regulatory Authority (AGCOM) Ministry of Internal Affairs and Communications (MIC); Telecommunications Business Dispute-Settlement Commission Malaysian Communications and Multimedia Commission (MCMC) Independent Post and Telecommunications Authority (OPTA); Radiocommunications Agency Trade Commission (Telecommunications Commissioner): Competition Authority National Communications Authority (ANACOM) Infocomm Development Authority of Singapore (IDA) Korean Communications Commission (KCC) Telecommunications Market Commission (CMT); Secretary of State for telecommunications and the Information Society (SETSI) Post and Telecom Agency (PTS) Office of Communications (Ofcom) Federal Communications Commission (FCC)
Agency that Defines Sector Policy Ministry of Economy, Finance and Industry (MINEFI) Federal Ministry of Economics and Labor (BMWA) Ministry of Communication Technologies and Information Irish Department of Communications, Marine and Natural Resources Ministry of Transport and Communications MIC
Malaysia Netherlands
Ministry of Information, Communications and Culture Ministry of Economic Affairs
New Zealand
Ministry of Economic Development
Portugal Singapore South Korea Spain
Ministry of Public Labors, Transport and Communications (MOPTC) IDA KCC Ministry of Industry, Tourism and Trade (MITYC) Ministry of Industry, Labor and Communications Department of Trade & Industry (DTI) FCC; National Information and Telecommunications Agency (NITA)
Sweden United Kingdom United States of America
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A review of the table above shows that three countries in Asia-Pacific (Japan, Singapore and South Korea) and the United States have the same authority as regulatory body and as agency that defines the sector policy. In other countries there is a separation of roles between policy definition and regulation, possibly fostered under the World Trade Organization (WTO) agreements seeking to ensure the independence of the sector regulator. The separation between sector policy definition authority and regulatory authority is common practice in the countries of the European Union. 1.2.2 Present Situation of Legislation. The development of legislation related to telecommunications and the audiovisual sector as well is usually a reflection of the countrys policy to adapt to the dynamic situations arising in both sectors. As indicated in the previous section, it is extremely difficult for the legislation of a country to cover all matters related to technological innovation. Nonetheless, a sufficiently flexible regulatory framework designed to deal with changes the best possible way can be created; in this case, generated by convergence. Some particular aspects impacting regulation within an environment of convergence were examined in selected countries, especially those related to legislation. 1.2.2.1 European Community Directives. The European Community established a community legal framework for telecommunications largely influenced by the subject of convergence. Community laws in turn influence national law of Member States, since they are compelled to incorporate them in their domestic legislation. Since the regulatory directives for the telecommunications sector were enacted in year 2002, several changes have been observed in both telecommunications and/or multimedia laws from various countries, as well reconfiguration of their regulatory structures: Directive (2002/21/EC) on a common regulatory framework for electronic communications networks and services (Framework Directive). Directive (2002/19/EC) on access to, and interconnection of, electronic communications networks and associated facilities (Access Directive). Directive (2002/20/EC) on the authorization of electronic communications networks and services (Authorization Directive). Directive (2002/22/EC) on universal service and users rights relating to electronic communications networks and services (Universal Service Directive). Directive (2002/58/EC) concerning the processing of personal data and the protection of privacy in the electronic communications sector (Directive on privacy and electronic communications). Directive (2002/77/EC) on competition in the markets for electronic communication networks and services. Regulation (2000/2887/EC) on unbundled access to the local loop. New Recommendation on Relevant Markets, COM(2007) 5406 rev1. Likewise, the results of the public consultation on the proposal of June 29, 2006 (COM(2007) 696) have also been published. Another communication on a common approach to the use of the spectrum released by the analogue
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blackout and an impact assessment, SEC(2007) 1473, on its main proposals.8 Directive (2009/140/EC) New Framework Directive. Commission decision of December 16, 2009 amending Decision 2002/622/EC establishing a Radio Spectrum Policy Group. Directive (2009/136/EC) which modifies Directive (2002/22/CE) on Universal Access and users rights, Directive 2002/58/CE concerning the processing of personal data and the protection of privacy in the electronic communications and Regulation (EC) N 2006/2004 on cooperation in matters regarding consumers protection. Directive (2009/140/EC) which modifies Directive (2002/21/EC) on a common regulatory framework for electronic communications networks and services, Directive (2002/19/EC) on access to, and interconnection of, electronic communications networks and associated facilities, and Directive (2002/20/CE) on the authorization of electronic communications networks and services. REGULATION (EC) N 1211/2009 establishing the Body of European Regulators for Electronic Communications (BEREC) and the Office. The major changes on the proposal for a new regulatory framework relate to functional separation, radio spectrum liberalization and regulatory harmonization between Member States. Functional separation is a measure which was not envisaged in the Commission proposal submitted to public consultation in June 2006. It was, however, included as an additional measure (remedy) to the existing. The liberalization of the radio spectrum was one of the main objectives of the review of the current framework, as noted in the July 2006 proposal from the Commission. Harmonization increases the powers of the Commission with respect to the National Regulatory Authorities (NRAs) concerning markets definition and analysis. On the other hand, the Commission created by a new Regulation a European authority for the for electronic communications market (BEREC), which replaces the European Regulators Group (ERG). Two fundamental aspects of the new radio spectrum management are service and technological neutrality and a secondary market for spectrum: Neutrality Member States shall ensure that any type of radio access or wireless technology (electronic communications service type) can be used in the frequency bands open for electronic communications services . Secondary Market Companies may transfer or rent individual rights of frequency use in the bands set out for that purpose. These bands will be harmonized by the Commission itself and,
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The European Regulation of Electronic Communications; Jorge Prez Martnez; VIII Telecommunications Congress. Madrid, December 11th, 2007 Page 33 of 248
additionally, each Member State may define other bands. Spectrum transfer or rent shall be notified to the NRA and made public. The Commission can identify specific bands for secondary market, general authorizations and even bands for pan-European services and establish procedures for frequency allocation and directly allocate frequencies for harmonized bands. The major changes in the access directive are the introduction of functional separation and access to new specific resources: Functional Separation A distinction is drawn between functional separation as a regulatory measure enforced by the NRA and voluntary separation by an operator. Defines functional separation as the obligation on vertically integrated enterprises to assign activities related to the supply of wholesale products in a business unit that operates independently. Voluntary separation is defined as the transfer of access network resources (as a whole or part) to a separate legal entity, with different owner, or to a separate business unit, with the goal to provide all retail providers (including their retail units) equivalent access products. The impact analysis made by the Commission emphasizes that functional separation should be considered only when other measures available to the NRA have failed. It adds that functional separation benefits depend on national circumstances. Access to new Specific Resources It opens the possibility to force: Facilitate the co-location or other forms of sharing facilities (ducts, buildings and masts), it includes access to buildings, antennas, manholes and racks (street cabinets) Included are the obligations associated with access to identity, location and presence services. When a NRA has to impose access obligations to an operator, it may also impose technical or operational conditions to the beneficiary of the co-location. 1.2.2.2 Convergence. The legislation directly related to convergence and its main characteristics was examined, and the results are shown in Table 2.
Table 2 - Convergence Legislation in Europe, USA and Asia-Pacific Source: OECD Data and Regulators
Country Australia
Normative for Convergence Australian Communications & Media Authority Act 2005
Characteristics Convergent regulator law; merges roles in telecommunications, broadcasting, spectrum management and broadcasting, content and data services
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Country Finland
Normative for Convergence Communications Market Act N 393/2003
France
Electronic Communications and Audiovisual Communication Services Act N 2004-669
Germany
New German Telecommunications Act (TKG) from 2004
India
Communications Convergence Act of 2001
Ireland
Communications Regulation Act of 2002
Italy
Electronic Communications Code N 259 of 2003 Broadcasting over Telecommunications Services Act of 2002 Communications and Multimedia Act N 588 of 1998
Japan Malaysia
Characteristics Convergence of broadcasting and telecommunications; license for provision of services to the public authorized via a simple notice; multiservice license Licenses by simple notice; licenses for public services have no deadline; modifications to licenses through notices; no restriction on ownership of cable networks; Internet regulated only when voice is carried; separate regulators for telecommunications and audiovisual Regulation is technologically neutral; separate rule for wholesalers and retailers; IP interconnection; non-geographic numbering; free frequencies (unlicensed); spectrum trading Convergence of broadcasting, telecommunications and multimedia; reproduces the Malaysia licensing scheme and introduces 5) value added; structure adjusted for NGNs Regulates networks without regard to class; license through notice; general authorization for services; technological neutrality; separate regulators for telecommunications and audiovisual License through notice; general license for services; technological neutrality; VoIP regulation; spectrum transfer by notice Settled the problem of IPTV in Japan between two ministries Pioneer Convergence act; introduces generic licensing; content regulation; licenses dived in: 1) Network Facilities provider, 2) Network Services provider, 3) Application Services provider, and 4) Content provider; transition regime No license is required to operate a communications network, just a
Netherlands
Reform to the Telecommunications Act of 2004
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Country
Normative for Convergence
New Zealand
Reform to the Telecommunications Act of 2006
Portugal
Communications Act N 5/2004
Singapore
Telecommunications Act (TA) and Broadcasting Act (BA)
South Korea Spain
Decree to the Broadcast Act N 20947, Jul. 29, 2008 Act 32/2003, from November 3 General Telecommunications Act
Sweden United Kingdom
Act N 2003:389 of Electronic Communications Communications Act of 2003
Characteristics registry; spectrum licenses can be transferred prior ministerial approval; loop unbundling still at NGN level Fully liberalized system for authorizations; license required just for spectrum; technological neutrality; sub-loop unbundling as NGNs access; local and mobile number portability; spectrum can be marketed by individuals A single license type: General license; simple licensing process; general license given for an indefinite period; spectrum licenses can be easily transferred; spectrum can be marketed between individuals Differentiation between facilitiesbased operator (FBO) and servicebased operator (SBO); FBOs require a license with formalities; licenses for FBOs are much simpler to obtain and are perpetual; IP telephony equivalent to traditional telephony; spectrum transfer with some restrictions Resolves problem with definition of IPTV as telecommunications or broadcasting Regulation of electronic communications inside telecommunications; provision of services to the public through a simple notice; Universal Service includes functional access to the Internet; spectrum transfer; automatic adjustment of licenses Simple licensing procedure; license transfer subject to prior approval; IP network-based cost model Convergent regulator for telecommunications, audiovisual and media; no license required to operate a network or provide services, unless spectrum is used; Ofcom may authorize use of the
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Country
Normative for Convergence
United States of America
Telecommunications Act of 1996
Characteristics spectrum without licensing; loop unbundling obligation just for NGN networks; spectrum transferred just via notice; specific rules for VoIP (similar to public telephony) Introduces the subject of intramodal competition; digital television; allows cable operators to provide telephony; content regulation
A first glance suggests that the majority of European countries adopted the Community Telecommunications Package within their respective legislation. Notably India, Malaysia and Finland established a regime which expressly refers to the convergence of telecommunications services. Australia, New Zealand and the UK have convergent regulators, and their legislation is openly flexible and simplified as far as licensing is referred. 1.2.2.3 Spectrum Assignment. Spectrum assignment is crucial for the development of convergence, because it becomes the main resource required by mobile services operators and those which use it to replace the use of physical subscriber loop lines with wireless access for the last mile. The results of the comparison are indicated in Table 3.
Table 3 - Spectrum Assignment Legislation in Europe, USA and Asia-Pacific Source: OECD Data and Regulators
Country Australia Finland
France Germany
India
Spectrum Assignment Flexibility The assignment process is direct or by tender; there are no automatic renewals. Certain bands are shared; spectrum licenses are assigned as they are requested; should there be more interested parties than bands, the Authority assigns them to whom it utilizes them the best. Spectrum is assigned by tend or beauty contest when there is not enough for all interested parties. Spectrum can be assigned for general use; but when this is not possible, is individually assigned by tendering or beauty contest Spectrum is granted subject to availability; for scarce spectrum a bidding process is initiated; unlicensed bands for spectrum commons available
Spectrum tied to Service? Spectrum is tied to the service. Spectrum is tied to the service.
Spectrum is tied to the service. Spectrum is tied to the service.
Spectrum is tied to the service.
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Country Ireland Italy Japan
Malaysia
Spectrum Assignment Flexibility Spectrum is assigned directly, but when it is scarce, it is assigned via tender or auctioned Spectrum is considered a scarce resource and it is assigned through public competitive processes. Marked difference between wired and wireless services; wireless services to the public subject to additional special conditions. Spectrum can be used through a spectrum, equipment, or a generic assignment (license). Spectrum is assigned directly; but when scarce, it is assigned via tender or auctioned. Exclusive rights over the spectrum are auctioned; these licensees are allowed in turn to grant individual licenses. Spectrum is assigned directly; but when scarce, it is assigned via tender or auctioned. Spectrum is assigned directly; but when scarce, it is assigned via tender, auctioned, or assigned through a contest on merits (beauty contest). Some frequencies are assigned for a fee, others are assigned for free. Spectrum assigned by tender or beauty contest when there is not sufficient for all interested parties. Spectrum is assigned directly; but when demand exceeds supply, it is assigned via tender, a selection process based on merit is initiated, or a combination of both. Each spectrum assignment goes through a specifically regulated competitive process or tender. Certain bands are allocated directly after a public consultation; other frequencies are granted in lengthy auctions.
Spectrum tied to Service? Spectrum is tied to the service. Spectrum is tied to the service. Spectrum is tied to the service.
Netherlands New Zealand
Spectrum awarded through a generic license can span various frequencies, depending on the Frequency Plan. Spectrum is tied to the service. Spectrum is tied to the service.
Portugal Singapore
Spectrum is tied to the service. Spectrum tied to the service, but attempts are made to share services within the same band. Spectrum is tied to the service. Spectrum is tied to the service. Spectrum is tied to the service.
South Korea Spain Sweden
United Kingdom United States of America
Spectrum is tied to the service. Spectrum linked to service, but recently some bands can be used the way the licensee decides.
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Differences observed between the different countries surveyed are not substantial. Scarce spectrum is usually assigned by a competitive process that can vary from an auction to a direct award based on merit. United States, Malaysia and Singapore are countries which differ from the traditional relationship of spectrum with a specific service. 1.2.2.4 Access and Interconnection. Unbundling of access infrastructure and interconnection with NGN networks at the IP level are important considerations in a next generation environment. Interconnection may be at a very primitive level (interconnection with VoIP), somewhat advanced (IP interconnection) or fully developed at a functional level between NGNs. The results of the evaluation are indicated in Table 4.
Table 4 - Access and Interconnection Legislation in Europe, USA and Asia-Pacific Source: OECD Data and Regulators
Country Australia Finland France
Germany
India
Ireland
Italy
Japan
Unbundling of Access Infrastructure Compulsory? Obligation for the dominant operator to unbundle essential facilities; local loop unbundling The regulator can impose the obligation to unbundle to operators with significant market power The dominant operator is forced to unbundle network elements and meet reasonable demands from other operators Dominant operator forced to unbundle; dominant should provide unbundled network elements; Reference Interconnection Offer (RIO) There are recommendations from the regulator to implement unbundling, which have not been imposed by Government yet The obligation to unbundle network elements exists for the dominant operator, but its implementation is slow; loop unbundling is provided under a Service Level Agreement (SLA) The dominant operator is forced to unbundle facilities and network elements; modalities for loop unbundling are line rental and bitstream Dominant operator forced to
Interconnection for NGN or IP Networks Obligation for the Public Switched Telephone Network (PSTN) operators to connect VoIP operators The obligation to interconnect is technologically neutral and obliges all network operators This situation has not been seen in France yet IP Telephony providers can use the method that best suits them to interconnect with the dominant Interconnection between public switched telephony networks and IP providers is not allowed yet Problems are still on a discussion stage
Application of technological neutrality reaches the subject, and interconnection is compulsory, without regard to technology The subject is quite advanced and
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Country
Malaysia
Netherlands
New Zealand
Portugal Singapore
South Korea
Unbundling of Access Infrastructure Compulsory? unbundle and to submit to the regulator price detail for the lease of network elements Access unbundling obligations are enforced by the regulator, even for new entrants with no dominance (3G operators) Obligations imposed on the dominant include loop unbundling for Broadband and voice with tariffs based on cost; reference offer is compulsoy; loop unbundling at copper or fiber level The regulator has imposed the obligation of disaggregation at various levels; loop unbundling at physical level or bitstream Only the dominant is forced to unbundle; there is a reference offer for loop unbundling Unbundling of network elements compulsory for dominant; reference offer or RIO contains details Obligation for loop unbundling in three modes: full unbundling, shared loop, or open access to Broadband Internet Obligation for dominant operator to unbundle on a non-discriminatory basis; requirement to present a reference offer Dominant operator must maintain a RIO to access elements; the offer must be based on nondiscriminatory terms The dominant is forced to unbundle all elements of the network at cost; disputes are resolved by the regulator within preset deadlines Existing operators (ILECs) forced to unbundle; decision on which elements are unbundled based on
Interconnection for NGN or IP Networks reaches interconnection between IP networks and Broadband services for broadcasting provision The regulator has imposed an obligation to interconnect with VoIP networks at reasonable prices When an NGN was introduced by the dominant a problem was generated for other operators; the dominant is forced to provide access to Broadband at cost Interconnection follows the principle of technological neutrality; the use of unbundling at sub-loop level is suitable for NGNs NGN interconnection is not regulated; there is a flat fee RIO for interconnection at IP level IP telephony providers can choose the most appropriate method of interconnection with the dominant operator There is not a complete determination of interconnection charges by category; the regulator recently determined charges for VoIP Debate on ex ante regulation for NGNs; regulator already adopted interim measures to ensure IP level interconnection An interconnection model based on IP networks with optical fiber connections is being considered When migrating to NGN networks, operators (including the dominant) should ensure compatibility with other operators; access services must be provided on a nondiscriminatory basis IP service providers are not required to interconnect or provide access to their networks; ILECs are not
Spain
Sweden
United Kingdom
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Country
Unbundling of Access Infrastructure Compulsory? an efficiency criteria, FCC has relaxed the obligation to unbundle in specific cases
Interconnection for NGN or IP Networks obliged to provide bandwidth capacity as a network element
It should be noted that most countries have local loop unbundling obligations at both levels: physical and stream splitting or bitstream. While NGN networks implementation and IP-based services are actively being developed in the countries analyzed, some such as France, India and Ireland have not yet decided on the issue at the legislative level. 1.2.3 Sectoral Regulation. Convergence implies in the long term the provision of telecommunications services and audiovisual through a single platform or network. It has been traditionally assumed that there were important differences between them, even though from the technological viewpoint, this is no longer so clear cut nowadays. Despite these conditions, some non-convergent (or non-converged) network schemes are still being kept. This section will analyze the current situation of the countries listed at the top of this section. 1.2.3.1 Audiovisual Sector and Contents. Regulation of the audiovisual sector, which includes the communication media commonly known as radio and television broadcasting, is described in Table 5.
Table 5 - Audiovisual Sector and Content Regulation in Europe, USA and Asia-Pacific Source: OECD Data and Regulators
Country Australia Finland France Germany
India Ireland Italy Japan
Audiovisual Regulatory Body ACMA FICORA Audiovisual Superior Council (CSA) BNetzA; Association of State Media Authorities for Broadcasting in Germany (ALM); German Commission on Concentration in the Media (KEK) Indian Ministry of Information and Broadcasting Broadcasting Commission of Ireland (BCI) AGCOM MIC
Spectrum Assignment for Audiovisual by: ACMA FICORA CSA BNetzA
Regulation of Content by: ACMA FICORA CSA ALM
TRAI BCI AGCOM MIC
Indian Ministry of Information and Broadcasting BCI AGCOM MIC
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Country Malaysia Netherlands New Zealand Portugal Singapore South Korea Spain
Audiovisual Regulatory Body MCMC Dutch Media Authority Ministry of Economic Development Regulatory Entity for Social Communications (ERC) Media Development Authority (MDA) Korean Communications Commission (KCC) Secretary of State for telecommunications and the Information Society (SETSI) Swedish Authority for Radio and Television Ofcom FCC; State Governments for cable television
Spectrum Assignment for Audiovisual by: MCMC Radiocommunications Agency Ministry of Economic Development ANACOM IDA KCC SETSI
Regulation of Content by: MCMC Dutch Media Authority Broadcasting Standards Authority (BSA) ERC MDA KCC SETSI
Sweden United Kingdom United States of America
PTS Ofcom FCC
Swedish Commission for Broadcasting Ofcom FCC
In general, the agency responsible for regulating the audiovisual sector is also at charge of regulating contents, which usually includes subscription television. 1.2.3.2 Telecommunications. Telecommunications regulatory authorities were analyzed and compared in relation to their role as multi-sector regulators or not. Table 6 shows the results.
Table 6 - Telecommunications Regulation in Europe, USA and Asia-Pacific Source: OECD Data and Regulators
Country Australia
Finland France Germany
Regulatory Body Australian Communications and Media Authority (ACMA); Australian Competition and Consumer Commission (ACCC) National Communications Regulatory Authority of Finland (FICORA) French Telecommunications and Postal Regulatory Authority (ARCEP) German Regulatory Authority for Industries: Telecommunications,
Multi-sector Regulation? Telecommunications and Audiovisual
Transport, Telecommunications, Audiovisual and Postal Services Telecommunications and Postal Services Electricity, Gas, Telecommunications and Postal
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Country India Ireland Italy Japan Malaysia Netherlands
New Zealand
Portugal Singapore South Korea Spain Sweden United Kingdom United States of America
Regulatory Body Postal Services, Railways, Electricity (BNetzA) Telecom Regulatory Authority of India (TRAI) Commission for Communications Regulation (ComReg) Communications Regulatory Authority (AGCOM) Ministry of Internal Affairs and Communications (MIC) Malaysian Communications and Multimedia Commission (MCMC) Independent Post and Telecommunications Authority (OPTA); Radiocommunications Agency Trade Commission (Telecommunications Commissioner): Competition Authority National Communications Authority (ANACOM) Infocomm Development Authority of Singapore (IDA) Korean Communications Commission (KCC) Telecommunications Market Commission (CMT) Post and Telecom Agency (PTS) Office of Communications (Ofcom) Federal Communications Commission (FCC)
Multi-sector Regulation? Services Telecommunications Telecommunications and Postal Services Telecommunications and Audiovisual Telecomunicaciones, Audiovisual y Correos Telecommunications and Audiovisual Telecommunications and Postal Services Electricity, Gas, Telecommunications and Airports Telecommunications and Postal Services Telecommunications and Postal Services Telecommunications and Audiovisual Telecommunications Telecommunications and Postal Services Telecommunications and Audiovisual Telecommunications and Audiovisual
1.2.4 Structure of the Regulatory Body. This section analyzed the structure of the regulators in the countries of Europe, Asia Pacific and the United States. The goal is primarily to verify the current situation of sector regulation regarding issues which are important for convergence. 1.2.4.1 Report and Appointment. A measure of the degree of independence of the regulator becomes evident by examining who appoints it and to whom it reports regarding performance. This analysis was conducted in the countries selected, and the results are listed in Table 7.
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Table 7 - Report and Appointment of the Regulatory Body in Europe, USA and Asia-Pacific Source: OECD Data and Regulators
Country Australia Finland France Germany India Ireland Italy Japan Malaysia Netherlands New Zealand Portugal Singapore South Korea Spain Sweden United Kingdom United States of America
Regulator ACMA FICORA ARCEP BNetzA TRAI ComReg AGCOM MIC MCMC OPTA Trade Commission ANACOM IDA KCC CMT PTS Ofcom FCC
Reports to: Congress and Minister Ministry Annual report to Ministry and Congress Congress every 2 years Annual report to Ministry and Congress Ministry Congress Does not report Ministry Annual report to Ministry Congress and Minister Annual report to Ministry and Congress Congress Does not report Annual report to Ministry and Parliament Ministry Congress Congress
Appointed by: General Governor President President President Central Government Minister President Government Minister The Crown Governor General The Council of Ministers President President Government with Parliament approval Government Secretaries of State President with Congress ratification
1.2.4.2 Term of Appointment. The telecommunications regulator characteristics regarding term of appointment, appointment renewal and number of members are listed in Table 8.
Table 8 - Term of Appointment for the Regulatory Body in Europe, USA and Asia-Pacific Source: OECD Data and Regulators
Country Australia Finland France Germany India Ireland Italy
Regulator ACMA FICORA ARCEP BNetzA TRAI ComReg AGCOM
Term of Appointment 5 years Open-ended 6 years 5 years 6 years 5 years 7 years
Appointment Renewal Yes (only once) No Yes Yes Not specified No
Number of Members 3-9 1 7 1 2-6 1-3 9
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Country Japan Malaysia Netherlands New Zealand Portugal Singapore South Korea Spain Sweden United Kingdom United States of America
Regulator MIC MCMC OPTA Trade Commission ANACOM IDA KCC CMT PTS Ofcom FCC
Term of Appointment 3 years 5 years 4 years 5 years 5 years 5 years 3 years 6 years 6 years 3 5 years 5 years
Appointment Renewal Yes Yes Yes Yes No Yes Yes Yes (only once) Yes Yes Yes
Number of Members 5 4-9 3 4-6 3-5 9 maximum 9 maximum 9 (Could be reduced to 4) 9 9 5
It can be observed that many of the telecommunications regulators are collegiate bodies (multimember), where the number of members reaches nine in several cases. The renewal of the mandate is the rule in most countries and five years seems to be the average term. 1.2.5 Distribution of Roles and Responsibilities for Regulators. Roles and responsibilities of the telecommunications regulator are analyzed and compared in this section, with the purpose of observing similarities/differences which will help to identify characteristics relevant for a telecommunication market in convergence. 1.2.5.1 Market Entry. Regulators in general have a marked responsibility for entry of new operators to the market. The regulators role regarding fixed and mobile licensing was analyzed, and the results are indicated in Table 9.
Table 9 Regulators Responsibilities for Market entry in Europe, USA and Asia-Pacific Source: OECD Data and Regulators
Country Australia Finland France Germany India
Authority Responsible for Awarding License Fixed Mobile R R R M R R R R M M
Oversight of License Requirements C, R R R R M
Approval for Mergers C C, R C C C, R
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Country
Ireland Italy Japan Malaysia Netherlands New Zealand Portugal Singapore South Korea Spain Sweden United Kingdom United States R R of America M Ministry R Regulator C Competition Authority
Authority Responsible for Awarding License Fixed Mobile R R M M M M R R R R Not required M R R R R M M R M R R R R
Oversight of License Requirements R M M R R M R R M R R R R
Approval for Mergers C C, R C, M R C, R C C, R C, R C, M C, R C C, R C, R
The case of New Zealand regarding fixed services should be outlined, because a license is not required to provide the service, which is the ultimate expression of flexibility regarding licenses. The participation of the competition authority is almost compulsoy in merger cases. 1.2.5.2 Interconnection. Interconnection is a key element in telecommunications regulation, especially if analyzed from the viewpoint of networks regulation in an IP environment. The topics discussed in Table 10 are interconnection charges definition, subscriber loop unbundling and dispute resolution.
Table 10 - Regulators Responsibilities for Interconnection in Europe, USA and Asia-Pacific Source: OECD Data and Regulators
Country Australia Finland France Germany India Ireland Italy Japan Malaysia Netherlands New Zealand Portugal Singapore South Korea
Charge Definitions C R R R M R R M R R R R R M, R
Local-Loop Unbundling C R R R M R R M R R R R R M
Controversy Resolution C R R R M R R R R R R R R R
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Country Charge Definitions Local-Loop Unbundling Spain R R Sweden R R United R R Kingdom United States R R of America M Ministry R Regulator C Competition Authority
Controversy Resolution R R R R
1.2.5.3 Spectrum Management. Spectrum management has been a constant concern of any countrys regulator, mainly because wireless systems, and particularly mobile services, have grown in importance these past years. Usually the Ministry and the regulator have shared functions on the subject of spectrum, as shown in Table 11.
Table 11 - Regulators Responsibilities for Spectrum Management in Europe, USA and AsiaPacific Source: OECD Data and Regulators
Country Spectrum Planning Australia R Finland R France M Germany R India M Ireland R Italy R Japan M Malaysia R Netherlands R New Zealand M Portugal R Singapore R South Korea M Spain M Sweden R United R Kingdom United States M, R of America M Ministry R Regulator
Spectrum Assignment R R R R M R M M R R M R R M M R R M, R
Transfer Authorization R R M Not allowed M R M, R M R M M R R M Limited R R R
Germany and Spain have limitations on spectrum transfer, something that negatively affects the establishment of a secondary market for this resource. 1.2.5.4 Numbering. Numbering management is another activity commonly performed by the regulator. Table 12 shows the countries comparison in this respect.
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Table 12 - Regulators Responsibilities for Numbering in Europe, USA and Asia-Pacific Source: OECD Data and Regulators
Country Numbering Plan Numbering Assignment Australia R R Finland R R France R R Germany R R India M M Ireland R R Italy R R Japan M M Malaysia R R Netherlands M R New Zealand O O Portugal R R Singapore R R South Korea M M Spain M R Sweden R R United R R Kingdom United States R R of America M Ministry R Regulator O - Operators The situation of New Zealand is remarkable, a country in which operators themselves have taken on the task of managing both the numbering plan and the assignment of this resource. 1.2.5.5 Tariff Regulation. The country regulatory analysis regarding rate regulation tasks, as well as the rate regulation scheme used, are compared in Table 13.
Table 13 - Regulators Responsibilities for Tariff Regulation in Europe, USA and Asia-Pacific Source: OECD Data and Regulators
Country Australia Finland France Germany India Ireland Italy
Type of Regulation Price caps Price caps Tariff control Price caps; tariff approval Tariff control Price caps Price caps
Regulation Applies to: Incumbent operator No one Universal Service; Wholesale markets with insufficient competition Dominants Dominants Services without substantial competition Services without substantial competition
Regulatory Body C C R R R R R
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Country Japan Malaysia Netherlands
Type of Regulation Notification; Price caps Price caps Price squeeze; tariff approval
New Zealand Portugal
Kiwi Share obligations Tariff approval
Singapore South Korea Spain Sweden United Kingdom United States of America M Ministry R
Tariff approval Tariff approval Price caps Tariff approval Price caps
Price caps or rate-ofreturn regulation Regulator C Competition Authority
Regulation Applies to: Universal Service; Wholesale markets with insufficient competition Wholesale markets Operators with significant market power in fixed-line telephony and leased lines Local telephony Universal Service; Wholesale and retail markets with insufficient competition Dominants Dominants Operators with significant market power Incumbent operator; Wholesale markets with insufficient competition Residential services from dominant operator Wholesale markets
Regulatory Body M R R
R R
R M R R R R
The table analysis shows that most countries impose tariff regulation only on the dominant operator, generally conceived as that which enjoys significant power in any market. In Finland and the United States of America, rate regulation only to wholesale telecommunications services is applied.
1.2.6 Role and Interaction with Academic Networks. Academic networks, also known as National Research and Education Networks (NRENs) have played a very important role in the development of networks based on packetswitching. Since its inception, Internet was conceived as a network to connect research centers through packet-switching techniques, and followed a development parallel public telecommunications networks based on circuit-switched technology. In this section the role and interaction of the regulators with the academic networks in selected countries was verified. One of the objectives was to analyze the degree of interaction which can exist with the telecommunications regulators, particularly in regards to regional telecommunications policies which could favor the development of sector policies. The results of this descriptive analysis are indicated in Table 14.
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Table 14 - Role and Interaction with Academic Networks in Europe, USA and Asia-Pacific Source: OECD Data and Regulators
Country Australia
Academic Networks AARNet is the academic and research of Australia network.
Role and Interaction with Regulator On 27 November 2000 AARNet Pty Ltd ACN received a license for carriers services from ACMA.
Comments AARNet has been effective in making representations to the Government in policy, legislation, strategy and programs to improve available services and telecommunications facilities not only in the sector of education and research but also to the community throughout Australia.
Finland
France
FUNET (Finnish University network and research) is a backbone Internet connection for Finnish universities, polytechnics and research facilities. It is governed by the State CSC - IT Center for Science Ltd. Renater (Rseau national de tlcommunications pour la technologie, lenseignement et la recherche) connects to over 1,000 sites. Deutsches Forschungsnetz (German Research Network), usually abbreviated DFN is the NREN used academically and for research purposes. C-DAC (Centre for Development of
FUNET operates as a private network with own circuits.
Germany
The NAP, called Service for French Internet Exchange (SFINX), is operated by RENATER, outsourcing dayto-day operations to France Telecom. The interaction between the NRENS and BNetzA is not very clear. DFN is registered as a private network. Both C-DAC and ERNET have
RENATER close relationship with the Government on one hand and universities on the other makes it a great mediator, apart from being the national domain administrator. There are not really problems with the regulator. The use of Internet and the German network of research and education as part of the Internet poses a multitude of new and unresolved legal issues. Therefore, DFN-Verein established a law research group at the University of Mnster. The regulator treats Indian NRENs as ISPs and in this sense
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India
Country
Academic Networks Advanced Computing), depends from the IT Department of the ICT Ministry. ERNET (Education and Research Network) provides communications infrastructure and services to universities, research centers, NGOs, Government, private sector and others. HEAnet is the National Education and Research Network of Ireland; it provides services to three categories of organizations: user, Member and connected. GARR (whose acronym means Gestione renovation Rete Ricerca Administration of the Research Networks Expansion) is composed by all those representing the Italian academic and scientific research community. SINET is a backbone of national Academic Internet designed to promote research
Role and Interaction with Regulator registries as ISP at TRAI and they are treated as such.
Comments they are on equal conditions with purely commercial access providers.
Ireland
ComReg awards HEAnet licences and authorizations the same way commercial operators, despite its character of NREN. No relationship between GARR and AgCom, the Italian regulator, could be verified.
Recently ComReg granted a temporary licence to perform tests on WiMAX to HEAnet and it recently obtained an extension until June 2010.
Italy
Japan
SINET and MIC are related through APAN, a high performance network for
Being both the regulator and the NREN member of APAN, relations between the two institutions are made viable by sharing a common goal.
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Country
Academic Networks and education for more than 700 universities and research institutions.
Malaysia
Netherlands
New Zealand
Portugal
MyREN, the first network of education and research of Malaysia, was established in 1997, headed by the Ministry of Energy, Communications and Multimedia. SURFnet is a subsidiary of the Organization of SURF, formed by Dutch universities, universities of applied sciences and research centers in innovative ICT facilities. (NGI - NZ (Next Generation Internet - New Zealand) is a consortium that provides a highspeed national network; therefore, connection to NGIs international networks). FCCN (Fundao para a Computao Cientfica Nacional) is a private nonprofit institution, with support from universities and national research
Role and Interaction with Regulator research and development of advanced applications and next generation services. MyREN holds a license for the provision of etwork facilities, as sets it the 1998 Multimedia and Communications Act SURFnet does not have at this time a relationship with OPTA, the communications regulator.
Comments
MyREN is on equal footing with other providers of network facilities.
Fixed networks do not require authorization for operation by the regulator.
In 2000, 2004 and 2007 SURFnet was compelled by OPTA to register as a provider of public telecommunications network and telecommunications services. On March 27, 2009, the Rotterdam District Court delivered its verdict in the case presented against OPTS for SURFnet. The Court ruled in favor of SURFnet. New Zealand is unique among member countries of the OECD in not having an advanced network research and development to support the development of next-generation Internet services, since this effective through a consortium. The FCCN is the non-profit organization that manages administration and registration of Portugals .pt domain.
FCCN operates as a private network with own circuits.
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Country
Academic Networks institutions, contributing to the expansion of Internet in Portugal. SingAREN (Advanced Research and Education Network in Singapore) is a nonprofit organization, Singapores NREN, and part of the Internet2 community organization. KREONET (Korea Research Environment Open NETwork) is a NREN supported by MEST (Ministry of education, science and technology) RedIRIS (interconnection of computer resources from universities and research centers); it is funded by the Ministry of Science and Innovation; is responsible for managing Red.es, from the Ministry of Industry, tourism and Trade. SUNET stands for the Swedish University Network for Computing. The Swedish Research Council operates
Role and Interaction with Regulator
Comments
Singapore
South Korea
As a project, SingAREN was initially funded by IDA, until it was restructured in October 2003 to become an independent organization through services provided to its members. KREONET is a private access network that uses its own optical links.
Although SingAREN became an independent society, the technology group of IDA continues to play an active role in SingAREN, advocating the development of advanced network applications and technology there.
Spain
In January 2004 RedIRIS becomes integrated as a Department with its own autonomy and identity within the business public entity Red.es, attached to the Ministry of Industry, Tourism and Trade. It is a private academic/research network with own circuits.
KREONETs national backbone is based on optical lambda equipment, specifically, an advanced optical transmission system based on multiple lambdas which provides a maximum speed of 20Gbps and 2.5Gbps minimum. RO 2004/1098 from the CMT on whether Red.es is an operator or not, rules: Red.es has been acting in the exercise of the functions assigned by the articles of association as public business entity and as guarantor of the satisfaction of needs of general interest, and not in the condition of public networks or public electronic communications services operator. SUNET is funded in part by the Ministry of Education, Research and Culture. Universities have to pay what the Ministry does not pay. That fee is distributed according to the size of the
Sweden
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Country
Academic Networks SUNET, is the responsible administrative authority and appoints SUNETs Board. JANET is the network dedicated to the needs of education and research in the UK. Education and research organizations are connected among themselves, as well as the rest of the world through links to the global Internet. Internet2 is a consortium of advanced non-profit networks comprising more than 200 U.S. universities.
Comments University. Other organizations have to pay a fee which is proportional to their connections capacity.
United Kingdom
JANET is a private network with own fiber infrastructure.
TeliaSonera International Carrier, providing IP connectivity to JANET, has 20,000 km of European fiber network. If a way could be opened to use JANET by businesses and consumers, it could possibly substantially reduce costs and the time required to build and deploy NGA.
The FCC currently uses the access through Internet2 for health and education projects in rural areas.
Interaction between Internet2 and Government agencies is extremely smooth and allows expansion of the NRENs throughout the country. Internet2 is a zealous advocate of network neutrality.
The analysis of the preceding table shows that many NRENs work directly with government entities (mainly ministries) and some are even part of them. Among those which are not part of the Government structure, most are non-profit organizations which in some cases get the same regulatory treatment than access providers, but most are considered private networks. In the context of networks, Europe has filled the gap with the GEANT network. This network is currently the most advanced in the world with a core of 10 Gbps bandwidth. It has exploited the liberalization of telecommunications in Europe and built on the rich experience of the NRENs and essential support from European and national funding agencies. GEANT is directly in line with the concepts of subsidiarity and complementarity. Thye APAN Network (Asia-Pacific advanced network), on the other hand, is an international non-profit consortium established on June 3rd, 1997. APAN is designed to be a high performance network for research and development of advanced next generation applications and services. APAN provides an advanced network environment
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research and education community in the Asia and Pacific region and promotes global collaboration.
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1.3
PRESENT SITUATION OF TELECOMMUNICATIONS REGULATION IN LATIN AMERICA Latin America is characterized by a highly varied composition on regulatory experience in the telecommunications sector. There are marked variations on the sector situation in different countries, which can be analyzed in the annexes attached to this study. With the exception of Haiti, all countries analyzed are members of REGULATEL. These are: Argentina Bolivia Brazil Chile Colombia Costa Rica Cuba Dominican Republic Ecuador El Salvador Guatemala Haiti Honduras Mexico Nicaragua Panama Paraguay Peru Uruguay Venezuela 1.3.1 Telecommunications Sector Government Agencies. The Latin American telecommunications sector entities are listed in Table 15, according to data provided by REGULATEL.9
Table 15 - Telecommunications Sector Government Agencies in Latin America Source: REGULATEL Data and Regulators
Country Argentina Bolivia Brazil Chile Colombia

9
Regulatory Body National Communications Commission (CNC) Oversight and Social Control of Telecommunications and Transport Authority (ATT) Telecommunications National Agency (ANATEL) Subsecretary of Telecommunications (Subtel) Communications Regulation
Agency that Defines Sector Policy Secretary of Communications (SECOM) Ministry of Public Utilities, Services and Housing (MOPSV) Ministry of Communications (MC) Ministry of Transport and Telecommunications (MTT) through Subtel Ministry of Information and
Telecommunications Regulators in Latin America; Cusco, 2004; Latin American Forum of Telecommunications Regulators REGULATEL; Secretariat General; Page 56 of 248
Country Costa Rica Cuba Dominican Republic Ecuador El Salvador Guatemala Haiti Honduras Mexico Nicaragua Panama Paraguay Peru Uruguay Venezuela
Regulatory Body Commission (CRC) Superintendence of Telecommunications (SUTEL) Ministry of Information Technologies and Communication (MIC) Dominican Institute of Telecommunications (Indotel) National Secretary of Telecommunications (SENATEL) General Superintendence of Electricity and Telecommunications (SIGET) Superintendence of Telecommunications (SIT) National Telecommunications Council (CONATEL) National Telecommunications Commission (CONATEL) Federal Telecommunications Commission (Cofetel) Nicaraguan Institute of Telecommunications and Postal Services (TELCOR) National Authority for Public Services (ASEP) National Telecommunications Commission (CONATEL) Office for Supervision of Private Investment in Telecommunications (OSIPTEL) Regulatory Unit of Communication Services (URSEC) National Telecommunications Commission (CONATEL)
Agency that Defines Sector Policy Communication Technologies (MinTIC) Ministry of Environment, Energy and Telecommunications (Minaet) MIC Indotel National Telecommunications Council (CONATEL) Ministry of Economy (ME) Ministry of Communications, Infrastructure and Housing (CIV) Ministry of Public Utilities, Transport and Communications (TPTC) Secretary of Finance (SEFIN) Secretary of Communications and Transport (SCT) TELCOR ASEP Ministry of Public Utilities and Communications (MOPC) Ministry of Transport and Communications (MTC) URSEC Ministry of Popular Power for Infrastructure (MINFRA)
1.3.2 Present Situation of Legislation. Just as in the case of the countries of Europe, Asia-Pacific and the United States, was an analysis was performed on existing legislation in Latin American countries, with the purpose of identifying rules that can promote (or delay) the introduction of convergence in the country.
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1.3.2.1 Convergence. Legislation related to networks and services convergence, where it exists, is vital to foster the convergence of networks and services in the telecommunications sector. Of particular importance is that concerning multiservice license or single license, which fosters the provision of services appropriately for a next-generation environment with the NGNs. Table 16 lists the normative directly related to convergence found in Latin America.
Table 16 - Present Situation of Legislation for Convergence in Latin America Source: REGULATEL Data and Regulators
Country Argentina
Normative for Convergence Decree N 764/2000 Telecommunications Deregulation
Characteristics Sets a single telecommunications license; sets 60 days as the deadline to grant the license; the license is granted open-ended (without time limit) and enables provision of any service, with or without its own infrastructure Defines Multimedia Communication Service (SCM) license; separates SCM services from network; provides numbering rights and other resources to the SCM Act N 18.168, October 02 1982, by focusing on networks rather than on the services provided over them, favors triple-play Introduces the concept of general license for provision of networks and services; licenses for spectrum use can be transferred; technological neutrality Introduces principles of technological neutrality and convergence; fosters free use of frequency bands; only one license required to provide services of telecommunications; license processing time set to a maximum of 2 months; inclusion of other services being offered by simple notice to the regulator
Bolivia Brazil
None Regulation for Multimedia Communication Service, Regulation N 272, de 9/8/2001 None in particular
Chile
Colombia
Act 1341, July 30th, 2009 (ICT Act)
Costa Rica
General Telecommunications Act N 8642 of June the 4th, 2008
Cuba Dominican Republic Ecuador El Salvador Guatemala
None None None None None

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Country Haiti Honduras Mexico
Normative for Convergence None None Agreement on Convergence for Local Telephony Fixed-line Services and Television and/or Restricted Audio of October 3rd, 2006
Characteristics Establishes the provision of voice, data and video in technological convergence as a strategic line; promotes convergence between wireline and wireless networks; allows dealers to determine which part of the frequency bands awarded are used for other services Explicitly defines access to NGNs, non-geographic numbers, roaming, translation of IP addresses and subjects relative to a nextgeneration environment Fosters convergence of networks and services; introduces single concession (license) to be formalized through a contract Introduces simplified process for general license; additional services can be provided via license modification; regulator has limited timeframe for processing request
Nicaragua
Administrative Agreement N 0042005 of January 7th, 2005, General Regulation for Interconnection and Access None None Act N 28737 of May 17th, 2006
Panama Paraguay Peru
Uruguay Venezuela
None Venezuelan Organic Telecommunications Act of June the 1st, 2000
One of the first assessments is that those rules concerning convergence were all, without exception, issued this decade, even though this phenomenon had already been observed since the end of the last century. Out of 8 countries that have normative for convergence, the oldest one is the Organic Telecommunications Act of the Bolivarian Republic of Venezuela (which adopted a similar approach to the law of Malaysia) and the latest is the ICT Act of Colombia. Brazil and Mexico have also made important advances with their respective multimedia licenses and triple-play requirements. Argentina and Costa Rica have also enriched their legislation on telecommunications with a multiservice license. 1.3.2.2 Spectrum Assignment. Convergence is closely linked with a flexible policy on spectrum assignment, primarily because of the enormous replacement effect that mobile services have in relation to fixed services and especially for the development of wireless Broadband, which enables users with an efficient IP access with mobility or portability characteristics. The result of this assessment is indicated in Table 17.
Table 17 - Present Situation on Legislation for Spectrum Assignment in Latin America Source: REGULATEL Data and Regulators
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Country Argentina
Bolivia
Brazil
Chile
Colombia
Costa Rica
Cuba
Dominican Republic Ecuador
Spectrum Assignment Flexibility Spectrum which is not scarce is granted directly; spectrum for mobile services is assigned through tender; processes can take a long time The spectrum for public services is granted with the concession (authorization) to provide services; tenders are agile, but must be backed by authorization of the Executive Power; spectrum transferable is not between individuals; there is no renewal for spectrum license Spectrum on high demand is assigned via tender; the complexity of the process is related to the political division of the country; private marketing of spectrum is not allowed Scarce spectrum can be tendered or assigned by beauty contest; special interest to maximize coverage, especially in rural projects; where there is no shortage and bands are shared, direct award Scarce spectrum is assigned via tender or assigned based on merit; cannot be commercialized privately; tenders usually extend for a long time; license renewal allowed Spectrum Assignment for public services with previous study; relatively new tender process; private commercialization not allowed The MIC determines spectrum assignment; spectrum assignment to private companies has an exceptional character Not scarce spectrum is assigned directly; spectrum for mobile services is assigned via tender; spectrum can not be transferred Spectrum not scarce is assigned
Spectrum tied to Service? Spectrum tied to service.
Spectrum tied to service.
Spectrum tied to service, but there are options for diversification in multimedia services
Spectrum tied to service, but with some opportunities for triple-play
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Country
El Salvador
Guatemala
Haiti
Honduras
Mexico
Nicaragua
Panama
Paraguay
Peru
Uruguay
Spectrum Assignment Flexibility directly; scarce spectrum is assigned by tender; bids take a long time; renewal of concessions for the spectrum is possible Scarce spectrum is auctioned; auctions preparation is complex; spectrum for public services cannot be transferred Scarce spectrum is assigned via tender; tenders can last for years; concessions for spectrum use can be renewed; spectrum concessions cannot be transferred Spectrum not scarce is assigned directly; spectrum for mobile services is assigned by tender; spectrum cannot be transferred Spectrum on high demand is assigned via tender; tenders are awarded on largest price offered; authorization can be renewed Spectrum not scarce is assigned directly; scarce spectrum is assigned via tender; tenders take quite some time and are complex; convergence agreement allows flexible use of certain bands Spectrum not scarce is assigned directly; spectrum for mobile services is assigned via tender; spectrum cannot be transferred Not scarce spectrum is assigned directly; spectrum with demand goes through a tender; tenders are based on highest price offered; authorization can be renewed Not scarce spectrum is assigned directly; scarce spectrum is assigned via tender; tenders take quite some time; renewal of spectrum licenses is possible Scarce spectrum tenders based on higher price; tender process can be lengthy; renewal of licenses for spectrum in certain cases Bands are divided in: free use, common use, specific use and
Spectrum tied to Service?
Spectrum tied to service, but with some opportunities for triple-play
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Country
Venezuela
Spectrum Assignment Flexibility Spectrum tied to Service? general use; public consultation at regulators discretion is carried out; licenses can be granted with or without a duration Spectrum tied to service, but with The concession of use and some opportunities for triple-play exploitation of the spectrum is awarded for a specific time period; general concessions can be modified or expanded; concessions for scarce spectrum are awarded using a competitive process; spectrum can be transferred with prior authorization
Similarity between all the countries surveyed is astonishing, because with greater or lesser intensity, spectrum resources are jealously guarded by the regulators as a result of inflexible normative. It is then difficult to think about short term spectrum liberalization policies, considering that spectrum is intimately linked to services provided through it. Limited availability of free-use spectrum bands is also notorious, confirming the little predisposition of Latin American countries to surrender this resource to users without compensation. 1.3.2.3 Access and Interconnection. Two elements are extremely important for the development of NGNs in any country: the unbundling of access infrastructure and IP protocol interconnection. Local loop unbundling does not guarantee by itself development or even existence of NGNs in the country, but is an important factor for access massification by new entrants. Moreover, NGN networks have an additional telecommunications regulators challenge in an environment strongly influenced by telephony in todays networks: time-based interconnection charges (per minute rates) represent a challenge for services in a next generation environment, with different charging schemes (data volume or flat fee). Results of the comparison are illustrated in Table 18.
Table 18 - Present Situation of Access and Interconnection Legislation in Latin America Source: REGULATEL Data and Regulators
Country Argentina
Bolivia
Brazil
Unbundling of Access Infrastructure Compulsory? Obligation for dominant to unbundle essential facilities; basic interconnection offer (BIO) must contain unbundled elements Obligation to unbundle network elements in BIO; local loop unbundling compulsoy, but not effective Network unbundling matters undergoing a study
Interconnection for NGN or IP Networks Open network architecture, but without specific previsions for NGN There are no specific provisions for NGNs or IP networks VoIP services are permitted subject to ANATELs permission;
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Country
Unbundling of Access Infrastructure Compulsory? Local loop unbundling regulation was proposed, but not approved; unbundling services are available but are not compulsory; model for an efficient company is used for costs calculation The dominants unbundling obligation was contained in Decree 2870 of 2007; CRC abrogated the provision containing the mechanism for unbundling (Res. CRT 2058/09) There is an obligation for the dominant to provide access to essential facilities; unbundling is in the regulation There is not an explicit rule The General Regulation for Interconnection explicitly stipulates provision of loop or sub-loop to the user and all its associated facilities; modalities are complete access or shared (bitstream) Resolution from CONATEL 602-292006 imposes unbundling of elements or essential facilities, without explicit reference to the local loop El Salvador Telecommunications Act defines as an essential resource the unbundling of the fixed network for the interconnection of commercial telecommunications networks By law network unbundling is compulsory for operators with more than 10,000 lines, including access elements There is not an explicit rule Unbundling of essential resources is compulsory for all operators; access to the local loop is covered in access unbundling Unbundling of network elements is
Chile
Interconnection for NGN or IP Networks interconnection with traditional systems is compulsory Interconnection standards are neutral regarding network type
Colombia
The ICT Act establishes interconnection principles, but does not establish interoperability for NGNs or IP networks specifically Mentioned in the Access and Interconnection regulation There is not an explicit rule The open architecture network, compatibility and interoperability are covered by the Regulation, but its implementation details are not specified Current interconnection regime does not mention NGN or IP networks
Costa Rica
Cuba Dominican Republic
Ecuador
El Salvador
Guatemala
Haiti Honduras
Mexico
It is also defined as an essential resource interconnection to all levels or exchanges, wherever technically feasible in the network; there are no explicit provisions for IP traffic Interconnection is compulsory only for access to essential resources; connection to IP level or for NGN networks is not mentioned There is not an explicit rule The regulation of unbundling indicates that it will be done via 2 Mbps streams, but establishes that other means may be agreed between the parties The Convergence Decree promotes
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Country
Unbundling of Access Infrastructure Compulsory? mandated in the Fundamental Technical Interconnection Plan; there is no mention of the local loop unbundling explicitly Administrative agreement No. 0042005 defines loop unbundling at complete loop level or as shared network and associated resource The law refers to contracts the issue of interconnection and there is no mention of unbundling of network elements; regulator imposes loop unbundling There is no express mention in the Regulation of Interconnection to access infrastructure unbundling The Unified Text for Interconnection Rules establishes unbundling of essential facilities; there is no explicit mention to the local loop Decree 442/2001 standardizes interconnection and mandates the unbundling of network elements; there is no express mention to the unbundling of subscriber loop The Regulation for Interconnection approved by Decree 1.093 11-242000 mandates the unbundling of elements; fails to mention the subscriber loop
Nicaragua
Panama
Interconnection for NGN or IP Networks the efficient interconnection and interoperability between fixed and multimedia networks; there is no explicit mention to IP traffic, but the use of bill and keep is allowed The Regulation for General Interconnection and Access establishes the conditions for interconnection between ISPs at IPlevel and the obligation to interconnect for NGNs Interconnection is oriented to vocal services and there is no express provision for other services Interconnection normative is based on voice services and does not contain special provisions for other services or network types Interconnection normative allows for the establishment of fixed periodic access charges; the scheme is based mainly on telephone traffic The Interconnection Decree is mainly oriented to telephone services; there is no mention of technological neutrality or interoperability between networks The Interconnection Regulation does not contain mechanisms which may serve to interconnect at IP level with NGN networks; interconnection charges are mainly oriented towards telephony
Paraguay
Peru
Uruguay
Venezuela
From a quick analysis of the comparative table, we can infer that the telecommunications sector is in a preliminary stage on access and interconnection for NGN networks. Although most countries incorporate the concept of technological neutrality in the normative, this principle becomes nothing more than a statement of good wishes at the time an IP protocol interconnection is materialized.
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1.3.3 Sectoral Regulation. The analysis of the current situation of the regulation by sectors was made in REGULATELs countries, taking into account that the sectors of telecommunications and audiovisual have been normally regulated each with its own dynamics. 1.3.3.1 Audiovisual Sector and Contents. As in section 1.2.3.1, the regulation of the audiovisual sector and contents in Latin America was analyzed. Table 19 shows the results.
Table 19 - Audiovisual Sector and Content Regulation in Latin America Source: REGULATEL Data and Regulators
Country Argentina Bolivia Brazil Chile Colombia Costa Rica Cuba Dominican Republic Ecuador El Salvador Guatemala Haiti Honduras Mexico Nicaragua Panama Paraguay Peru Uruguay Venezuela
Audiovisual Regulatory Body Federal Broadcasting Committee (COMFER) ATT ANATEL National Television Council (CNTV) MinTIC; National Television Council (CNTV) Ministry of the Interior and Police MIC Indotel CONATEL SIGET SIT CONATEL CONATEL Cofetel TELCOR ASEP CONATEL MTC URSEC CONATEL
Spectrum Assignment for Audiovisual by: COMFER ATT ANATEL CNTV MinTIC; CNTV SUTEL MIC Indotel CONATEL SIGET SIT CONATEL CONATEL SCT TELCOR ASEP CONATEL MTC URSEC CONATEL
Regulation of Content by: COMFER ATT Social Communications Council Subtel; CNTV MinTIC; CNTV Ministry of the Interior and Police MIC Indotel CONATEL SIT CONATEL CONATEL Secretary of the Interior; Secretary of Public Education (SEP) TELCOR ASEP CONATEL MTC URSEC CONATEL
Due to the importance for Governments given to the content disseminated on audiovisual media, especially broadcasters, draft proposals seeking to regulate or control content are varied. In most cases the media regulator itself is also responsible for regular content.
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1.3.3.2 Telecommunications. An important factor in regulatory convergence is the ability of the regulator to perform as multi-sector regulator, especially in the sectors of telecommunications and audiovisual. The comparison is indicated in Table 20.
Table 20 - Telecommunications Sector Regulation in Latin America Source: REGULATEL Data and Regulators
Regulatory Body CNC ATT ANATEL Subtel CRC SUTEL MIC Indotel SENATEL SIGET SIT CONATEL CONATEL Cofetel TELCOR ASEP CONATEL OSIPTEL URSEC CONATEL
Multi-sector Regulation? Telecommunications Telecommunications, Audiovisual and Transport Telecommunications and Audiovisual Telecommunications Telecommunications Telecommunications Telecommunications, Audiovisual and Postal Services Telecommunications and Audiovisual Telecommunications and Audiovisual Telecommunications, Audiovisual and Electricity Telecommunications and Audiovisual Telecommunications and Audiovisual Telecommunications and Audiovisual Telecommunications Telecommunications, Audiovisual and Postal Services Telecommunications, Audiovisual and Electricity Telecommunications and Audiovisual Telecommunications Telecommunications, Audiovisual and Postal Services Telecommunications and Audiovisual
1.3.4 Structure of the Regulatory Body. The structure of the telecommunications regulators in Latin America has been shaped from sector reforms experienced during the 1990s in most countries, which inherited those regulatory powers normally assigned to ministries. Today, we observe that these structures still persist, despite the fact that the emphasis of the regulatory duties has been reversed in some countries from a free market approach to one with much more Government participation in telecommunications services.
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1.3.4.1 Report and Appointment. Authorities to whom the telecommunications regulator reports and who appoints them are indicated in table 21. It is almost a constant the interrelationship that the regulator keeps with the sector Ministry, as well as the appointment by the President (with few exceptions).
Table 21 - Report and Appointment of the Regulatory Body in Latin America Source: REGULATEL Data and Regulators
Regulator CNC ATT ANATEL Subtel CRC SUTEL MIC Indotel SENATEL SIGET SIT CONATEL CONATEL Cofetel TELCOR ASEP CONATEL OSIPTEL URSEC CONATEL
Reports to: Secretary Ministry Ministry Ministry Ministry Regulator General President President President Ministry Ministry President Ministry Ministry President Ministry Ministry Ministry Ministry Ministry
Appointed by: President (the Intervener) President President President President Regulator General President President President (the Councils President) President Minister President President President President President President President President President
1.3.4.2 Term of Appointment. The term of appointment of telecommunications regulators in Latin America, along with its composition, is shown in Table 22. Half of the regulators are appointed for an open-ended term and are subject to instant dismissal, and most are formed by collegiate bodies.
Table 22 - Term of Appointment for the Regulatory Body in Latin America Source: REGULATEL Data and Regulators
Country Argentina Bolivia Brazil Chile
Regulator CNC ATT ANATEL Subtel
Term of Appointment 5 years Open-ended 5 years Libre remocin
Appointment Renewal Yes No -
Number of Members 8 1 5 1
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Country Colombia Costa Rica Cuba Dominican Republic Ecuador El Salvador Guatemala Haiti Honduras Mexico Nicaragua Panama Paraguay Peru Uruguay Venezuela
Regulator CRC SUTEL MIC Indotel SENATEL SIGET SIT CONATEL CONATEL Cofetel TELCOR ASEP CONATEL OSIPTEL URSEC CONATEL
Term of Appointment 3 years 5 years Open-ended Open-ended Open-ended 7 years Open-ended Open-ended 4 years 8 years Open-ended 7 years 5 years 4 years 6 years Open-ended
Appointment Renewal No No Yes Yes Yes No No No Yes -
Number of Members 3 3 1 5 7 1 1 5 3 5 1 1 5 5 3 3-5
1.3.5 Distribution of Roles and Responsibilities for Regulators. The telecommunications regulator roles are used in this analysis to determine the degree of flexibility to address situations that might arise in a next generation environment. Roles inherited from pre-convergence structures can be used if certain conditions are fulfilled. 1.3.5.1 Market Entry. Table 23 shows the current responsibilities of Latin American telecommunications regulators on licensing.
Table 23 - Regulators Responsibilitiesy for Market Entry in Latin America Source: REGULATEL Data and Regulators
Country Argentina Bolivia Brazil Chile Colombia Costa Rica Cuba Dominican Republic Ecuador El Salvador
Authority Responsible for Awarding License Fixed Mobile M M R R R R R R M M R R M M R R R R R R
Oversight of License Requirements R R R R M R M R R R
Approval for Mergers M R R C R R M R R R, C
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Country Guatemala Haiti Honduras Mexico Nicaragua Panama Paraguay Peru Uruguay Venezuela M Ministry
Authority Responsible for Awarding License Fixed Mobile R R R R R R M M R R R R R R M M R R R R R Regulator C Competition Authority
Oversight of License Requirements R R R R R R R R, M R R
Approval for Mergers R R R C Not allowed R R R, M R R
As a reflection of the sector reforms of the past decade, the telecommunications regulator maintains the powers to award and oversee licensing for fixed and mobile requirements. Where the sector Ministry is responsible for granting licenses, the regulatory body performs requisites oversight thereof. 1.3.5.2 Interconnection. Interconnection is a crucial issue in telecommunications regulation, especially in a competitive environment with operators with NGNs. This responsibility almost exclusively falls within the regulator in the comparison in Table 24.
Table 24 - Regulators Responsibilities for Interconnection in Latin America Source: REGULATEL Data and Regulators
Country Argentina Bolivia Brazil Chile Colombia Costa Rica Cuba Dominican Republic Ecuador El Salvador Guatemala Haiti Honduras Mexico Nicaragua Panama Paraguay Peru
Charge Definitions R R R R R R M R R R R R R R R R R R
Local-Loop Unbundling Does not exist R Does not exist Not compulsory R R Does not exist R Does not exist Does not exist R Does not exist R R Does not exist Does not exist Does not exist Does not exist
Controversy Resolution R R R R R R M R R R R R R R R R R R
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Country Uruguay Venezuela M Ministry
Charge Definitions Local-Loop Unbundling R Does not exist R Does not exist R Regulator C Competition Authority
Controversy Resolution R R
1.3.5.3 Spectrum Management. Spectrum management is a traditional regulatory duty, shared with the Ministry in many cases. The comparison shown in Table 25 verifies that in effect roles are balanced and there are several cases where the Ministry plans and the regulator assigns the spectrum.
Table 25 - Regulators Responsibilities for Spectrum Management in Latin America Source: REGULATEL Data and Regulators
Country Argentina Bolivia Brazil Chile Colombia Costa Rica Cuba Dominican Republic Ecuador El Salvador Guatemala Haiti Honduras Mexico Nicaragua Panama Paraguay Peru Uruguay Venezuela M Ministry
Spectrum Planning M M M R M M M R
Spectrum Assignment M, R R R R M R M R
Transfer Authorization M R R R, M M R M R R R, C R R R C Not allowed R R R, M R R
R R R R M R R R R R M, R R R R R R R R M M M R R R R Regulator C Competition Authority
1.3.5.4 Numbering. Table 26 shows the responsibilities regarding numbering in Latin America.
Table 26 - Regulators Responsibilities for Numbering in Latin America Source: REGULATEL Data and Regulators
Country Argentina Bolivia
Numbering Plan M R
Numbering Assignment M R
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Country Brazil Chile Colombia Costa Rica Cuba Dominican Republic Ecuador El Salvador Guatemala Haiti Honduras Mexico Nicaragua Panama Paraguay Peru Uruguay Venezuela M Ministry
Numbering Plan R R M R M R R R R R R R R R R M R R R Regulator
Numbering Assignment R R R R M R R R R R R R R R R M R R
1.3.5.5 Tariff Regulation. Tariff regulation, besides being a classical telecommunications regulators responsibility, has a marked importance in generating competition conditions and to avoid market distortions. Table 27 shows the responsibilities of the regulator.
Table 27 - Regulators Responsibilities for Tariff Regulation Source: REGULATEL Data and Regulators
Country Argentina Bolivia Brazil Chile Colombia
Type of Regulation Price caps Price caps Price caps Tariff setting Tariff setting
Costa Rica Cuba
Tariff setting Tariff setting
Regulation Applies to: Operator with dominant position Operator with dominant position Incumbent Fixed-line telephony operators Fixed and Mobile telephony operators All providers, under insufficient competition, market distortions, or bad quality of service Mobile telephony operators Local and Mobile telephony operators
Regulatory Body R R R M R
R M
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Country Dominican Republic Ecuador El Salvador Guatemala Haiti Honduras Mexico Nicaragua Panama Paraguay Peru Uruguay Venezuela M Ministry
Type of Regulation Tariff setting Price caps; Tariff setting Price caps; Tariff approval Freedom to set Tariffs Tariff setting Price caps; Tariff setting Price caps; Tariff approval Tariff setting Tariff setting Price caps; System of Reasonability Control Price caps Absolute Freedom to set Tariffs Tariff setting
Regulation Applies to: All providers when a service does not have effective competition Operator with dominant position Fixed public telephony services operators Local and Mobile telephony operators Fixed public telephony services operators Operator with dominant position Operator with dominant position Fixed basic telephony service operators Incumbent Fixed-line telephony operators Basic Local and Longdistance services Services under regulated regime
Regulatory Body R R R R R R R R R R R R R
Basic Local and Longdistance services R Regulator C Competition Authority
Price caps applied to the operator with dominance are the most commonly used methods of tariff regulation, followed by tariff setting. The next method is pricing setting, which is generally associated to fixed telephony services. An interesting case is Uruguay, which does not regulate tariffs under the absolute tariff freedom regime.
1.3.5.6 Universal Service. Oversight of service goals or universal access is usually a regulators responsibility, comprising the deployment of services to areas with little purchase capacity. It is important to remember that Universal Access is defined as the possibility to access telecommunications services at a reasonable distance from home, while Universal Service means provision of communications to each individual. Table 28 shows the results of the comparison obtained based on REGULATELs data.10
Table 28 - Regulators Responsibilities for Universal Service in Latin America Source: REGULATEL Data and Regulators
10
New Models for Universal Access Country Reports; November 27th, 2006; Regulatel Page 72 of 248
Country Argentina Bolivia Brazil Chile Colombia Costa Rica Cuba Dominican Republic Ecuador El Salvador Guatemala Haiti Honduras Mexico Nicaragua Panama Paraguay Peru Uruguay Venezuela M Ministry
Universal Access/Service? US UA US UA UA UA UA US
Financing Mechanism Operators contributions Fines, spectrum fees Universal service obligations Nations general income Subsidies, operators contributions Subsidies, operators contributions, fines Dominant obligations Operators contributions
Estimates Costs M M R R M R O R R R M O O M R M, R R R O R
Assigns Resources M M M M M R O R R R M O O M R M, R R M, R O R
US Operators contributions US Frequency auctions UA Spectrum fees UA Dominant obligations UA Dominant obligations UA Public funds UA 20% of regulators income US/UA Operators contributions US Operators contributions UA Operators contributions UA Dominant obligations US Operators contributions R Regulator O - Operator
A comparison indicates that Universal Access is most commonly chosen as opposed to Universal Service, unlike Europe, which implements the last. This is possibly determined by the degree of network deployment (penetration index or telephone density) in Latin America and the enormous differences in infrastructure. Financing mechanisms are various, ranging from public resources to operators contributions. Entities that allocate and manage resources are many and usually depend from the ministries. In some cases, operators are the ones compelled to provide services to the underprivileged sectors of the population. 1.3.6 Steps towards Convergence. In this section we discuss measures implemented by the various countries to incorporate convergence in the sector. Based on data obtained from the comparison between functions and structures, we verified that not very many of the countries from REGULATEL are with a good standing on normative development to face challenges posed by a next generation regulatory environment. 1.3.6.1 Next Generation Networks Convergence. Measures to incorporate of new generation networks convergence in Latin America are shown in Table 29. Among those which were identified for this purpose we find:
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a. Separation between networks and services, in order to free services from networks through which they are provided. b. Multiservice license, which favors convergence through NGNs. c. The possibility of offering multiple services through a single platform. d. Interconnection via IP protocol, normally used by NGNs.
Table 29 - Measures to Implement Next-Generation Networks Convergence in Latin America Source: REGULATEL Data and Regulators
Separation of Networks from Services
Multiservice License
Several Services/Single Platform
IP Interconnection
The comparison shows that with the exception of Costa Rica, very few countries show conditions to incorporate NGNs regulation, at least with regards regulatory normative development. Brazil, Colombia, Mexico and Venezuela are highlighted for having implemented three of the four measures indicated in the evaluation. 1.3.6.2 Convergence of Voice, Data and Video. Measures used for analyzing convergence of voice, data and video in Latin America and the results of the comparison are shown in Table 30. Measures selected to perform this assessment are: a. Triple-play implementation or service bundling (voice, data and video), even when provided using non-IP networks (or diverse platforms).
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b. VoIP regulation, which implies an implicit recognition of an alternate way to provide voice services. c. IPTV or IP television, which is gradually being deployed in the region and uses networks with an IP platform. d. Access unbundling, which has been implemented via local-loop unbundling in most countries.
Table 30 - Measures for Convergence of Voice, Data and Video in Latin America Source: REGULATEL Data and Regulators
Triple-Play
Regulation of VoIP
IPTV
Sub-Loop Unbundling
While no country reaches compliance with all four measures studied for the convergence of voice, data and video, several countries incorporate 3 out of 4: Argentina, Brazil, Chile, Mexico and Panama. The measure which has been implemented more widely is triple-play, followed by subscriber loop unbundling. 1.3.7 Role and Interaction with Academic Networks. The Internet has significantly increased knowledge exchange between the scientific cooperation networks. This fact is accelerating the pace of scientific progress, technological development and the variety of innovations. To the speed of movement of knowledge transfer, one has to add flexibility and the bringing together of spaces for leisure and creation of knowledge, the allocation of resources: human, material and financial, and the exercise of shared management power. With the support of the Internet, networks of researchers that are formally located in existing organizations
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can attain real and virtual mobility to move between different fields of global knowledge.11 Academic networks have played a fundamental role in the development of the Internet as a vehicle of dissemination of knowledge, taking account of its origin as a network to connect research centers. Academic networks at national and regional level are strategic partners before Governments. They are also indicated stakeholders to articulate in a significant manner, local and regional identities, actively collaborating in overcoming the strong asymmetries that prevail in the region and the world due to the global phenomenon of the internationalization of higher education.12 The advanced National Academic Networks in Latin America and the Caribbean are:13 Argentina- Red Nacional de Investigacin y Educacin de Argentina / INNOVA|RED http://www.innova-red.net/ Bolivia- Agencia para el Desarrollo de la Sociedad de la Informacin en Bolivia / ADSIB http://www.bolnet.bo/ Brasil- Red Nacional de Enseanza e Investigacin / RNP http://www.rnp.br Colombia- Red Nacional Acadmica de Tecnologa Avanzada / RENATA http://www.renata.edu.co Costa Rica- Red Nacional de Investigacin / CR2Net http://www.crnet.cr/cr2net Cuba- RedUniv http://www.mes.edu.cu Chile- Red Universitaria Nacional / REUNA http:// www.reuna.cl Ecuador- Consorcio Ecuatoriano para el Desarrollo de Internet Avanzado / CEDIA http://www.cedia.org.ec/ El Salvador- Red Avanzada de Investigacin, Ciencia y Educacin Salvadorea / RAICES http://www.raices.org.sv Guatemala-Red Avanzada Guatemalteca para la Investigacin y Educacin / RAGIE http://www.ragie.org.gt Honduras- Universidad Tecnolgica Centroamericana / UNITEC http://www.unitec.edu Mxico- Corporacin Universitaria para el Desarrollo de Internet / CUDI http://www.cudi.edu.mx Nicaragua- Red Nicaragense de Internet Avanzada / RENIA http://www.renia.net.ni Panam- Red cientfica y Tecnolgica / RedCyT http://www.redcyt.org.pa Paraguay- Arandu http://www.arandu.net.py Per- Red Acadmica Peruana / RAAP http://www.raap.org.pe Uruguay- Red Acadmica Uruguaya / RAU http://www.rau.edu.uy/redavanzada/ Venezuela- Red Acadmica de Centros de Investigacin y Universidades Nacionales / REACCIUN http://www.reacciun2.edu.ve Analysis of the role and interaction of Latin American telecommunications regulators with the academic networks seeks to identify means and cases by which regional telecommunications policies could favor the development of the sector, enabling the
11
The networks of Scientific Cooperation in Latin America and the Caribbean (Study of ThirtyOne Networks); Alhim Adona Vera Silva; Editorial Universidad Surcolombiana; First edition: June 2006 12 Conclusions from the Meeting of the International Institute for Higher Education in Latin America and the Caribbean (IESALC); Cartagena de Indias, Colombia; (June the 6th, 2008) 13 The Interinstitutional Networks in Latin America: How to Strengthen the Own Capacity; Dr. lvaro Romo de la Rosa Page 76 of 248
regional networks a workspace with clear rules that favor their relationship with national and international public and private entities, making this an area of collaboration that benefits the entire region and receives the essential financial and political support for its sustainability. The result of this analysis is shown in Table 31.
Table 31 - Role and Interaction with Academic Networks in Latin America Source: Academic Networks and Regulators
Country Argentina
Academic Networks The Foundation INNOVA-T (entity linked to the CONICET) is in charge of the NRENs by an agreement between SECOM, SECYT and CONICET ADSIB (Agency for the development of the Information Society in Bolivia) is a decentralized entity under dependency of the Vice-Presidency of the Republic of Bolivia The Rede Nacional de Ensino e Pesquisa (RNP National Education and Research Network) is the national advanced network infrastructure for collaboration and communication in education and research.
Role and Interaction with Regulator Being SECOM part of the agreement with INNOVA-T, relationship with the regulator (CNC) is made viable through this nexus. ADSIB does not have an own network at this time and just coordinates with the regulator aspects of domain names registration in Internet in the country RNP has authorization to exploit the Special Limited Services, of restricted interest, to provide advanced nationwide Internet services. RNP collaborates with the Anatel in measuring quality of Internet access to the user. In the Subtel records, REUNA is
Comments CONICET, as part of the Federal Government under the jurisdiction of the Ministry of Science, Technology and Productive Innovation, is capable of promoting the inclusion of the NRENs in the regulation of Advanced Networks. On December 3rd, 2009, the inclusion of Bolivia to ALICE2 and CLARA was formalized, through the signing of the agreement by the ADSIB.
Bolivia
Brazil
Besides public resources, RNP obtains, in the condition of Informatics Priority Program (Sepin/MCT), funding from private sources in projects with IT companies (Act N 8248/91) and other organizations
Chile
REUNA (National University
By statutes, the purpose of REUNA is the establishment,
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Country
Academic Networks Network) arises in 1986 as a cooperative organization of University interconnection; in 1991, under the auspices of the National Commission on Science and technology, CONICYT, it is incorporated as a private non-profit corporation. RENATA (National Academic Network of Advanced Technology) is managed by the RENATA Corporation, whose members are the regional academic networks, the Ministry of Education, the Ministry of Information and Communications Technology and COLCIENCIAS. CRNet emerges as a pioneer project, driven by the Ministry of Science and Technology, between: University of Costa Rica, Technological Institute of Costa Rica, Tropical
Role and Interaction with Regulator shown as a related agency and not as a concessionaire. REUNA selfdefines itself as an ISP specializing in the University System.
Comments operation, development and promotion of national and international information system, to which partners and third parties can subscribe and interconnect. This allows the Corporation to have users and function as an ISP, even though restricted to the University environment.
Colombia
Interaction with the regulator (in this case the CRC) is through the MinTIC, who is a member of the Corporation.
RENATA, is a scientific and technological organization of mixed participation, with its own legal capacity, nonprofit, which aims to promote the development of infrastructure and services of the high-speed network, its use and appropriation. ISP regulation is not applicable due to its particular characteristics.
Costa Rica
At the moment there is not a relationship with the regulator.
Between 2004 and 2006, Costa Rica had its own Research and Education Network, CR2NET, of which seven universities were part. It was connected to RedCLARA, but factors such as scarce use of the network resources, poor coordination between the institutions involved and poor dissemination of information
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Country
Academic Networks Agronomy Centre for Research and Education and the University of WisconsinMadison. REDUNIV (National Network of Education and Research of Cuba) is the NREN on the island. The Ministry of Higher Education is in charge of the subject. RUDAC (Dominican University Academic and Research Network) CEDIA (Ecuadorian Consortium for Development of Advanced Internet) is officially created on September 18th, 2002. RAICES (Salvadoran Advanced Research Network for Science and Education) was incorporated on January 29th, 2004 RAGIE (Guatemalan Advanced Network for Research and Education) is a non-profit social enterprise formed by universities, research institutes
Comments to researchers in universities, propitiated its withdrawal from the project.
Cuba
No data exists
REDUNIV is one of the largest in Cuba, with more than 16,000 machines and 23 network components
Dominican Republic
There is not a relationship between RUDAC and INDOTEL CONATEL is an active member of CEDIA.
, o Internet2.
Ecuador
In December 2004 CEDIA signed an interinstitutional agreement with the Solidarity Fund for its backbone connectivity.
El Salvador
None direct
Guatemala
None was identified
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Country Haiti
Academic Networks and others. REHRED (Reseau Telematique Haitien pour la Recherche et le Developpement) UNITEC (Central American Technological University) is a private higher education institution and considered a NREN The University Corporation for the Development of Internet (CUDI) is an association formed by the universities of the country, private, non-profit, which was founded in April 1999. RENIA (Nicaraguan Advanced Internet Network) connected to the Internet in 1987, since the creation of the first .ni node. REDCyT (Scientific and Technological Network) is a nonprofit academicbased foundation Arandu is a project which includes the interconnection of universities and research centers. RAAP (Peruvian
Role and Interaction with Regulator No information could be found.
Comments The creation of the network was sponsored by Foundation Networks and Development (FUNREDES) former Office Redalc of the Latin Union. On April 25th, 2005 the Honduran Network of Universities with Advanced Telecommunications (RHUTA), was created without registering major advances subsequently. On May 20th, 1999 an agreement was signed with Telmex participating as an institutional associate. Telmex donated the backbone fiber for the project.
Honduras
None
Mexico
CUDI network does not provide commercial Internet services, nor can sell services to third parties, as it has a registry as a private network. No activity with TelCor identified
Nicaragua
Panama
No relationship with ASEP
Paraguay
Arandu does not appear in the records of CONATEL licensees The RAAP is an
Arandu is a word in Guaran language (pronounced Arand, with ending stress) which means wisdom or knowledge RAAP rents connectivity from
Peru
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Country
Academic Networks Academic Network) is a nonprofit institution whose primary purpose is to develop infrastructure based on advanced communication technologies to integrate universities and research centers. The Uruguayan Academic Network (RAU) is a venture of the University of the Republic, administered by the Central Service of Informatics University (SeCIU) which operates since 1988. Reacciun2 (Academic High Speed Network of Research Centers and National Universities) interconnects 7 national universities and a Research Center, with Internet2.
Role and Interaction with Regulator exclusively academic institution and does not hold licenses for communications services
Comments Telefnica del Per. Among one of the immediate applications supported by the RAAP network is IP videoconferencing.
Uruguay
The RAU manages the .uy domain, but is unrelated to the URSEC
The RAU videoconference services in principle are reserved for those activities that are related to activities in the framework of the advanced networks, or with academic activities of the University of the Republic.
Venezuela
Because Reacciun2 depends on a Ministry different than that of CONATEL, there is no interaction between the NRENS and the regulator
In March 2000, the National Center of Information Technology (CNTI), took over the technological platform and the human resources of Reacciun. Since then, thanks to institutional commitment from the CNTI, it was possible to extend and modernize the technology platform of Reacciun through the addition of innovative IP services.
Unlike European and Asian countries, where the interaction of the regulator with the NRENs is well-defined, in most of the Latin American countries there is not an interrelationship between them. This makes extremely difficult the introduction of the Academic Networks into a regulatory environment with NGNs, since they have not been traditionally considered as stakeholders in the sector, even though the technological developments that are perceived in an environment of convergence were developed within the advanced IP networks (NRENs).
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1.3.8 Comparison of Government Agencies. As a corollary to the review made in previous sections on Latin American telecommunications regulators, a comparison of the regulators country by country was made, selecting features related to convergence and carrying out a comparative assessment of them. The results of the comparison are indicated in Table 32, where the colors indicate the degree of fitness for convergence observed for each characteristic. Green indicates a favorable situation, the yellow a neutral situation and red indicates an unfavorable condition for convergence.
Table 32 - Comparison of Countries regarding Fitness for Convergence Source: REGULATEL Data and Regulators
Spectrum License for a Single Service
Interconnection Public Networks/IP
Country
Argentina Bolivia Brazil Chile Colombia Costa Rica Cuba Dom. Republic Ecuador El Salvador Guatemala Haiti Honduras Mexico Nicaragua Panama Paraguay Peru Uruguay Venezuela
= favorable
= neutral
= unfavorable
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Multi-Sector Regulator
Audiovisual Linked to Telecommunications
Sub-Loop Unbundling
Spectrum Secondary Market
Multiservice License
Emphasis to Voice Services
Backhaul Cost
Regulates VoIP
Triple-Play
We can infer from the comparison made using this visual encoding, that the country with best conditions to incorporate convergence in an environment of next-generation networks is Brazil, followed by Mexico and Chile. Venezuela also has favorable conditions for an environment of convergence. Colombia, Costa Rica and Argentina show good conditions, except for the fact that the telecommunications regulator does not have responsibilities for audiovisual. El Salvador, Nicaragua and Peru, also show some conditions favorable to convergence.
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CHAPTER 2 - TECHNOLOGICAL CONVERGENCE AND REGULATORY CONVERGENCE This second chapter contains research on technological and regulatory convergence, showing how they are interrelated, as well as possible regulatory asymmetries, technological neutrality, competition and NGN. The structure of this chapter includes an overview of what is understood today by technological convergence, along with examples of how it manifests in the telecommunications and audiovisual sectors. The meaning of regulatory convergence is also specified and the different ways it is materialized. The way these two types of convergence are related is discussed, as well as the way in which one influences the other. Finally, the possible regulatory asymmetries that can occur in a next-generation world are discussed, taking into account the widespread introduction of NGN, as well as technological neutrality and issues related to competition that must be taken into account by the regulator.
Technological Convergence and Regulatory Convergence
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2.1 THE TECHNOLOGICAL CONVERGENCE IN THE TELECOMMUNICATIONS SECTOR The technological convergence does not have a standardized definition yet, even though this phenomenon has been developing in the telecommunications industry for a decade. Without any doubt, the one who can better perceive it, even though unable to accurately define it yet, is the user, who in a very short period of time has been undergoing deep changes in the way in which services are being provided. For a normal user in his/her daily experience, convergence means the current availability of telephony, data/Internet and media (TV and radio) through the use of a single device, PC or mobile phone or any other (electricity connector definitely a possibility), via a single service provider. The path towards convergence was led mainly by the increasing digitalization of content, the shift towards IP-based networks, the diffusion of high-speed Broadband access, and the availability of multi-media communication and computing devices.14 Convergence is taking place at different levels: Network Convergence driven by the shift towards IP-based Broadband networks. It includes fixed-mobile convergence and three-screen convergence (mobile, TV and computer). Service Convergence stemming from network convergence and innovative handsets, which allows the access to web-based applications and the provision of traditional and new value-added services from a multiplicity of devices. Industry/Market Convergence brings together in the same field industries such as information technology, telecommunication and media, formerly operating in separate markets. Legislative, Institutional and Regulatory Convergence or at least co-operation taking place between broadcasting and telecommunication regulation. Policy makers are considering converged regulation to address content or services independently from the networks over which they are provided (technology neutral regulation). Device Convergence most devices include today a microprocessor, a screen, storage, input device and some kind of network connection increasingly they provide multiple communication functions and applications. Converged user Experience: unique interface between telecommunications, new media and computer technologies. end-users and
The process towards convergence has been based on an evolution of technologies and business models, rather than a revolution. This process has led to: Entry of new players into the market. Increasing competition among players operating in different markets. The necessity for traditional operators to co-operate with companies previously in other fields. (e.g. telephony operators and cable television).
Convergence and Next Generation Networks; Claudia Sarrocco y Dimitri Ypsilanti; Organization for Economic Co-Operation and Development (OECD); DSTI/ICCP/CISP(2007)2/FINAL Technological Convergence and Regulatory Convergence Page 85 of 248
14
As a result, convergence touches not only the telecommunication sector, but involves a wider range of activities at different levels, including the manufacturer of terminal equipment, software developers, media content providers, ISPs, etc.
2.1.1 From the Public Switched Telephone Network to Convergence. Traditionally, service providers have been using different types of networks to provide voice, video and data. The Public Switched Telephone Network (PSTN) for voice, Public Switched Packet Data Network (PSPDN) for data, of transmission and distribution television networks to broadcast TV; and end-users have generally used different equipments to receive these services. Technological developments have led to convergence technologies for voice, data and video, paving the way for the convergence of services, industries and markets. The Internet Protocol (IP) that provides a common platform for all ICT services is fading at the same time the concept of the so-called long distance. Figure 5 shows what has been happening in the telecommunications and audiovisual sectors, where due to the effect of the convergence of services, networking, industry and devices, networks that were previously separate (or watertight) compartments, are consolidated now around a single access platform, obviating the multiplicity of networks typical of the last century. The user now has no awareness of the networks that provide converged services and occasionally the only thing he perceives is whether the access media is fixed or wireless. What two decades was sought with very limited success through the Integrated Services Digital Network (ISDN), i.e. multiple services through a single point of access, is today being materialized by new (or next) generation networks (NGNs) with core IP (Internet Protocol).
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Figure 5 - Scenario Change with Convergence Source: Osiptel
Technological changes in the sector pose then profound paradigm changes in the way in which we have conceived the sector. Firstly, telecommunications networks have been conceived as independent one from another for a long time and have been considered as such by operators, users, regulators and policy-makers. It is so that each network was governed by its own merits and parameters (and still remain like that), in which the characteristics of each one served to define aspects such as tariffs, service levels or Quality of Service (QoS), geographic coverage and access devices. The current situation is one of a single technological platform of signal transport and multiplicity of services, none linked to a network in particular. Another paradigm shift that of access through several specialized terminal devices (phone to receive and make a voice call at the work or at home, cell phone for voice and messaging on the move, computer or laptop to browse the web and television set to watch broadcast or subscription television). With converged devices such as those of Figure 6, these activities are performed on a single personal computer terminal; so the multiplicity of computer terminals, each for a single service, gives way to the adoption of multiservice terminals. The new paradigm for service providers is to provide packages of ICT services, a triple-play voice, Broadband Internet access and audiovisual services (radio and TV), all in a package for a monthly price at home and at the cell phone as well. Therefore, with a full range of services and applications now available via several network operators and service providers, it is difficult to distinguish between voice, data and audiovisual signals networks. In other words, single-service providers (telephony-only, data-only,
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broadcasters, etc.) are now a species threatened with extinction, because most of them are changing nowadays into multi-service and content providers, and many services are even created by the users themselves. Convergence truly has profound implications in the way in which we have become used to see the telecommunications and audiovisual sectors. From the consumer point of view, all these before different networks are starting to look alike, because they can provide virtually the same types of content and services.
Figure 6 - Convergent Device
2.1.2 Technological Changes that Promote Convergence. Technological changes that occur both in electronics and computer systems are responsible in the most part for the fast development experienced in the telecommunications sector. This development allows users to have greater storage and processing capabilities, and the growing needs of interactivity, ubiquity and mobility between individuals and groups in turn generate the deployment of communications networks that support them, thus creating a virtuous circle. Globally, regulatory, economic and investment environments in each country, have generated a dynamic development and use of these technologies to support the market needs, enabling the networks integration, new services generation and the convergence of them. Of course, technology alone is not responsible for the convergence that is being experiencing at all levels, as indicated at the beginning of this chapter. But what one can see is that technological changes foster convergence, the way we are observing it now.
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2.1.2.1 Digitalization. One of the most important technological changes that promotes convergence has been undoubtedly the digitalization of virtually all systems and telecommunications networks worldwide. Thanks to the digitalization of signals, services of different classes and nature (voice, data, video) can be transmitted using the same system, because for a transmission link, a bit is nothing more than that... a bit (1 or 0). It is true that there are still many services currently being provided using analog signals, notably broadcast radio and television in most countries. But at the present time, Digital Terrestrial Television (DTT) transition plans are being made worldwide, primarily due to the advantages that the system offers regarding level of quality, sharpness and better use of the spectrum. Existing difficulties regarding replacement at some point in time of the analogue television systems by DTT are widely compensated by the release of a large amount of spectrum usable for wireless Broadband systems (see Figure 7), considering the existing spectrum scarcity today.
Figure 7 - Spectrum freed by Migration to Digital Television in the U.S. Source: FCC
2.1.2.2 Broadband Development. Worldwide Broadband development makes possible that telecommunications users have access to higher speeds and better service levels for their communicational, as shown in Figure 8. In many countries, the emphasis of Government policies in providing Broadband access to their citizens has generated greater penetration and consequently, better utilization, mainly regarding to Internet applications access. Recently, Finland established by law Broadband as a citizens right, and this initiative will probably be followed by most European countries.15
15
http://www.techcrunch.com/2009/10/14/applause-for-finland-first-country-to-makebroadband-access-a-legal-right/ Technological Convergence and Regulatory Convergence Page 89 of 248
Figure 8 - Broadband Development Worldwide Source: EnterData
We must recognize that the massive adoption of Broadband by itself does not guarantee that the convergence of networks and services will materialize. However, the users access to digital communications speed equal to or greater than 2 Mbps is a fundamental requirement to take advantage of an environment of convergence. These speeds are not easily achievable today for most of the inhabitants of Latin America, at least at affordable prices in relation to average income. It so happens that besides the technological difficulties inherent to transforming the existing telecommunications infrastructure into a convergent environment, Governments must also face the challenge of making services available to the population in general. 2.1.2.3 Internet and the IP Protocol. Current telecommunications networks and Internet have followed different development paths. In technical terms, PSTNs were conceived under clear objectives of ensuring realtime communications between people, under strict conditions of quality and continuity for real-time voice communications. The emphasis of Governments in telephone services was such, that they were called basic services for a long time. This designation today begins to lose much of its essence, since access to the Internet is gradually inserting in the minds of many people as the basic service par excellence, instead of vocal band communications. On the other hand, Internet was born as a data network to communicate different research entities spread far apart at geographically distant locations, without stringent requirements regarding quality and absence of real-time communications outages. The absence of strict controls and lack of designation as a basic service from Governments allowed Internet to develop without limitations and acquire its well-known widespread dissemination today. A key aspect of Internet is the Internet Protocol (IP) upon which the network of networks is built. Internet Protocol allows communication between different elements of the
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network be materialized through a uniform layer, so that users have the idea that the entire transport platform is one (see Figure 9).
Figure 9 - IP Protocol
The use of the IP protocol is not restricted just to the Internet, since diverse networks use it also as a mechanism to carry communications using the compatibility between devices that it provides in a natural way. In common terms, IP acts as a translator between different protocols and underlying networks, enabling that all network elements interact together via a common element. This feature is vital in an environment of convergence, given the multiplicity of protocols and standards that exist today for access levels (levels below IP (in gray) in the Figure). 2.1.2.4 Access Diversity. The so-called disruptive technologies, (i.e. those that cause large innovations and revolutionize the traditional way of doing things), occur frequently in telecommunications. Some of the most striking are concerning access; evolution has been quite fast on the subject. Table 33 shows the existent diversity regarding access to telecommunications services, where it is shown that in addition to the traditional copper pair characteristic of voice and data networks 25 years ago, we have now variety on access networks ranging from coaxial cable and fiber, wireless access and even the electrical network.
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Table 33 - Actual Examples of Access and Services
Network Infrastructure Access Network Voice Copper Pair PSTN, VoIP Cable (coaxial VoIP and fiber) Mobile Analog, 2G, IMT2000, AWS Fixed Wireless Electrical Grid PSTN, VoIP VoIP, PLC
and Services - Examples Type of Service Data Video xDSL VOD, IPTV Cable Modem Analog, DTV 3G, IMT-2000, AWS, WiMAX mobile, 4G or LTE IMT-2000, AWS, WiMAX, LTE, HSDPA BPL DTV, mobile TV DTV VOD, DTV, IPTV
It is important to outline that diversity in access networks today does not become an obstacle for the convergence of networks and services. The network access medium may very well be different for each type of user, and the choice of medium will be his/hers at some point in time. British Telecom system called BT Fusion is an example of convergence on access, allowing the user to make a quick change from a mobile system to a fixed one and vice versa, maintaining the connection already established.16 Service providers should then strive to provide them via any means available for the user access. The range of services that can currently be provided through different access continues growing and diversifying, and in many countries with not very-well developed communications systems, wireless systems are being opted instead of traditional copper pairs in order to avoid substantial investments in the deployment of new wireline networks. The concept of wired networks as a natural monopoly, so much in vogue before the 1990s, has today day less and less support and in practice, substitution of wireline networks by mobile networks progresses more and more. 2.1.2.5 Mobility and Ubiquity. The introduction of mobile telephony more than 20 years ago represented a huge leap in the telecommunications sector, since voice communication shifted from being something linked to wired equipment to true mobility for the individual. Although radio equipment existed long before, full mobility and the ability to make calls to any telephone user emerged only with the cell phone. Now that we are already on the third generation digital mobile services (not just telephony), we realize how indispensable the mobile equipment has become for one. Mobility and the ability to be placed on any geographical point where one can connect to the network (ubiquity) are important considerations and extremely large technological incentives for convergence. In the near future, network technology such as IMS (IP multimedia Subsystem), should provide a standardized next-generation architecture based on Internet Protocol (IP) for operators and allow fixed and mobile services through the use of converging terminal devices with the inclusion of a radio interface such as dual-mode cellular/Wi-Fi or cellular/Bluetooth. Currently, the main promoting factor for fixed-mobile convergence is
16
http://www.btfusionorder.bt.com/ Page 92 of 248
the trend towards VoIP enabled wireless telephony (VoWi-Fi); that is, devices which use Wi-Fi to connect to a VoIP service as Skype or roam between cellular and wireless LAN systems. Some VoWi-Fi operators are providing Wi-Fi only based services at this time, but some are beginning to provide converged services combining cellular services with VoWi-Fi. The challenges for mobile telecommunications operators come also from operators with Wi-Fi access points (hotspots), such as Boingo, allied with Skype. Some mobile operators are linking or considering binding their mobile networks with Wi-Fi access points, and use VoWi-Fi to improve internal coverage and provide low-cost calls at Wi-Fi locations. The picocells and femtocells are also moving in this direction. Today there are various means that are used to provide fixed-mobile converged services, some of which are technologically more integrated than others. Dual-mode Cellular/WiFi phones and the use of Wi-Fi modems at home to access VoIP via ADSL connections can be found in some countries (BT Fusion). There are less evolved forms of fixed-mobile convergence using dual-mode cellular/WiFi mobile phones that do not have a handover function or have handover, but do not use a fixed voice or Broadband network at home. There are also services that link fixed and mobile networks as well, which are not technologically convergent, such as those that provide a unique voicemail box for fixed and mobile networks. 2.1.3 Next Generation Networks (NGNs). The development of so-called new (or next) generation networks (NGNs) marked an important milestone in electronic communications, understanding it as any form of transmission of information driven by electronic means (unlike the more restrictive term of telecommunications). The ITU definition for NGN is: Packet based network able to provide services including telecommunication services and able to make use of multiple Broadband, QoS-enabled transport technologies and in which service related functions are independent from underlying transport-related technologies. NGN offers access by users to different service providers, and supports generalized mobility which will allow consistent and ubiquitous provision of services to users. 2.1.3.1 NGN Structure. Next-generation backbone networks are defined on the basis of their underlying technological components which include packet-based networks, with the service layer separated from the transport layer, which transforms them into a convergent infrastructure platform for a variety of previously different networks and services related to them. These features can have an impact on traditional business and market structure models, as well as in the regulation: IP-based network: Central next-generation networks generally cover the migration of several existing core networks to IP-based networks for provision of all services. This means that information is transmitted through packets. Packets can take different routes to the same destination and therefore do not require the establishment of an end-to-end dedicated route, as it is the case of PSTNbased communications. Packets-based, multipurpose: While traditionally separate networks are used to provide voice, data and video applications, each requiring independent access devices, with NGN different types of applications can be transformed into
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packets, labeled accordingly, and dispatched simultaneously using a number of transport technologies, which in turn allows a change form a single-purpose network (one network, one service), towards multipurpose networks (one network, many services). The interconnection between NGN and existing networks such as PSTN, ISDN, cable and mobile telephony networks, can be provided through communications systems gateways. Separation of transport and service layers: This is the key common factor between NGN and convergence, prompting the radical change in the relationship between network levels (transport infrastructure, transport and control services, content services and applications). In next-generation networks servicerelated functions are independent of underlying technologies related to transport. Figure 10 shows an NGN reference model, where the independence of the aforementioned levels is shown. The decoupling of applications and networks allows applications to be defined directly at the service level and to be provided without problems on different platforms, allowing market access to multiple service providers on a non-discriminatory basis.
Figure 10 - NGN Reference Model
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2.1.3.2 Emerging Scenario. Being NGN networks essentially based on the IP Protocol, the convergent new-generation environment presented to operators and users show marked differences with the schema of traditional telecommunications networks. Table 34 shows the change from the current environment to one essentially based on NGN networks. One of the first changes shown is the migration of single-purpose networks to multipurpose networks, capable of carrying all types of electronic communications. An IP network can in practice carry totally heterogeneous traffic, making differentiation only in the required quality levels (quality or QoS required for real-time voice is quite higher than that used for e-mail messages). Replacing narrowband by Broadband is another constant in the nextgeneration environment as well as the dissolution of the watertight compartments characteristic of the pre-NGN era. Since there is no longer the intimate relationship between a service and the network that provides it (see Figure 5), services and content are developed independently. We cannot keep talking about the telephone network, the data network, the cellular network, etc., but rather talk about the network when referring to the NGN access layer. Finally, the operator no longer has the absolute control of the service, because the user gradually appropriates it.
Table 34 - An IP-based Converged Environment Source: OECD Telecommunications environment Next generation converged environment Single purpose networks Multi-purpose networks PSTN, cellular, broadcast IP network (providing voice, video and mobile services) Narrowband Broadband Watertight compartments Destroys compartmentalization Traditional boundaries between industry segments (e.g., telephony, cable TV, broadcasting, wireless) are blurring Need to re-think market definitions (product definition and geographic boundaries definition) Network-service link New services and content developed independently of the network Operators control services to end Increased consumer control users
The existing PSTNs are currently being replaced by converged IP-based Broadband NGN network infrastructure, providing voice, data, audio and video (webcasting) broadcasting, interactive multimedia services and other application services in a ubiquitous way. It is expected that the current telecommunications industry evolves towards a broader ICT industry within 2 to 5 years, with the establishment of Broadband NGN networks as a predominant factor. A connection through a fixed or mobile terminal will give access to a customer to all voice, data and video services in an auto managed manner. As a result, the regulatory regime will face various problems of this emerging convergence of ICT network infrastructure and services. 2.1.3.3 Convergence and the Internet Protocol. The Internet Protocol (IP) provides a common network platform for voice, data and video transmission signals over a public packet-switching network. The introduction of voice over IP (VoIP) has led to the demolition of the telephone services classification, due to the vanishing boundaries between services such as local, domestic and
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international long-distance, categorizations that have no meaning in IP telephony. Networks in many countries are quickly evolving to reflect the new IP and VoIP-based design principles, an evolution which can be seen as a manifestation of convergence. Figure 11 shows this evolution since the early 1990s, when Internet had not yet begun to spread, networks were completely separated, sharing only the communication level of ATM switching and Synchronous Digital Hierarchy (SDH) links. The introduction of IP in the middle of the 1990s replaced the ATM level for switching, but only for Internet access. At the beginning of this millennium is when an IP world becomes more clearly discerned, where applications on Internet converge on a single network. The leap to global applications independent from geography and platform is the last step in this evolution.
Figure 11 - Network Evolution to NGN with IP Source: Telstra
These technological results have profound implications in terms of the market structure, as well as in the regulation. VoIP, when used to evade traditional voice telephone networks, is the biggest challenge to current telephony on PSTN, which has affected equality of conditions for basic services providers and ISPs, and has already led to conflicts in some countries, due to the current service-specific licensing regimes in vogue in those countries. Paradoxically, VoIP has been the most important catalyst for transformations occurring in the pathway to an IP converging environment, due among other things to the fact that much of the income from the operators currently comes from voice services. Finally, convergence eliminates traditional boundaries between audiovisual and telecommunications sectors by amalgamating both within the same network. 2.1.4 Impact of Convergence. The traditional approach based on the participation of more than a century of PSTN telecommunications industry and having the negotiations at the World Trade Organization (WTO) been held in this context, have apparently caused the countries to introduce a regulatory framework suitable for the situation then prevailing. The General
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Agreement on Trade in Services (GATS) of the WTO was signed by the majority of countries in a context where separate networks were considered, with supreme importance conferred to voice communications. It is then a retrograde burden that has lost much of its importance today. In most countries licenses for services basic PSTN, cellular, Internet Service Providers (ISP), Satellite and Cable TV, are granted separately, each with a different business structure and entry conditions and varying requirements to deploy infrastructure (see CHAPTER 1 - PRESENT SITUATION OF COMMUNICATIONS REGULATION IN EUROPE, THE UNITED STATES OF AMERICA, ASIA-PACIFIC AND LATIN AMERICA, IN AN ENVIRONMENT OF TECHNOLOGICAL CONVERGENCE). This ought to be revised and replaced in order to address the challenges of convergence, with a view of allowing operators to: (a) Provide any service that the market might demand, and (b) Option to use any technology. Convergence enables nowadays that operators use their facilities to provide services not covered by your licenses, thus violating the existing regulatory framework (licensing regime). Market conditions at the time of sector opening to private investment made then sense, for example, to award service-specific licenses. With the emergence of convergence, Broadband and NGNs will have profound impact on the current legal and regulatory framework. 2.1.5 Benefits and Challenges of Technological Convergence. The benefits and challenges of technological convergence have been indirectly discussed in this section. Any technological change represents the decline of many practices and styles of doing business, but also the dawn of new ones. Among the benefits and challenges that foreseen in an environment of technological convergence, the following are indicated: Promotes competition: allows the operators and consumers to derive full benefits of technology directly with no regulatory restrictions; Encourages development of increasingly efficient technologies and services; Results in lower costs; Enables custom-made service packages to suit consumer needs; Challenges the existing regulatory framework based on WTO Reference paper in some respects; Shifts the emphasis on regulatory responsibility from the regulation of services to the regulation of markets
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2.2 REGULATORY CONVERGENCE IN THE TELECOMMUNICATIONS SECTOR Convergence poses several challenges regarding regulation, because hardly ever the legal framework will be able to reflect technological changes that promote it. The previous chapter referred to the structures of the regulatory bodies and Government institutions in Europe, Asia-Pacific, United States of America and Latin America, reveals that much of regulatory and policy frameworks is at a very preliminary stage to face the challenge of convergence and the replacement of existing networks by NGNs. The Organization for Economic Co-operation and Development (OECD) has compiled and suggested some points related to regulation in convergence, which should be attended by the authorities at charge the sector policy.17 These are: 1. Market developments. 2. Access to Passive Infrastructure. 3. Technological Neutral Regulation. 4. Interconnection. 5. Numbering, Naming and Addressing. 6. Spectrum Allocation. 7. Universal Service. 8. Digital Divide. 9. Emergency Services. 10. Quality of Service. 11. Telecommunication and Broadcasting Convergence. 12. Cross-border Issues. Electronic communications (not just telecommunications) are a structural cost for all businesses and activities, so that any radical change could have enormous economic impact. A regulatory framework that enables better use of infrastructure and the adoption of new services at reasonable costs for users will be of greater benefit to society. Worldwide convergence in todays competitive market has a positive impact on the efficiency of companies. The new regulatory framework should then eliminate old boundaries and consider the new reality, where voice, data and audiovisual are being increasingly interlaced. A comprehensive solution that addresses all the key areas is required to ensure that all the benefits of convergence and advanced services are obtained. 2.2.1 Convergence Impact Key Issues. Negotiations at the WTO, adherences to the GATS and sector reforms in the countries that signed the agreement, took place at a time when traditional circuit-switched networks were widespread and in an era when clear functional differences between services and infrastructure existed. Nowadays, the agreements are effective, but the
OECD Policy Guidance on Convergence and Next Generation Networks; Organization for Economic Co-Operation and Development (OECD); OECD Ministerial Meeting on the Future of the Internet Economy; Seoul, Korea, 17-18 June 2008
17
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effects of convergence are felt in the countries that signed the agreement and in many cases there are contradictions between the text of the GATS and real-life practices. For example, subparagraph (b) of paragraph 2 (Scope) of the Annex on Telecommunications stipulates that [t]his Annex shall not apply to measures affecting the cable or broadcast distribution of radio or television programming. Convergence has removed the borders between broadcasting and telecommunications services. Convergence raises basic of policy and regulation issues and affects mainly the following: Licensing regime. Licensing in a converging environment is different from the current traditional scheme, due primarily to the absence of todays formal nature. European Community directives reduce the complexity of the process to a simple notification, provided scarce resources such as spectrum are not required. Interconnection regime. Interconnection in the IP convergent world has dynamics very different from the current regime inherited from circuitswitched networks. Management of costs and tariffs. In an environment of convergence, tariffs and costs associated with the service are not calculated the same way as it is done in the present system. Long-run incremental costs in most cases fall to zero, justifying the adoption of flat rates. Spectrum management. Extremely rigid management which is currently used for spectrum hinders the development of technologies and innovative applications typical in an environment of convergence. Numbering. Numbering in an environment of convergence shows usually nongeographic traits, unlike what happens with traditional networks. Consumer protection. In a new environment, consumer protection must be focused by the regulator in other areas (identity protection, content, etc.) Public policy: universal service obligation. Universal Access/Service obligations should be refocused to ensure access to networks and not concentrate just on services. Regulation of broadcasting. Broadcasting (audiovisual) is now an integral part of the whole electronic communications group and is part of the convergent regulatory obligations. 2.2.2 Policy and Regulation Issues. Several questions are raised for the regulator in convergence, which will have to be responded taking into consideration the new environment and current legislation when we move to a different environment. While most Latin American countries are at a very preliminary stage, convergence raises issues that the sector policy makers and regulators will have to resolve in the medium term (5 years or less):18
18
Trends in Telecommunication Reform: Licensing in an Era of Convergence; UIT-T; December 2004 Page 99 of 248
How to pass to a converged licensing framework without unduly benefiting existing shareholders (incumbent) or new entrants into the market? (This debate has been developing for a long time in the UK). If the existing and new market participants get licenses with fewer restrictions, how can regulators ensure that public interest is being treated properly? Can Governments relax licensing requirements and still force operators to achieve social objectives such as Universal Access? How can they deregulate completely licensing for the spectrum and other limited or scarce network resources? There are no generic answers to these questions, since the countries regulatory framework has developed differently for each case. There are regulatory aspects that cannot be ignored, such as international treaties such as GATS with the WTO or the regulation of the Andean Community of Nations (CAN in Spanish) for some countries. It is reasonable to assume that the legal framework of countries will have to change to adapt to the technological convergence environment, because not doing so will irremediably stop the introduction of new services and networks in detriment of the general interest. But as can be seen from the questions raised, conflicts with vested rights and vested interests may delay the introduction of a convergence regime if there is not a strong commitment from Government authorities to implement required changes. 2.2.3 Licensing Trends. In this era of convergence, some policy-makers are increasingly questioning the usefulness of licensing and require licenses be adapted for the sector policy goals without interfering with market and technological development. A demonstration of this has been given by the European Community by simplifying the licensing process and the scope to include several services at once. Countries have been changing their regulatory frameworks to deal with this new situation by simplifying their licensing regimes. This has mainly been implemented through: Introduction of technology-neutral licenses with wider service categories; The establishment of a unified (service-neutral) license and technologically neutral that allows operators to provide multiple services under a single license using any kind of technology; The impact of the unified license should be placed under observation, since not many Latin American countries have adopted it into their legislation. In any case, no compulsory migration or adjustment from the old licenses to the unified regime has been observed, so that regulators will have to deal for some time in an environment where the old single-service oriented licenses will live with unified licenses. Another way to simplify the licensing aspect is via unlicensing or non-licensing, according to which the operator simply sends a notification or registration to the agency or regulator designated by Government, although specific easements may be needed when scarce resources for the provision of a service, such as spectrum or numbering, are required. The case may be that not even a registration or notification might be necessary, taking into account services that fall outside the regulators authority or
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because the regulator has decided to refrain from regulating a particular service (valueadded service, for instance). In order to adjust the licensing regime for operators so that it resembles the situation of a converged environment, network-based and services-based licenses can be awarded. Thus, the pernicious practice of awarding licenses for networks bound to the services might be interrupted. Whoever intends to operate a public network would in this case request a network license and could also request a service license, without establishing a strong link between one and another. A reseller without an own network would then apply just for a license to provide services. Modification of the licensing regime might not be an easy task for those responsible for the sector policy and the regulators, due to the existing legal framework and current market structures. The major components used for the production of multimedia services are: 1. Network facilities: physical infrastructure, comprising the access network (wired, wireless, fixed or mobile wireless) and backbone network; 2. Services (telecommunications: voice, data, pictures, images); 3. Content services (broadcasting services: radio, television, etc.); and 4. Application services: Tele-education, telemedicine, e-commerce and in general all e-services. Adequately combining those, all services can be provided. The transition to service-neutral and convergent technology licensing is resulting in convergent regulators, such as in the UK. There are other examples: The telecommunications regulator responsible for networks and telecommunications services matters, along with transmission and distribution of broadcasting, and the audiovisual regulator dealing mainly with content matters. This could be an alternative in the case of many Latin American countries where either by tradition or by constitutional mandate, regulators ought to remain separate. 2.2.4 Interconnection in Convergence. The WTO reference paper (GATS) establishes that interconnection with a major operator will be provided under non-discriminatory terms and conditions, technical standards and inclusive specifications and rates not less favorable than those provided to its own similar services or to its affiliates in a timely manner and at cost-oriented prices that are transparent, reasonable and sufficiently unbundled so that the provider does not need to pay for those facilities that are not required for the service provided. Consequently, interconnection charges are determined in the PSTN with network elements sufficiently unbundled, so charges are directly related to capital and operating costs relevant to the actual network resources used. Regulation of the traditional interconnection has been established for PSTN services. IP-based services require a new approach. Traditional electronic communications networks used for voice and related services employ circuit-switched technology and guarantee the quality of end-to-end service. On the contrary, the Internet uses packet-switching technology that although less expensive to operate, it does so on a best effort basis without any guarantee of quality (see Figure 12). To grasp the benefits of the Internet efficiency, but also to provide the
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benefits in quality of traditional networks, the communications industry is developing new generation networks (NGNs) capable of carrying voice and data to acceptable levels of quality depending on consumer services.19
Figure 12 - Circuit-Switching vs. Packet-Switching Source: GAO Analysis
In many countries, regulatory requirements for public reference interconnection offers and pricing based on interconnection costs imposed on monopolistic operators, provide today a good framework for the development of competitive markets. Traffic or the use of units for measuring interconnection and access rates have always been traditional telephone network units such as minutes (conversation time), kilometers (distance) and circuits (capacity). Convergence to an IP world is rendering these units obsolete for the future. Circuits are no longer attached nor are provided, and distance and time are not determinant cost factors. Rather, new units of measure related to bandwidth increments, quality and other demands on network capacity are more relevant. Therefore, virtually all interconnection and access agreements will have to be renegotiated in the new environment, with many more players in markets that are still characterized by large asymmetries in bargaining power. Interconnection and access problems can be even more important in the transition to the future environment of convergence, than they were on the first stage of the telecommunications reform process. Public reference interconnection offers and proactive regulation on interconnection where there is monopoly power will be needed to drive the transition in countries with low development indexes.
19
NGN Interconnection: Charging Principles and Economic Efficiency; Richard Cadman; NGNuk; 12th July 2007 Page 102 of 248
2.2.5 Adapting Interconnection Charges Regulation. Traditionally the issue of interconnection charges has been managed based on the calculation of costs incurred to complete a call on the operators network when communication is initiated from another operators network. Costs are dependent on technology, but in the case of regulation in convergence cost-based termination is in conflict with technological independence, since service providers can use any technology and any network to reach the end user. Current approaches are mostly based on technology and for the case of NGN network costs are not obvious. The estimate of costs for unbundled network elements and the identification of individual elements that are used in IP networks are not easily achievable. There is no overriding justification for cost-based termination. The fundamental principle is that regardless of the network, any network operator can interconnect with any other operator. With these basics concepts, the following general patterns emerge: Interconnection should be simple and the basis for charges should be easy to understand and apply; Symmetrical interconnection regimes (with a large number of operators, determination of significant market power becomes difficult); New interconnection types: access to parts of the infrastructure (with the exclusion of local loop or directory services databases); Interconnection based on capacity; Flat fee for a specific interconnection capacity. The other problem that arises regarding the regulation of interconnection in convergence is the fact that the most common interconnection scheme is that set out in the GATS of complete interconnection, where all networks need to interconnect with each other. This is generally not difficult to achieve when the number of networks is small, but the situation becomes complex when the number of interconnecting networks increases, because interconnections and consequently interconnection agreements follow the formula i = n(n-1)/2 for all networks within a single hierarchy, so that the growth is quadratic. Interconnection in the IP world is governed by other principles, since only large networks are interconnected between them, as shown in Figure 13, forming a core or super core. Other networks are partially connected and some even may remain on the periphery as edge nodes, as long as there is a way by which communications can be routed to the final destination through any network providing transit. The regulator should then adapt the interconnection regime to fit a hierarchical or tree interconnection model of shown in the figure.
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Figure 13 - Complete vs. Hierarchical Interconnection
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2.3 PROBLEMS THAT REGULATION OF CONVERGENCE HAS TO SOLVE Telecom regulators carry the primary task of implementing policy changes to adapt to a changing industry and market environment. But the scope and limitations of what they can do are determined by government policies, most often established before IP convergence was even recognized as an issue for policy or regulatory attention. Although there is much that national regulators can do within their existing policy guidelines and legislative remits, relatively few have sufficient powers to develop and implement a full program of necessary reforms. This is especially true in most developing countries.20 Recognition of the benefits and opportunities of IP convergence at the policy level, and a commitment to implement necessary changes, is important in setting the policy framework for convergence. This helps ensure that issues are defined and examined holistically and comprehensively rather than as ad hoc isolated problems. For example, if VoIP is viewed simply as a diversion of voice service revenues from the incumbent operator and a decline in quality of public voice services, as some countries have done, it will only be seen as a problem with negative effects. The benefits and opportunities of VoIP within a context of IP convergence of all services providing the information infrastructure for e-commerce and future economic development will be missed. 2.3.1 Market Development. The adaptation process is still going on in most of the region, and in some countries has not even started. Several interconnection models are feasible in an environment of convergence, but the ones that are most used are centered around principles applicable to PSTNs and not to an NGN environment where rules are different. The most obvious concern of Governments is not to affect the game rules, so that the change has not negative consequences in the market developments. Mobile telephony (not mobile services such as 3G) for instance, has placed itself in an enviable position in Latin America in the course of only a few years, as shown in Figure 14. The dynamics of mobile services penetration is something we all want to maintain, because it has achieved what fixed telephony could not for decades: democratize access to telephone services.
Convergence, IP Telephony and Telecom Regulation: Challenges & Opportunities for Network Development, with particular reference to India; Workshop on Convergence, VoIP and Regulation; sponsored by infoDev in association with the Telecommunication Regulatory Authority of India (TRAI), New Delhi. 11 March , 2005 Technological Convergence and Regulatory Convergence Page 105 of 248
20
Mobile Telephony Penetration Latin American Countries

140.00
120.00
100.00
80.00
60.00
40.00
20.00
ARGENTINA BRAZIL COLOMBIA CHILE MEXICO PERU URUGUAY VENEZUELA
1996 1.89 1.58 1.30 2.20 1.10 0.83 2.53 2.24
1997 5.63 2.68 3.15 2.78 1.84 1.75 3.13 4.83
1998 7.39 4.45 4.42 6.46 3.48 2.91 4.80 8.62
1999 10.56 8.92 4.73 14.96 7.96 4.06 9.52 15.92
2000 16.88 13.66 5.33 22.36 14.19 4.96 15.26 22.47
2001 19.26 16.73 7.63 34.23 21.61 6.87 15.47 26.18
2002 17.50 20.06 10.62 42.83 25.39 8.62 15.95 25.96
2003 20.71 26.29 14.13 49.38 29.06 10.61 15.40 27.31
2004 35.35 36.32 23.16 62.08 36.31 14.85 18.52 32.17
2005 57.41 46.25 47.92 67.79 45.14 19.96 35.54 46.71
2006 80.52 52.90 64.31 75.62 52.59 29.95 66.83 69.04
2007 63.08 73.54 83.66 62.65 55.25 89.96 86.13
2008 78.47 91.90 88.05 69.37 72.66 97.49
2009 89.79 92.33 96.94 76.20 84.69 98.39
102.20 116.61 128.84
104.73 113.13
Year
Figure 14 - Mobile Telephony Penetration in some Latin American Countries Source: Cofetel
Internet, not originally conceived as a public network, has separated services from connectivity and thus managed to stay at the front in developments for many years. Since it was initially conceived as a research network in the second half of last century, Internet has been able to revolutionize not only the telecommunications or the audiovisual sectors, but it has changed much of the worlds population living habits. But above all, it managed to generate markets until recently unimaginable for the traditional telecommunications operators, such as social networking, e-commerce, web applications, etc. Internet separated applications from transport from the very beginning, relegating the latter to the TCP/IP Protocol and giving absolute freedom for users to develop their own applications. For this reason is that NGNs, which use the same Internet structure for provision of services, represent a mystery for companies that for years exploited telephony, data, TV cable and other services in a given way, and now face a monumental paradigm shift. Since users can provide themselves their own services, user dependency from the provider is becoming weaker. We are reaching the point where a user will simply require Internet access at a sufficiently high speed to be able to fulfill his/her communicational needs of any nature. The recent prohibition by German mobile operators to their users to use Skype on their 3G networks, thus blocking them the possibility of placing cheap long-distance mobile calls by forcing them to use
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traditional operators services, is a demonstration of how incumbent operators could react to the massive deployment of next-generation networks. Telephone companies are worried about a declining revenue services scenario which can affect investment in infrastructure, and it acquires a special dimension in underdeveloped countries where many investments of many years might be affected. Sector policy-makers and/or the regulators should then harmonize the normative so that market sectors affected by the introduction of NGNs and converged services provided through them do not suffer a quite pronounced initial impact. Much can be learned from the way in which OFCOM in the UK managed the introduction of convergence through public consultations and careful planning.21 At any rate, it is imperative that Governments start already normative modifications for an environment of convergence, because bypass of traditional networks using VoiP is quickly undermining voice operators revenues and unless appropriate rules are established for competition between them, the tendency will be to diminish even more and at an accelerated pace. 2.3.2 Impact on Costs and Prices. A basic ingredient in the transition from a protected market to competition is the alignment of prices to costs (i.e. based on cost or cost-oriented prices), for prices to better reflect the actual levels in a competitive environment. For the so-called basic telecommunications services, in most of the developing countries the pricing structure for individual services contains cross-subsidization, which introduces distortions in the information used by users in their consumption choices, as well as to investors and service providers. This issue is typically not expressly acknowledged by telecommunications administrations, but in practice it manifests itself via excessively high prices unrelated to the actual cost for providing them; for instance: the cost of fixed-to-mobile calls in many countries. 2.3.2.1 How do Prices Relate to Costs in an Environment of Convergence? Convergence presents another routing scenario as a function of labeling based on besteffort and/or quality for differentiated services, where flat or volume-based rates are more common. In an IP network, the concept of tariffs based on usage time, so common in circuit-switching systems, end up being extremely artificial. The base cost has changed, since the existing model was designed for expensive centralized networks and access to the user by expensive means also. Costs per user of distributed IP switching equipments and last mile access (especially with wireless systems) are lower than those of PSTNs, and this generates a marked disparity when both types of networks enter to compete for the same market (switched voice). Treating VoIP as a technology (not to circumvent or bypass the use of traditional voice networks) should then draw the attention of regulators, avoiding seeing it as unfair competition to traditional operators, looking in any case for a reasonable balance to achieve peaceful coexistence until full migration to NGNs is attained. The retail market is changing with subscriptions and packages, which are no longer in line with interconnection charges calculated in time units in the PSTNs. Users preference for flat rates and buckets of minutes is evident, since they reduce or eliminate the uncertainty as to what the consumer will have to pay as opposed to a
21
http://www.ofcom.org.uk/telecoms/discussnga/ Page 107 of 248
system based on utilization (per minute rates).22 Prepaid plans, where most of the lowincome population in Latin America is found, as shown in Figure 15, does not solve the problem either, since certainty regarding consumption is obtained at the expense of higher rates per minute.
Figure 15 - Percentage of Prepaid Plans in Latin America and the Caribbean Source: DIRSI
When comparing the network features of NGN with traditional operators, it becomes evident that refurbishing a backbone oriented to a single service for multiple services is organizationally complex and unnecessary. It is preferable, in any case, to make a gradual replacement of legacy networks. New services are appearing and many more may show up in the future, and todays networks are not properly suited for the most part in terms of providing these new services efficiently. Finally, reducing costs in termination charges should be the goal of adjustments in the structure of market prices and costs in a next-generation environment, but with enough incentive for telecommunications companies to invest in infrastructure. 2.3.2.2 Options for Tariffs in Convergence. In an NGN environment, there may be several options for tariff models, many of them based on current experience with Internet and services currently offered through the network of networks. Some suggested are:
22
INTERCONNECTION IN AN NGN ENVIRONMENT; BACKGROUND PAPER; J. Scott Marcus (Senior Consultant, WIK-Consult GmbH, ITU; April 15, 2006 Page 108 of 248
En un ambiente de NGN pueden existir varias opciones para modelos tarifarios, muchos de ellos basados en la experiencia actual que se tiene con Internet y servicios prestados actualmente a travs de la red de redes. Algunas que se sugieren son: 1. flat rate tariff; 2. volume based (traffic in terms of transacted bits/bytes) + fixed charge; 3. volume based (traffic in terms of transacted bits/bytes) + fixed charge + local value additions (managed services); 4. volume based (traffic in terms of transacted bits/bytes) + fixed charge + content based differentiated tariff; 5. Subscribers would pay separately for connectivity and services. It should be indicated that none of the above is a generic solution to the situation of markets in Latin American countries. They are largely the product of experiences in European countries and the United States, with market development characteristics and legislation sometimes quite different from those of Latin America, and without taking into account the high level of service development those countries have. Each of the options should then be considered on its own merits and applicability conditions for a specific scenario. 2.3.3 Bundling of Services. Bundling of services refers to the provision of a number of services combined into a single-price package, sometimes excluding the possibility that users can obtain a unique service without having to take or pay for other services in the package (tying of services). It is important to note that bundling of services can be offered both on converged networks as well as on those that are not, because it is a purely commercial, non-technological offering. Bundling of services can help build economies to the provider (e.g., reduction in the costs of marketing services, the cost of customer acquisition, charges of billing, etc.) For the user, bundling often has the advantage that prices are lower in comparison with having to subscribe to each service individually; however, users might not want all services that are offered in a bundle. A client who does not want IPTV services could be compelled to pay for these services in order to subscribe to certain triple play bundles. In the EU, as a primary condition, all bundled services must be available individually (i.e. marketed separately); otherwise, bundling is not allowed. A bundle, which nominally offers a better price than subscribing to the same services separately, is also difficult to assess when you try to compare prices across a range of different offerings. A service provider can also use a service on the bundle to crosssubsidize other services, using this to get an unfair advantage in the market. The bundle can also make it difficult for the regulators to define markets, assess market power and establish, therefore, whether or not dominant position exists in a given market. The main issue presented to the convergent regulator regarding bundling of services is the fact that while service providers know the detail of income received from services provided to the users, very few can accurately determine the costs required for the provision of each individual service. There is also a great asymmetry in the information, because even if the service provider knew the exact distribution of income by each
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service within this vertical integration, he might not be interested in providing this information to the regulator. Restrictions to provide triple-play in Argentina could somehow reflect the difficulties of the regulator to control and monitor the provision of bundled services.23 Additional potential regulatory challenges come via the possibility of horizontal extension of position dominance based on price-squeezing practices or the impossibility by alternative operators to replicate the bundle due to lack of networks, contents and/or wholesale services that would enable them to compete for bundling of services. 2.3.4 Fixed-Mobile Convergence (FMC). It is expected that deployment of NGNs accelerates the offering of FMC services in a transparent manner to the user and uses the lowest cost routing. In turn, this will require regulators to review existing frameworks to ensure that they do not become a disincentive for the development of new services and that existing regulatory frameworks treat new services in a technologically neutral way. Treatment of these communications within a network with geographical limitations imposed by tariff reasons (price differentiation by zones) carries adjustment difficulties to the FMC, since fixedline and mobile phone services are often managed by different schemas. The tangled tariff distribution based on communications generated in one point and completed in another in some countries, characteristic of PSTN, should seriously be reconsidered at the time of introduction of NGN technology in replacement of existing networks. For packet-switching traffic characteristic of the IP protocol, part of the communication could be following one route and the other part another, and the network itself would have no real awareness of the paths followed by the packages. Another concept that the regulator in an environment of convergence has to deal with regarding FMC is nomadism. Nomadism is defined by ITU-T as Ability of the user to change his network access point after moving; when changing the network access point, the users service session is completely stopped and then started again, i.e., there is no handover possible. It is assumed that the normal usage pattern is that users shutdown their service session before moving to another access point or changing terminal. This is the mobility alluded to in the case of fixed mobile convergence.24 Tariff systems that assume the category of fixed services will slowly progress in that direction and it will be very difficult to impose arbitrary geographical restrictions in communications which by nature are not restricted to a geographical area. A classic example of nomadism is the ability to receive and send e-mails from any geographical point on the planet, without the network having a need to know the geographic location of the user to transmit information. Numbering policies must also accommodate FMC services and, if the existing geographical numbers are then used with the calling-party pays (CPP) billing system, it may be necessary to devise ways to inform the party who initiates the call if different charges will be applied depending on the location of the called subscriber. In a nextgeneration environment, the location of the called subscriber could become an irrelevant piece of data for tariff calculation, being only the network access (fixed or
23
The Possibilities of the new Audiovisual Technologies in Argentina: Triple-Play (Internet + Fixed-Line Telephony + Television) and Quadruple-Play (Internet + Fixed-Line Telephony + Television + Mobile Telephony); CICOMRA; Argentina 24 Recommendation Q.1761 (04), 3.9, ITU-T Technological Convergence and Regulatory Convergence Page 110 of 248
wireless) relevant for that purpose. It may also be important for regulators to develop sufficient market tests, given that existing operators already have market power and quite often their mobile operators are also market leaders. The development of FMC may increase this market power. 2.3.5 Interconnection, a Burning Issue. Interconnection at the NGN level is being studied from various angles and by institutions seeking to reconcile the criteria of all stakeholders and participants in the world of electronic communications. The Y series of the ITU-T recommendations for the Global Information Infrastructure, Internet Protocol Aspects and Next-Generation Networks provides plenty of information regarding this aspect. However, there is no real expertise in interconnection in an environment of technological convergence, even though many countries are already well on the way as to implement the change toward NGNs. NGN migration represents a natural transition point where interconnection agreements must necessarily be changed and could represent a rare moment in time when migration to Bill and Keep may be worth the effort to be considered. In Europe, it is NGN migration what is prompting national regulators to reconsider the kind of interconnection they would want in future agreements. Conversely, those developing countries seeking to promote initial widespread adoption of mobile services possibly might prefer CPP/CPNP (Calling-Part Network pays), even though they tend to incorporate distortions. CPNP agreements can have additional short term advantages for operators in countries in development: CPNP for international calls tends to generate net monetary transfers in the direction of the least developed country due to the asymmetries in the number of calls made, probably as a result of differences in the level of income available; and CPNP for national and international calls, implemented to reflect the higher costs incurred by rural operators, can provide a means to support access or Universal Service. It is important to mention that the mechanisms listed above are not sustainable in the medium or long term, since market distortions they create tend to widen gaps, especially in access. 2.3.5.1 Bill & Keep. Sender keeps all (Bill & Keep) is a type of regulation or an agreement between operators which consists of having termination charges between interconnected operators be equal to zero. Thus, each company pays all costs of installation and maintenance of its own network to the interconnection point, besides any extra expenses generated by providing interconnection. The justification for this formula is the difficulty of managing the interconnection, problems to find a price system for termination acceptable for all operators and an easy way to simplify interconnection accounting.25
25
http://es.wikitel.info/wiki/Bill_and_Keep Page 111 of 248
Zero termination charges seek that service providers revenues come from their own subscribers; in summary, they require the provider to generate more market innovations and promote competition. The Bill & Keep advocates argue that it provides the following benefits: Less regulatory burden: only supervision to prevent anti-competitive practices; Interconnection agreements become simpler; Fixed-mobile convergence and portability are promoted; More incentives to invest in new technologies as well as to benefit from lower costs (Moores law) and more efficient use of network infrastructure; Lower Capex and Opex, resulting in lower retail tariffs; Allows achieving network neutrality. An important condition for Bill & Keep to function properly is that networks interconnected via this method be approximately the same size; or what is almost the same, have a similar traffic load between them. Very large traffic imbalances could generate significant imbalances in costs incurred by network operators. The issue of how much imbalance is tolerable has been studied in specific cases, arriving to the conclusion that if operators have the option to choose the level of imbalance between networks, they will prefer to determine a low imbalance.26 In cases where the imbalance, despite everything, is considerable, it will be preferable to establish transit agreements, similarly to those from the ISPs. How does the current Calling Party Network Pays (CPNP) compares compare to Bill and Keep in developing countries? J. Scott Marcus made a detailed analysis of this point and in short, what seems to be known thereon is: Bill and Keep wholesale arrangements enable low or zero retail per-minute usage fees, but higher initial and fixed per-month fees; CPNP wholesale arrangements tend conversely to preclude flat rate or buckets of minutes retail arrangements, leading instead to low initial and per-month fees but high per-minute usage fees; Countries with buckets of minutes retail arrangements tend to experience high and efficient utilization, but slower adoption of mobile services; Countries with conventional CPNP/CPP arrangements tend to experience lower utilization, but faster adoption of mobile services; Overall, CPNP arrangements seem to lead to larger economic distortions that Bill and Keep. An obvious consequence is that CPNP countries in which the mobile services market is already mature or saturated should consider migrating to Bill and Keep agreements.
26
Establishment of the Imbalance Level in the non-Reciprocal Bill & Keep (B&K) Scheme; Rafael del Villar Alrich y Jessica Serrano Bandala; Preliminary version; June 2007 Page 112 of 248
However, from the practical point of view, it is very difficult to abandon subsidies implicit in a CPNP environment once they have been implemented.27 2.3.5.2 Charges for Connectivity and for Services. Some schemes of charges are based on subscribers paying for connectivity when paying for access. Retail access charges could be established as a function of use or flat fee, but the component of use would take into account only the volume of bits or packets and would not differentiate between the services provided. In practice, access charges as function of use would normally be used only when access systems have relatively high costs, as in the case of the mobile service costs. The argument held by mobile services operators regarding higher costs for access is still in force in Latin America, but might change in a few years with the opening of new frequency bands and the decline in equipment prices that is being observed. Access charges could also be based on the quality associated with a class instead of a service. This would very well comply with the issue of quality, because major quality problems are typically due to access systems. The QoS offered in this case would determine the payable tariff, subject to the conditions of the offered access. This method would eventually have the disadvantage of adequately determining quality levels to set the tariff, and the regulator would have to perform studies of the ongoing conditions to establish appropriate thresholds for this differentiation. Hybrid charges for connectivity and services such as those listed above have the disadvantage of complication, but better reflect the real world that must be analyzed by regulators and service providers themselves. Subscribers may pay for services based on use, quality classification or flat rate, but in practice charges for various lower cost services would probably have a flat fee. 2.3.5.3 A new Model Based on Report ECC 75. The Electronic Communications Committee (ECC) within the scope of the European Conference of Postal and Telecommunications Administrations (CEPT) has developed a new model for IP called 75 ECC-based networking. The new model differs from the current plans for the NGN being discussed in ETSI and ITU-T but is similar to the main aspects of one of the models used by the mobile operators for the GRX (the roaming model for GPRS in GSM IP-based networks), which may also become the basis for the provision of the IP Multimedia Subsystem. It is also used for services on the Internet. The reasons for considering this model are: A model is needed that is compatible with the easy introduction of new and third party services; The cost basis of the networks has changed and the backbone network is now relatively inexpensive.
27
INTERCONNECTION ON AN IP-BASED NGN ENVIRONMENT; J. SCOTT MARCUS; WIK-CONSULT GmbH; GLOBAL SYMPOSIUM FOR REGULATORS; ITU; Dubai World Trade Center; Dubai, United Arab Emirates; 5-7 February 2007 Page 113 of 248
The retail market is moving away from call charges and towards flat rate charges and the retail and interconnection charges need to be matched as closely as possible to reduce arbitrage risks. High quality interconnected service platform -a new utility; Transport comprising of access and backbone; Full separation of transport and services; Interconnection charging based on capacity and quality -not service and usage; Uncontrolled and innovative service creation from the normal customer interface. Unfortunately, there are still too many pending points regarding interconnection aspects between IP-based networks that the ITU itself has not been able to reconcile, due primarily to the profound changes involving these transitions.28 The global standardization initiative of next-generation networks dependent on this body has been working for several years and recommendations have been gradually emerging almost in parallel with the actual interconnection experiences.
2.3.6 Spectrum Management. Wireless technologies, including those that use unlicensed spectrum, are becoming an important part of the telecommunications sector. The range of technologies that have demands of spectrum is growing rapidly (HDTV, mobile TV, Broadband mobile 3G and long-term evolution (LTE) technologies, WiMAX, unlicensed spectrum technologies, etc.). Effective management of spectrum is thus becoming a key sector policy issue. Since most of the premium spectrum has been assigned, it is becoming increasingly difficult to find spectrum for the expansion of existing applications or new innovative businesses generated by technological evolution and the convergence of markets. This, in turn, has led to concerns about the traditional approach of command and control in the current spectrum allocation and management policies, in which key aspects of the spectrum allocation and use are controlled, including exactly what frequencies can be used, precisely for what purpose and with which technologies. The objective is the management of spectrum in a technology and service neutral regime. Government entities have considered for too long spectrum as a national resource of high economic and strategic value, and therefore licensing for its exploitation has been seen as an excellent source of revenue for Government, and at the same time as an extremely delicate activity, which consumes considerable time in planning and development. It was not uncommon that competitive processes for frequency bands with high demand took years to materialize, with the consequent negative effects to society for not counting with the services provided through them. Traditionally, planning and spectrum allocation have been coordinated and regulated at international and national level based on technologies and application services. Efficiency and economies of scale from providers have been achieved this way, as in GSM and CDMA technologies. Technological neutrality represents a challenge to this long time established system.
28
http://www.itu.int/ITU-T/ngn/index.html Page 114 of 248
As a principle, the most efficient use of spectrum, a limited resource, is required to generate the maximum benefits in providing different services; for example: Mobile services, including digital TV; 3G data services; Other new services and applications. Not only more spectrum access is required in many countries, but there is an urgent need for flexible reallocation of unused or underused spectrum to those that use it more efficiently. Increasingly more flexibility in use/market solutions (tradability) is considered the best way of taking into account the demands of competition that would be expected. In particular, the introduction of secondary markets for spectrum is extremely important to improve economic efficiency in spectrum markets. Secondary markets can allow spectrum resources to change from little value uses to higher value uses. Trade and liberalization of spectrum are independent developments. Even without the use of the spectrum liberalization, spectrum trade has some benefits. However, liberalization allows flexibility by giving spectrum users freedom to adopt new technologies and offer new services. Combining spectrum trade and liberalization: can help the market decide how much spectrum must be assigned to different uses; enables faster and more flexible access to spectrum, including unused or sparsely used spectrum; helps to promote development of new, spectrum-efficient technologies; and increases innovation in spectrum use and in products and services based on the spectrum. While spectrum trading is not applicable to all frequencies, it allows that the opportunity cost of frequencies allocated by the traditional method of command and control or the commons approach be allocated separately from those which are traded. National security, public safety, health, pluralism of the media and other legitimate objectives of public interest should not be committed in a spectrum trading scheme. But where Governments are involved in decisions of spectrum management, this intervention should be clearly defined, transparent and limited in its scope as much as possible. Given the importance of wireless technology in rural and remote areas and the difficulties in duplicating some lines of fiber networks, changes in the spectrum markets are important. It should be noted that the use of secondary markets for spectrum does not apply and in fact should not be applied to unlicensed bands, since these bands are not assigned to a specific user or service. It is also important that these unlicensed bands continue being reserved for unlicensed use. Countries have an important opportunity to introduce reforms in spectrum markets in the coming years with the change of analogue to digital TV, which will liberate a significant amount of spectrum bandwidth potentially available for other applications (digital dividend). Taking into account expected competing demands to use the digital dividend and the uncertainty of technology development and the convergence of services, a market approach to proprietary rights (exclusive use rights + marketing) combined with flexible spectrum usage (in broader terms), subject to public interest
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objectives (cultural diversity and pluralism of information, international agreements, protection against interference, etc.) can be considered. 2.3.7 Numbering. Telephone numbers, domain names, IP addresses and other addresses are crucial resources for communication and access to the market. They supply operators and service providers with data needed to locate and identify users and network points in order to provide their services. For end-users, they provide a presence in the world of communications and a means to communicate with others. For the PSTN, the public switched telephone network, the telephone numbering system is the primary routing mechanism for end users. Virtually all current wireline and wireless network operators based in numbering their interconnection, interoperability and the provision of services in the telephone system. With NGN, it is expected that the current numbering system will continue, at least in the short and medium terms, as the dominant system in voice communication to identify and connect subscribers. Numbering plans, originally developed for PSTN on the basis of geographic locations (ITU-E164), must now adapt to IP-based network environments. The development of a numbering plan must take into account the possibility for subscribers who already have a number for a same comparable national service, evolve from their national subscriber number (SN) to the global subscriber number (GSN). It is assumed that global services recognized by the ITU-T would be location independent.29 The structure of the global subscriber number is indicated in Figure 16.
Figure 16 - International Number Structure for Global Services Source: ITU-T Recommendation E.164
29
The international public telecommunication numbering plan; ITU-T Recommendation E.164; (02/2005) Page 116 of 248
Phone numbers by which the PSTN subscribers are eventually identified can evolve to alternative names and addresses, but generally many new services, such as web-based IM and VoIP services are generally used above the regular voice subscription and this does not lead to the replacement of phone numbers. The emergence of new directions, however, gives rise to increasing divergence, since users begin to collect more numbers and IDs in different areas. But there is no real indication that this divergence is posing problems on the users side, since user devices are becoming increasingly intelligent and able to handle multiple addresses and manage contact information. However, divergence represents a challenge for providers. Phone numbers in their standard format are not compatible with IP-based core NGN networks where typically the URI format or other IP-based identifiers are used. Still, for users, as well as for providers, to be able to continue using the phone numbers is considered crucial for migrating the classic Telephony phone service to VoIP and for the integration of new IP multimedia services. ENUM, a standard developed by the IETF was designed for this purpose; it provides a mechanism for transforming public phone numbers into unique domain names as shown in ANNEX B. TYPICAL PSTN-IP CALL FLOWS USING SESSION INITIATION PROTOCOL (SIP). At the same time it solved the problem of assignment, it also introduced new potential applications as a result of the inclusion in the domain name system. The ENUM to unify the PSTN system with Internet is already under study by regulatory authorities. Some countries assign specific numbers to VoIP services (for example, Japan, Korea and some EU States), others assign geographic numbering, and some a mixture of both. The ENUM comprises a set of standards and mechanisms to transform public phone numbers into unique domain names used in NGN, allowing providers and users to continue using phone numbers that are considered crucial for the change from the existing public switched telecommunications environment towards an environment based on the Internet protocol, thus becoming an essential pillar for NGN. Due to ENUM the lifespan of the existing telephone numbering scheme could be extended, consequently keeping the role of phone numbers as key identifiers for telecommunications services. Eventually, however, regulators may need to introduce more flexibility into the numbering plans to expand the uses of existing numbering ranges, taking into account the portability of numbers between different services. At the same time, ENUM data access will become crucial to establish interconnection. ENUM is a function to match E.164 numbers to uniform resource identifiers (URIs) to which communications applications are associated with. ENUM uses the protocol developed by the special Internet Engineering Task Force (IETF), specified in RFC 2916, which first transforms the E.164 numbers into ENUM domain names and then uses the architecture based in domain names system (DNS) to access records from which URIs are derived. The ENUM function allows the use of E.164 numbers to provide calling users a diversity of addresses, including those used for telephony, fax and e-mail, which identify the called user (see Figure 2). This allows the called user to customize the way he/she will be contacted via a single number. Contact information can also be modified, completed and easily updated without changing the number used for access.
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Figure 17 - Possible Applications Associated with E.164 Numbers Source: ITU-T Recommendation E.164 Supplement 3
2.3.8 Universal Access/Service. According to the WTO (GATS reference document), Member States may define the type of universal access/service they want to keep, provided they are supplied in a transparent, non-discriminatory and neutrally competitive manner and not more burdensome than necessary for the defined service. Most countries defined it to include voice and Internet access service and this is suggested in the legislative framework referred to universal access/service. Considering the relatively low levels of penetration in rural and peri-urban areas in Latin America compared to countries with more developed networks, it is foreseeable that services universalization goals will continue to occupy the agendas of Governments and also from the regulators.30 Convergence enhances the scope of universal access/service obligation to include other services, which together become much more appreciated than simple voice or narrowband Internet access services. In convergence, problems of access/universal service that arise are: Which services should be included in the scope of universal service obligation? If contributions to the universal service Fund, generally mandatory on voice service providers, should be extended to include other service providers.
New Models for Universal Access: Country Report; FORO LATINOAMERICANO DE ENTES REGULADORES DE TELECOMUNICACIONES - Regulatel; November 27th, 2006 Technological Convergence and Regulatory Convergence Page 118 of 248
30
Should the regulator temporarily exempt advanced new services from contributions to the Fund in order to foster development of these services? It is expected that provision of advanced services to people in underserved areas reduces the cost of universal service. All countries seek to ensure that some minimum, crucial set of electronic communications services is available to everyone at a reasonable cost. Different countries fund universal access/service in different ways. National and international interconnection charges (call termination charges) have played an important role in financing universal service in several countries. Migration to NGN will put downward pressure on call termination charges and may ultimately make the current call termination system become unsustainable. If this is the case, how will these countries, especially developing countries, finance universal service? To what extent, if any, universal access or universal service needs to be subsidized in an NGN world? These questions must be resolved by Government authorities responsible for the matter and the regulator will ultimately be one with the important task of ensuring that services, but above all access, is affordable for society as a whole.
2.3.9 User Protection. The role of the regulator in relation to the user has traditionally been to ensure that he/she has sufficient criteria so as to make an informed decision. In a sufficiently competitive market, the user would not require a great deal of help from the regulator. But when market imperfections or the existence of operators with dominance require a more direct action by the regulator, it will ensure that users can exercise their rights in everything that law permits them. The debate on the degree of intervention that the regulator should have regarding user protection matters is still ongoing, although the more generally accepted notion is that of the regulator protecting mainly the market rather than protecting individual user or groups of users. Regulators impose requirements on service providers to make sure that there is sufficient information publicly available so that customers can make informed decisions between options. For example, for VoIP phone calls, regulators in the United States, United Kingdom, Spain and Hong Kong, have ordered that customers be informed about limitations regarding location information for emergency calls.
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Figure 18 - End-to-End Security Architecture for NGN Communications Source: ITU
One aspect related to users protection is the degree of security which will be provided regarding privacy, protection of information, identity and other aspects of end-to-end electronic communications which are carried through next-generation networks. Figure 18 shows the architecture for NGN end-to-end network security, where the enormous variety of attacks and threats to which users are exposed in this new environment is appreciated. This is largely due to the fact that NGN networks are exposed to the same type of threats and attacks suffered by Internet communications and the regulator must expand its traditional roles of user protection to incorporate new ones referred to ensuring that they have sufficient guarantees for security.
2.3.10 Audiovisual: Separation of Content from Transmission. Regulation of the audiovisual sector is a topic that awakens discussions and debates in any forum or workshop, due to the content control connotation involved. The main regulatory challenge faced in a convergence environment is precisely the treatment of content in mass media, which in short is unrelated to traditional telecommunications regulation. There are countless examples of bodies that regulate both telecommunications and audiovisual (radio, television and TV cable) which, at the time of performing their duties encounter problems with media operators, especially when they allude that regulation should not undermine the basic principles of freedom of expression or the right to keep people informed. It is then when a radio or television broadcast operator (free reception) often times gets to continue operating irregularly, hiding behind the specified arguments. On the other hand, there are also cases where Government exerts pressure on audiovisual operators via the regulatory body, alluding in many cases non-compliance with technical standards, when the real reasons lie behind the content they broadcast. For these reasons, the audiovisual regulatory regime should keep transmission matters apart from content. In an environment of convergence, networks carry all kinds of traffic, and audiovisual is no exception. Problems arise when the regulation of content begins to interfere with the
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regulation of transmission, because it forces the regulator to discontinue being a technical and/or economic issues-oriented body and begin to take care of social issues that increase the regulatory burden, many times forcing it to make decisions that are not based on objective criteria. The preparation of the regulator for a scenario where the traditional boundaries between broadcasting and telecommunications have disappeared should then be oriented to ensure that roles remain differentiated between electronic communications per se and audiovisual content. The objective should be then to rationalize the regulation of audiovisual services and telecommunications through: Audiovisual regulatory framework regulating content; Telecommunications regulatory transmission and technology; framework taking care of network
Although there are cases of converged regulators that are responsible for both broadcasting and telecommunications with good results (for example, Ofcom in the UK), regulation of content is normally performed by another Government body. The key to success is ensuring that the convergent regulator has well-defined roles regarding networks and electronic communications, leaving the audiovisual regulator all matters related to content. Regulation of audiovisual content is very much related to the idea of regulation of Internet content, which leads to think that freedom of expression is being hampered; moreover, being Internet a medium which, given its nature, has been difficult to control, a space where freedom of expression is protected, as Lawrence Lessig states, by the own network architecture.31 Finally, it is illustrative to cite the views of the doctors Gaspar Ario and Juan Miguel of the Cutara, in the framework Conference Audiovisual and telecommunications: the Latin American case sponsored by AHCIET.32 In their opinion, the huge challenge posed by next-generation networks and convergence, requires a reconstruction of the regulatory model from the political and legal perspective. The term regulatory convergence is not perhaps the most appropriate as it might imply that it is an aggregation of regulations, which is incorrect, because no current regulation may be moved to new networks and services. There is a clear alteration of economic flows towards content providers, and competition between networks allows different prices and variety of offerings. In implementing functional or structural separation, telecommunications, or better said the telecommunications sector, should not be confused with other sectors such as that of energy, because what can be positive in the energy sector isnt necessarily so in telecommunications, where the plurality of networks and links makes a significant difference. Such measures may lead to a standstill network, and the most recommended pathway might be infrastructure competition. Convergence is real, and companies based in three converging sectors (voice, data and audiovisual) direct their steps towards Internet, where other newcomers are already (i.e. Google). Financial markets increasingly valued more content than networks and tend to direct their money towards: Those who organize it,
31 32
Code - Version 2.0; Lawrence Lessig; 2006; Communications Faculty, University of Malaga Regulation Immediate Challenges: The Distribution of Roles; Transcription of the IX Regulatory Forum; AHCIET; Barcelona, June 4th and 5th, 2008 Page 121 of 248
Those who generate it, and Those who market it. If money stays there and doesnt go to the networks, this can represent a serious threat in the long run. Operators would have no incentive to deploy new platforms if they are not allowed to enter the audiovisual sector. With this situation in mind, we have to walk towards a reintegration of networks innovation, give them access to the multimedia world, prevent opportunistic third-party behavior and enable inter-platform competition. Network is laid by operators and not so by aggregators, so the regulatory asymmetries have no sense in the multimedia world. 2.3.11 Rule of Law and Vested Rights. As a corollary to all the topics described in this chapter, it still remains to develop one that will invariably manifest itself when the Governments of countries decide to modify the legal framework for regulation to a new environment of convergence. The vested rights of existing operators will probably be invoked when topics such as modification of licensing conditions, introduction of competition by new entrants and changes regarding universal access/service obligations are introduced. Experience has shown that most of the existing operators, once they have achieved a stable position within the market, will not give it up easily as a result of legislative changes made by Government. The rule-oflaw to guarantee investments often is contained in contracts sworn by the regulator or the Ministry, which embodies the faith of the Government. In short, a company that is benefiting from the current sector situation in a given country will not favorably view Government changing the rules of the game in such a form that income is diminished or obligations or additional burdens are imposed that imply higher expenses. This has become evident with mobile operators in several countries, where incumbent operators voiced Governments to require new entrants to pay for spectrum assignment the same amounts they had to pay in order to enter the market. They assumed as vested right that any company that would want to enter the market to compete with them, must do it under the same conditions in which they were admitted. Guillermo Cabanellas defines the vested right as: That, which by effect of the Law itself is irrevocably and definitively incorporated into a persons estate.33 The doctrine of vested rights has given rise to extensive discussions about what can be considered as such, distinct from mere expectancies. Generally speaking, licenses, authorizations to exploit the spectrum, easements, administrative contracts and all kinds of rights expressly granted in favor of operators, can be considered as belonging to their estate. Exclusivity for provision of certain services, so in vogue during the past decade, could also be part of the estate, provided they had been instituted by law. But profit levels for a particular investment, existence of entry barriers for other operators not instituted by law, and keeping tax conditions or similar unchanged, could hardly be considered vested rights incorporated into the estate, even though their modification could substantially affect the operators estate. Government can change the rules of the game regarding sector normative. The sovereign act is defined as: all intervention of public authorities which has as a result affecting, one way or the other, the legal conditions or in fact the execution of a contract sworn
33
Diccionario Enciclopdico de Derecho Usual III D-E 1981, Buenos Aires, Argentina, p.106 Page 122 of 248
by a private party, causing a net worth decrease in rights. Modification of the economic-financial equation of an administrative contract by Government could give rise to compensation, but within a contentious process which should be initiated by the operator itself. These processes are generally the origin of international arbitrations seeking redress for economic damages from Government to the affected operator or the restoration of the original conditions. When time comes, sector policy makers and regulators must carefully analyze the implications of changes to be introduced by the normative, trying not to improperly or unfairly affect real vested rights acquired by incumbent operators.
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2.4 CONCLUSIONS In the development of this research chapter on technological and regulatory convergence, after examining how they relate to each other, possible regulatory asymmetries, technological neutrality, competition and NGN, we arrived to the following conclusions: The existence of different kinds of convergence: Network convergence, service convergence, industry and market convergence; legislative, institutional and regulatory convergence; device convergence; converging user; indicates that the topic should be approached from different angles. The different sector shareholders perceive convergence in different forms, and it still remains as a subject of study for Governments. Technological changes generate profound paradigm shifts in the sector: o The current picture is one of a single technology platform of signal transport and multiplicity of services, none linked to a network in particular. Specialized terminal devices will no longer exist; with convergent devices all of these activities are performed via single personal terminal equipment. ICT service packages will be offered, a triple play bundle of voice, Broadband Internet and broadcast (radio and TV) services or even n-play services access, and single service providers will transform themselves into multi-service and content providers. Many of the services will be created by users themselves. All networks viewed as different before are starting to look the same, because they can provide virtually the same types of services and content.
o o
Globally, regulatory, economic and investment environments in each country, have generated a dynamic development and use of these technologies in support of market needs, giving way to network integration, new services generation and convergence of these. VoIP used to circumvent the use of traditional voice networks is the greatest challenge to current telephony on PSTN, which has affected equal conditions for basic services providers and ISPs, and has already led to conflicts in some countries, due to the current service-specific licensing regimes. Convergence enables now that operators use their facilities to provide services not covered by their licenses, thus violating the existing regulatory framework (licensing regime). Thats why the emergence of convergence, Broadband and next-generation networks (NGNs) will have a profound impact on the current legal and regulatory framework. Among the benefits and challenges that are envisioned in an environment of technological convergence are the following: o Promotes competition: allows operators and users to obtain all the benefits of technology directly;
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o o o o o
Encourages development of always more efficient technologies and services; Results in reduced costs; Allows for the existence of custom service packages to meet users needs; Challenges the existing regulatory framework based on the WTO reference document in many respects; Modifies the focus of regulatory responsibility.
Many of the Latin America regulatory and policy frameworks are at a very preliminary stage to face the challenge of convergence and replacement of existing networks by NGNs. Convergence raises basic of policy and regulation issues and affects mainly the following: o Licensing regime. Licenses in a converging environment are different from those from the traditional scheme, due primarily to the absence of the todays formal nature. European Community directives reduce process complexity to that of a simple notification, as long as scarce resources such as spectrum are not involved. Interconnection regime. Interconnection in the convergent IP world has very different dynamics than the current legacy circuit-switched networks regime. Management of costs and tariffs. In a convergence environment, costs and tariffs associated with service are not calculated the same way that in the current system. Long-run incremental costs tend in most cases to zero, justifying the adoption of flat rates. Spectrum management. Extremely rigid management currently used for spectrum hinders the development of technologies and innovative applications typical of a convergence environment. Numbering. Numbering in a convergence environment has usually nongeographic features, unlike what happens with traditional networks. Consumer protection. In a new environment, consumer protection must be refocused by the regulator in other areas (identity protection, content, etc.) Public policy: universal service obligation. Universal access/service obligations should be refocused to ensure network access and not concentrate just on services. Broadcasting Regulation. Broadcasting (audiovisual) is now an integral part of the whole electronic communications suite and part of the convergent regulatory duties.
o o
The impact of single license should still be observed, since not many Latin American countries have adopted it into their legislation. In any case, in none of them the existence of a migration or compulsory adjustment of the old licenses to the unified regime has been observed; so that regulators will have to handle
for some time an environment where the old single-service oriented licenses will live with unified licenses. Spectrum trade and liberalization are independent developments. Even without spectrum use liberalization, trade spectrum has some benefits. However, liberalization allows a needed flexibility, giving spectrum users freedom to adopt new technologies and offer new services. The retail market is changing with subscriptions and bundles, which are no longer in line with the interconnection charges determined by time units in the PSTNs. Telephone companies are worried about a scenario of declining income from traditional services (voice over PSTN, for example) which can affect infrastructure investment already in place. Sector policy-makers and/or the regulators should then harmonize the normative so that market sectors affected by the introduction of NGNs and converged services provided through them do not suffer a quite pronounced initial impact. In an IP network, the concept of tariffs based on usage time, so common in circuit-switching systems, end up being extremely artificial. The base cost has changed, since the existing model was designed for expensive centralized networks and access to the user by expensive means also. CPNP countries in which the mobile services market is already mature or saturated should consider migrating to Bill and Keep agreements. However, from the practical point of view, it is very difficult to abandon subsidies implicit in a CPNP environment once they have been implemented. Hybrid charges for connectivity and services have the disadvantage of complication, but better reflect the real world that must be analyzed by regulators and service providers themselves. Subscribers may pay for services based on use, quality classification or flat rate, but in practice charges for various lower cost services would probably have a flat fee. Countries have an important opportunity to introduce reforms in spectrum markets in the coming years with the change of analogue to digital TV, which will liberate a significant amount of spectrum bandwidth potentially available for other applications (digital dividend). ENUM could extend the lifespan of the existing telephone numbering scheme d, keeping the role of phone numbers as key identifiers for telecommunications services. Eventually, however, regulators may need to introduce more flexibility into the numbering plans to expand the uses of existing numbering ranges, taking into account the portability of numbers between different services. At the same time, ENUM data access will become crucial to establish interconnection. Migration to NGN will put downward pressure on call termination charges and may ultimately make the current call termination system become unsustainable. NGN networks are exposed to the same type of threats and attacks suffered by Internet communications and the regulator must expand its traditional roles of user protection. The preparation of the regulator for a scenario where the traditional boundaries between broadcasting and telecommunications have disappeared should then be
oriented to ensure that roles remain differentiated between electronic communications per se and audiovisual content. When time comes, sector policy makers and regulators must carefully analyze the implications of changes to be introduced by the normative, trying not to improperly or unfairly affect real vested rights acquired by incumbent operators. Users need connectivity + software + DNS/ENUM and dont really need as before service providers for their communication needs. If users create and provide for themselves, telephone companies may not be able to compete with their own customers.
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CHAPTER 3 - FUNCTIONS OF A CONVERGENT REGULATOR IN THE MARKETS OF VOICE, DATA AND AUDIOVISUAL This third chapter contains an analysis of the functions of a convergent regulator in the markets of voice, data and audiovisual, with the aim of assessing regulation homogenization in all three areas. The structure of this chapter includes a description of the regulatory functions in convergence in the markets of voice, data and audiovisual. Different schemes of regulation in convergence may occur are described, including regulation by sectors, multi-sector and convergent regulator. The advantages and disadvantages of each scheme are discussed. A description of some regulators on convergence and the results obtained are included. Finally, methods and ways in which regulation of different sectors in Latin America could be homogenized are analyzed.
Functions of a Convergent Regulator in the Markets of Voice, Data, and Audiovisual
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3.1 FUNCTIONS OF REGULATION IN CONVERGENCE Convergence poses several challenges regarding regulation, since hardly ever the legal framework will be able to reflect technological changes that promote it. One of the factors that affect by the most part regulation is the speed at which changes take place at the technological level. Figure 19 shows the speed at which different technologies have been adopted in United States households, showing that for some technologies such as cellular or commercial Internet, adoptions rates in the order of 60% were attained in 15 years, while the fixed phone took 75 years to reach that same level.
Technology Adoption Rate in the United States
100.0% 90.0%
% of Adoption in Households
80.0% 70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0%

1 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100 105 110 115 120 125
Years Since Invention of Technology

Telephone VCR Radio Television PC Cellular Commercial Internet
Figure 19 - Years for Technology Adoption Source: U.S. Bureau of Statistics Data
The so-called disruptive technologies are precisely those that cause major changes and shakeups in markets and in the patterns of use of the services. Each of the technologies listed in Figure 19 was disruptive at some point in time, only that today the adoption of them is much faster. In an environment of convergence, voice, data and audiovisual markets slowly merge and intermingle, which yields as a result that individual market regulation should now be adapted to the new environment on one hand, and other new functions emerge that regulators should incorporate within its activities. So we can differentiate functions in those so-called traditional or pre-convergence and others that would be new or in convergence. Among regulators duties in all three markets considered (voice, data and audiovisual) the following are outlined: Competition Promotion and Defense. Numbering, Naming and Addressing. Service Availability and Continuity. Licensing Regime.
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Spectrum o Assignment. o Management. o Control. Network Neutrality. Interconnection Regime. Passive Infrastructure Access. Tariff Regulation. Content Regulation. Universal Access/Service o Gap Reduction. o Foster to Broadband. User Protection. o Information Asymmetry o Quality of Service o Spam o Data Protection o Privacy A regulatory framework that enables better use of infrastructure and the adoption of new services at reasonable costs by users will be of greater benefit to society. The new regulatory framework should then eliminate old boundaries and consider the new reality, where voice, data and audiovisual are being increasingly interlaced. Table 35 indicates the intensity of regulatory functions before convergence, in transition (i.e. when pre-convergence and next-generation systems still coexist) and when it has been consolidated. When sectors are merged into one, it is more logical to consider integral functions; avoiding entering into the analysis of which market should one focus more or less. The table evaluates the intensity of the regulators effort in a five-level scale (none, low, medium, high and complete) for regulatory functions in all three stages (pre-convergence, transition and finally convergence). Evaluation is also a subjective estimate of what functions should occupy most of the regulators time in convergence. Development of the regulatory functions for each stage is done as follows.
Table 35 - Regulatory Functions Intensity Before, in Transition to and in Convergence Source: Own Data
Regulatory Functions Competition Promotion and Defense. Numbering, Naming and Addressing. Service Availability and Continuity. Licensing Regime. Spectrum: Assignment Management Control Before Convergence Voice Data Audiovisual In Transition Convergence
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Regulatory Functions Network Neutrality. Interconnection Regime. Passive Infrastructure Access. Tariff Regulation. Content Regulation. Universal Access/Service: Gap Reduction Foster to Broadband User Protection: Information Asymmetry Quality of Service Spam Data Protection Privacy = None
Before Convergence Voice Data Audiovisual
In Transition
Convergence
= Low = High
= Medium = Complete
3.1.1 Competition Promotion and Defense. The promotion and defense of competition has consistently been one of the activities to which the telecommunications regulator has dedicated more time. This is because incumbent operators traditionally have always existed for telecommunications networks which, with the passage of time were, consolidated into so-called natural monopolies. The market entrance of new entrants made difficult by the high cost of laying cable networks and the regulator sought to replicate the conditions of a market in competition to avoid abuse to users from incumbent service providers. As competition was being introduced in most voice markets last century, the regulatory functions focused on lowering barriers in order to allow the entry of competitors, avoiding at the same time abuse of dominant position from historical operators. In this millennium development of the networks, particularly those for cable operators and mobile services, allowed competition at service level from different networks (long distance offered via telephone or coaxial cable networks) and the regulator should then strive to avoid crosssubsidies between services. As it is seen today, the telecommunications regulator has a permanent activity in promoting and defending competition in the voice services marketplace. Telecommunications regulator activity in the data market has not had the intensity of voice markets, mainly because conflicts were resolved between operators themselves without intervention of the regulatory authority. A characteristic of the Internet world,
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where most of the ICT applications and services are developed, is that access is generally open for any new entrants (low entry barriers), especially at the ISP level. Despite this, the regulator should try to ensure that ICT service providers with dominant position do not make use of anti-competitive practices in detriment of other vendors. Regarding the audiovisual market, regulatory functions related to competition have surfaced mostly in subscription television. Broadcasting and over-the-air television have not generated so many competition conflicts as the traditional telecommunications services, with the exception of practices against free and fair competition by extremely large television networks, which required the intervention of the regulators to restore market balance. With many audiovisual operators offering nowadays triple-play and even quadruple-play, the regulator must concentrate on maintaining healthy competition between services to enable development of new services and networks. When voice, data and audiovisual markets begin to intermingle in the transition towards convergence, the telecommunications regulator, which could also be regulating the audiovisual market, must necessarily address situations where competition is compromised by the coexistence of not-convergent networks with others already entering a next-generation environment. Many operators cannot easily get rid of their legacy networks due to investments made on them and also by the impossibility of having immediate funding for the migration. Contrary to what one might expect, the regulatory responsibilities intensify rather than becoming reduced, since networks and services convergence leads to a multiplicity of new services competing on all kinds of networks, in entirely new ways and conditions. The regulator duties in competition promotion and defense in this transition consists then in assuring that operators with dominant position migrated towards a next-generation environment do not impose conditions that restrict competition on those that have not yet managed to migrate. The regulator will see then its work and dedication intensified to a maximum in this transition stage. In a next generation or technological convergence environment the regulator should recognize that many of the markets will be in better conditions to develop if regulation is performed ex post rather than ex ante. There are two reasons why it doesnt make much sense to intervene in advance: not every situation that will be presented in competition is foreseeable, and ex ante regulatory interventions could have negative effects on market developments. Others argue deployment of IP-enabled NGNs requires significant investments to build out high-speed environment and this suggests regulatory moratoria for providers. Current competitive telecom providers argue the opposite, saying there are questions as to whether, in the absence of wholesale economic regulation, market dynamics will be sufficient to ensure a competitive NGN environment. The European Union (EU) has simplified the process of regulatory intervention regarding competition through the so called Directives for Electronic Communications. One of the major contributions of this new regulatory framework lies in the possibility of establishing a dynamic regulatory framework, supported by a periodic analysis of relevant markets (not sectors nor technologies); hence, establish an innovative dialogue between laws and rules of competition (ex post) and traditional ex ante regulation. To determine if a market is competitive, the EU currently uses three criteria (basic questions), to be evaluated by regulators in 18 relevant markets, namely:
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Are there high and non transitional entry barriers? In this field two types of barriers are identified; structural barriers such as economies of scale, scope and density as well as submerged cost barriers and legal or regulatory barriers. What is the dynamic towards effective competition? On this field it is hoped that analysis of each of the markets will help national regulatory agencies to determine if the possibility exists for that market to be directed towards competition. What are sufficient competition law regulations? Although introduction of competition in these markets to eliminate the need for sectoral regulation is desirable, it is recognized that certain requirements such as costs assessment, the monitoring of technical requirements and accounting reports can be more easily obtained at the sector level. In many Latin American countries a competition authority different from the electronic communications regulator already exists, which among other things, analyzes mergers between companies and performs both ex ante and ex post activities to protect markets. This can potentially generate an overlapping of roles in many cases between the authority (which may very well be a regulator too) and the electronic communications regulator. In an environment of convergence, it is convenient to maintain the defense of the electronic communications markets (voice, data and audiovisual) within the powers of the regulator by virtue of a principle of specialty. But whereas the regulator is more concentrated in ex post activities in a next-generation environment, the competition authority could case concentrate on ex post competition matters, but at a general level. It is good to remember that who usually concentrates specialized and technical knowledge will always be the regulator of electronic communications, but at the same time will lack global knowledge of other markets. The latter is an area where the competition authority will normally excel at. 3.1.2 Numbering, Naming and Addressing. Management and allocation of telephone numbering for voice services has always been a traditional regulatory activity in the telecommunications sector for long. The first telephone networks required that the regulator allocated numbering so that order could be maintained in the identification of each user on the network. Subsequently the mobile telephony operators were also requesting numbering, which in sector regulation had already become a scarce resource. Indeed telecommunications numbering ranges have not been exhausted yet, and despite representing a problem for voice services providers and for the user, national numbering in each country can be extended with the addition of more digits to reach 15 digits.34 Telephone numbering management for voice services is and will still remain as an important regulatory function of the telecommunications regulator. Assignment of domain names and addresses is a regulatory function that rarely falls on the telecommunications regulator. For a long time academic institutions administered domains assignment in different countries, until commercial pressure forced Governments to entrust names and addresses allocation to other Government bodies or
34
The international public telecommunication numbering plan; ITU-T Recommendation E.164; (02/2005) Page 133 of 248
to the regulator. Internationally, domain names and associated IP addresses are managed by the Internet Corporation for Assigned Names and Numbers (ICANN), which is an non-profit organization that operates at international level, responsible for assigning numeric addressing spaces for Internet Protocol (IP), Protocol identifiers and management [or administration] of generic top level domain (gTLD) names and country code (ccTLD) system features, as well as the root server system management. Even though these services were initially carried out by the Internet Assigned Numbers Authority (IANA) and other entities under contract with the U.S. Government, currently they are ICANNs responsibility.35 Figure 20 shows the Internet domains of different countries in the world, whose names have been represented in size according to the population of the country, with the exception of China and India, which were adjusted to fit in the figure. ANNEX C. DOMAIN NAMES AND NATIONAL ADMINISTRATORS also shows current domain names and the entity that manages them in each country.36
Figure 20 - Internet Domains in Countries of the World Sorce: Country Codes of the World (Bytelevel)
In the pre-convergence stage, the audiovisual regulator has no responsibility at all for the management and/or assignment of numbering and domain name or IP addresses. Recently at the stage of transition to convergence when with the advent of Internet Protocol Television (IPTV) and multimedia content that the regulator of audiovisual begins to get involved with these functions. When the telecommunications and
35 36
http://www.icann.org/tr/english.html http://www.iana.org/domains/root/db/ Page 134 of 248
audiovisual regulatory functions start becoming shared, resource management such as domain name or IP address and numbering becomes more important. IP addresses, phone numbers and other addresses are crucial resources for communications and access to the market in an environment of convergence. In particular, availability of new IP addresses space is necessary for the growth of the Internet. The entity responsible for regulation in convergence should worry about: Promoting the adoption of the new version of Internet Protocol (IPv6), in particular through timely adoption by Governments, as well as major users of IPv4 addresses of the private sector, in view of the imminent exhaustion of IPv4. Review numbering plans to increase flexibility, facilitate new converged services and improve the nomadicity of persons. Monitor the use of E.164 NUmber Mapping (ENUM) as a routing and interconnection mechanism between networks. In all the above topics, the regulator must rely on the experience gained by Academic Networks regarding management of numbering and addressing resources, whereas in a future IP addresses could easily absorb the current telephone numbering resources. As a reflection: The number portability issue for fixed and mobile telephone services, which in many countries has generated or generates intense discussions about its feasibility and cost impact to the user, has been resolved in the IP world without greater controversy (Skype, Vonage, Windows Live Messenger and others) several years. 3.1.3 Service Availability and Continuity. The availability and continuity of voice services has been a daily concern of telecommunications regulators for a long time. Service must be available when it is required and its provision must be continuous. In voice markets, the fixed telephone network and later mobile networks have traditionally been designed to operate even when the electrical power supply is interrupted. Emergency services have been of upmost attention for telecommunications regulators, due to the fact that communications become essential in cases of general or particular emergencies. 911 in the United States and 112 in Europe are emblematic as universal, emergency numbers, allowing the operator in fixed telephony systems to additionally track the place from where the call is initiated in order to deliver help immediately. Emergency voice market regulatory functions should then concentrate on ensuring that users have these services available free of charge and without restrictions, since human lives may depend on the proper functioning of those. The data services market differs in nature from those provided by voice networks. In a pre-convergence environment, the telecommunications regulator does not consider availability and continuity of data services as a priority, so that Internet access does not receive the basic service tag. There are demands from the regulator as to continuously provide access to data networks, but without imposing heavy demands such as those observed for voice networks. Even though the same mechanisms to provide emergency online services are not seen, for instance, the natural resilience of IP networks makes them a natural means to transfer information reliably. Furthermore, considering that many places today are connected via Internet, provision of emergency
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services over data networks is becoming a concern for the regulator. Indeed, the network of networks is in many countries the favorite means to transmit emergency messages or to find out about national calamities, even before audiovisual media inform about them. The availability and continuity of audiovisual services is of daily regulatory concern, despite the fact that they do not have the importance of voice services (the so-called basic services) for the regulator. Since there is generally a higher level of competition within the audiovisual market, operators themselves seek to maintain their systems failsafe and prevent disruptions that might generate customer loss and a possible reduction of their market participation. Regarding emergency services, audiovisual regulators usually have an obligation to ensure that in situations of emergency or national disaster, radio stations and television channels inform users about it and do so not unjustifiably alarming people. Due to the high adoption of radio and television in almost all regions of the world, emergency information transmissions via audiovisual media is today an extremely effective way to keep people informed about situations of risk or calamities, apart from preventing about imminent dangers (floods, hurricanes, tornadoes and others). In transition towards networks and services convergence, the regulator should pay much attention to the issue of services continuity, since the risk of problems with networks can manifest itself in form of interruptions or unavailability of services. Old voice and data networks will likely have the same performance than before transition, but new networks could presumably experience problems when they are introduced, so that the regulator must ensure service continuity to users. There is a growing risk of confusion as to whether users have access to emergency call services with platforms and terminal convergence, increased mobility and the shift to IP-based communication. For example, the regulator must ensure that users of innovative voice services are adequately informed regarding access to emergency services and that some kind of access to emergency services is guaranteed for users of VoIP services. Another important point regarding emergency services is the ability to be able to geographically locate the place from where the request was initiated, which in next-generation networks (NGNs) is still an unresolved problem due to the nomadicity and constant displacement of users. The regulator in an environment of convergence must then spend more time in the resolution of problems related to the establishment and operation of effective emergency services. Having a state of full convergence been reached, next-generation networks will have a much more stable performance than what is observed nowadays, and the strengths of the IP protocol or any other switching system utilized (multi-lambda optical switching networks, for example) will help to relax the regulatory requirements.
3.1.4 Licensing Regime. The granting of licenses or authorizations in telecommunications, mainly for voice services, has been carried out by telecommunications regulators as a function of Governments need to monitor and control public services delivery to users in general. Much of the telecommunications regulators time is used to grant licenses for various types of networks and services, acquiring the process in some cases unnecessary solemnity and formalities, which in most cases increase the regulatory burden without apparent benefits. Stiffness of the services classification results in excessive
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bureaucratization of the licensing process. The bureaucratic process of licensing is very broad and may become an unnecessary entry barrier in a new convergent environment. Authorizations to provide data services, particularly when it comes to Internet access providers, have been much more flexible and lacking the formalities of those for the voice market. In line with the position prevalent in the world of Internet, available services require little intervention from the regulator to be provided to the public. In many cases the provision thereof is within the so-called value-added services, with the end-result that formalities to provide them are very few. This situation, however, is changing when many services provided via data networks start to compete with voice services (for example peer-to-peer with traditional voice services). The function of audiovisual sector regulator regarding licensing is related in many countries to the concept that Government should have a good level of control on broadcasting and over-the-air television services. This concept is not necessarily shared by those who advocate the need for unrestricted freedom of expression and question the need to obtain a license or authorization to disseminate their ideas. There is active work by the audiovisual media regulator of most countries in licensing, which becomes quite complex today when services can be provided through different networks. For example, the Asia-Pacific region forecast 72.3 million mobile TV users by year 2010.37 As a result of the processes of digitalization and convergence, the traditional services classification does not fit to the new converged services, and is indeed a matter of heavy debate even in international trade fora. Nowadays, it is not easy to differentiate basic and value-added services, or between telephony and data services. As a result of network and services convergence, it is important to ensure that the market is open to different technologies to compete on equal terms. In this context: Insofar as possible, the regulator should encourage the development of technology-neutral regulation, especially in converging areas. In the cable and mobile sectors, regulators should consider where changing licenses linked to a technology to a technology-neutral authorization would be beneficial, in terms of efficient management of scarce resources, spectrum allocation and relevant public interest objectives. In a transition context, the regulator has the main task of adapting the conditions of existing licenses so as not to conflict with those who will get authorizations in much more flexible situations, supposedly. When licensing requirements are relaxed, some operators may choose to join the new conditions, but others may opt not to renounce to advantages or more favorable terms of the old authorizations regime. The process of making them compatible could use-up much of the regulators time in order to ensure a smooth transition and possibly with adjustment periods determined in the normative. In practice, technological convergence represents a rupture of the telecommunications regulatory model which alters the technical foundations of the services classifications and licensing, as well as institutional and legal separation between different ICT areas, particularly between telecommunications and broadcasting. That is, the traditional regulatory logic lost their foundations in the new context. At the same time, the private
37
http://www.3g.co.uk/PR/Nov2006/3899.htm Page 137 of 248
sector is actively searching for alternate sources of income which can counterbalance the significant loss of income from traditional services.38 A unique or more general license for electronic services as a solution is an already existing measure in some countries, and fosters a notable decrease in the institutional barriers to market entry, significantly contributing to increased competition. This also means a reduced regulatory burden for the regulator in convergence. 3.1.5 Spectrum. Radio electric spectrum has represented for a long time ago a vital resource for the development of access technologies in ICT. Its importance in the context of convergence has increased much more, when mobile networks connect today more people than fixed networks. The traditional regulatory spectrum-related functions have been categorized into three: 1. Spectrum assignment of (who is authorized to use it?) 2. Spectrum management (how to use and what for?) 3. Spectrum control (is it being used as it should?) 3.1.5.1 Spectrum Assignment. Spectrum assignment is commonly associated with the licensing regime, since its authorization for use and exploitation is granted usually the same way and in parallel with the license to provide services. In many cases the authorization for use of the spectrum is much more valuable than the license to provide services, due to the scarce resource of that feature. Usually the spectrum allocation process is guided by a principle of maximizing benefit to society (Pareto optimal) as a whole, which often gives rise to all kinds of assignment schemes ranging from direct award to competitive processes of the most varied nature (auctions, beauty contest, tender). When facing an apparent shortage of this resource, assignment methods can become quite complex. Spectrum assignment for the voice services market, especially for mobile services, has been highly demanding in terms of time and dedication for the telecommunications regulator at the pre-convergence stage. The main resource requested by operators to Government has usually been related to the frequency bands to provide these services, and spectrum assignment processes are among the notable functions of the regulator or the Ministry (depending on the case), always in the category of traditional regulatory function. One aspect which manifests itself even in a pre-convergence environment is the growing need for spectrum to provide services in data markets. WiFi, WiMAX, 3 G networks are examples of how spectrum has become now an essential resource to provide data services. The emphasis regarding spectrum assignment to provide services is now manifesting in the data market, which before new technologies appeared, used almost exclusively physical transmission media (twisted pair, cable, fiber) for access to networks and the Internet.
38
EnREDos: Regulation and corporate strategies facing regulatory convergence; MARCIO WOHLERS Y MARTHA GARCA-MURILLO; First edition: March 2009; Copyright United Nations 2009; ECLAC in co-edition with Mayol Ediciones S.A., 2009 Page 138 of 248
Spectrum assignment is a typical regulatory function from the audiovisual regulator, especially with regards to over-the-airl radio and television. As for voice services for mobile networks, spectrum is essential to provide radio and television broadcasting and methods for assigning it efficiently are essentially the same. The matter that will influence the most for audiovisual spectrum is television digitalization and the so-called analogue blackout, when transmissions in the VHF and UHF bands move from analog to digital and release a large amount of spectrum for wireless mobile Broadband (the digital dividend). It is very likely that in many countries, during the transition stage to an environment of convergence, it will coincide with the release of the digital dividend spectrum. For this reason the regulator in convergence (or in transition to it) will probably have to deal with the allocation of these bands at this stage. When the transition to a next generation environment is finally over, spectrum allocation ceases to be of cardinal importance, but nevertheless occupies part of the regulators time. If spectrum assignment mechanisms via secondary markets are created, the workload of the convergent regulator can be greatly relieved, since the real value of spectrum for society is materialized via less cumbersome and more efficient market mechanisms. Relaxation of regulatory activity regarding spectrum assignment at this stage could also come from greater use of license-exempt frequencies which simplify access to the NGNs without operators having to acquire exclusive rights over those frequency bands. 3.1.5.2 Spectrum Management. Within scarce resources management is spectrum management, which in the telecommunications sector has usually been performed by the regulatory body as an almost full-time activity. While there are regulatory bodies that have not spectrum management as one of their established functions, the sector Ministry can perform this activity in the same role as the regulator. Spectrum use planning and development of the National Frequencies Attribution Plan are duties executed within spectrum management on a routinely manner. Spectrum planning has traditionally followed extremely rigid patterns in the use of frequencies and bands, generating plans for band use closely tied to services. This has also led to service-specific authorizations for spectrum use being awarded with little flexibility to use spectrum for other applications. The fact that countries view spectrum tenders or auctions as a quick way of raising revenue for Government is being challenged, because cost is eventually transferred to the telecommunications end-user. For data services, spectrum management was not a regulatory activity that would take the first place on the regulators agenda. Firstly, the spectrum was seen in the data market as an access mean and nothing more. Then, the data networks sector is an open advocate of spectrum freedom of use, so that spectrum allocation ceases to be a priority for it. Finally, much of the ICT networking infrastructure consists of high-speed physical media, where spectrum is complementary. For these reasons the telecommunications regulator was not usually involved with spectrum management. This began to change with the emphasis of mobile service providers towards data services and the diversification of wireless access technologies to data networks, especially the Internet. In pre-convergence, spectrum management takes more and more time from the regulator, who seeks a more efficient and orderly use of it for access to data networks.
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Broadcasting and over-the-air television are services that use spectrum as the primary means of access to users, and for this reason spectrum management is vital among the audiovisual sector regulator functions. Problems regarding frequency band allocation for new audiovisual services are very similar to those of the telecommunications sector, with the difference that there is much less flexibility to innovate when it comes to use of bands for radio and television. Spectrum management in a transition stage must balance current use of spectrum with future applications that will be generated. The National Frequency Allocation Plans must be able to reflect in a short time the service diversification that may be offered in different bands, when greater flexibility in the use of them exists. Paradoxically, we should be aware that when one has wireless Broadband access to the Internet, the range of services that one can have access to is much broader than any service definition embodied in a national spectrum usage plan. In convergence, wireless technologies allow the offer of permanent and ubiquitous access to the users, ideally through a multiservice device (convergent device). The regulator must now devote part of its efforts to make spectrum use more flexible in order to accommodate for new applications and services emerging as a consequence of technological innovation. A future is envisioned where frequency bands will be fully independent from services which have traditionally been assigned to them for decades, so the network operator will be responsible for using spectrum as efficiently as possible. On the other hand, the introduction of secondary markets for spectrum could relieve the regulator from several problems in spectrum assignment, being required its intervention only in cases where anomalous situations exist. Finally, the regulator in convergence should pay much attention to license-exempt bands, because as these bands are being used by more and more people, society benefits. A larger number of these free frequencies in a country also correspond to a higher level of network accessibility by users and a smaller burden for the regulator. Today, the 2.4 GHz unlicensed band for WiFi access is one of the most used worldwide and is also one that greater welfare to society provides, considering that the regulatory burden imposed by it is virtually nil. The important thing here is to make proper planning to avoid falling into the tragedy of the commons, which manifests itself when a good such as spectrum is misused by everybody and becomes saturated, resulting in harm to each and every user. 3.1.5.3 Spectrum Control. Spectrum control is a typical regulatory function for the telecommunications regulator for voice and data markets that must be performed to keep spectrum free from interferences, something that includes unlicensed frequencies, because they are also protected by Government for well-being and benefit of users in general. It is important to differentiate the activity spectrum control from spectrum assignment, while the first is an eminently technical role that involves use of specialized monitoring equipment; the second is referred to assigning the scarce resource to network operators. In the audiovisual market, spectrum control function is performed with the same rigor as in telecommunications. When transition to an environment of convergence is performed, the regulator still keeps rigorous control over spectrum. Already in an environment of convergence, deep transformations occur which render the spectrum control function a less important regulatory activity, with less regulatory intervention due to the appearance of
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unlicensed and seemingly unrestricted spectrum bands. The debate on the benefits of promoting the use of unrestricted-use versus exclusive-use frequency bands spectrum has generated interesting conclusions, since free spectrum generates inter alia smaller regulatory burden. Systems that use free spectrum are much more resilient to interference than those who use exclusive frequencies. 3.1.6 Network Neutrality. The network neutrality issue has gained notoriety as more and more services are being offered on IP networks and particularly over Internet. A neutral network is one that is free of restrictions on the kind of equipment that can be used and on communication modes allowed, which does not restrict content, sites and platforms and where communication is not unreasonably degraded by other communications. In an environment of convergence, where IP-based NGNs multiply, the role of the regulator becomes crucial to avoid situations in which the market is unbalanced by absence of network neutrality. A common sense has emerged, that net neutrality will be a basic concept to communication policy, to develop a pro-competitive regulatory framework for NGNs. However, there is a heated debate about the exact definition and implementation of neutrality rules. Some stakeholders argue that the IP communications environment has thrived in an unregulated environment that has produced Darwinian Competition resulting in new and innovative applications, some even arguing that network neutrality should be codified in technical, legislative and regulatory regimes.39 As the universe of applications has grown, the original conception of IP neutrality has dated: for IP was only neutral among data applications. Internet networks tend to favor, as a class, applications insensitive to latency (delay) or jitter (signal distortion). Consider that it doesnt matter whether an email arrives now or a few milliseconds later, but it certainly matters for applications that want to carry voice or video.40 In other words, Internet itself is not at the present time neutral as far as network is concerned. The voice services market was not usually involved with the concept of network neutrality, except when VoIP providers enter into competing with the PSTN and voice services providers oppose allowing voice over Internet applications to compete against them. The most emblematic case was when T-Mobile, the largest German mobile telecommunications company, announced that it would be blocking Skype on their 3G networks even though, according to the international coalition pro network-neutrality, OpenNet, Skype is both a key application for voice communication on the Internet and a small bandwidth consumer. Therefore, is clear that the decision was not based on a real need for traffic management or a problem of quality of service. In the case of data, regulation to ensure network neutrality is extremely important, since restrictions imposed by the operators can very quickly affect application development and the use of facilities on Internet. While the issue is just becoming important for telecommunications regulators, the debate has been already opened. Also, in the audiovisual sector, the
39
Ruling the New and Emerging Markets in the Telecommunication Sector; Challenges: The Emergence of Next Generation Networks; Background Paper; ITU; April, 15 2006 40 Network Neutrality, Broadband Discrimination; 2003; Tim Wu; Associate Professor of Law, University of Virginia Law School
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topic of network neutrality is starting to loom due to the growing capacity developed to control the information flow through access networks. In the transition towards convergence, the regulator must probably dedicate much of its regulatory effort to network neutrality-related tasks. Two interests are strongly opposing: That of users and application providers over networks, that do not stand a restriction on what can be sent through data networks, and the interest of network owners who want to recover the (sometimes substantial) investments and network neutrality means fewer possibilities in this regard for them. Regardless of the regulatory approach to be adopted, measures to increase transparency and clarity of traffic management practices will certainly be needed. Indeed, transparency strengthens the power of decision to users and applications providers, promoting clear and fair competition conditions between operators. Already in convergence, the concept of network neutrality will be sufficiently mature as to avoid the imposition of conditions on the network that negatively affect both users and network operators. Network neutrality is according to many a requirement for NGNs to develop in an optimal environment and with no restrictions to applications that are being provided through them. It is important to remember that in an environment of convergence, applications and services can be provided by participants that are not related at all to the network owners. Thus, networks that offer greater neutrality will at the same time become the best guarantors for effective competition. Further considering that in an environment of convergence, markets and services are in the hands of the users themselves, the regulator must encourage imagination and creation of new applications in a world different from that of traditional networks (Facebook is an excellent example, since it was not born as a telecommunications operators idea, but rather from the users themselves). 3.1.7 Interconnection Regime. Interconnection in telecommunications is responsible for much of the of the regulators effort to maintain balance in the market and allow the entry of new players. As historical operators were experiencing increased competition with the emergence of new players, they delayed interconnection establishment or imposed disproportionate conditions to set it, prompting for the regulators intervention to avoid abuse of a dominant position. Traditionally, interconnection in telecommunications has been set at the telephone services level, with the establishment of links based on depending on voice circuits and call termination charges determination based on minutes of conversation. This scheme worked quite well for the telephony environment, but began to experience problems with the advent of new services and marked preference of users for flat rates. The need to reformulate the postulates for the establishment of effective interconnection is an imperative need at the moment, as the IP world gains ground day by day in detriment of traditional voice networks. Interconnection in data networks is generally based on peer-to-peer or transit agreements, typical of the Internet world. Problems experienced with interconnection in telecommunications such as refusal to interconnect, destination network monopoly and interconnection charges that do not reflect costs, are not present in ICT and conflicts are rare. What can be said today is that Internet interconnectivity is near perfect and that peering disputes are, in a relative sense, quite rare. It is reasonable, based on these indicia, to conclude that the global commercial Internet is operating well below the
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thresholds where this form of anticompetitive effects would predominate.41 For this reason regulatory intervention for data networks interconnection is extremely rare. Regarding the audiovisual sector, due to the current characteristics, this duty is nonexistent on the regulators agenda. In a situation of transition towards convergence, interconnection should possibly be reformulated, taking into account the NGNs architecture, because it needs to be present in all functional levels so that all service providers can access new networks and provide content, services and applications to end users. Commercial markets for the exchange of IP traffic have developed very well without regulatory intervention. The regulator in an environment of convergence should then: Monitor the future development of NGN markets to promote transparent and non-discriminatory traffic exchange between networks and consider where regulatory intervention is still required. Re-examine the functioning and evolution of the current interconnection system and the evolution in transition to NGNs from consultations with industry and the user. Interconnection in transition to convergence could present two different scenarios, depending on the degree of preparation of the countries: All network operators perform an orderly transition, in which case interconnect automatically adjusts to an IP-based network model; or One or more operators, but not all, migrate to NGN networks, forcing the industry to coexist in a hybrid system for a time period which could be extended to several years. The second case is usually the one that requires greater regulatory activity, since at the interconnection level existing conditions are maintained and NGN networks must transform electronic communication flows to interconnect with traditional networks. Keeping interconnection points at the PSTN level can represent an additional burden to operators that made the migration already, but the regulator should ensure that they remain active until NGN interconnection is established at a general level. In an environment of convergence, many network operators will prefer indirect interconnection via other operators networks. It is an important distinction between the NGN and the PSTN worlds. In the IP world, indirect interconnection is perfectly reasonable. One aspect that must be taken into account by the regulator during the transition is that most current schemes of interconnection charges calculation in Latin America are based on minutes of conversation and long-run incremental costs (LRIC for short). Considering that incremental costs tend to zero in the NGN interconnection, holding too long PSTN interconnections can be detrimental for the sector, so that operators that have not migrated to NGNs yet should be encouraged to do it in the shortest possible time. There is a parallel between network digitalization two decades ago and migration to NGNs today. In most cases there were not obligations for operators to digitalize their
41
INTERCONNECTION ON AN IP-BASED NGN ENVIRONMENT; J. SCOTT MARCUS; WIK-CONSULT GmbH; GLOBAL SYMPOSIUM FOR REGULATORS; ITU; Dubai World Trade Center; Dubai, United Arab Emirates; 5-7 February 2007 Page 143 of 248
networks: They did so because it was economically convenient for them. The same should happen in the case of the NGNs, because without much external incentives, operators will replace their current networks by next-generation networks. Many of the problems currently seen in the telecommunications sector will be nonexistent in an environment of convergence, which will require regulatory intervention only when problems arise (i.e. ex post regulation). Transition to the new environment of convergence must rely on lessons learned from the IP world and the simplicity with which the subject of interconnection is currently handled at the IT level. 3.1.8 Passive Infrastructure Access. Telecommunications regulators devote part of their efforts to ensure that physical infrastructure owned by an operator can be shared with other operators when duplication is impractical from the physical or economic viewpoint. The physical infrastructure can be understood as subscriber loop, towers, booths, drawers, physical space at exchange centers, ducts and others. ITU itself has recommended sharing infrastructure for the purpose of reducing costs for the end user.42 Despite this, operators usually feel little comfortable about sharing infrastructure considered strategic with competitors, and therefore the regulator should encourage or in some cases force them to make this passive infrastructure available to other operators via interconnect agreements or unbundling obligation of essential elements, including the subscriber loop in all its variations (total, partial, bitstream, sub-bucle, etc.) In data networks, access to others passive infrastructure difficulties become often bottlenecks for expansion of network coverage. Paradoxically, telecommunications operators themselves are the ones who place the most obstacles to infrastructure access, particularly the subscriber loop and optical fiber links (local, national and international). The development of the academic networks in particular has been affected in many countries due to the refusal of dark fiber leasing or due to high prices set for various types of infrastructure. The regulator has an arduous work in resolving these access problems or achieving the establishment of affordable rental tariffs, especially when data networks are characterized by high traffic and financing structures that are not dependent on the sale of offered services. In audiovisual the regulator faces very often the situation of having to intervene to ensure access to passive infrastructure such as fiber or coaxial cable from subscription service providers. In many countries the obligation to unbundle essential facilities affected equally telecommunications and subscription audiovisual service providers. But in the United States, however, the FCC established asymmetrical regulation in the case of local-loop unbundling for cable and fixed-line services operators. The EU has devoted considerable attention to the issue of loop unbundling, recognizing that it can become an excellent vehicle for the development of Broadband access. In transition to an environment of convergence, the functions of a regulator increase, due mainly to many operators making the replacement of their old networks by new converged networks that require at some point in time to use infrastructure from other operators. Central components of the NGNs are high-speed connections (usually optical)
Trends in Telecommunications Reform 2008: Six Degrees of Sharing; International Telecommunications Union ITU-T; N 246-8; 9th edition, 2008
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which should necessarily be shared to avoid duplication of efforts and resources in the sector. This is particularly true in countries with a still incipient development of infrastructure, in which some regions not could be efficiently count with a multiplicity of networks without sharing it between several operators. In some cases Government may enable building common infrastructure, but the rule is that these developments come from operators themselves. In an environment of convergence, the regulator must ensure that there is nondiscriminatory access to passive infrastructure. It must be recognized that a large part of the cost of fiber network deployment belongs to civil works, and by the same token policies appropriate to guarantee equitable and non-discriminatory access to ducts, poles and rights of way should be established. Sub-loop separation and sharing points of optical fiber line termination equipment in buildings/departments might be required. In the particular case of NGNs, local-loop unbundling at the sub-loop level is an extremely important issue and the regulator must not neglect this key aspect in the transition to a next generation environment. 3.1.9 Tariff Regulation. The telecommunications regulator has been particularly active in managing costs and tariffs, on the understanding that service providers would have a natural tendency to leverage market distortions in order to obtain extraordinary income based on them. In perfect competition (hypothetical and unreachable situation in a permanent regime), costs and tariffs of telecommunications services would tend to situate at a point in which benefit to society is maximized. But facing the existence of real-world situations, the regulator acts through ex ante mechanisms such as tariff or price-cap approvals, or through ex post mechanisms such as reviews and evaluations in response to complaints or ex officio. In any case, a good proportion of the time spent by the telecommunications regulator is generally dedicated to reviewing costs and tariffs. The regulator engages occasionally with costs and tariffs in the data market, since services have their own dynamics and it can be said that there is a good degree of selfregulation, rendering constant intervention by the regulator unnecessary. The prevalent idea in the data market is that services are provided at actuals and often times for free, when dealing with academic networks and their partners, since funding many times comes from sources not seeking to economically recover their investments. Costs and tariffs in audiovisual subscription services have the same treatment as telecommunications services, resulting in a more or less constant regulatory intervention from the regulator. A transversal issue that has been showing up in the transition with services bundling or triple play is the accurate determination by the regulator of which costs correspond to each service, being audiovisual services part of that bundle offered at a single price (flat rate). In convergence, the regulator must now deal with combinations of services whose individual real costs cannot be accurately determined, so tariffs do not have a very accurate treatment either. In this scenario, the regulator in an environment of convergence will seek to leave market forces come to establish a reasonable tariff balance, reserving its intervention for those situations where abuse of monopoly situation or dominance exists. One of these markets is wholesale indeed, where infrastructure and/or network owner has usually dominant market power and requires
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regulatory intervention. This will usually be sufficient for markets with a high degree of self-regulation.
3.1.10 Content Regulation. Regulation of content has not usually been a very common regulatory function for telecommunications regulators. Content regulation for data networks has focused on issues such as abuse of the Internet to disseminate messages of racism, child pornography, terrorism and others, always with a strong connotation of restriction on freedom of expression. One of these expressions is the Patriotic Act, called USA PATRIOT Act, which is an American legal text enacted on October 26th, 2001, whose objective is to enhance Government control capacity in order to combat terrorism, improving the capacity of different security agencies by coordinating and providing them with greater surveillance powers against terrorist crimes. Content regulation has usually been strongly present in the audiovisual sector, due a supposed influence it can exert on citizens of a country. It is rare for the audiovisual regulator not to have powers to regulate content and for the vast majority of them this is a main function. Convergence enables different types of communication and content services be offered through the same network and consumed on a variety of platforms and user devices. The evolution of technology not necessarily modified many of the underlying social and cultural objectives, but can change the way in which these objectives are achieved. The evolution of technology may also allow increasing market liberalization, keeping its central policy objectives. In order to do this, regulators have to: Reconsider existing platform-specific obligations, in light of broadcasting and telecommunications convergence and develop policies for a multiplatform environment for media, to ensure regulatory consistency. Facilitate content dissemination via different devices. Both at the transition stage towards convergence and when it has finally been achieved, regulatory intervention should be reduced to the bare essentials to avoid colliding with aspects related to freedom of expression and civil rights. Unavoidable aspects related to Internet content, for instance, will have to be analyzed by the regulator in absence of another Government entity being entrusted with the task.
3.1.11 Universal Access/Service. Universal access/service has been considered for a long time a major telecommunications regulatory responsibility. Regarding the audiovisual sector, promotion of over-the-air access to the media (broadcast radio and television) has usually been catalogued as typical regulatory duty for the audiovisual regulator. Convergence and the advance of the Information Society impose the need to change the traditional approach of universalization programs. Before, they were thought of only from the network supply side. However, a comprehensive policy that includes demand and that contemplates inclusion and digital literacy projects is now required. Figure 21
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shows the evolution observed in new generation programs as compared to traditional services. Universal service is an evolving concept which can change over time to reflect advances in technology and use. Regulators in convergence should review the definitions of the universal service to determine if changes should made and, if so, what services and accesses would be required. They must also decide whether to change the financing mechanisms.
Figure 21 - Evolution of Universal Access Programs Source: REGULATEL
3.1.11.1 Gap Reduction. The regulator usually has a direct or indirect responsibility for gap reduction, either through the generation of adequate conditions for investments in the sector or by means of a fair and impartial behavior to ensure that the rights of all sector shareholders involved are guaranteed. Before convergence, the telecommunications sector usually relies on the sector regulator indirectly promoting market development and access gaps reduction by performing an effective work in defending shareholders rights. Usually, the task of attracting and promoting investment is performed by the sector Ministry and it is expected that in an appropriate environment, markets develop without major problems. The telecommunications regulator devotes itself mainly to defend the voice and data markets in situations where distortions or market power abuses exist, but rarely is also
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directly responsible for their development. Governmental entities and NGOs involved with the Information Society, on the other hand, promote and monitor the development of Information Technologies (IT) accompanying the regulators work, worrying inter alia about incentives to academic networks, digital literacy and promotion of access to the Internet for vulnerable sectors of society where appropriate. The audiovisual sector (audio and/or video) is basically split in two categories: That of subscription services such as cable or satellite television and those without subscription such as over-the-air radio and television or broadcasting. In both cases the regulator does not promote the development of markets and allows supply and demand market forces to act, with the notable exception of Government-controlled media, in which case the regulator might play an important role in market development, despite the fact that this is a typical work of the sector Ministry. In the transition stage and in convergence, the regulator maintains an active role in reducing gaps, mainly those for access. While responsibility for reducing gaps generally falls on the institutions responsible for public policy design, the regulator is responsible for verifying that the conditions established by the sector policy-makers are complied with. The regulator must also solve those problems where gaps are generated as a result of anti-competitive behavior by some operator or as a result of breach of obligations. 3.1.11.2 Foster to Broadband. Despite not expressly included as regulatory function, fostering Broadband is a matter which occupies much of the telecommunications regulators agenda. It is recognized that Broadband access has a direct relationship with a countrys degree of development43, and therefore regulators pay considerable attention to the topic. It is interesting that Broadband access is becoming now one of the main sources of income for telecommunications operators when traditional telephone service revenues are experiencing considerable reductions. For data networks, Broadband Internet access is vital to develop all kinds of services provided over the networks. Market data regulatory functions end-up directly or indirectly fostering Broadband access, and for that purpose strategies have been developed to close the digital divide, most of which are linked to the Millennium Development Goals. For the purely audiovisual regulator, Broadband access fostering is not part of their functions. However, the advent of Internet Protocol Television (IPTV) is starting to change the perspective of the audiovisual sector simply by the fact that without Broadband access at a reasonable speed, the service may not be provided in the conditions required by users. The outlook of technological convergence is presented to the regulator in transition with changes in the way services are provided. Broadband speed requirements will increase, but at the same time enormous differences between countries regarding this topic will be created. Figure 22 indicates the average speed of Broadband between different countries, outlining the marked difference that exists, which the regulator should seek to bridge for the benefit of users of the country.
Affordable Broadband: Empowering Communities Across the Digital Divide; Dr. Jabari Simama; Alliance for Digital Equality
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Figure 22 - Average Broadband Speed in Some Countries Source: The Information Technology and Information Foundation
The deployment of NGN can create new access imbalances in areas not covered by highspeed Broadband infrastructures. This can cause new concerns about the regional competitiveness and economic growth. Regulators should encourage the development of high-speed nationwide Broadband networks to avoid the creation of access asymmetries within countries, which can be particularly pronounced between urban and rural areas. 3.1.12 User Protection. User protection is carried out by the telecommunications regulator in different ways, the primary motivation being to prevent abuse from service providers. Mechanisms range from reviewing complaints generated by users due to service problems, to campaigns informing the general public about their rights and actions that can be taken to prevent abuse. The idea is that information publicity and transparency can help to avoid situations of abuse, allowing a more relaxed and less interventionist work from the regulator. The data market is facing quite different problems, since user protection by the regulator is focused on topics such as spam protection, copyright, privacy and others. Problems that arise from Internet use have a different nature than those experienced in the telecommunications sector. The audiovisual regulator incorporates among its functions that of user protection, but from a perspective very similar to content regulation. This generates then controversy
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about whether the regulator should then become an entity that for the sake of defending the user, would restricts freedom of expression to those providing audiovisual services. The debate has been open for many years and no firm conclusions have been reached yet. 3.1.12.1 Information Asymmetry. Information asymmetry shows up in the telecommunications sector when the user does not have enough information to make an appropriate choice at the service level. Being the operator much more informed about services that the user, he/she is at disadvantage. The regulator should then ensure that the user will have enough information (either through the own regulator or via directly imposed obligations on the operator), so that he/she will have more elements before making a decision. Periodic publication of tariff comparisons, for example, allows the user to find the cheapest ones for a particular situation. In the case of data services, precise information on access speeds and quality allows the user to select among several providers the one that can best provide the service. In the audiovisual sector, asymmetry is counteracted by overthe-air radio station and television channel audiences via scores (rankings). For subscription services, the mechanism is the same as for voice and data services. In transition to convergence, the regulator must take a proactive approach in reducing and ideally eliminating information asymmetry, since new services through more evolved platforms begin to be offered, or in some cases the same traditional services but under different technical conditions (e.g., a voice services provider that begins to offer VoIP under different conditions). Already in convergence, the user will probably have more market options to do a careful evaluation between services and facilities that are offered on an environment of convergence. 3.1.12.2 Quality of Service. Ensuring a good quality service to the user has been among traditional functions of the telecommunications regulator. The establishment of a minimum set of quality standards and a constant supervision have been for a long time the tools to achieve this objective, especially to regulate monopolistic and incumbent operators who might at some point in time lower quality levels to the users without them having many alternatives. As competition increased in different markets, operators began to compete in quality and price, with a consequent improvement in quality levels without regulatory intervention. However, this picture gets complicated again for the telecommunications regulator when dissimilar networks begin to provide the same services, making the work of establishing uniform quality levels for different networks extremely difficult. In fact, ITU has developed various criteria to define what is meant by quality levels, but the task is permanent and does not seem to have an end.44 Quality of service in data networks has a different connotation as that for voice services, inter alia, because users have less stringent requirements on them. Moreover, once the problem of access to networks is solved, quality of data services seems to standardize, thus simplifying the regulator duties. Something similar happens with the regulation of the audiovisual sector, where interference or signal cut off problems constitute most of
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Definitions of terms related to quality of service; ITU-T, International Telecommunication Union ITU-T; Recommendation ITU-T E.800; (09/2008) Page 150 of 248
the problems presented to the regulator, which are more related to telecommunications than to audiovisual per se. Quality of the service still remains important in a converging next generation environment where information travels through various networks. In this context, the regulator should ensure that convergence benefits to consumers and businesses, providing sufficient options with respect to connectivity, access to and use of Internet applications, terminal devices and content, as well as clear and accurate information about quality and costs of services so that they can make an informed choice. When properly integrated, the delivery of converged services will benefit from strong economies of scale and scope. Under conditions of effective competition in the market and proper regulation, price reduction and improvement of quality are possible, increasing the consumers welfare. However, the regulator must consider underlying networks, particularly those for access, may have different levels of quality between them, so that standardization of minimum end-to-end quality levels will become a time and effort consuming task. The private IP networks mainly have the same characteristics as the general Internet, however with a vital difference which is the possibility of establishing certain levels of quality of service (QoS) within these networks. This enables the providers of private IP networks to offer high quality services to their costumers. QoS in the IP based networks is implemented by allocation and reservation of capacity for different services following predefined prioritization schemes. The main deployment of QoS is, nevertheless, connected to the introduction and development of IP version 6 (the advanced or next generation IP), which enables end-to-end QoS provision.45 3.1.12.3 Spam. Spam o junk mail, as it is sometimes called, consists of a constant attack of information not requested by the user and may sometimes represent a danger by flooding communications, in an anonymously way, and even intending to harm equipment through viruses, worms, or other threats. Spam hardly ever manifests in voice services, except for unsolicited calls, usually from online marketing, which mean little or no involvement from the regulator. In data systems, by contrast, spam represents a constant annoyance for the user, which can even become a threat. Spam is absent in audiovisual. In transition, it should be taken into account that converged systems are highly sensitive to the spam information that can be generated in huge quantities in an IP environment. The regulator must then take action to prevent that networks with ever-increasing capabilities, suffer spam attacks. Already in full convergence, responsibilities for user protection remain, especially with regard to unsolicited information which could be sent to the user. 3.1.12.4 Data Protection. In convergence, one aspect related to users protection is the degree of security which will be provided regarding privacy, information and identity protection and other
Convergence, IP Telephony and Telecom Regulation: Challenges & Opportunities for Network Development, with particular reference to India; William Melody, Ewan Sutherland & Reza Tadayoni; Workshop on Convergence, VoIP and Regulation; New Delhi. 11 March, 2005
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aspects of end-to-end electronic communications carried through next-generation networks. Figure 23 shows the security architecture for NGN networks from end to end, where the enormous variety of attacks and threats to which users are exposed in this new environment can be appreciated. This is largely due to the fact that NGN networks are exposed to the same type of threats and attacks than Internet communications, and the regulator must expand its traditional roles of user protection to incorporate new ones referred to ensuring that they have sufficient security guarantees.
Figure 23 - Security Architecture for NGN end-to-end Communications Source: ITU
In transition to NGN networks, systems are particularly vulnerable to various attacks that may occur, involving data destruction. While at the pre-convergence stage, data protection is not an essential task of the telecommunication and/or audiovisual regulator, in transition it becomes a major concern, due to the introduction of systems that rely more and more on programs stored in computers and the complexity that computer systems represent for network operators accustomed to simpler systems. Being intelligence on the periphery of an NGN network, data vulnerability increases and protection mechanisms must be able to periodically back-up the information. Nowadays telecommunications systems are subject to the same kind of threats affecting computer networks, to the point that a hacker can cause today as many difficulties as a terrorist armed with explosive would have a decade ago. Until an environment of full convergence is achieved, the aspect of data protection will represent one of the largest areas of regulatory work. 3.1.12.5 Privacy. Internet is revolutionizing traditional market structures by providing a global common infrastructure for the provision of a wide range of electronic communications services. Even through publicly available electronic communications services introduce new
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possibilities for users, they also introduce new risks to personal data and privacy.46 Telecommunications service providers have normally been exposed to the disclosure of personal data of its users, especially to personal information obtained from calls or Internet access logs. This information could be in many cases used for purposes that range from unsolicited marketing to crimes such as extortion or abduction. Most countries today already incorporate some regulatory measure to prevent obtaining private or personal information from users of telecommunications services (both voice and data), and Directive 2002/58/EC of the European Parliament an important advance in the field. How should the regulator in convergence act in relation to privacy? In transition an increase in regulatory functions for this area can be expected, mainly due to the humongous amount of information that will begin to flow on converged networks, some of which might not necessarily guarantee an adequate level of protection for the privacy of users. Already in an environment of pre-convergence, the privacy of persons can be seriously compromised with the proliferation of social networks (FaceBook, Hi5, Twitter) and Web 2.0, which under a principle of sharing information could be placing the novel or imprudent user in danger. Undoubtedly, the work of the regulator in relation to the privacy of the information will be increased in a next-generation environment, especially in terms of identity protection.
46
DIRECTIVE 2002/58/EC OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 12 July 2002 concerning the processing of personal data and the protection of privacy in the electronic communications sector (Directive on privacy and electronic communications) Page 153 of 248
3.2 REGULATION IN CONVERGENCE Convergence generates as a logical consequence changes in regards to regulation, which in many ways tries to conform to the new scenarios which are being posed to the markets of voice, data and audiovisual. But unlike networks and services, regulation does not necessarily follow this fusion of different sectors and areas. The experiences of several countries in relation to regulation in convergence have various nuances, depending inter alia on legislation, sector policy, short-term situations and economic considerations. Regulators are carrying out the major task of implementing policy changes to adapt to a changing environment in industry and market. But the scope and limitations of what they can do are determined by Government policies, often established before IP convergence was even recognized as a problem for the policy or regulatory attention. Although there is much that national regulators can do within their existing powers on policy and legislative proposals, relatively few have enough authority to develop and implement a comprehensive program of reforms. This is especially true in most developing countries. Among the different alternatives to address regulation in a convergence environment the following are included: Regulation by Sectors - The current division of individual regulation by sectors is kept, but each sector adapts to convergence. Requires a high degree of interaction between sectoral regulators. Multi-sector Regulation - Groups under a single authority all regulated sectors and establishes cross-cutting policies. Many developing countries adopted this scheme to economize in regulatory costs. Often dissimilar sectors are grouped for reasons of economy or Government policy. Converged Regulator - Is one which brings together all those agencies whose duties are related to the sectors affected by convergence. In the short term, given that a convergence of agencies would be difficult to obtain, a workaround is that of a body or coordination procedures allowing all these regulators and Government institutions to coordinate their tasks and decisions so that no contradictions or redundancies occur when it comes to establishing the normative affecting the ICT sector.47 Figure 24 shows the alternative regulatory structures that could be applied in the case of the regulation of voice, data and audiovisual. Regulation by sectors or industries is the first from above, while the multi-sector regulation incorporates in addition of ICT, other sectors under a single regulatory entity. The convergent regulator below is shown as an entity separate from other sectors, comprising only those agencies related to sectors affected by convergence.
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Technological Convergence and Regulatory Agenda for Telecommunications in Latin America; Marcio Wohlers; LC/W 184; Copyright United Nations; May 2008; Printed in United Nations, Santiago de Chile Page 154 of 248
Figure 24 - Alternative Models for Regulation Source: Adapted from Peruvian Institute of Economics
Some general guidelines should be observed when it comes to establishing a system of regulation towards convergence. Table 36 shows the aspects that should be taken into account when it comes to generate a pro-convergence regulatory system, in which differences before and after it has materialized can be appreciated.
Table 36 - Guidelines for Regulation Before and Towards Convergence Source: Marcio Wohlers
Regulation before convergence SERVICE CLASSIFICATION LICENSES (authorizations) SPECTRUM Rigid and detailed classification associated to licenses Licenses associated to services Award associated to a license and a type of service Interconnection of similar Networks and similar services. Focused on fixed telephony, public and rural Regulation towards convergence Flexible and generic classification, which does not difficult market entry Generic or unique license which does not impose market entry barriers Award independent from licenses and free to use, subject to technical standards Interconnection between convergent Networks and providers utilizing different protocols and technologies Vision pro bridging digital divide via ICT
INTERCONNECTION
UNIVERSAL SERVICE
It is interesting to note that while the majority of operators cry out for minimizing the role of regulators (also known as deregulation), paradoxically, in an environment of
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convergence regulatory activities seem to multiply. The fact that many activities in developed markets become ex post rather than ex ante is reasonable; but trying to have the regulator abruptly disappear in a world of convergence is certainly risky. 3.2.1 Regulation by Sectors. Traditionally, regulation differentiated by sectors has spread among the majority of the countries in the world (see CHAPTER 1 - PRESENT SITUATION OF COMMUNICATIONS REGULATION IN EUROPE, THE UNITED STATES OF AMERICA, ASIA-PACIFIC AND LATIN AMERICA, IN AN ENVIRONMENT OF TECHNOLOGICAL CONVERGENCE). What is then the proposed innovation regarding the structure of the regulatory bodies? It is assumed that there will still be different regulators for telecommunications markets (voice and data) and audiovisual, who will have to face all the regulatory challenges posed in a newgeneration environment as indicated in the previous section. The difference here is the degree of coordination that must exist between the regulatory bodies in a world quite different from that they met at the pre-convergence stage. The 2005 OECD Guiding Principles for Regulatory Quality and Performance encourage better regulation at all levels of government, improve co-ordination and avoid overlapping responsibilities among regulatory authorities and levels of government. This summarizes one basic concern that most OECD countries are facing today: high quality regulation at one level can be undermined or reversed by poor regulatory policies and practices at other levels, while conversely, co-ordination and coherence can vastly expand the benefits of reform.48 While these principles were developed for multilevel regulation in the OECD countries, they are also applicable when it comes to promote coordination between different regulators in an environment of convergence. Undoubtedly the schema of maintaining separate telecommunications (voice and data) and audiovisual regulators in an atmosphere of convergence is far from being an ideal solution, and is closer to the status quo prevailing today in developing countries and very particularly in Latin America. However, an adequate level of coordination between regulators can help alleviate the negative consequences that operators will face when they are under the authority of different regulators; until competences become unified at the normative level and a real convergent regulatory can emerge. It cannot be ignored in many countries, whether by reasons of strong tradition or even by constitutional precepts that unification of the telecommunications and audiovisual sectors is complicated, and might not be implemented in the medium term. 3.2.2 Multi-sector Regulation. Multi-sector regulation appears as a solution for those countries in which the emphasis of regulation rests on aspects of competition and free market. For this case, the multisector regulator that incorporates public utilities within a single entity can greatly enhance regulatory activity and obtain very interesting synergies. Obviously multi-sector regulation tends to complicate a great deal when they extremely dissimilar sectors are considered together, but there are significant advantages in the adoption of this model.
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Multi-Level Regulatory Governance: Policies, Institutions and Tools for Regulatory Quality and Policy Coherence; Rodrigo, D., L. Allio and P. Andres-Amo (2009); OECD Working Papers on Public Governance, No. 13; OECD publishing, OECD. Page 156 of 248
Advantages of Multi-sector regulation:49 1. Weight of the regulator. Having a single regulator gives to it greater weight and importance, as opposed to having several regulators by sector. 2. Sharing of technical and administrative resources. The staff of economists, financial analysts and professionals in general can perfectly work inter-sectoral issues. Significant resource savings would be achieved this way. 3. Facilitates learning through sectors. All industries have particular features. However, the core regarding their economic regulation is basically similar: management of tariff adjustment rules, how introduction of competition is promoted in inherently monopolistic markets, and management of relations with the users. 4. Reduction of the risk of the regulators capture. A basic factor in the regulation of public utilities is to avoid companies comprising the regulated industry capturing the regulator. If the industry and the regulator develop a too close regulation, industry could be in ability to block the efforts of the regulator with the aim of promoting their interests (private interest), rather than the public interest. The greater weight of a single regulator for all public services would prevent situations where single-sector regulator regulates virtually a single company. Similarly, there is a risk that the regulator be also captured by the political authorities. In this case, the risk is reduced because the regulator could exert greater independence with regards to different ministries. Specific political pressures have less effect, unless they come from high-ranking political authorities. 5. Reduction of the economic distortions risk. Economic factors common to all industries, such as inflation or capital valorization, which could create economic distortions, can best be reconciled in the case of all industries before the existence of a single regulator. 6. Boundaries between industries not very well defined. Traditional boundaries between industries are rapidly disappearing. The firms involved in different sectors can exploit the differences between rules for each of the sectors when the firms are merging; so a regulatory decision in an industry may also affect other industries. The existence of a multi-sector entity can deal with the issue in a more coordinated manner. For example, the operation of Broadband over Power Lines (BPL) communications would be simplified if authorizations were under control of a multi-sector regulator. Critics to Multi-sector regulation: 1. Multi-sector regulation lacks specialized knowledge. This could be solved with the creation of specific departments for each industry within the regulatory entity, but considering joint decision-making between sectors, sharing knowledge and resources. 2. Leaving the responsibility of various industries with a single regulator is equivalent to placing all eggs in the same basket. It means that regulator
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failure would have implications across all industries. But it has to be considered the fact that if industry-specific regulation chosen, this is done in detriment of the greater force that a single regulator could have, increasing the risk of error. 3. Different regulators might lead to gain experience with different scopes (unequal specialization). This can be achieved even in the case of the multisector regulator. At the time of implementing structural or functional separation, telecommunications should not to be confused; or better said, the telecommunications sector, with other sectors such as that of energy. What in the energy sector can be positive isnt necessarily so in telecommunications, where the plurality of links and networks makes a significant difference. In criteria of some, such measures may lead to a standstill on the network, so they recommend implementing infrastructure competition.50 Although this may be applicable in the context of developed countries with a vast telecommunications infrastructure laid throughout the entire territory, developing countries are in a different situation. There might be infrastructure competition in densely populated areas with users having high purchasing power; but for those sparsely populated areas with a majority of low-income population, reality is different. In any case, utilization of existing telecommunications infrastructure should be maximized rather than deploying new facilities from scratch. 3.2.3 Convergent Regulator. In a number of OECD countries there has traditionally been a distinction between broadcast regulators and telecommunication regulators. In some countries, even though there may be a single regulatory body, there are distinct legal frameworks for broadcasting, cable television and telecommunications. Significant regulatory changes have already affected the telecommunication sector, and while changes have been made in broadcast regulation they have not been in the amplitude of those in telecommunications. Broadcast regulators have, in general, been more cautious in opening up the market to increased competition even though this competition has emerged from telecommunication networks and the Internet.51 The implications of convergence on regulatory institutions has focused on whether separate bodies should merge into one, and whether there should be two regulators, one for content and one for carriage. There are a number of issues that need to be taken into account to determine the appropriate regulatory structures. It is important for industry to have coherence which is easier to achieve through a single regulator. Content and carriage are not independent and with convergence it is necessary to take into account a much broader view of the market, market entry possibilities and how these developments impact on plurality in the content market. Minimizing the number of regulators that an enterprise needs to deal with is also important in order to minimize regulatory costs, and reduce the potential for uncertainty and inconsistency. The area of spectrum allocation is one of particular importance to the broadcasting and telecommunication sector. A single regulator is better placed to assess the cost and
Immediate Challenges of Regulation: Audiovisual and Telecommunications. Distribution of Powers; Transcript of the IX Regulatory Forum; Barcelona, June 4th and 5th, 2008 51 Convergence and Next Generation Networks; Claudia Sarrocco y Dimitri Ypsilanti; Organization for Economic Co-Operation and Development (OECD); DSTI/ICCP/CISP(2007)2/FINAL
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benefits of different allocation proposals across the industry rather than separate regulatory bodies who often are more concerned in protecting their part of the industry than they are with the wider question of increasing overall spectrum efficiency. In some countries broadcasters need two licenses, one to operate the carriage network including spectrum and one to operate a broadcasting content service. Concern has been expressed that with a single regulatory body, issues of culture would come secondary to arguments on efficient market mechanisms and competition. The UK experience is helpful here where a Content Board with a wide membership was created which works within Ofcom, but is to some extent separate from Ofcom. Regulators in broadcasting and telecommunication have had an important role in regulating dominant market positions. Convergence is changing the definition of the market which has implication for decisions on dominance depending on how broadly the market is defined. Convergence is also leading to the creation of new and emerging markets which produces another set of difficulties in defining the market. Convergence may also lead to more vertical integration, for example, through mergers and commercial agreements between owners of delivery platforms and content providers which will mean that some decisions concerning the regulation of carriage will have an impact on the provision of content and vice versa. Network operators able to deny access to competitors (or impose delays or unreasonable conditions) can create substantial barriers to entry and reduce competition. When the network operator is a vertically integrated enterprise with interests in the provision of content services, the concern about the potential for anticompetitive behavior is heightened. Convergence driven by NGN is clearly increasing the need for better horizontal coordination in regulation of the communications sector widely defined (telecommunications + audiovisual). It is especially important in the field of spectrum management and carriage regulation to establish efficient resource management, to avoid market distortion and to improve competition between infrastructures. A single regulatory authority would be best placed to bring about the necessary market efficiencies which could be achieved through convergence. To summarize, the organization form for a convergent regulator consists in grouping the two sectors (telecommunications and audiovisual) under a single entity structure, pending the decision to maintain content regulation within the regulator or creating a new one exclusively for content. The motivation to separate content regulation from that for transport and competition relies primarily in political considerations, so as to not compromise the independence of the convergent regulator with controversial topics such as freedom of expression and governmental control over the media, so common in developing countries with emerging regulatory institutions.
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3.3 REGULATORS IN CONVERGENCE AND RESULTS In the diverse set of duties entrusted to the regulatory bodies, considering the variety of socio-political realities, one of the major common challenges is to establish a regulatory activity adapted to the phenomenon of technological convergence. The regulatory bodies born primarily with the mission to monitor radio and television face now a movement of intense speed, in which conventional media is just one of the platforms used for mass distribution of audiovisual content. Today, it is difficult to draw clear boundaries between telecommunications, the traditional media and Internet. Technological development is going well ahead of legislation, generating conflicts and a major challenge to regulators. Many regulators are already in the situation of facing the challenges of networks and services convergence in its different facets, because they were adequately prepared for the change or because they were able to properly adapt to the so called next-generation environment.
3.3.1 United Kingdom. One of the main examples of countries with a converged regulator is the United Kingdom which, through a legal reform in the year 2002, created the Office of Communications (Ofcom), a body idealized as a convergent regulatory agency, since it agglutinated structure, responsibilities and duties of instances which until that time separately regulated telecommunications and different areas of the British audiovisual sector.52 The Ofcom began to assume their responsibilities in 2003 to configure nowadays in one of the world references for audiovisual regulation. However, has the Ofcom been able to cope with the fast technological change and establish an authentic convergent regulation? After the United States, with its Federal Communications Commission, the UK was the first country to establish regulatory bodies for the audiovisual. The Independent Television Authority (ITA), responsible for ensuring compliance with the conditions imposed on the commercial operator, was created almost simultaneously to the emergence of ITV. In the 1970s, the ITA was transformed into Independent Broadcasting Authority (IBA) and at the beginning of the 1990s, merged with the Cable Authority to form the Independent Television Commission (ITC). Similarly, emerged the Radio Authority, the Broadcasting Complaints Commission, the Broadcasting Standards Council, among others. At the end of the 20th century lived in the British audiovisual sector up to five different agencies for the regulation of radio and television; apart from an authority with powers on radiocommunications and other for telecommunications. Facing the technological challenges presented towards the year 2000, the British Government promoted a study on the needs of change in broadcasting. The results gave rise to the white paper A New Future for Communications, jointly written by the Departments of Culture, Media and Sport (DCMS) and of Commerce and Industry (DTI). Considered the transformations which the sector suffered, especially the technological convergence movement, the white paper proposed reformulating the audiovisual sector regulatory regime, from the unification of existing regulatory bodies into a single authority with more powers and authorities, the Office of Communications (from now on
Independent Audiovisual Regulatory Entities: The first five years of Ofcom and the challenge of convergence; Ricardo Carniel Bugs; ricardo.carniel@uab.cat; Facultat de Cincies de la Comunicaci UAB; Edificio I / Despacho I0 -111; 08193 Bellaterra (Cerdanyola del Valls)
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Ofcom). Thus, the British showed the need to reduce distances between telecommunications and audiovisual. In 2002, the Office of Communication Act, officialized the fusion of the regulators and the configuration of the new institution, the Ofcom, a public corporate body with legal personality. However, the Ofcoms definite kickoff was conditioned to another outstanding political reform, the new Communications Act which, at that time, the British Government was passing. The Communications Act of 2003 provided relevant changes in the UK, ranging from broad and technological aspects such as radio spectrum, economic elements, like competition in the communications market, all the way to very specific issues of the audiovisual sector, such as the European production quotas. The regulatory principles of the Ofcom are governed by the minimum intervention necessary to achieve certain goals that markets cannot reach if alone, based on proven reality, consultations to stakeholders involved in the different issues and an impact study before imposing any regulation. To serve such a comprehensive system, a particular configuration of the regulatory body was needed. The brain of this regulatory body is the Board Ofcom. It is comprised by a Chairman and a maximum of nine members (currently, seven). The President is appointed by the Secretary of State for Industry and Commerce, his homonym of Culture, Media and Sport, and an independent council; other non-executive members, generally five, are appointed by the same Joint Committee, considered the opinion of the President. The other part of the Board are executive members (currently, two), that is, hired professionals to perform executive functions of the Ofcom, but who also have a place in the Board of Directors. The Chief Executive Officer is appointed by the President of the Board and approved by the aforementioned Secretaries of State. All other executive members are elected by the non-executive Board members (see ANNEX D. STRUCTURE OF OFCOM). The Board is the collegiate body that provides strategic direction to the Office, with a key role in the effective implementation of the Communications Act. From the Board, a network of function distribution was established, divided into groups also incorporated in a collegiate way. On the one hand are the Ofcom Executive instances: the Executive Committee (EXCO), the Politics Executive (PEX), the Operation Board and the Senior Management Group (SMG). On the other hand, are the committees, 10 different working groups responsible for most of specific and concrete duties of regulation and supervision, of which stands the Content Board. The content Board is one of the main instances of Ofcom, because thats where the regulation of audiovisual content is performed. Other committees also have specific areas of regulation, such as license award, foster of community radio, business competition, etc. Finally, there are the Advisory Committees, also collegiate. They contribute to the work of the Ofcom, to which they bring the vision of different groups such as the handicapped, or experts on issues such as the management of radio spectrum. One of the most prominent is the Consumer Panel, a requirement of the Communications Act of 2003, responsible for protecting the interests of the consumer in the markets regulated by the OFCOM. In this context, the current configuration of the UK Office of Communications is as follows:
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Table 37 - Basic Configuration of Ofcom Source: Carniel (2008) Office of Communications (Ofcom) The Body Creation and Configuration Characteristics - Public corporate body, with express legal personality from the Office of Communications Act 2002; - Financial and budgetary autonomy respecting the expenditure ceiling set forth, for a period of four years by HM Treasury; - Financing rates and fees imposed on operators besides public funding; - Entity with own assets - Internal administrative autonomy - Collegiate structure at different levels; the Board has eight members while in councils, commissions or specific groups the number varies from three to fifty. -Authority on public and private media with jurisdiction in UK, regardless of the transmission platform used; - Competition on telecommunications and audiovisual; - Competition on market and contents; - Normative legal authority; - Inspection legal authority and information requirement injunction; - Sanctioning legal authority and sanctions applied directly - Keeps consultative and reports to the political power activity - Presents annual reports to Parliament; accounting is controlled by the National Audit Office; - The Ofcom proceedings of liable to be appealed before the judicial courts. 800 hired employees and three officials attached to other institutions.
Regulatory Activity
Personnel
The new regulatory body for the UK was born under the philosophy of achieving the lowest possible regulation. A clear position from the first Annual Report, in which its Chairman States that the main requirement to the OFCOM was ... explore other options before recommend intervention (Annual Report 2003/04: 3); what is sought, in fact, was rationalizing intervention. Between 2003 and 2007, audiovisual and telecommunications sectors went through major changes in the UK, with the creation of the Ofcom, the convergent regulator. The fusion of ancient authorities into the new body was a new reality to operators and the market in general. The Ofcom was established as a body with a broad legal authority, high-level functional autonomy and much decision-making power. Since the beginning of its operation, in 2003, the Ofcom was quickly structured and in a quite particular manner in relation to other regulators. Its configuration is very close to the model of a private company, with executive and non-executive members, and from the beginning adopted the position of defending a minimum possible intervention in the sector. However, the apparent liberalizing position only focuses on setting priorities in the regulation. The Ofcom understands that there are areas in which regulation can be smoothed and others where control should be strengthened, such as surveillance over contents.
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Furthermore, it is noted that in spite constitution of the Ofcom, audiovisual and telecommunications sectors regulation is still separated. The new Broadcasting Code published by the regulator, for example, covers the contents conveyed by radio and TV, and does not contemplate the same content transmission by cell phone or computer networks. It is true that as convergent regulator, the Ofcom works to approximate the legal framework of the two areas and to promote a real convergent regulation, result that perhaps might be observed in the near future.
3.3.2 Australia. The Australian Communications and Media Authority (ACMA) is the regulator of Australia for Broadcasting, radiocommunications, Telecommunications and Internet. It was formed on July 1st, 2005 by the merger of the Australian Communications Authority (ACA) and the Australian Broadcasting Authority (ABA). ACMA has offices in Canberra, Melbourne and Sydney and employs approximately 540 officials. ACMAs day to day activities are managed by a team composed of the President, VicePresident, the full-time Member, five General Directors and 13 Executive Directors. The General Directors are responsible for five major areas:
1. Inputs to Industry 2. Industry Outputs 3. Convergence and Coordination 4. Corporate services 5. Legal services
The areas are divided into branches and sections with specific business functions. More detailed information is available in the organizational structure of the ACMA chart (see ANNEX E. STRUCTURE OF ACMA). ACMA is responsible for regulating the online content, including Internet and mobile phone content, and the application of Australia law against spam.53 The responsibilities of the ACMA include:

Promoting self-regulation and competition in the communications industry while protecting consumers and other users The promotion of an environment in which electronic media respect the norms of the community and respond to the audience and the needs of the user Manage access to radio frequency spectrum Represents the interests of Australian communications internationally. The ACMA plan channels used by radio and television services, grants and renew licenses, regulates the content of radio and television services and manages property and control rules for broadcasting services.
Broadcasting Regulation
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Online content regulation
The ACMA is responsible for regulating online content (including the content of Internet and mobile) and implementation of Australian law against spam. The ACMA licenses Australia telecommunications operators and regulates the fixed and mobile telecommunications lines. The ACMA plans and manages the radio frequency spectrum in Australia. It is responsible for compliance with the licensing requirements and investigation of allegations of interference to services.
Telecommunications regulation
The management of radio frequency spectrum regulation
Convergence is a term with many meanings. In ACMA, convergence has been used primarily to reference the merging of the previously distinct platforms by which information is communicated: telephone, television (free and subscription) and radio. These platforms now sit alongside social media, online media and new ways of connecting with others. Content is inclusive of broadcast and print media, plus online media and user-generated content. Connectivity extends beyond voice to include social networking, messaging and video. Convergence issues have been identified by ACMA across nine areas of regulation focus. ACMA is currently undertaking a range of activities across these areas to develop responses to convergence issues that are both appropriate and forward-looking:54 1. Regulation for the Citizen. Regulation for the citizen in an IP-based media and communications environment encompasses two key elements: Public interest protections, such as access to the emergency call service, protection of personal data and online protection from cyberstalking and bullying Digital economy engagement tools: supporting online security and access to services, addressing digital divide issues and digital literacy. ACMA is actively engaged with emerging regulatory issues affecting the citizen. It is a leader in the provision of comprehensive cybersafety initiatives and education programs as part of the Australian Government cybersafety policy. 2. Regulation for the Consumers For media and communications services, regulation supports consumers making informed choices about services and managing their relationship with service providers. Challenges are being created as service offerings become more complex. ACMA has a dedicated digital literacy work program which is examining, among other things, consumer confidence in engaging with new technologies. 3. Voice Regulation
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ACMA is continuing to develop an approach for applying the regulatory requirements that are based on traditional fixed and mobile voice services to emerging voice over Internet protocol (VoIP) services. 4. Content Regulation Business models for content delivery have undergone significant change. Content is available across a wide number of platforms, including on mobile phones and online, as well as through traditional broadcasting services. It is available anytime and anywhere. Regulatory consistency is a challenge ACMA faces in this area, particularly in applying legacy legislative definitions to new technologies. 5. Co- and self-regulation ACMA has a role in facilitating co-regulatory and self-regulatory arrangements for both the telecommunications and broadcasting sectors. ACMA is working with industry to ensure that these arrangements continue to be effective, particularly given significant technological and market changes. 6. Regulation for Industry Minimizing regulatory burdens on business and enabling market entry and market diversity are likely to provide significant challenges for industry regulation. ACMA is presently engaged in a range of activities to support regulatory certainty about new services, such as VoIP services, and clarifying the application of regulation to emerging business models. 7. Online Content Regulation The business models for the supply of content are divergent. As a result, methods for promoting online safety that are relevant, feasible or effective for one business model (for example, a news portal), have little in common with those for another (for example, a user-generated video content site). ACMAs awareness of this issue informs its administration of the national regulatory scheme for online content. 8. Resource Allocation ACMA is guided by its legislative responsibilities and its project on Spectrum Management Principles in discharging its spectrum management functions in a way that responds to changes in technology and the increased demands on bandwidth and spectrum. While technical progress has always been a feature of radiocommunications, new sharing technologies such as cognitive radio and the demand for wireless access services (including broadband) mean that the future may well be qualitatively different from the past. ACMA also intends to address the issues raised in the allocation of telephone numbers in the context of the convergence changes. 9. ACMA Institutional Arrangements Challenges being posed by convergence and significant, related changes in the policy environment may affect the extent to which institutional
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arrangements deliver public policy outcomes. ACMA has developed a review program to ensure that internal processes continue to effectively and efficiently manage regulatory arrangements for communications and media services. ACMA has work programs to monitor developments in each of these areas and will use existing regulatory flexibility and discretion to develop appropriate responses to the extent possible. A key component of the ACMA Corporate Plan is dedicating sufficient intellectual effort and resources to envisage sustainable regulatory frameworks and to develop flexible approaches that are responsive to change, particularly engaging tools such as co-regulation.
3.3.3 Malaysia. 1998 was the year of the telecommunications regulatory reform. Two laws were passed. One defined the regulatory policy, The Communications and Multimedia Act; and another, The Malaysian Communications and Multimedia Commission Act, the institutional architecture.55 Malaysia is an interesting regulatory experience, in particular due to its concessionary scheme or licensing. This appears to be a good case of regulatory reflex of convergence in telecommunications. The title of the Act already suggests some of this: communications and multimedia both together. And both are concessionable in the form of two units: class license and individual license. These units appear to be abstract, in the sense that they are not referring to the specific services that typically relate concessions or licenses (such as granting of mobile public telephone service for example). Class license is defined as: a license for any or all persons to conduct a specified activity and may include conditions which the conduct of that activity shall be subject. They are generic authorizations, similar to a mere registry. Individual license, for one part, is a license for a specified person to conduct a specified activity and may include conditions which the conduct of that activity shall be subject. These are more specific authorizations and have greater regulatory intensity. The importance of convergence as a policy objective is explicitly recognized. The reform of 1998 is officially taken as the way to fulfill the need to regulate an increasingly convergent communications and multimedia industry. This has to do with the effort of jointly regulating the more structural dimension that telecommunications have, with the more substantive or content-related of the electronic media. On this, it is striking that content is described as digitalized. In addition to convergence, there are other policy objectives that legislation says it pursues: Transparency and openness More competition and less regulation (The law mandates: A licensee shall not engage in any conduct which has the purpose of substantially lessening competition in a market communications). Regulation can be asymmetric if a dominant position in the market is detected.
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Flexibility Innovation (criteria established by law at the time of awarding licenses) A bias toward general rules Emphasis in the process rather than content Sectoral and administrative transparency Industry self-regulation These policy objectives are broken down as follows: To convert Malaysia into a major global communications, multimedia information and content hub; Promote a civil society where information-based services provide the foundations for a continuous improvement in the quality of work and life; Grow and nurture local information and cultural representation resources that facilitate national identity and global diversity; Regulate for the long-term benefit of the end-user; Promote a high level of confidence in the consumer with respect to industry; Ensure the equitable provision of affordable services on present infrastructure (ubiquitous) throughout the country; Create a robust application environment for end-users; Facilitate the efficient distribution of resources such as skilled labor and culture capital; Foster development of capabilities and skills within the convergent industry in Malaysia; Ensure the security of information and the reliable and complete nature of the network; and Discourage Internet censorship, by warning that nothing in this law might be interpreted in the sense that allows such censorship. With some degree of contrast to the apparent sophistication of this regulatory policy, the organic design on it seems rather simple, hierarchical, and at least formally, under full dependency of a political authority, which at least formally too, enjoys a broad discretion. This is something sensitive, especially because this regulator has authority to control content. The regulator is structured around the Communications and Multimedia Commission (CMC), found under the hierarchy of the Ministry of Energy, Communications and Multimedia. This portfolios main authority appoints all members of this Commission, which are between four and five: its Chairperson, a representative of the Government and not less than two but not more than three other members. Apart from freely making these nominations, the Minister has the last word of the decisions taken by the CMC. Hierarchical verticality design is evident (see ANNEX F. STRUCTURE OF THE MCMC). Eventually, the Minister may designate a Court of appeal for best resolving a particular issue. And the CMC names different committees on specific issues (such as spectrum, for example). The CMC has diverse powers: to advise the Minister on all matters concerning the national policy objectives for communications and multimedia activities;
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to implement and enforce the provisions of the communications and multimedia law; to regulate all matters relating to communications and multimedia activities not provided for in the communications and multimedia law (); to consider and recommend reforms to the communications and multimedia law; to supervise and monitor communications and multimedia activities; to encourage and promote the development of the communications and multimedia industry; to encourage and promote self-regulation in the communications and multimedia industry; to promote and maintain the integrity of all persons licensed or otherwise authorized under the communications and multimedia industry; to render assistance in any form to, and to promote cooperation and coordination amongst, persons engaged in communications and multimedia activities; and to carry out any function under any written law as may be prescribed by the Minister by notification published in the Gazette. This diverse competition can be sorted according to the following four criteria: 1. Economic regulation. Includes the promotion of competition and prohibition of anti-competitive conduct, as well as the development and enforcement of access codes and standards. It also includes licensing, enforcement of license conditions for network and application providers and ensuring compliance to rules and performance/service quality. 2. Technical regulation. Includes efficient frequency spectrum assignment, the development and enforcement of technical codes and standards, and the administration of numbering and electronic addressing. 3. Consumer protection. Emphasizes the empowerment of consumers while at the same time ensures adequate protection measures in areas such as dispute resolution, affordability of services and service availability. This relates to the need to provide Universal Service. The law establishes a fund for the universal service (USP), which is administered by the CMC. In this regard, it defines a criterion for determining areas or group respect of which Universal Service is not sufficiently provided. According to the general rule, the criterion is built on public telephony. They are called underserved areas or groups: areas where the penetration rate for Public-Switched Telephony Network (PSTN) subscribers is 20 % below the national penetration rate or any locality where, in the opinion of the Malaysian Communications and Multimedia Commission, applications services are not sufficiently available to the community at large, while underserved groups are groups of people who by similar characteristics do not have access to basic communication services. 4. Social regulation. Includes the twin areas of content development as well as content regulation; the latter includes the prohibition of offensive content as well as public education on content-related issues. The law recognizes technological evolution and obsolescence, both technological as regulatory, that it entails. It imposes on the CMC legislation review every three years,
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when thus determined by the Minister of Energy, Communications and Multimedia. The emphasis is on the removal of regulations with risk of obsolescence.
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3.4 HOMOGENIZATION OF SECTORAL REGULATION IN LATIN AMERICA Telecom regulators carry the primary task of implementing policy changes to adapt to a changing industry and market environment. But the scope and limitations of what they can do are determined by government policies, most often established before IP convergence was even recognized as an issue for policy or regulatory attention. Although there is much that national regulators can do within their existing policy guidelines and legislative remits, relatively few have sufficient powers to develop and implement a full program of necessary reforms. This is especially true in most developing countries.56 Recognition of the benefits and opportunities of IP convergence at the policy level, and a commitment to implement necessary changes, is important in setting the policy framework for convergence. This helps ensure that issues are defined and examined holistically and comprehensively rather than as ad hoc isolated problems. For example, if VoIP is viewed simply as a diversion of voice service revenues from the incumbent operator and a decline in quality of public voice services, as some countries have done, it will only be seen as a problem with negative effects. The benefits and opportunities of VoIP within a context of IP convergence of all services providing the information infrastructure for e-commerce and future economic development will be missed. Marcio Wohlers performs a very comprehensive study on possible scenarios for the technological convergence and regulation in Latin America, taking into account the experience of several countries on the subject.57 As the original regulatory framework provides a number of regulatory-institutional barriers, entry to various segments will be severely limited. Convergence necessarily requires extensive legal modifications aimed at the reduction of these barriers. It is clear that elements such as consultation processes, frameworks which adopt frequent assessments, formal mechanisms for cooperation between agencies, administrative simplification and transparency, must be taken into consideration for the formulation of the vision and its implementation. It is expected that the experiences of these countries/regions serve as a guide for the elaboration of strategic agendas in Latin America. In Latin America, the situation is quite different, since Broadband penetration, on the average, is still very low (less than 1.5 % in 2005 and with projections of 9.3 % by 2010). Therefore, the phenomenon of convergence is still an emerging fact. In spite of this, some small advancement in the high-income metropolitan areas can be observed, where there is a growing service offering of triple-play. It is clear that, from the private operators point of view, they are starting to make efforts to take advantage of technologies integration. Regarding regulation, the author notes that until now the region lacks a vision for the sector, even though in some individual countries some positive changes towards convergence are foreseen. Nonetheless, these efforts arise in response to pressures imposed by the private sector. A proactive process of a strategic framework formation to support convergence, innovation and competition is not seen yet. In fact, public agendas
Convergence, IP Telephony and Telecom Regulation: Challenges & Opportunities for Network Development, with particular reference to India; Workshop on Convergence, VoIP and Regulation; sponsored by infoDev in association with the Telecommunication Regulatory Authority of India (TRAI), New Delhi. 11 March , 2005 57 EnREDos: Regulation and corporate strategies facing regulatory convergence; MARCIO WOHLERS Y MARTHA GARCA-MURILLO; First edition: March 2009; Copyright United Nations 2009; ECLAC in co-edition with Mayol Ediciones S.A., 2009
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pro-convergence would appear to conform more to a process of incremental adjustments, by not proposing general changes, but rather specific initiatives. There are countries, even in 2007, which do not show consistent agendas of transformation, such as Brazil and Argentina. While other countries such as Chile, Mexico, Peru and Colombia, have agendas outlined to some extent with a pro-convergence orientation. Figure 25 presents four possible scenarios by which the regulation for convergence in Latin America could traverse, depending on the degree of regional cooperation and digital inclusion.
Figure 25 - Four Scenarios for Telecommunications in Latin America Source: Marcio Wohlers
In fact, scenarios I, II, III and IV shown in Figure 25 represent different combinations of the two crucial dimensions of telecommunications of the region: the regulatory dimension, with digital inclusion (universalization) and the regional cooperation in the telecommunications regulation dimension. Here is a brief description of each of the four scenarios. 1. Continuity: is the baseline that represents the current situation and its continuity, that is: with little application of a pro-convergence regulation, without ICT policy use (such as of second-generation universalization programs) and also without coordination of their regulatory policies at regional level. It can be summarized as convergence for the rich, understood as triple-play bundles for higher income sectors. 2. Convergence with social accent: in this scenario regulatory reforms in each country are implemented and pro-active measures for extensive social use of ICT
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are taken; however the low regulatory cooperation situation at regional level remains (market fragmentation in the region). 3. Market integration: this scenario assumes that countries will cooperate regionally to harmonize their current regulatory frameworks, but without incorporating the benefits of convergence. The main beneficiaries of this scenario are operators of regional scale. 4. Latin American cooperation towards equity: replicating the experience of European integration, this scenario is the most desirable because it combines the benefits of effective regional cooperation, which is applied in a context marked by the effective incorporation of convergence in the regulatory framework and the implementation of a solid and consistent program pro ICT social use. There is still the possibility of regional agreement on criteria to be determined: significant market power; incentives for new investments; regulatory decisions ex ante and ex post. Scenario oriented assurance of the MDG and eLAC goals; there is a great opportunity for ECLAC to institute a division for social use of ICT. The degree of progress which can be obtained by the countries of the region in regards to the regulation for convergence depends largely on the adoption of an efficient model by regulators themselves. Regulatory homogenization is an extremely useful tool to achieve this goal, provided it can be asserted by means of effective standardization mechanisms taking into consideration each countrys peculiarities.
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3.5 CONCLUSIONS In the development of this chapter, after the analysis of a convergent regulator functions in the markets of voice, data and audiovisual, with the goal of assessing the regulation homogenization in the three areas, we arrived to the following conclusions: In an environment of convergence, voice, data and audiovisual markets slowly merge and intermingle, which yields as a result that individual market regulation should now be adapted to the new environment. Among regulators duties in all three markets considered (voice, data and audiovisual) the following are outlined: o o o o o Competition Promotion and Defense. Numbering, Naming and Addressing. Service Availability and Continuity. Licensing Regime. Spectrum Assignment. Management. Control. Network Neutrality. Interconnection Regime. Passive Infrastructure Access. Tariff Regulation. Content Regulation. Universal Access/Service Gap Reduction. Foster to Broadband. User Protection. Information Asymmetry Quality of Service Spam Data Protection Privacy
o o o o o o
In convergence, the regulator should monitor that access gaps as a result of market distortions or due to anti-competitive behavior of the operators are not generated. In a next-generation or technological convergence environment, the regulator should recognize that many of the markets will be in better conditions to develop if regulation is performed ex post rather than ex ante. In the subjects of numbering, addressing and domain names, the regulator must rely on the experience gained by Academic Networks regarding management of numbering and addressing resources, whereas in a future IP addresses could easily absorb the current telephone numbering resources. The regulator in an environment of convergence must then spend more time in the resolution of problems related to the establishment and operation of effective emergency services.
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The main deployment of QoS is connected to the introduction and development of IP version 6 (the advanced or next generation IP), which enables end-to-end QoS provision. A unique or more general license for electronic services as a solution is an already existing measure in some countries, and fosters a notable decrease in the institutional barriers to market entry, significantly contributing to increased competition. In an environment of convergence, deep transformations occur which render the spectrum control function a less important regulatory activity, with less regulatory intervention due to the appearance of unlicensed and seemingly unrestricted spectrum bands. In convergence, the regulator must now devote part of its efforts to make spectrum use more flexible in order to accommodate for new applications and services emerging as a consequence of technological innovation. The introduction of secondary markets for spectrum could relieve the regulator from several problems in spectrum assignment. Many of the problems currently seen in the telecommunications sector will be non-existent in an environment of convergence, which will require regulatory intervention only when problems arise (i.e. ex post regulation). Transition to the new environment of convergence must rely on lessons learned from the IP world and the simplicity with which the subject of interconnection is currently handled at the Internet level. In an environment of convergence, the regulator must ensure that there is a nondiscriminatory access to passive infrastructure. Regulators should encourage the development of high-speed nationwide Broadband networks to avoid the creation of access asymmetries within countries, which can be particularly pronounced between urban and rural areas. In convergence, combinations of services whose individual real costs cannot be accurately determined prompt the regulator to leave market forces come to establish a reasonable tariff balance, reserving its intervention for those situations where abuse of monopoly situation or dominance exists. Convergence enables different types of communication and content services be offered through the same network and consumed on a variety of platforms and user devices. The evolution of technology not necessarily modified many of the underlying social and cultural objectives, but can change the way in which these objectives are achieved. Universal service is an evolving concept which can change over time to reflect advances in technology and use. Regulators in convergence should review the definitions of the universal service to determine if changes should made and, if so, what services and accesses would be required. They must also decide whether to change the financing mechanisms. Due to the fact that NGN networks are exposed to the same type of threats and attacks than Internet communications, the regulator must expand its traditional
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roles of user protection to incorporate new ones referred to ensuring that they have sufficient security guarantees. Among the different alternatives to address regulation in a convergence environment the following are included: Regulation by Sectors - The current division of individual regulation by sectors is kept, but each sector adapts to convergence. Requires a high degree of interaction between sectoral regulators. Multi-sector Regulation - Groups under a single authority all regulated sectors and establishes cross-cutting policies. Many developing countries adopted this scheme to economize in regulatory costs. Often dissimilar sectors are grouped for reasons of economy or Government policy. Converged Regulator - Is one which brings together all those agencies whose duties are related to the sectors affected by convergence. In the short term, given that a convergence of agencies would be difficult to obtain, a workaround is that of a body or coordination procedures allowing all these regulators and Government institutions to coordinate their duties and decisions so that no contradictions or redundancies occur when it comes to establishing the normative affecting the ICT sector. Multi-sector regulation appears as a solution for those countries in which the emphasis of regulation rests on aspects of competition and free market. For this case, the multi-sector regulator that incorporates public utilities within a single entity can greatly enhance regulatory activity and obtain very interesting synergies. The organization form for a convergent regulator consists in grouping the two sectors (telecommunications and audiovisual) under a single entity structure, pending the decision to maintain content regulation within the regulator or creating a new one exclusively for content. The degree of progress which can be obtained by the countries of the region in regards to the regulation for convergence depends largely on the adoption of an efficient model by regulators themselves. Regulatory homogenization is an extremely useful tool to achieve this goal, provided it can be asserted by means of effective standardization mechanisms taking into consideration each countrys peculiarities.
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CHAPTER 4 - INSTITUTIONAL ORGANIZATIONAL MODEL FOR THE CONVERGENT REGULATOR IN THE MARKETS OF VOICE, DATA AND AUDIOVISUAL This last chapter presents a model of an institutional regulatory organization for Latin America countries, which includes the model of a structure that incorporates best practices, functions performed by each unit within the structure, and a proposal for a normative for the establishment of functions within the sectors included in regulatory convergence.
Institutional Organization Model for the Convergent Regulator in Voice, Data and Audiovisual
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4.1 THE REGULATOR IN CONVERGENCE Based on the experiences of several countries in relation to regulation in convergence, the regulator could take different forms, depending inter alia on legislation, sectoral policy, short-term situations and economic considerations. Among the different alternatives to address regulation in an environment of convergence, the following were identified: Regulation by Sectors - The current division of individual regulation by sectors is kept, but each sector adapts to convergence. Requires a high degree of interaction between sectoral regulators. Multi-sector Regulation - Groups under a single authority all regulated sectors and establishes cross-cutting policies. Many developing countries adopted this scheme to economize in regulatory costs. Often dissimilar sectors are grouped for reasons of economy or Government policy. Converged Regulator - Is one which brings together all those agencies whose duties are related to the sectors affected by convergence. The discussion about the regulator in an environment of convergence could come to consider topics such as the convenience of having horizontal regulators, as seen in several countries with national competition authorities. In reality, the competition regulator per se would be no different than a multi-sector regulator, which however would refrain from analyzing topics of technical nature. In many countries there is not a competition authority as such, but rather processing of competition issues are in charge of specialized courts. This study did not analyze the conformation of these courts, since this is a matter of judicial structure, and judges and courts can only act when the rule has been violated and not before the breach is materialized. On the other hand, a regulatory authority can act proactively, since its scope of action is generally understood as being within the field of administrative law and not relating to the jurisdictional functions of judges and courts.
4.1.1 Convergent Regulator. Selection of a structure for the regulator in convergence has fallen on the convergent regulator model, which is one whose duties are related to sectors included within convergence. Although there are different legal frameworks for telecommunications (voice and data) and audiovisual (broadcasting and cable television), the convergent regulator would be in charge of regulating all of them as a general platform for the transport of electronic communications. This assumes that the electrical distribution networks themselves could be considered as part of the transport platform for the case of Broadband over Power Lines (BPL) communications. In relation to the issue of whether there should be two regulators, one for content and another for transport, this has already been analyzed from the viewpoint of the convenience and possibility of combining both types of regulation under a single entity. Content and transport are independent, but with convergence it becomes necessary to take into account a much broader market vision, the possibilities of market entry and the way in which technological developments impact plurality in the content market. But on the other hand, the inevitable collision which could have content regulation in
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many Latin American countries with aspects such as freedom of expression prompts to reconsider this conjunction of regulatory functions at the time of determining the structure of the regulator in convergence. Figure 26 shows a transition to a convergent regulator from the traditional sectors or markets.
Voice Services Regulator (Fixed and Mobile)
TELECOMMUNICATIONS
Data Networks Regulator (Internet)
Content Regulator
HOLISTIC REGULATOR
Broadcasting Regulator (Radio and Television)
AUDIOVISUAL
Subscription Services Regulator (Cable TV)
Electronic Communications Regulator (Platforms)
Figure 26 Transition towards a Convergent Regulator Source: Own
The subject of the so-called holistic regulator is something that warrants a careful analysis, especially within the field of Latin American countries, where many new regulators are still within an institutionalization stage (15 years or less). In a nextgeneration environment, it would be ideal to have a single regulator handle both communication platforms (transport) and content. Experiences with regulators such as Ofcom (United Kingdom) and ACMA (Australia) are living proofs that this situation can be achieved, since both are examples of holistic regulators. In this study this type of regulator will be regarded as a long-term reference point, which will incorporate both transport and content. However, in the medium term, it is prudent and advisable to delimit the convergent regulatory to aspects related to platforms for electronic
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communications, referring content matters to a specialized regulator or finally leaving these functions within the Ministry or organizations which can legally handle them.
4.1.2 Preparing for Transition. Transition towards a regulatory scheme appropriate for convergence is a process which often takes several years and inevitably has a cost which is often underestimated in terms of training human resources, creation of adequate infrastructure, consolidation of mergers between agencies involved and confrontation with existing operators. This last point should be taken into account when the regulation comes to facilitate the entry of competitors in different markets, without infrastructure development requirements being levied on new entrants. Lessons learned from experiences in other continents show that success was obtained in the transition towards a convergent environment precisely in those countries where preparation was made in anticipation and not as a response to convergence itself. The steps suggested to materialize transition to the convergent regulatory are shown in Figure 27, along with some events that may coincide in time for the different stages. The transition stages indicated in the figure are: Planning transition to convergence. Sectoral policy designed to promote and foster convergence is outlined. Drafting normative for regulation in convergence. Principles and fundamental norms are established to ensure an effective transition, prioritizing Universal Access/Service, access gap reduction and availability and ubiquity of services for users, with clear and fair competition rules. Creation of convergent regulatory body. Performed by merging regulatory entities or through a new regulator with wide powers. Adapting to new legal framework. Necessary step to adapt existing rights of operators and shareholders to the new normative, respecting vested rights. Consolidation of regulation in an environment of convergence. Stage of maturity where regulatory functions are fully performed by the convergent regulator. Regulatory proceedings relaxation or Deregulation. Marks the final phase of transition towards a converged regulatory environment where the regulator can step back in front of a self-sustaining competition environment and when benefits of convergence have been achieved.
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Planning Transition to Convergence
Drafting Normative for Creation of Regulation in Convergent Convergence Regulatory Body
Consolidation of Adapting to Regulation in an New Legal Environment of Framework Convergence
Relaxation of Regulatory Duties or Deregulation
Time
Triple Play Broadband development 3G and WiMAX IPTV development 4G and mobile WiMAX n-Play Multiservice license Cloud Computing Generalized Universal Access Academic Networks as pathway to Information Society 100% Mobile coverage Migration to NGNs Generalized optical switching Diversified access Grid Computing
IP Interconnect
Fixed-mobile convergente consolidated IPv6 replaces IPv4 100% NGN networks
Universal Service reached Intermodal competition for access consolidated Mesh Networks
Figure 27 Transition Stages towards a Convergent Regulator Source: Own
The stages indicated in the preceding figure are not necessarily uniform for all countries, nor the events listed on the time axis. As seen in the first chapter of this study, many countries are already with several normative advances concerning regulation in convergence, while others have not started yet planning towards transition. Problems could potentially occur if some of the events occur while the regulatory framework is not sufficiently prepared for them. For example, without an appropriate normative framework, IP interconnection might favor dominant operators with consolidated NGN networks, without allow new entrants the opportunity to establish interconnection agreements within reasonable terms.
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4.2 STRUCTURE AND FUNCTIONS OF CONVERGENT REGULATOR As it is clear from the studies on the subject, many so-called traditional regulatory functions are losing force, while new ones appear on the horizon. In an atmosphere of convergence, where voice, data and audiovisual markets are merging and become often indistinguishable, the functions of the regulator are also adapting to this new environment. Among regulatory functions in the three markets considered (voice, data and audiovisual) to be incorporated within the structure of the convergent regulator, the following stand out: Competition Promotion and Defense. Numbering, Naming and Addressing. Service Availability and Continuity. Licensing Regime. Spectrum o Assignment. o Management. o Control. Network Neutrality. Interconnection Regime. Passive Infrastructure Access. Tariff Regulation. Content Regulation.58 Universal Access/Service o Gap Reduction. o Foster to Broadband. User Protection. o Information Asymmetry o Quality of Service o Spam o Data Protection o Privacy Regulatory functions, to be properly incorporated in an organizational structure, must be described within what is called an organization manual. The organization manual is a management tool prepared in an institution to delineate the responsibilities and functions of the staff. The primary objective of the manual is to clearly describe the institution activities and to distribute responsibilities in each of the units. This way, overlapping of responsibilities that may result in duplication of activities and dilution of responsibilities and functions is avoided. It is important to also reflect in the organization manual, relationships inside and outside each unit, with the aim of establishing relations between them and the surrounding environment. This model is neither intended to impose a particular management style nor to establish the advantages of one organizational structure over another. It is rather a view of a convergent regulator scheme, where the functions analyzed are distributed as logically as possible, without implying that this might be the only way of doing it. The analysis made in the first chapter of this study referred to the structures of Government agencies and regulatory bodies in Europe, Asia Pacific, United States and Latin America shows that the current status of regulators is extremely varied. This means then that
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uniformity across all regulators on structure, functions, processes and others, is not easily reachable. Each country has its own vision on where in the Government structure the regulator should stand, an aspect that must be respected as a manifestation of sovereignty. What is described in the following sections is just a proposal, which could be incorporated as each country deems appropriate and useful.
4.2.1 Structure of the Convergent Regulator. Taking into account the functions the convergent regulator must perform in an environment of technological convergence, which have been widely developed in this study, we define now a proposal for a convergent regulator structure along the offices that comprise it. A determined office within the structure section does not mention whether it is configured as a Committee, Department, Division, or if it even is comprised by a single person. The structure must be sufficiently general so that can accommodate any particular condition in each country. In many cases it will not be possible to generate a structure with the characteristics set out in the model presented here, since each particular case may warrant changes or additions that are viewed as necessary. The proposed structure for the convergent regulator is indicated in Figure 28. The offices referred to in the proposal are: Legal Affairs Spectrum Management and Control Universal Access and Service User Protection Market and Competition Analysis Licenses and Scarce Resources Convergence Control and Oversight
Chief Executive Officer
Legal Affairs
Spectrum Management & Control
Universal Access & Service
User Protection
Market and Competition Analysis
Licenses and Scarce Resources
Convergence Control and Oversight
Figure 28 Structure Proposal for Convergent Regulator Source: Own
As can be seen in the figure, the names of the offices are very general and do not allow full understanding at a glance of the functions that each should perform within an environment of transition towards convergence or when it has been completed.
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Regulatory functions of each office and their relationships will be defined below, when the organization manual is developed. The fact that the existence of a Chief Executive Officer is indicated does not necessarily call for a single-person regulatory authority, because he/she may very well be replaced by a collegiate body without this presupposing a change of philosophy. Nor is indicated in the structure an office for Administration and Finance or internal audit functions, because in order to simplify the diagram we preferred to leave out those offices that do not perform a regulatory work.
4.2.2 Organization Manual. The organization manual allows for the different sections within the structural model of the convergent regulator functions to be clearly displayed. The organization manual is a work instrument necessary to regulate and specify the functions of those who make up the organizational structure, delineating at the same time responsibilities and achieving functional correspondence between posts and structure through its adequate implementation.59 To be able to adequately represent the functions of the convergent regulator within the structure presented in the previous section, the following format for description of functions was used: 1. Mission 2. Identification and Reference in the Structure Dependence Subordinates 3. Basic Functions 4. Responsibilities 5. Relational Framework Internal External The mission of each office is in this case a brief summary of its reason for existence, unlike the enterprise mission that is used in business administration to define the purpose of the institution. In any case, each office defined in the structure of the regulator has a specific mission that should alone specify why it exists. The concept of mission is extracted from the typically tactical scope and it is placed in a more elevated dimension. The Mission of the office should then be understood as the major objective, the fundamental purpose of its operations. Identification and reference in the structure refers to its position within it, where the dependence and subordinate units are described where appropriate. Since this proposed structure reaches only the second level, the definition of subordinates is left at the discretion of whoever establishes the other levels. This does not preclude the possibility of, as in many institutions, creating an extremely flat hierarchy, where no units below the second level exist. Many successful IT companies (Amazon, Yahoo, Napster) often times have business structures with suppressed chains of command, which comes handy to eliminate excessive controls and give greater dynamism to the institutions.
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The basic functions are those that have been analyzed as regulatory functions for convergence, apart from the traditional regulatory functions. These functions should be performed by the office and should be consistent with the mission established in paragraph (1). One way of defining the basic functions of a particular office consists of asking oneself what it has to do within the structure of the convergent regulator. The office responsibilities, on the other hand, are obligations it has within the structure of the regulator, whose breach would be directly attributable to it. It should be understood that the office is responsible for those topics over which it can influence, or more specifically by the results attributable to their actions or their omission to act, when they constitute duties. As a principle, no office should have responsibilities for something that is not under its control. Also, they should not have responsibilities for something that would happen anyway, regardless of their actions. Finally, within the relational framework, both internal (with other sections of the structure) and external (with the environment, which is often also very dynamic) relationships were identified. The convergent regulator has external relations with all types of shareholders in different markets, and develops a highly dynamic relationship with all of them. Different offices will have consequently key actors identified, with whom they have to maintain a relationship within their regulatory activities. 4.2.2.1 Legal Affairs. The Legal Affairs Office is undoubtedly characteristic of a regulator body, due to its frequent interaction with normative of all kinds. It is no coincidence that many of the regulatory authorities, particularly in Latin America, are precisely legal professionals, because most of the problems the regulator has to face have a direct relationship with compliance or not of the law. In the proposal for description of functions of this office, the following are described:
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LEGAL AFFAIRS 1. Mission: Ensure that the regulatory actions fully conform to the normative in force 2. Identification and Reference in the Structure: Dependence: Chief Executive Officer Subordinates: To be determined 3. Basic Functions: a. Interaction with all external institutions at the judicial and administrative proceedings level. b. Legal advice to all offices of the regulatory body. c. Review and verification of the Chief Executive Officers actions in relation to judicial and administrative proceedings. d. Coordination with other offices for administrative actions. 4. Responsibilities: a. Ensure that all regulatory processes are carried out in a timely manner within the time limits established by law. b. Guarantee the legality of the Chief Executive actions. c. Report to the Chief Executive and/or other offices about any normative changes or modifications which could have consequences for the regulator. d. Assist in the legal defense of all those matters entrusted to the Office. 5. Relational Framework: Internal: a. Chief Executive Officer b. All other offices External: a. Government authorities b. Operators c. Tribunals d. Users associations Despite the fact that regulatory functions are not included in the functions of this Office explicitly, all legal affairs activities are linked to the convergent regulator activity. This is probably the most distinctive office in relation to others forming part of the proposed structure, but at the same time it is foreseen that it will have a growing activity in a transition to convergence situation. An alternative to having a specific office for Legal Affairs is to distribute all these roles and responsibilities between the different offices of the structure, leaving the office without regulatory functions. This assumes that a high degree of autonomy from other offices will exist, since legal responsibility for all administrative proceedings would be in charge of each individual office. This could contribute to more celerity in processing proceedings that would otherwise be centralized within the Legal Affairs Office; but that requires a lot of coordination between offices, particularly regarding administrative proceedings.
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4.2.2.2 Spectrum Management and Control. Duties related to spectrum are called traditional regulatory functions by a large part of the regulators. Some countries preferred to keep spectrum management and control in charge of the sector Ministry or within a specialized agency, leaving the regulator with the economic rather than technical regulatory activities. This is perfectly feasible in an environment of convergence, provided that the sectoral policy is clearly determined and does not generate struggles for power between the regulator and the Ministry or the agency responsible for the spectrum. Spectrum assignment is excluded from the responsibilities of this Office, because it has been included within duties of another office due to its classification as scarce resource. The description of functions for the Office of Spectrum Management and Control within this proposal is as follows: SPECTRUM MANAGEMENT AND CONTROL 1. Mission: Ensure that electromagnetic spectrum is exploited and used in the best possible way for the benefit of society 2. Identification and Reference in the Structure: Dependence: Chief Executive Officer Subordinates: To be determined 3. Basic Functions: a. Plan spectrum usage taking into account the convergence of services via spectrum bands. b. Determine unlicensed frequencies that do not require authorization. c. Develop strategies to maximize use of electromagnetic spectrum as an access mean. d. Modify and maintain the Frequency Allocation Plan considering the different usages given to the bands. e. Control spectrum use to avoid harmful interference. 4. Responsibilities: a. Get the maximum benefit for society from spectrum usage. b. Reduce access barriers for spectrum. c. Generate an environment of appropriate flexibility for use of bands for multiple applications. d. Keep the national spectrum in optimal conditions of use. e. Ensure sufficient spectrum to cover access shortage in underprivileged areas. f. Facilitate Fixed-mobile convergence. 5. Relational Framework: Internal: a. Chief Executive Officer b. Office of Legal Affairs c. Office of Universal Access & Service d. Office of Licenses and Scarce Resources e. Office of Convergence Control and Oversight External: a. Government authorities b. Spectrum users
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4.2.2.3 Universal Access and Service. Universal Access and/or Service should be understood as providing ICT services to all sectors of the population regardless of income level, ensuring a minimum level of quality. In order to complete the cycle of access barriers elimination, it is also necessary to make Broadband available to the entire population. Digital literacy is another problem to solve, which requires the involvement of other entities in parallel. Many countries keep Universal Access/Service projects separate from regulatory functions. However, in convergence, issues of Broadband access and ICT gap reduction are cross-cutting and require coordination across the entire structure of the regulator. Description of functions for the Office of Universal Access & Service is as follows: UNIVERSAL ACCESS AND SERVICE 1. Mission: Ensure that all the population is included without any discrimination in the Information and Knowledge Society 2. Identification and Reference in the Structure: Dependence: Chief Executive Officer Subordinates: To be determined 3. Basic Functions: a. Reduce ICT access gaps. b. Ensure good quality Broadband accessibility throughout national territory. c. Assist in the preparation of development plans for Universal Access and/or Service. d. Periodically review definitions and mechanisms for Universal Access and/or Service to maintain consistency with an environment of convergence. e. Plan inclusion and digital literacy projects. 4. Responsibilities: a. Achieve an efficient use of resources for Universal Access and/or Service. b. Benefit population with a greater range of services in a next-generation environment. c. Beneficiar a la poblacin con una mayor gama de servicios en un entorno de siguiente generacin. d. Create conditions for an efficient development of Broadband infrastructure. e. Prevent generation of new access gaps as a result of substitution by NGNs. f. Take advantage of fixed-mobile convergence in digital inclusion projects. 5. Relational Framework: Internal: a. Chief Executive Officer b. Office of Legal Affairs c. Office of Market and Competition Analysis d. Office of Licenses and Scarce Resources e. Office of Convergence Control and Oversight External: a. Government authorities b. Operators c. Beneficiaries of Universal Access and/or Service projects d. Educational Institutions and Academic Networks
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Financing sources for projects in this Office are not explicitly listed, which in any case would be defined by the own mechanisms established in each country. 4.2.2.4 User Protection. The subject of user protection has been widely discussed in forums of regulators, mainly because there is resistance from many to incorporate it as a regulatory function. Reality has made it apparent that while in an ideal situation of perfect competition the user would be reasonably protected from abuse by consumer choice, real-life situations are quite different and require intervention of the regulator or another entity entrusted with user protection duties. In an environment of convergence, the type of threats menacing the user diversifies, forcing the convergent regulator to take on a role that was not previously among its duties. The description of functions for the Office of User Protection is as follows: USER PROTECTION 1. Mission: Guarantee that the ICT user is properly protected in an environment of technological convergence 2. Identification and Reference in the Structure: Dependence: Chief Executive Officer Subordinates: To be determined 3. Basic Functions: a. Propose and devise user protection plans. b. Reduce information asymmetry in a changing technological convergence environment. c. Verify that quality of service to the users is within the established parameters, regardless of the type of access used. d. Establish protection plans against spam and monitor their compliance. e. Verify that service providers protect users data in an environment of technological convergence. f. Design information protection strategies against attacks and verify their incorporation by converged networks operators. g. Study and implement along with Academic Networks, contingency plans for networks. 4. Responsibilities: a. Ensure privacy and personal data protection for users by service providers. b. Create a secure and protected environment for ICT users. c. Ensure that the user is sufficiently informed in a time of growing diversification of services. d. Monitor that NGN attacks do not cause disruption or unnecessary damage 5. Relational Framework: Internal: a. Chief Executive Officer b. Office of Legal Affairs c. Office of Market and Competition Analysis d. Office of Convergence Control and Oversight External:
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a. b. c. d.
Government authorities Operators Users associations Educational and Academic networks
4.2.2.5 Market and Competition Analysis. Much of the economic regulation theory is based on the study of markets, under the premise that in competition the best regulator is the market itself through supply and demand mechanisms. When the range of substitute services or offerings is changing in a next-generation environment, market and competition analysis becomes then an essential task. The dynamism this Office has to show in its performance is a formidable challenge. The description of functions for the Office of Market and Competition Analysis follows: MARKET AND COMPETITION ANALYSIS 1. Mission: To achieve that under convergence, ICT behave as ideal markets. 2. Identification and Reference in the Structure: Dependence: Chief Executive Officer Subordinates: To be determined 3. Basic Functions: a. Periodically identify situations of dominance in relevant markets and apply ex ante regulatory measures. b. Promote and defend competition in ICT markets. c. Intervene in cases of price and tariffs determination under distortion situations. d. Solve problems of anti-competitive practices. e. Analyze mergers and transfers. 4. Responsibilities: a. To ensure free competition in ICT. b. Prevent monopolies or oligopolies consolidation in any market. c. To achieve that users enjoy just and equitable rates. d. Avoid abuse of market power in a converged environment. 5. Relational Framework: Internal: a. Chief Executive Officer b. Office of Legal Affairs c. Office of Universal Access & Service d. Office of User Protection e. Office of Convergence Control and Oversight External: a. Government authorities b. Operators c. Users
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4.2.2.6 Licenses and Scarce Resources. Resources such as numbering, domain addresses and electromagnetic spectrum tend at some point to become scarce resources, because they are not easily substitutable. The efficient use of resources is the responsibility of the regulator, as well as licensing in a converged environment. The description of functions for the Office of Licenses and Scarce Resources is: LICENSES AND SCARCE RESOURCES 1. Mission: ICT scarce resources are utilized and assigned the most efficient way in convergence. 2. Identification and Reference in the Structure: Dependence: Chief Executive Officer Subordinates: To be determined 3. Basic Functions: a. Assign numbering, naming and IP addresses in a timely and efficient manner. b. Develop and implement allocation plans for scarce resources (with the exception of spectrum). c. Perform transition to numbering in an IP environment. d. Award licenses for provision of services in an environment of convergence. e. Assign the spectrum efficiently by means of competitive processes. 4. Responsibilities: a. Achieve an optimal use of scarce resources. b. Ensure availability of adequate IP resources in an environment of convergence. c. Simplify the licensing award process. d. Achieve optimal distributive efficiency regarding electromagnetic spectrum. 5. Relational Framework: Internal: a. Chief Executive Officer b. Office of Legal Affairs c. Office of Spectrum Management & Control d. Office of Universal Access & Service e. Office of Convergence Control and Oversight External: a. Government authorities b. Operators c. Spectrum users
4.2.2.7 Convergence Control and Oversight. This Office is responsible for verifying that the transition to an environment of convergence occurs within established parameters and with the least traumatic effects for users and operators. On the other hand, it is also suggested that oversight of matters such as implementation of network neutrality and IP interconnection be commissioned to
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it in order to make transition feasible. This Office could also, at the choice of the regulator, be divided into two sections. The Office of Convergence Control and Oversight has the following functions: CONVERGENCE CONTROL AND OVERSIGHT 1. Mission: That transition to an environment of convergence occurs in an optimal way. 2. Identification and Reference in the Structure: Dependence: Chief Executive Officer Subordinates: To be determined 3. Basic Functions: a. Verify compliance of operators with transition schedules towards a converging environment. b. Monitor that NGN migration does not create unfavorable conditions for other operators. c. Analyze and report progress on transition plans to a next-generation environment. d. Verify the application of network neutrality principles by operators. e. Ensure a suitable transition to interconnection in convergence. f. Oversee IP interconnection conditions and impose remedial measures in case of conflicts. g. Ensure that the operators passive infrastructure is available on fair, reasonable and non-discriminatory terms. 4. Responsibilities: a. To achieve full compliance of transition schedules. b. Verify that transition to the new environment generates the least amount of problems to the market. c. To ensure a fair and unbiased IP interconnection environment. d. Ensure network neutrality conditions for all service providers. 5. Relational Framework: Internal: a. Chief Executive Officer b. Office of Legal Affairs c. Office of Spectrum Management & Control d. Office of Universal Access & Service e. Office of Market and Competition Analysis f. Office of Licenses and Scarce Resources External: a. Government authorities b. Operators c. Service providers
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4.3 NORMATIVE PROPOSALS Transition to an environment of convergence will invariably require normative to implement the changes needed. This legislation may have the form of laws, decrees, ministerial resolutions, multilateral treaties or others. Each country has so many differences with others regarding legal systems that proposing common legislation applicable to all is risky and even inadvisable, since what appears to be appropriate for one may be innocuous or even pernicious to another. For this reason this study does not present normative for general use under the label of panacea, and instead gives examples of legislation whose success has been demonstrated in practice, so that each country can choose what best suits their own reality. This does not mean that incorporating principles or even entire normative will ensure success in establishing an environment suitable for convergence; but surely the proactive move forward will generate better results than remaining inactive before what inevitably will occur as a result of technological advances. Several areas have been identified where normative concerning convergence exists: Convergence in General Competition Numbering Service Continuity and Availability Licensing Spectrum Network Neutrality Interconnection Access to Passive Infrastructure Content Universal Access/Service User Protection The content of each specific normative has been summarized, and to the extent possible, the relevant part of the normative for each case has been transcribed.
4.3.1 Convergence in General. Directive 2002/21/EC of the European Parliament and of the Council of 7 March 2002 on a common regulatory framework for electronic communications networks and services (Framework Directive) The objective of this Directive is to establish a harmonized framework for the regulation of electronic communications networks and services. It contains horizontal provisions serving the other measures: the scope and general principles, basic definitions, general provisions on the national regulatory authorities (NRAs), the new concept of significant market power, and rules for granting certain essential resources such as radio frequencies, numbers or rights of way. In response to the convergence of technologies and the need for horizontal regulation of all infrastructures, the new framework is no longer limited to telecommunications
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networks and services but covers all electronic communications networks and services. This includes fixed-line voice telephony, mobile and broadband communications and cable and satellite television. On the other hand, the content of services delivered over electronic communications networks, such as broadcasting content or financial services, is excluded, as is telecommunications terminal equipment.
Australian Communications and Media Authority Act 2005 Established ACMA as the convergent regulator for telecommunications, broadcasting and spectrum management. Legislation focused on merging two predecessor agencies to organize them as a convergent regulator in anticipation of convergence. This has allowed ACMA to become a convergent regulator and address the real challenges created by inheritance from two previous organizations without having to deal with new regulation at the same time. Finland Communications Market Act 393/2003 The laws governing telecommunications and broadcast digital networks in Finland were converged to expand the scope of the liberal Finland Telecommunications Market Act (396/1997) to include cable TV and wireless digital terrestrial broadcasting. The name of the Telecommunications Market Act was changed to Communications market Act to reflect its new scope. Convergence legislation represents the first phase of Finland efforts to harmonize its legislation with European Union legislation, as well as to maintain the widely recognized Finland leadership in service innovation and information society, deregulation and competition in the communications market network. Communication Convergence Act, 2001 from India This Act aims primarily to the communications sector promotion and development, in a scenario of growing convergence of technologies. India became the second country in the world to have legislation in the field of convergence after Malaysia. The draft Act has four main objectives and they are: facilitate the development of national infrastructure for a society based on information, and allow access to it; provide a variety of services to the people to promote plurality of news, views and information; set a regulatory framework for transport and communications content on the scenario of convergence of telecommunications, broadcasting, data, multimedia and other communication technologies and related services; and set the powers, procedures and functions in a single regulation and licensing authority and the Court of Appeals Authority
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Communications and Multimedia Act N 588 from Malaysia Is the pioneer Law in convergence in the world. Introduces generic license and regulates content in a transitional regime. Licenses are divided into: 1) Network Facilities Provider, 2) Network Service Provider, 3) Applications Service Provider and 4) Content Applications Service Provider. The Communications and Multimedia Act 1998 is based on the basic principles of transparency and clarity; more competition and less regulation; flexibility; bias towards generic rules; regulatory forbearance; emphasis on process rather than content; administrative and sector transparency; and industry self-regulation. The Act seeks to provide a generic set of regulatory provisions based on generic definitions of market and service activities and services. The jurisdiction of this Act is restricted to networked services and activities only.
4.3.2 Competition. Commission Directive 2002/77/EC of 16 September 2002 on competition in the markets for electronic communication networks and services Under the new Directive the terms electronic communications and electronic communications networks include all electronic communications services and/or networks which are concerned with the conveyance of signals by wire, radio, optical or other electromagnetic means, including therefore, the broadcasting of radio and television programs. However, the directive excludes from the regulatory framework services providing or exercising editorial control over content transmitted, using electronic communications networks and services. This clarification confirms the distinction made by the new regulatory framework between services and content transmitted by means of networks and services. The key provision of the directive provides for the abolition of exclusive or special rights granted by the Member States for the establishment and/or the provision of electronic communications networks, or for the provision of publicly available electronic communications services. Before 24 July 2003, each Member State must take the necessary measures to guarantee each undertaking the right to provide services or exploit networks, without discrimination, in accordance with a general authorization regime which replaces the licensing system. Only a reasoned opinion on the part of the competent regulatory authority within the framework of a general request for authorization may prevent an undertaking from providing services or networks. Member States must ensure that vertically integrated public undertakings which provide electronic communications networks and which are in a dominant position do not discriminate in favor of their own activities.
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The trend to liberalisation also extends to directory and directory enquiry services, frequencies, television satellites and cable networks with the same objective of abolishing any unjustified restriction which might hinder the development of competing services.
4.3.3 Numbering. Regulation (EC) No 733/2002 of the European Parliament and of the Council of 22 April 2002 on the implementation of the .eu Top Level Domain. This Regulation aims to establish the conditions of implementation of the .eu top-level domain (TLD), and in particular to provide for the designation of a Registry and establish the general policy framework within which the Registry will function. The call for expressions of interest [EN] for the selection of the .eu TLD Registry was published in Official Journal C 208 of 3 September 2002. Following this call for expressions of interest the European Commission decided to designate the European Registry for Internet Domains (EURID) as the Registry for the .eu top-level domain. Directive 2002/21/EC of the European Parliament and of the Council of 7 March 2002 on a common regulatory framework for electronic communications networks and services (Framework Directive). Numbering, naming and addressing Member States must ensure that NRAs control the assignment of all national numbering resources and the management of the national numbering plans. Adequate numbers must be provided for all electronic communications services. To this end, the national regulatory authorities must establish objective, transparent and non-discriminatory procedures for assigning national numbering resources. 4.3.4 Service Continuity and Availability. Directive 2002/22/EC of the European Parliament and of the Council of 7 March 2002 on universal service and users rights relating to electronic communications networks and services (Universal Service Directive) The users of telecommunications services enjoy a number of rights, including in particular:
the right to have a contract where consumers subscribe to services providing connection and/or access to the public telephone network. The contract must contain a minimum set of information (the identity and address of the supplier, the types of services provided, the duration of the contract and renewal conditions, the arrangements for procedures for settling disputes, etc.) which must be included in the contracts concluded between the users and suppliers of connections to a telephone network;
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the provision by operators of transparent, up-to-date information on applicable prices and tariffs; the publication by undertakings which offer publicly accessible electronic communications services of comparable, adequate and up-to-date information on the quality of their services; the guarantee that, in the event of catastrophic network breakdown or in cases of force majeure, access to the public telephone network remains available to users; the provision of operator assistance and directory enquiry services.
The single European emergency call number (112) must remain free of charge, even from public pay telephones. The single international access code (00) is also maintained.
4.3.5 Licences. Directive 2002/20/EC of the European Parliament and of the Council of 7 March 2002 on the authorization of electronic communications networks and services (Authorization Directive) The provisions of this Directive cover authorizations for all electronic communications networks and services, whether they are provided to the public or not. However, they only apply to the granting of rights to use radio frequencies where such use involves the provision of an electronic communications network or service, normally for remuneration. The aim is to establish a harmonized market for electronic communications networks and services by limiting regulation to the minimum that is strictly necessary. The main innovation is the replacement of individual licenses by general authorizations, while a special scheme for attributing frequencies and numbers continues to exist. According to this principle, the provision of electronic communications networks or services may only be subject to a general authorization. In other words, the undertaking concerned may be required to submit a notification but it may not be required to obtain an explicit decision or any other administrative act by the national regulatory authority (NRA) before exercising the rights stemming from the authorization. A clear distinction is made between the conditions applicable under the general authorization and those linked to the rights to use radio frequencies and numbers.
4.3.6 Spectrum. Decision No 676/2002/EC of the European Parliament and of the Council of 7 March 2002 on a regulatory framework for radio spectrum policy in the European Community (Radio Spectrum Decision)
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The objective of this Decision is to establish a policy framework for the use of the radio spectrum, taking account of the economic, cultural, scientific and social aspects of Community policy, as well as considerations of security, public interest and freedom of expression. The Decision is also aimed at establishing a legal framework to ensure that the conditions for the availability and effective use of the radio spectrum are harmonised. The final objective is to protect the interests of the European Community in international negotiations on the use of the spectrum. New German Telecommunications Act (TKG) of 2004 Section 62 Spectrum Trading (1) The Regulatory Authority may, after hearing the parties concerned, release frequency bands for trading and stipulate the framework conditions of and the procedure for trading when there is interest in trading usage rights for the spectrum concerned. The procedure shall include termination of the frequency assignment and the issue of a new assignment.
4.3.7 Network Neutrality. Internet Freedom Preservation Act of 2009 United States of America SEC. 12. INTERNET FREEDOM. (b) DUTIES OF INTERNET ACCESS SERVICE PROVIDERS.With respect to any Internet access service offered to the public, each Internet access service provider shall have the duty to: (1) not block, interfere with, discriminate against, impair, or degrade the ability of any person to use an Internet access service to access, use, send, post, receive, or offer any lawful content, application, or service through the Internet; (2) not impose a charge on any Internet content, service, or application provider to enable any lawful Internet content, application, or service to be offered, provided, or used through the providers service, beyond the end user charges associated with providing the service to such provider; (3) not prevent or obstruct a user from attaching any lawful device to or utilizing any such device in conjunction with such service, provided such device does not harm the providers network; (4) offer Internet access service to any person upon reasonable request therefore; (5) not provide or sell to any content, application, or service provider, including any affiliate provider or joint venture, any offering that prioritizes traffic over that of other such providers on an Internet access service; and (6) not install or utilize network features, functions, or capabilities that impede or hinder compliance with this section.
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4.3.8 Interconnection. Directive 2002/19/EC of the European Parliament and of the Council of 7 March 2002 on access to, and interconnection of, electronic communications networks and associated facilities (Access Directive) It establishes rights and obligations for operators and for undertakings seeking interconnection and/or access to their networks. The principle is to allow competition rules to act as an instrument for market regulation. However, insofar as there is no effective competition on the market, the national regulatory authorities (NRA) must act, among other things by imposing obligations on operators which have significant market power. The objective is to establish a framework which will encourage competition by stimulating the development of communications services and networks, and also to ensure that any bottlenecks in the market do not constrain the emergence of innovative services that could benefit the users. The approach adopted is technologically neutral, i.e. the Directive is not intended to introduce rules which could be adapted to technological progress but, instead, to establish a modus operandi to address market problems. The Directive applies to all forms of communication networks carrying publicly available communications services. These include fixed and mobile telecommunications networks, networks used for terrestrial broadcasting, cable TV networks, and satellite and Internet networks used for voice, fax, data and image transmission.
4.3.9 Access to Passive Infrastructure. Regulation (EC) No 2887/2000 of the European Parliament and of the Council of 18 December 2000 on unbundled access to the local loop, revoked by Directive 2009/140/EC. The Regulation introduced compulsory unbundling of and shared access to the local copper loop controlled by the incumbent operators. It did not concern new optical fiber loops, for which the market is already much more competitive. The obligation to provide unbundled access to local copper-wire loops only concerned notified operators designated by their national regulatory authorities (NRAs) as having significant market power. Pricing must be transparent, non-discriminatory and fair. It must be proportionate to costs, while ensuring a return which ensures the development of the existing infrastructure. Annex II of Directive 2002/19/EC mentions the minimum list of items to be included in a reference offer for wholesale network infrastructure access, including shared or fully unbundled access to the local loop at a fixed location to be published by notified operators with significant market power (SMP).
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4.3.10 Content. Recommendation 2006/952/EC of the European Parliament and of the Council of 20 December 2006 on the protection of minors and human dignity and on the right of reply in relation to the competitiveness of the European audiovisual and on-line information services industry The emergence of new information and communication technology demands constant vigilance when it comes to protecting the rights of the individual. It must be ensured that the content of audiovisual and information services stays within the law, respects the principle of human dignity and does not impair the development of minors. To create a European media area that respects freedom of expression and, at the same time, the rights of the consumer, action will be required at all levels: European level, by Member States, and by the industry and other parties concerned.
4.3.11 Universal Access/Service. Directive 2002/22/EC of the European Parliament and of the Council of 7 March 2002 on universal service and users rights relating to electronic communications networks and services (Universal Service Directive), modified by Directive 2009/136/EC Universal service means an obligation imposed on one or more operators of electronic communications networks and/or services to provide a minimum set of services to all users, regardless of their geographical location within the national territory, at an affordable price. Universal service obligations Availability of the universal service. The Member States must ensure that the telecommunications services are made available to all users in their territory, regardless of their geographical location, at a specified quality level and an affordable price. Directory enquiry services and directories. At least one comprehensive directory which is updated at least once a year must be available to end-users. Similarly, at least one directory enquiry service must be available to end-users, including users of public pay telephones. Public pay telephones. The national regulatory authorities must be able to impose obligations on undertakings to ensure that public pay telephones are provided to meet the needs of end-users, whether in terms of geographical coverage, the number of telephones, the accessibility of such telephones to disabled users or the quality of services. Special measures for disabled users. The term universal means that the Member States must ensure that disabled users enjoy a service which meets their needs.
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Designation of undertakings. The Member States may designate one or more undertakings to guarantee the provision of universal service. The Member States may also designate different undertakings to provide different elements of universal service and/or to cover different parts of the national territory. Affordability of tariffs. The Member States shall ensure that consumers with low incomes have access to special tariff arrangements or are given special assistance to enable them to have access to the telephone service and to use it. Furthermore, the Member States may require undertakings which have universal service obligations to comply with price caps or to apply common tariffs, including geographical averaging, throughout the national territory. Quality of service. The national regulatory authorities must set performance targets for undertakings with universal service obligations and monitor compliance with these targets by designated undertakings. Financing of universal service obligations. In order to compensate for the net costs to which the provision of universal service might give rise, compensation mechanisms for operators with universal service obligations may be provided for. This may involve the introduction of a mechanism to compensate from public funds and/or a mechanism to share costs between providers of electronic communications networks and services. Connection at a fixed location to a public communications network. As a minimum a provider shall provide end-users a connection capable of supporting voice, fax and data communications at rates that are sufficient to permit functional Internet access. 4.3.12 User Protection. Directive 2002/58/EC of the European Parliament and of the Council of 12 July 2002 concerning the processing of personal data and the protection of privacy in the electronic communications sector (Directive on privacy and electronic communications), modified by Directive 2009/136/EC. This Directive tackles a number of issues of varying degrees of sensitivity, such as the retention of connection data by the Member States for police surveillance purposes (data retention), the sending of unsolicited electronic messages, the use of cookies and the inclusion of personal data in public directories. In March 2006 the European Parliament and the Council adopted a Directive on the retention of data generated or processed in connection with the provision of publicly available electronic communications services or of public communications networks services and amending Directive 2002/58/EC. The Directive seeks to harmonize the provisions of the Member States concerning obligations incumbent on the providers of electronic communications services with respect to data retention. The aim is to ensure the availability of these data for the purpose of investigating, detecting and prosecuting infringements. In particular, the Directive defines the following:

the categories of data to be retained; the shelf-life;
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the storage requirements for retained data; the principles to be observed in the area of data security.
In November 2009, Directive 2002/58/EC was partially amended with the approval of the Citizens Rights Directive (2009/136/EC). The main points modified are as follows:

the obligation to report violations of personal data breaches (to the competent national authority and, even, to the individual); avoid uncontrolled storage data of users (cookies and spyware), so that information storage or access to is only allowed after express consent of the subscriber; and enable operators to take legal action against spam.
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4.4 RECOMMENDATIONS Based on the analysis made on the structure of the regulator in convergence, we present a model of regulatory institutional organization for Latin American countries. The structure model incorporates best practices, the roles played by each unit within the structure, as well as references to normative for the establishment of functions within the sectors included in the regulatory convergence. As conclusion of this study, the following recommendations are made: Selection of a structure for the regulator in convergence has fallen on the convergent regulator model, which is one whose duties are related to sectors included within convergence. About whether two types of regulators should exist, one for content and the other for transport, the convenience and possibility of merging both types of regulation under a single entity has been analyzed. However, in the medium term, it is prudent and advisable to delimit the convergent regulatory to aspects related to platforms for electronic communications, referring content matters to a specialized regulator or finally leaving these functions within the Ministry or organizations which can legally handle them. Transition towards a regulatory scheme appropriate for convergence is a process which often takes several years and inevitably has a cost which is often underestimated in terms of training human resources, creation of adequate infrastructure, consolidation of mergers between agencies involved and confrontation with existing operators. The steps suggested to materialize transition to the convergent regulatory are the following: o o Planning transition to convergence. Sectoral policy designed to promote and foster convergence is outlined. Drafting normative for regulation in convergence. Principles and fundamental norms are established to ensure an effective transition, prioritizing Universal Access/Service, access gap reduction and availability and ubiquity of services for users, with clear and fair competition rules. Creation of convergent regulatory body. Performed by merging regulatory entities or through a new regulator with wide powers. Adapting to new legal framework. Necessary step to adapt existing rights of operators and shareholders to the new normative, respecting vested rights. Consolidation of regulation in an environment of convergence. Stage of maturity where regulatory functions are fully performed by the convergent regulator. Regulatory proceedings relaxation or Deregulation. Marks the final phase of transition towards a converged regulatory environment where the regulator can step back in front of a self-sustaining competition environment and when benefits of convergence have been achieved.
o o
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Among regulatory functions in the three markets considered (voice, data and audiovisual) to be incorporated within the structure of the convergent regulator, the following stand out: o o o o o Competition Promotion and Defense. Numbering, Naming and Addressing. Service Availability and Continuity. Licensing Regime. Spectrum Assignment. Management. Control. Network Neutrality. Interconnection Regime. Passive Infrastructure Access. Tariff Regulation. Content Regulation. Universal Access/Service Gap Reduction. Foster to Broadband. User Protection. Information Asymmetry Quality of Service Spam Data Protection Privacy
o o o o o o
This model is neither intended to impose a particular management style nor to establish the advantages of one organizational structure over another. It is rather a view of a convergent regulator scheme, where the functions analyzed are distributed as logically as possible, without implying that this might be the only way of doing it. The proposed structure for the convergent regulator includes the following Offices: o o o o o o o Legal Affairs Spectrum Management and Control Universal Access and Service User Protection Market and Competition Analysis Licenses and Scarce Resources Convergence Control and Oversight
Transition to an environment of convergence will invariably require normative to implement the changes needed. This study does not present normative for general use under the label of panacea, and instead gives examples of legislation whose success has been demonstrated in practice, so that each country can choose what best suits their own reality.
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Several areas have been identified where normative concerning convergence exists: o o o o o o o o o o o o Convergence in General Competition Numbering Service Continuity and Availability Licensing Spectrum Network Neutrality Interconnection Access to Passive Infrastructure Content Universal Access/Service User Protection
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ANNEXES ANNEX A. SECTORAL DATA FOR LATIN AMERICA SECTORAL DATA OF ARGENTINA
Surface: 2,766,890 km2 Population: 40,913,584 Gross Domestic Product (PPP): US$M 571,392 GDP per Capita (PPP): US$ 14,376 Standard & Poors Rating: BFixed Lines: 9,474,315 Mobile Lines: 50,409,900 Broadband Connections: 3,650,764 Main Operators: Long Distance: Telefnica, Telecom Local: Telefnica, Telecom Mobile: Claro, Movistar, Telecom, Nextel Broadband: Telefnica, Telecom, Cablevisin, Flash Regulatory Body: Comisin Nacional de Comunicaciones (CNC) Policy Maker: Secretara de Comunicaciones (SECOM)
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SECTORAL DATA OF BOLIVIA
Surface: 1,098,580 km2 Population: 9,374,663 Gross Domestic Product (PPP): US$M 39,440 GDP per Capita (PPP): US$ 4,400 Standard & Poors Rating: B Fixed Lines: 667,400 (est. 2009) Mobile Lines: 4,811,700 (est. 2009) Broadband Connections: 75,288 (est. 2009) Main Operators: Long Distance: ENTEL, AXS, Teledata, Viva, Tigo Local: COTEL, COTAS, COMTECO, ENTEL Mobile: ENTEL, Viva, Tigo Broadband: ENTEL, Viva, Tigo, COTAS, COTEL Regulatory Body: Autoridad de Fiscalizacin y Control Social de Telecomunicaciones y Transportes (ATT) Policy Maker: Ministerio de Obras Pblicas, Servicios y Vivienda (MOPSV)
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SECTORAL DATA OF BRAZIL
Surface: 8,511,965 km2 Population: 198,739,269 Gross Domestic Product (PPP): US$M 1,849,000 GDP per Capita (PPP): US$ 9,500 Standard & Poors Rating: BBB+ Fixed Lines: 43,678,709 Mobile Lines: 168,000,000 Broadband Connections: 13,600,000 Main Operators: Long Distance: Embratel, Telesp, Telemar, Brasil Telecom Local: Telemar, Brasil Telecom, Telefnica, Embratel, GVT Mobile: Vivo, Claro, TIM, Oi, Brasil Telecom, CTBC Broadband: Telefnica, Oi, Net Virtua, Brasil Telecom, GVT, CTBC, Telesp, Terra, Internet Group, Neovia, Embratel Regulatory Body: Agncia Nacional de Telecomunicaes (ANATEL) Policy Maker: Ministrio das Comunicaes (MC)
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SECTORAL DATA OF CHILE
Surface: 756,950 km2 Population: 16,601,707 Gross Domestic Product (PPP): US$M 246,227 GDP per Capita (PPP): US$ 14,673 Standard & Poors Rating: AA Fixed Lines: 3,579,652 Mobile Lines: 15,462,434 Broadband Connections: 1,965,529 Main Operators: Long Distance: Telefnica Mundo, Entel S.A., Telmex, VTR Global Carrier S.A., Globus 120, Telsur Local: Movistar, VTR Banda Ancha, Telsur, Telmex, Entelphone Mobile: Movistar, Entel PCS, Claro, Nextel Broadband: Movistar, VTR Banda Ancha, Telsur, Telmex, Entel S.A. Regulatory Body: Subsecretara de Telecomunicaciones (Subtel) Policy Maker: Ministerio de Transportes y Telecomunicaciones (MTT)
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SECTORAL DATA OF COLOMBIA
Surface: 1,138,910 km2 Population: 45,644,023 Gross Domestic Product (PPP): US$M 340,771 GDP per Capita (PPP): US$ 7,653 Standard & Poors Rating: BBB Fixed Lines: 7,730,634 Mobile Lines: 42,025,520 Broadband Connections: 2,184,285 Main Operators: Long Distance: ETB, Telefnica (Telecom), EPM Local: ETB, EPM, Telefnica, EMCALI, Telmex Mobile: Comcel, Movistar, Tigo, Avantel Broadband: ETB, Telefnica, EPM, Telmex Regulatory Body: Comisin de Regulacin de Comunicaciones (CRC) Policy Maker: Ministerio de Tecnologas de la Informacin y las Comunicaciones (MinTIC)
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SECTORAL DATA OF COSTA RICA
Surface: 51,100 km2 Population: 4,253,877 Gross Domestic Product (PPP): US$M 45,770 GDP per Capita (PPP): US$ 11,100 Standard & Poors Rating: BBBFixed Lines: 1,039,040 Mobile Lines: 1,897,179 Broadband Connections: 265,000 Main Operators: Long Distance: ICE Local: ICE Mobile: ICE Broadband: RACSA, AMNET, ICE Regulatory Body: Superintendencia de Telecomunicaciones (SUTEL) Policy Maker: Ministerio de Ambiente, Energa y Telecomunicaciones (Minaet)
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SECTORAL DATA OF CUBA
Surface: 109,886 km2 Population: 11,236,099 Gross Domestic Product (PPP): US$M 60,806 GDP per Capita (PPP): US$ 5,400 Standard & Poors Rating: N/D Fixed Lines: 1,176,521 Mobile Lines: 577,754 Broadband Connections: 16,032 (est. 2009) Main Operators: Long Distance: ETECSA Local: ETECSA Mobile: Cubacel-ETECSA, Movitel Broadband: ETECSA, CITMATEL Regulatory Body: Ministerio de la Informtica y las Comunicaciones (MIC) Policy Maker: Ministerio de la Informtica y las Comunicaciones (MIC)
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SECTORAL DATA OF ECUADOR
Surface: 283,560 km2 Population: 14,073,878 Gross Domestic Product (PPP): US$M 98,790 GDP per Capita (PPP): US$ 7,200 Standard & Poors Rating: CCC+ Fixed Lines: 2,011,605 Mobile Lines: 12,624,463 Broadband Connections: 280,325 Main Operators: Long Distance: Andinatel (CNT), Pacifictel, Etapa, Movistar Local: Andinatel, Pacifictel, Etapa, Linkotel, Ecutel Mobile: Porta, Movistar, Alegro PCS Broadband: Andinatel, Suratel, Pacifictel, Punto Net, Telecsa, Regulatory Body: Secretara Nacional de Telecomunicaciones (SENATEL) Policy Maker: Consejo Nacional de Telecomunicaciones (CONATEL)
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SECTORAL DATA OF EL SALVADOR
Surface: 21,040 km2 Population: 7,185,218 Gross Domestic Product (PPP): US$M 41,650 GDP per Capita (PPP): US$ 6,000 Standard & Poors Rating: AAA Fixed Lines: 1,196,537 (est. 2009) Mobile Lines: 7,934,653 (est. 2009) Broadband Connections: 187,514 (est. 2009) Main Operators: Long Distance: CTE, Americatel Local: CTE Mobile: Claro, Movistar, Tigo, Digicel Broadband: CTE, Digicel, Tigo, Claro Regulatory Body: Superintendencia General de Electricidad y Telecomunicaciones (SIGET) Policy Maker: Ministerio de Economa (ME)
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SECTORAL DATA OF GUATEMALA
Surface: 108,890 km2 Population: 13,276,517 Gross Domestic Product (PPP): US$M 62,530 GDP per Capita (PPP): US$ 5,100 Standard & Poors Rating: BBBFixed Lines: 1,181,054 Mobile Lines: 15,939,932 Broadband Connections: 29,208 (est. 2009) Main Operators: Long Distance: Telgua, Tigo, Movistar Local: Telgua Mobile: Tigo, Claro, Movistar, Digitel Broadband: Telgua, Yego, Telefnica, Turbonett, Newcom Regulatory Body: Superintendencia de Telecomunicaciones (SIT) Policy Maker: Ministerio de Comunicaciones, Infraestructura y Vivienda (CIV)
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SECTORAL DATA OF HAITI
Surface: 27,750 km2 Population: 9,151,252 Gross Domestic Product (PPP): US$M 11,140 GDP per Capita (PPP): US$ 1,300 Standard & Poors Rating: N/D Fixed Lines: 150,000 (est. 2009) Mobile Lines: 5,217,581 (est. 2009) Broadband Connections: N/D Main Operators: Long Distance: Teleco, Haitel, Comcel Local: Teleco Mobile: Haitel, Voil, Digicel Broadband: Teleco, Haitel, Comcel Regulatory Body: Conseil National des Tlcommunications (CONATEL) Policy Maker: Ministre des Travaux Publics, Transports et Communications (TPTC)
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SECTORAL DATA OF HONDURAS
Surface: 112,090 km2 Population: 7,792,854 Gross Domestic Product (PPP): US$M 30,650 GDP per Capita (PPP): US$ 4,300 Standard & Poors Rating: BBFixed Lines: 742,631 Mobile Lines: 8,100,000 Broadband Connections: 46,795 (est. 2009) Main Operators: Long Distance: Hondutel Local: Hondutel, Multifon Mobile: Tigo, Claro Broadband: Hondutel, Sercom, Multidata Regulatory Body: Comisin Nacional de Telecomunicaciones (CONATEL) Policy Maker: Secretara de Finanzas (SEFIN)
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SECTORAL DATA OF MEXICO
Surface: 1,972,550 km2 Population: 111,211,789 Gross Domestic Product (PPP): US$M 1,353,000 GDP per Capita (PPP): US$ 12,400 Standard & Poors Rating: A Fixed Lines: 20,537,507 Mobile Lines: 78,944,000 Broadband Connections: 8,256,838 (est. 2009) Main Operators: Long Distance: Telmex, Avantel, Alestra, Bestel, Maxcom Local: Telmex, Maxcom, Avantel, Alestra Mobile: Telcel, Movistar, Iusacell, Unefon, Nextel Broadband: Telmex, Maxcom, Cablems, InterCable, Avantel, Axtel, GlobalSat, Marcatel Regulatory Body: Comisin Federal de Telecomunicaciones (Cofetel) Policy Maker: Secretara de Comunicaciones y Transportes (SCT)
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SECTORAL DATA OF NICARAGUA
Surface: 129,494 km2 Population: 5,891,199 Gross Domestic Product (PPP): US$M 15,840 GDP per Capita (PPP): US$ 2,800 Standard & Poors Rating: N/D Fixed Lines: 252,000 Mobile Lines: 3,139,697 Broadband Connections: 45,000 Main Operators: Long Distance: ENITEL, Movistar, Publitel Local: ENITEL Mobile: Claro, Movistar Broadband: ENITEL, Movistar, Amnet, Newcom, NicaNet Regulatory Body: Instituto Nicaragense de Telecomunicaciones y Correos (TELCOR) Policy Maker: Instituto Nicaragense de Telecomunicaciones y Correos (TELCOR)
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SECTORAL DATA OF PANAMA
Surface: 78,200 km2 Population: 3,360,474 Gross Domestic Product (PPP): US$M 34,510 GDP per Capita (PPP): US$ 10,700 Standard & Poors Rating: AAA Fixed Lines: 524,000 Mobile Lines: 4,076,723 (est. 2009) Broadband Connections: 157,500 Main Operators: Long Distance: Cable & Wireless, Advanced, Telemax, Telecarrier, ClaroCOM, CableOnda Local: Cable & Wireless, Telecarrier Mobile: CW Movil, Movistar Broadband: Cable & Wireless, Telefnica, Optynex, Telecarrier, CableOnda Regulatory Body: Autoridad Nacional de los Servicios Pblicos (ASEP) Policy Maker: Autoridad Nacional de los Servicios Pblicos (ASEP)
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SECTORAL DATA OF PARAGUAY
Surface: 406,750 km2 Population: 6,995,655 Gross Domestic Product (PPP): US$M 27,080 GDP per Capita (PPP): US$ 4,000 Standard & Poors Rating: BBFixed Lines: 347,569 (est. 2009) Mobile Lines: 6,155,000 (est. 2009) Broadband Connections: 50,000 Main Operators: Long Distance: Copaco Local: Copaco Mobile: Tigo, Claro, Ncleo, VOX Broadband: Copaco, Itacom, Telecel Regulatory Body: Comisin Nacional de Telecomunicaciones (CONATEL) Policy Maker: Ministerio de Obras Pblicas y Comunicaciones (MOPC)
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SECTORAL DATA OF PERU
Surface: 1,285,220 km2 Population: 29,546,963 Gross Domestic Product (PPP): US$M 219,600 GDP per Capita (PPP): US$ 7,600 Standard & Poors Rating: BBB+ Fixed Lines: 2,980,651 Mobile Lines: 23,480,447 Broadband Connections: 850,000 (est. 2009) Main Operators: Long Distance: Telefnica, Gilat-to-Home, Telmex, Americatel, Impsat, IDT, Convergia Local: Telefnica, Gilat-to-Home, Telmex, Americatel Mobile: Claro, Movistar, Nextel Broadband: Telefnica, Americatel, Telmex, StarGlobal, ImpSat, Comsat, WI-NET Regulatory Body: Organismo Supervisor de la Inversin Privada en Telecomunicaciones (OSIPTEL) Policy Maker: Ministerio de Transportes y Comunicaciones (MTC)
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SECTORAL DATA OF DOMINICAN REPUBLIC
Surface: 48,730 km2 Population: 9,650,054 Gross Domestic Product (PPP): US$M 61,790 GDP per Capita (PPP): US$ 6,600 Standard & Poors Rating: BBFixed Lines: 962,432 Mobile Lines: 8,374,077 Broadband Connections: 289,093 Main Operators: Long Distance: Codetel, Tricom, Trilogy, Wind Local: Codetel, Tricom Mobile: Claro, Orange, Tricom, Viva Broadband: Codetel, Claro, Tricom, OneMax, WindMax Regulatory Body: Instituto Dominicano de las Telecomunicaciones (Indotel) Policy Maker: Instituto Dominicano de las Telecomunicaciones (Indotel)
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SECTORAL DATA OF URUGUAY
Surface: 176,220 km2 Population: 3,494,382 Gross Domestic Product (PPP): US$M 37,190 GDP per Capita (PPP): US$ 10,800 Standard & Poors Rating: BB+ Fixed Lines: 969,330 Mobile Lines: 3,900,000 Broadband Connections: 280,520 Main Operators: Long Distance: Antel, Telmex, Movistar, Convergia, Dedicado Local: Antel Mobile: Ancel, Movistar, Claro Broadband: Anteldata, Dedicado, Telmex, TIWS, Netgate, Internet Uruguay, Montevideo Comm, IFX Regulatory Body: Unidad Reguladora de Servicios de Comunicaciones (URSEC) Policy Maker: Unidad Reguladora de Servicios de Comunicaciones (URSEC)
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SECTORAL DATA OF VENEZUELA
Surface: 912,050 km2 Population: 26,814,843 Gross Domestic Product (PPP): US$M 334,300 GDP per Capita (PPP): US$ 12,800 Standard & Poors Rating: BBFixed Lines: 6,640,373 Mobile Lines: 27,700,000 Broadband Connections: 1,329,425 Main Operators: Long Distance: CANTV, Telefnica, Digitel, Intercable, NetUno Local: CANTV, Telefnica, NetUno, Telecom Mobile: Movilnet, Digitel, Movistar, Conmvil Broadband: CANTV, Intercable, Movistar, Movilmax, NetUno, Telecom Regulatory Body: Comisin Nacional de Telecomunicaciones (CONATEL) Policy Maker: Ministerio del Poder Popular para la Infraestructura (MINFRA)
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ANNEX B. TYPICAL PSTN-IP CALL FLOWS USING SESSION INITIATION PROTOCOL (SIP)
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ANNEX C. DOMAIN NAMES AND NATIONAL ADMINISTRATORS

Domain .AC .AD .AE .AERO .AF .AG .AI .AL .AM .AN .AO .AQ .AR Type country-code country-code country-code sponsored country-code country-code country-code country-code country-code country-code country-code country-code country-code Purpose / Sponsoring Organization Ascension Island Network Information Center (AC Domain Registry) c/o Cable and Wireless (Ascension Island) Andorra Andorra Telecom United Arab Emirates Telecommunication Regulatory Authority (TRA) Reserved for members of the air-transport industry Societe Internationale de Telecommunications Aeronautique (SITA INC USA) Afghanistan Ministry of Communications and IT Antigua and Barbuda UHSA School of Medicine Anguilla Government of Anguilla Albania Electronic and Postal Communications Authority - AKEP Armenia Internet Society Netherlands Antilles University of The Netherlands Antilles Angola Faculdade de Engenharia da Universidade Agostinho Neto Antarctica Mott and Associates Argentina MRECIC (Ministerio de Relaciones Exteriores, Comercio Internacional y Culto) Reserved exclusively to support operationally-critical infrastructural identifier spaces as advised by the Internet Architecture Board Internet Assigned Numbers Authority American Samoa AS Domain Registry Restricted to the Pan-Asia and Asia Pacific community DotAsia Organisation Ltd. Austria NIC.AT Internet Verwaltungs und Betriebsgesellschaft m.b.H Australia .au Domain Administration (auDA) Aruba SETAR Aland Islands lands landskapsregering Azerbaijan IntraNS Bosnia and Herzegovina Universtiy Telinformatic Centre (UTIC) Barbados Government of Barbados Ministry of Economic Affairs and Development Telecommunications Unit Bangladesh Ministry of Post & Telecommunications Bangladesh Secretariate
.ARPA .AS .ASIA .AT .AU .AW .AX .AZ .BA
infrastructure country-code sponsored country-code country-code country-code country-code country-code country-code
.BB
country-code
.BD
country-code
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Domain .BE .BF .BG .BH .BI .BIZ .BJ .BL .BM .BN .BO .BR .BS .BT .BV .BW .BY .BZ .CA .CAT .CC .CD .CF .CG .CH .CI .CK
Type country-code country-code country-code country-code country-code genericrestricted country-code country-code country-code country-code country-code country-code country-code country-code country-code country-code country-code country-code country-code sponsored country-code country-code country-code country-code country-code country-code country-code
Purpose / Sponsoring Organization Belgium DNS BE vzw/asbl Burkina Faso DELGI Delegational Generale Informatique Bulgaria Register.BG Bahrain BATELCO Burundi Centre National de lInformatique Restricted for Business NeuStar, Inc. Benin Offices des Postes et Telecommunications Saint Barthelemy Not assigned Bermuda Registry General Ministry of Labour and Immigration Brunei Darussalam Jabatan Telekom Brunei Bolivia Agencia para el Desarrollo de la Informacin de la Sociedad en Bolivia Brazil Comite Gestor da Internet no Brasil Bahamas The College of the Bahamas Bhutan Ministry of Information and Communications Bouvet Island UNINETT Norid A/S Botswana University of Botswana Belarus Open Contact Ltd. Belize University of Belize Canada Canadian Internet Registration Authority (CIRA) Autorite Canadienne pour les Enregistrements Internet (ACEI) Reserved for the Catalan linguistic and cultural community Fundacio puntCAT Cocos (Keeling) Islands eNIC Cocos (Keeling) Islands Ltd. Pty, d/b/a Island Internet Services Congo, The Democratic Republic of the NIC Congo - Interpoint SARL Central African Republic Societe Centrafricaine de Telecommunications (SOCATEL) Congo ONPT Congo and Interpoint Switzerland Switzerland SWITCH The Swiss Education & Research Network Cote dIvoire INP-HB Institut National Polytechnique Felix Houphouet Boigny Cook Islands
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Domain
Type
Purpose / Sponsoring Organization Telecom Cook Islands Ltd. Chile NIC Chile (University of Chile) Cameroon Cameroon Telecommunications (CAMTEL) China Chinese Academy of Sciences The Computer Network Center Colombia Universidad de Los Andes NIC Colombia Generic top-level domain VeriSign Global Registry Services Reserved for cooperative associations DotCooperation LLC Costa Rica National Academy of Sciences Academia Nacional de Ciencias Cuba CENIAInternet Industria y San Jose Capitolio Nacional Cape Verde Agncia Nacional das Comunicaes (ANAC) Christmas Island Christmas Island Internet Administration Limited Cyprus University of Cyprus Czech Republic CZ.NIC, z.s.p.o Germany DENIC eG Djibouti Societe des Telecommunications Internationales de Djibouti (STID) Denmark Dansk Internet Forum Dominica DotDM Corporation Dominican Republic Pontificia Universidad Catolica Madre y Maestra Recinto Santo Tomas de Aquino Algeria CERIST Ecuador NIC.EC (NICEC) S.A. Reserved for post-secondary institutions accredited by an agency on the U.S. Department of Educations list of Nationally Recognized Accrediting Agencies EDUCAUSE Estonia National Institute of Chemical Physics and Biophysics Egypt Egyptian Universities Network (EUN) Supreme Council of Universities Western Sahara Not assigned Eritrea Eritrea Telecommunication Services Corporation (EriTel)
.CL .CM .CN
country-code country-code country-code
.CO .COM .COOP .CR
country-code generic sponsored country-code
.CU
country-code
.CV .CX .CY .CZ .DE .DJ .DK .DM .DO .DZ .EC .EDU .EE .EG .EH .ER
country-code country-code country-code country-code country-code country-code country-code country-code country-code country-code country-code sponsored country-code country-code country-code country-code
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Domain .ES .ET .EU .FI .FJ .FK .FM .FO .FR .GA .GB .GD .GE .GF .GG .GH .GI .GL .GM .GN .GOV .GP .GQ .GR .GS .GT .GU
Type country-code country-code country-code country-code country-code country-code country-code country-code country-code country-code country-code country-code country-code country-code country-code country-code country-code country-code country-code country-code sponsored country-code country-code country-code country-code country-code country-code
Purpose / Sponsoring Organization Spain Red.es Ethiopia Ethiopian Telecommunications Corporation European Union EURid vzw/asbl Finland Finnish Communications Regulatory Authority Fiji The University of the South Pacific IT Services Falkland Islands (Malvinas) Falkland Islands Government Micronesia, Federated States of FSM Telecommunications Corporation Faroe Islands FO Council France AFNIC (NIC France) - Immeuble International Gabon Gabon Telecom United Kingdom Reserved Domain - IANA Grenada The National Telecommunications Regulatory Commission (NTRC) Georgia SANET Ltd. French Guiana Net Plus Guernsey Island Networks Ltd. Ghana Network Computer Systems Limited Gibraltar Sapphire Networks Greenland TELE Greenland A/S Gambia GM-NIC Guinea Centre National des Sciences Halieutiques de Boussoura Reserved exclusively for the United States Government General Services Administration Attn: QTDC, 2E08 (.gov Domain Registration) Guadeloupe Networking Technologies Group Equatorial Guinea GETESA Greece ICS-FORTH GR South Georgia and the South Sandwich Islands Government of South Georgia and South Sandwich Islands (GSGSSI) Guatemala Universidad del Valle de Guatemala Guam University of Guam
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Domain
Type
Purpose / Sponsoring Organization Computer Center Guinea-Bissau Fundao IT & MEDIA Universidade de Bissao Guyana University of Guyana Hong Kong Hong Kong Internet Registration Corporation Ltd. Heard Island and McDonald Islands HM Domain Registry Honduras Red de Desarrollo Sostenible Honduras Croatia CARNet - Croatian Academic and Research Network Haiti Consortium FDS/RDDH Hungary Council of Hungarian Internet Providers (CHIP) Indonesia IDNIC-PPAU Mikroelektronika Ireland University College Dublin Computing Services Computer Centre Israel Internet Society of Israel Isle of Man Isle of Man Government India National Centre for Software Technology Generic top-level domain Afilias Limited Used only for registering organizations established by international treaties between governments Internet Assigned Numbers Authority British Indian Ocean Territory IO Top Level Domain Registry Cable and Wireless Iraq Communications and Media Commission (CMC) Iran, Islamic Republic of Institute for Studies in Theoretical Physics & Mathematics (IPM) Iceland ISNIC - Internet Iceland ltd. Italy IIT - CNR Jersey Island Networks (Jersey) Ltd. Jamaica University of West Indies Jordan National Information Technology Centre Reserved for human resource managers Employ Media LLC Japan Japan Registry Services Co., Ltd. Kenya
.GW .GY .HK .HM .HN .HR .HT .HU .ID
country-code country-code country-code country-code country-code country-code country-code country-code country-code
.IE
country-code
.IL .IM .IN .INFO .INT
country-code country-code country-code generic sponsored
.IO .IQ .IR .IS .IT .JE .JM .JO .JOBS .JP .KE
country-code country-code country-code country-code country-code country-code country-code country-code sponsored country-code country-code
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Domain
Type
Purpose / Sponsoring Organization Kenya Network Information Center (KeNIC) Kyrgyzstan AsiaInfo Telecommunication Enterprise Cambodia Ministry of Post and Telecommunications Kiribati Ministry of Communications, Transport, and Tourism Development Comoros Comores Telecom Saint Kitts and Nevis Ministry of Finance, Sustainable Development Information & Technology Korea, Democratic Peoples Republic of Korea Computer Center Korea, Republic of National Internet Development Agency of Korea (NIDA) Kuwait Ministry of Communications Cayman Islands The Information and Communications Technology Authority Kazakhstan Association of IT Companies of Kazakhstan Lao Peoples Democratic Republic Lao National Internet Committee (LANIC) Science Technology and Environment Agency Lebanon American University of Beirut Computing and Networking Services Saint Lucia University of Puerto Rico Liechtenstein Hochschule Liechtenstein Sri Lanka Council for Information Technology LK Domain Registrar Liberia Data Technology Solutions, Inc. Lesotho National University of Lesotho Lithuania Kaunas University of Technology Information Technology Development Institute Luxembourg RESTENA Latvia University of Latvia Institute of Mathematics and Computer Science Department of Network Solutions (DNS) Libyan Arab Jamahiriya General Post and Telecommunication Company Morocco Agence Nationale de Rglementation des Tlcommunications (ANRT) Monaco Gouvernement de Monaco Direction des Telecommunications Moldova, Republic of MoldData S.E.
.KG .KH .KI .KM .KN .KP .KR .KW .KY .KZ .LA
country-code country-code country-code country-code country-code country-code country-code country-code country-code country-code country-code
.LB .LC .LI .LK .LR .LS .LT .LU
country-code country-code country-code country-code country-code country-code country-code country-code
.LV
country-code
.LY .MA .MC .MD
country-code country-code country-code country-code
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Domain .ME .MF .MG .MH .MIL .MK .ML .MM .MN .MO .MOBI .MP .MQ .MR .MS .MT .MU .MUSEUM .MV .MW
Type country-code country-code country-code country-code sponsored country-code country-code country-code country-code country-code sponsored country-code country-code country-code country-code country-code country-code sponsored country-code country-code
Purpose / Sponsoring Organization Montenegro Government of Montenegro Saint Martin Not assigned Madagascar NIC-MG (Network Information Center Madagascar) Marshall Islands Cabinet Office Reserved exclusively for the United States Military DoD Network Information Center Macedonia, The Former Yugoslav Republic of Ministry of Foreign Relations Mali SOTELMA Myanmar Ministry of Communications, Posts & Telegraphs Mongolia Datacom Co., Ltd. Macao University of Macau Reserved for consumers and providers of mobile products and services mTLD Top Level Domain Limited dba dotMobi Northern Mariana Islands Saipan Datacom, Inc. Martinique SYSTEL Mauritania University of Nouakchott Montserrat MNI Networks Ltd. Malta NIC (Malta) Mauritius Internet Direct Ltd Reserved for museums Museum Domain Management Association Maldives Dhiraagu Pvt. Ltd. (DHIVEHINET) Malawi Malawi Sustainable Development Network Programme (Malawi SDNP) Mexico NIC-Mexico ITESM - Campus Monterrey Malaysia MYNIC Berhad Mozambique Centro de Informatica de Universidade Eduardo Mondlane Namibia Namibian Network Information Center Reserved for individuals The Global Name Registry Ltd. New Caledonia Office des Postes et Telecommunications Niger SONITEL
.MX .MY .MZ .NA .NAME .NC .NE
country-code country-code country-code country-code genericrestricted country-code country-code
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Domain .NET .NF .NG .NI .NL .NO .NP .NR .NU .NZ .OM .ORG .PA .PE .PF
Type generic country-code country-code country-code country-code country-code country-code country-code country-code country-code country-code generic country-code country-code country-code
Purpose / Sponsoring Organization Generic top-level domain VeriSign Global Registry Services Norfolk Island Norfolk Island Data Services Nigeria Nigeria Internet Registration Association Nicaragua Universidad Nacional del Ingernieria Centro de Computo Netherlands Stichting Internet Domeinregistratie Nederland Norway UNINETT Norid A/S Nepal Mercantile Communications Pvt. Ltd. Nauru CENPAC NET Niue Internet Users Society - Niue New Zealand InternetNZ Oman Oman Telecommunications Company Generic top-level domain Public Interest Registry (PIR) Panama Universidad Tecnologica de Panama Panamanian Academic National Network Peru Red Cientifica Peruana French Polynesia Ministre des Postes et Tlcommunications et des sports, charg des nouvelles technologies de linformation Papua New Guinea PNG DNS Administration Vice Chancellors Office The Papua New Guinea University of Technology Philippines PH Domain Foundation Pakistan PKNIC Poland Research and Academic Computer Network Saint Pierre and Miquelon AFNIC (NIC France) - Immeuble International Pitcairn Pitcairn Island Administration Puerto Rico Gauss Research Laboratory Inc. Restricted to credentialed professionals and related entities Registry Services Corporation dba RegistryPro Palestinian Territory, Occupied Ministry Of Telecommunications & Information Technology, Government Computer Center. Portugal
.PG
country-code
.PH .PK .PL .PM .PN .PR .PRO
country-code country-code country-code country-code country-code country-code genericrestricted
.PS .PT
country-code country-code
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Domain
Type
Purpose / Sponsoring Organization Fundacao para a Computacao Cientifica Nacional Palau Micronesia Investment and Development Corporation Paraguay NIC-PY Qatar Qatar Telecom (Q-Tel) Q.S.C. Reunion AFNIC (NIC France) - Immeuble International Romania National Institute for R&D in Informatics Serbia Serbian National Register of Internet Domain Names (RNIDS) Russian Federation Coordination Center for TLD RU Rwanda NIC Congo - Interpoint SARL Saudi Arabia Communications and Information Technology Commission Solomon Islands Solomon Telekom Company Limited Seychelles VCS Pty Ltd Sudan Sudan Internet Society Sweden The Internet Infrastructure Foundation Singapore Singapore Network Information Centre (SGNIC) Pte Ltd Saint Helena Government of St. Helena Slovenia Academic and Research Network of Slovenia (ARNES) Svalbard and Jan Mayen UNINETT Norid A/S Slovakia SK-NIC, a.s. Sierra Leone Sierratel San Marino Telecom Italia San Marino S.p.A. Senegal Universite Cheikh Anta Diop NIC Senegal Somalia Ministry of Post and Telecommunications Suriname Telesur Sao Tome and Principe Tecnisys Soviet Union (being phased out) Russian Institute for Development of Public Networks (ROSNIIROS) El Salvador SVNet
.PW .PY .QA .RE .RO .RS .RU .RW .SA .SB .SC .SD .SE .SG .SH .SI .SJ .SK .SL .SM .SN .SO .SR .ST .SU .SV
country-code country-code country-code country-code country-code country-code country-code country-code country-code country-code country-code country-code country-code country-code country-code country-code country-code country-code country-code country-code country-code country-code country-code country-code country-code country-code
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Domain
Type
Purpose / Sponsoring Organization Col. Medica Dr. Emilio Alvarez Syrian Arab Republic Syrian Telecommunications Establishment (STE) Swaziland University of Swaziland Department of Computer Science Turks and Caicos Islands Melrex TC Chad Socit des tlcommunications du Tchad (SOTEL TCHAD) Reserved for businesses and individuals to publish their contact data Telnic Ltd. French Southern Territories AFNIC (NIC France) - Immeuble International Togo CAFE INFORMATIQUE ET TELECOMMUNICATION Thailand Thai Network Information Center Foundation Tajikistan Information Technology Center Tokelau Telecommunication Tokelau Corporation (Teletok) Timor-Leste Ministry of Infrastructure Information and Technology Division Turkmenistan TM Domain Registry Ltd Tunisia Agence Tunisienne dInternet Tonga Government of the Kingdom of Tonga H.R.H. Crown Prince Tupoutoa c/o Consulate of Tonga Portuguese Timor (being phased out) Turkey Middle East Technical University Department of Computer Engineering Reserved for entities whose primary area of activity is in the travel industry Tralliance Registry Management Company, LLC. Trinidad and Tobago University of the West Indies Faculty of Engineering Tuvalu Ministry of Finance and Tourism Taiwan Taiwan Network Information Center (TWNIC) Tanzania, United Republic of University of Dar Es Salaam Ukraine Communication Systems Ltd Uganda Uganda Online Ltd. United Kingdom Nominet UK
.SY .SZ .TC .TD .TEL .TF .TG .TH .TJ .TK .TL .TM .TN
country-code country-code country-code country-code sponsored country-code country-code country-code country-code country-code country-code country-code country-code
.TO
country-code
.TP .TR .TRAVEL .TT .TV .TW .TZ .UA .UG .UK
country-code country-code sponsored country-code country-code country-code country-code country-code country-code country-code
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Domain .UM .US .UY .UZ
Type country-code country-code country-code country-code
Purpose / Sponsoring Organization United States Minor Outlying Islands Not assigned United States NeuStar, Inc. Uruguay SeCIU - Universidad de la Republica Uzbekistan Computerization and Information Technologies Developing Center UZINFOCOM Holy See (Vatican City State) Holy See Secretariat of State Internet Office of the Holy See Saint Vincent and the Grenadines Ministry of Telecommunications, Science, Technology and Industry Venezuela, Bolivarian Republic of Centro Nacional de Tecnologias de Informacion Virgin Islands, British Pinebrook Developments Ltd Virgin Islands, U.S. Virgin Islands Public Telcommunications System c/o COBEX Internet Services Viet Nam Ministry of Information and Communications of Socialist Republic of Viet Nam Vanuatu Telecom Vanuatu Limited Wallis and Futuna AFNIC (NIC France) - Immeuble International Samoa Government of Samoa Ministry of Foreign Affairs Reserved for testing internationalised domain names Internet Assigned Numbers Authority Reserved for testing internationalised domain names Internet Assigned Numbers Authority Reserved for testing internationalised domain names Internet Assigned Numbers Authority Reserved for testing internationalised domain names Internet Assigned Numbers Authority Reserved for testing internationalised domain names Internet Assigned Numbers Authority Reserved for testing internationalised domain names Internet Assigned Numbers Authority Reserved for testing internationalised domain names Internet Assigned Numbers Authority Reserved for testing internationalised domain names Internet Assigned Numbers Authority Reserved for testing internationalised domain names Internet Assigned Numbers Authority Reserved for testing internationalised domain names Internet Assigned Numbers Authority Reserved for testing internationalised domain names Internet Assigned Numbers Authority Yemen TeleYemen
.VA .VC .VE .VG .VI .VN .VU .WF .WS . test:zh-Hans . test:hi-Deva . test:ru-Cyrl . test:ko-Hang . test:yi-Hebr . test:zh-Hant . test:fa-Arab . test:ta-Taml . test:el-Grek . test:ar-Arab . test:ja-Kana .YE
country-code country-code country-code country-code country-code country-code country-code country-code country-code test test test test test test test test test test test country-code
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Domain .YT .YU .ZA .ZM .ZW
Type country-code country-code country-code country-code country-code
Purpose / Sponsoring Organization Mayotte AFNIC (NIC France) - Immeuble International Yugoslavia (being phased out) Serbian National Register of Internet Domain Names (RNIDS) (temporary caretaker) South Africa ZA Domain Name Authority Zambia ZAMNET Communication Systems Ltd. Zimbabwe Postal and Telecommunications Regulatory Authority of Zimbabwe (POTRAZ)
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ANNEX D. STRUCTURE OF OFCOM
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ANNEX E. STRUCTURE OF ACMA
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ANNEX F. STRUCTURE OF THE MCMC
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BIBLIOGRAPHY
ACMA (Australian Communications and Media Authority) (2008); ACMA Corporate Plan 2009-2011; Australian Government ACMA (Australian Communications and Media Authority); http://www.acma.gov.au/
H H
AHCIET (Asociacin Iberoamericana de Centros de Investigacin y Empresas de Telecomunicaciones) (2008); Retos inmediatos de la regulacin: Audiovisual y Telecomunicaciones. El reparto de competencias; Relatora del IX Foro de Regulacin; Barcelona, 4 y 5 de junio de 2008 ASLI (Asian Strategy & Leadership Institute) (2009); The Convergence Factor: Next Generation Telecommunications in the Making; Asia Telecommunications Forum; 16 17 July 2009; Putra World Trade Centre, Kuala Lumpur Baker; Stewart, Shaun Waterman, & George Ivanov (2010); En el punto de mira: las infraestructuras crticas en la era de la ciberguerra; Un informe global sobre las amenazas que sufren los sectores clave; 2010 McAfee, Inc.; 7795rpt_cip_0110 Barrantes, Roxana (2008); Convergencia tecnolgica y armonizacin regulatoria: evolucin reciente y tendencias Estudio de caso: Per; CEPAL/Unin Europea: @LIS - Alianza para la Sociedad de la Informacin; Mayo 2008 British Telecom; http://www.btfusionorder.bt.com/
H H
Cabanellas de la Torre, Guillermo (1981); Diccionario Enciclopdico de Derecho Usual III D-E 1981, Buenos Aires, Argentina, p.106 Cadman; Richard (2007); NGN Interconnection: Charging Principles and Economic Efficiency; NGNuk; 12th July 2007 Carniel Bugs, Ricardo (2008); Organismos independientes de regulacin del audiovisual: Los primeros cinco aos de la OFCOM y el desafo de la convergencia; ricardo.carniel@uab.cat; Facultat de Cincies de la Comunicaci UAB; Edificio I / Despacho I0 -111; 08193 Bellaterra (Cerdanyola del Valls)
H H
Chapman, Chris (2007); The Legal Challenges Facing ACMA as Regulator; Chairman and CEO, Australian Communications and Media Authority; UNSW Law Journal Volume 30(1) CICOMRA (Cmara de Informtica y Comunicaciones de la Repblica Argentina) (2007); Las posibilidades de las nuevas tecnologas audiovisuales en Argentina: Triple Play (Internet + Telefona Fija + Televisin) y Cudruple Play (Internet + Telefona Fija + Televisin+Telefona Mvil); Argentina CISCO (2009); White Paper; Cisco Visual Networking Index: Global Mobile Data Traffic: Forecast Update; 2009 Cisco Systems, Inc.; January 29, 2009 CITEL (Comisin Interamericana de Telecomunicaciones) (2000); Libro sobre la Infraestructura de la Informacin en las Amricas; CITEL / CCP-I; XV Reunin del Comit Consultivo Permanente I Collins, Richard (2004); From monopolies, virtual monopolies and oligopolies to. what? Media policy and convergence in South Africa and the UK.; Vodacom Visiting Professor; LINK Centre; Wits University Graduate School of Public and Development Management; Faculty of Commerce, Law and Management; University of the Witwatersrand, Johannesburg de Len, Omar (2008); Entorno para el desarrollo de los negocios de la convergencia para los sectores de las telecomunicaciones y del audiovisual en Latinoamrica; AHCIET, Convergencia Latina y Teleconsult; primer semestre de 2008
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del Villar Alrich, Rafael & Jessica Serrano Bandala (2007); Establecimiento del nivel de desbalance en los esquemas de no cobro recproco Bill and Keep (B&K); Versin Preliminar; Junio 2007 EC (European Commission) (2008); The Future of the Internet; A Compendium of European Projects on ICT Research Supported by the EU 7th Framework Programme for RTD; ICT Information Desk; European Commission; Information Society and Media Directorate-General EC (European Community) (2002); Directive 2002/58/EC of the European Parliament and of the Council of 12 July 2002 concerning the processing of personal data and the protection of privacy in the electronic communications sector (Directive on privacy and electronic communications) ECC (Electronic Communications Committee) (2003); Next Generation Network Developments and their Implications for the New Regulatory Regime; Bornholm, October 2003; European Conference of Postal and Telecommunications Administrations (CEPT); ECC Report 27 ECC (Electronic Communications Committee) (2005); A model for interconnection in IP-based networks; Vilnius, October 2005; European Conference of Postal and Telecommunications Administrations (CEPT); ECC Report 75 ECC (Electronic Communications Committee) (2007); Regulating Interoperability; Constanta, July 2007; European Conference of Postal and Telecommunications Administrations (CEPT); ECC Report 107 ERG (European Regulators Group) (2009); Report on Fixed-Mobile Convergence: Implications on Competition and Regulatory Aspects; ERG (09) 06; March 2009 Espn, Augusto (2007); Gestin Eficiente del Espectro Radioelctrico; Superintendencia de Telecomunicaciones; SENATEL Ecuador Fowler, Dr. Thomas B. (2006); Convergence in Telecommunications: Meaning, History, Present Status, Future Rollout; Center for Telecommunications and Advanced Technology Galperin, Hernn & Judith Mariscal (2007); Oportunidades Mviles: Pobreza y Telefona Mvil en Amrica Latina y el Caribe; DIRSI; Instituto de Estudios Peruanos (IEP); Noviembre 2007 Galperin, Hernn and Sebastin M. Cabello (2008); Convergencia tecnolgica y armonizacin regulatoria: el caso argentino; CEPAL/Unin Europea: @LIS - Alianza para la Sociedad de la Informacin; LC/W. 183 GLG (Global Legal Group) (2009); The International Comparative Legal Guide to: Telecommunication Laws and Regulations 2009: A practical insight to cross-border Telecommunication Laws and Regulations; www.ICLG.co.uk
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Hajela, Shailendra K. (2007); Convergence; UNESCAP; National Seminar on Capacity Building for Policy Making; Baku, 27 28 November 2007 Hellerstein, Judith (2008); Cases in Market Reform The Impact of Convergence on the Regulatory Framework; Hellerstein & Associates; PURC/WORLD BANK INTERNATIONAL TRAINING PROGRAM January 14-25, 2008 - Gainesville, Florida Husy, Mette & others (2006); Nordic NRAs; Competition and regulation in the Nordic mobile markets IANA (Internet Assigned Numbers Authority); Root Zone Database; http://www.iana.org/domains/root/db/
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ICANN (Internet Corporation for Assigned Names and Numbers); http://www.icann.org/tr/spanish.html

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IESALC (Instituto Internacional para la Educacin Superior en Amrica Latina y el Caribe) (2008); Conclusiones de la reunin del IESALC; Cartagena de Indias, Colombia; (junio 6 de 2008) infoDev & International Telecommunication Union (ITU) (2007); Reglamentacin del Sector de las Telecomunicaciones: Panorama General; Conjunto de Herramientas para la Reglamentacin de las TIC; www.ictregulationtoolkit.org; Marzo 2007
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Convergence and Regulation

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STUDY ABOUT AN INSTITUTIONAL REFERENCE MODEL FOR REGULATION IN CONVERGENCE

Technological Changes which foster Convergence. ................................................................. 23

Sectoral Regulation. ................................................................................................................. 41

Structure of the Regulatory Body. ............................................................................................ 43

Distribution of Roles and Responsibilities for Regulators........................................................ 45

Sectoral Regulation. ................................................................................................................. 65

Structure of the Regulatory Body. ............................................................................................ 66

Distribution of Roles and Responsibilities for Regulators........................................................ 68 Page 1 of 248

Study about an Institutional Reference Model for Regulation in Convergence

1.3.5.1 1.3.5.2 1.3.5.3 1.3.5.4 1.3.5.5 1.3.5.6

Steps towards Convergence...................................................................................................... 73

Next Generation Networks (NGNs). ......................................................................................... 93

2.3.3 2.3.4 2.3.5

Study about an Institutional Reference Model for Regulation in Convergence

3.1.2 3.1.3 3.1.4 3.1.5

3.1.6 3.1.7 3.1.8 3.1.9 3.1.10 3.1.11

User Protection. ..................................................................................................................... 149

Study about an Institutional Reference Model for Regulation in Convergence

Study about an Institutional Reference Model for Regulation in Convergence

Study about an Institutional Reference Model for Regulation in Convergence

Study about an Institutional Reference Model for Regulation in Convergence

Study about an Institutional Reference Model for Regulation in Convergence

ALM ANACOM ANATEL APAN Arandu ARCEP ASEP ATM ATT

AWS BCI BEREC BMWA

Study about an Institutional Reference Model for Regulation in Convergence

Study about an Institutional Reference Model for Regulation in Convergence

Study about an Institutional Reference Model for Regulation in Convergence

Study about an Institutional Reference Model for Regulation in Convergence

Study about an Institutional Reference Model for Regulation in Convergence

RedUniv REGULATEL REHRED RENATA Renater RENIA REUNA RNP

Study about an Institutional Reference Model for Regulation in Convergence

RUDAC SCT SECOM SEFIN SENATEL SETSI

Study about an Institutional Reference Model for Regulation in Convergence

VOD VoIP Wi-Fi WiMax WTO xDSL

Study about an Institutional Reference Model for Regulation in Convergence

iv. v. vi. vii.

Study about an Institutional Reference Model for Regulation in Convergence

Figure 1 - Perception of Convergence by the User

Figure 2 - Convergence through Multiservice Source: Jos Manuel Huidobro

Figure 3 - Multiservice Terminal Equipment (SmartPhones)

Figure 4 NGNs Plane Distribution Source: Jos Manuel Prez Marzabal

Country France Germany

India Ireland Italy Japan

Ministry of Information, Communications and Culture Ministry of Economic Affairs

Ministry of Economic Development

Portugal Singapore South Korea Spain

Sweden United Kingdom United States of America

Normative for Convergence Communications Market Act N 393/2003

Electronic Communications and Audiovisual Communication Services Act N 2004-669

New German Telecommunications Act (TKG) from 2004

Communications Convergence Act of 2001

Communications Regulation Act of 2002

Reform to the Telecommunications Act of 2004

Normative for Convergence

Reform to the Telecommunications Act of 2006

Communications Act N 5/2004

Telecommunications Act (TA) and Broadcasting Act (BA)

South Korea Spain

Sweden United Kingdom

Act N 2003:389 of Electronic Communications Communications Act of 2003

Normative for Convergence

United States of America

Telecommunications Act of 1996

Country Australia Finland