ensuring effective regulation of nga networks in austria
TRANSCRIPT
26.01.2011 IIR Interconnection World Forum 2011 Page 1
Ensuring effective regulation of NGA networks in Austria
Kurt ReichingerAustrian Regulatory Authority for
Telecommunications and Broadcasting
The opinions expressed in this presentation are the personal view of the author and do not prejudge decisions of the Austrian regulatory authorities.
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Agenda The Regulator’s dilemma
Life between hard-core SMP and soft law regulation
The Austrian Unbundling market as an example From the ladder of investment concept to accepted products on the market
Virtual unbundling A universal wholesale product or a useless remedy more?
Final Considerations
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The regulator‘s dilemma
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The regulator‘s dilemma
Hard-core SMP regulation Regulation often means definition of general conditions or a framework
Efficient regulation means that total benefits to some exceed total costs to others Regulation as an ex ante or ex post procedure
Market analysis procedure Definition of relevant markets Analysis of competitive situation Occurrence of
significant market power (?) Imposition of appropriate remedies
Soft law regulation EC recommendations like the one on NGA regulation EC general strategies like the Digital Agenda BEREC common positions National topics
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Trying to bridge the gap
Safeguardingcompetition
Promotinginnovation
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Competition, innovation and investment
Safeguarding competition Mandating appropriate wholesale products (remedies) from SMP operator Incentivising OLOs climbing the ladder of investment Allowing sufficient margin for alterative and SMP operator
Promoting innovation Promoting innovation from incumbent operator with financial strength Promoting innovation from alternative operators
Incentivising investment Making investment scenarios attractive while safeguarding competition But: Investors usually want return not regulation
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The Austrian unbundling market as an example
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Access to physical network infrastructure
Austrian market definition Only metallic loops included Not included: Fibre, cable, mobile technologies But ancillary services like access to ducts and dark fibre included
Austrian market analysis Copper access network of A1 Telekom Austria as „bottleneck“ 100% market share of A1 Telekom Austria Disadvantages for alternative operators – also for broadband roll-out A1 Telekom Austria has significant market power
Now, what remedies to choose?
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Deployment scenarios
Yesterday: Copper only ADSL2+: ~ 16 – 20 MBit/s VDSL@CO: ~ 25 – 30 MBit/s
Today: Copper and fibre FTTC: ~ 30 – 40 MBit/s FTTB: ~ 50 – 80 MBit/s
Tomorrow: Fibre only FTTH: > 100 MBit/s
ADSL2+ / neu: VDSL2
VDSL2Glasfaser
VDSL2Glasfaser
Glasfaser
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EC‘s recommendation on NGA regulation (2010)
Addressing the challenge of managing competing (and sometimes conflicting) drivers in the implementation of broadband
1. Securing investment in infrastructure and roll out, Past and future investment in active and passive infrastructure Both from incumbent and alternative operators
2. Promoting competition both at the infrastructure and service layers, Promotion of competition on both infrastructure and service edge possibly conflicting
3. Relaxing regulation where there are sufficient levels of competition, and Relaxing regulation on market fully based on regulation may be dangerous Signals of relaxing regulation important for investment decisions
4. Designing a framework for the transition from copper to fibre.
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Basics of Austrian decision M 3/09
Promote alternative operator investment in VDSL@CO VDSL2 from the „Central Office“ (VDSL@CO) allowed as a first step Compensation for frustrated investment by A1 Telekom in case of future FTTx roll-out
Promote alternative operator investment in FTTC/B Better data delivery for FTTC/B-Planning transparency Access to ancillary services duct / dark-fibre Negotiation possibilities for deploying new infrastructure (Cabinets)
Allow for A1 Telekom Austria investment in FTTC/B No obligatory „spectrum shaping“ under specific conditions Planning meeting,
compensation payment, Migration to virtual unbundling, … Prioritising more advanced technologies VDSL@CO < FTTC < FTTB < FTTH
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Basics of Austrian decision M 3/09
Access to ducts – for backhauling Cost savings – civil works Attractive access conditions – better than general rule acc to Telecoms Act Nationwide offer – not only in NGA areas Fees – similar to general rule
Access to dark fibre – for backhauling Cost savings – civil works Attractive access conditions – better than general rule acc to Telecoms Act Nationwide offer – not only in NGA areas Fees – similar to general rule BUT: only available in case of ducts not available or not economically viable
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MDF CAB
Remedies available so far
Full unbundling of copper line Sub-loop unbundling of parts of copper line Co-location Access to ducts Access to dark fibre
CAB
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The NGA problem
MDF
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The NGA problem
MDF
CAB
CAB
CABCABCAB
CAB
CAB
CAB CAB
CAB CAB
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Basic considerations of Austrian decision M 3/09
Economies of scale will be harder to achieve in NGA scenario For incumbent operator and – even harder – for alternative operators Alternative operator roll-out of FTTC/B/H rather not expected on larger scale Classical unbundling at the MDF will become less attractive Sub-loop unbundling never has been a success
Introduction of a new remedy In addition to traditional remedies on unbundling market Keeping alternative operators competitive Providing a substitute wholesale product for classical unbundling Introducing an active product (layer 2 bitstream) on a passive market( infrastructure) Virtual unbundling
European Commission Accepted the new remedy as an intermediary wholesale product
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Virtual unbundling
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Virtual unbundling - cornerstones
1. Possibility for a grade of innovation comparable with passive access
2. Highest possible transparency for higher layers
3. Possibility for multicast services
4. Technological neutrality
5. Flexibility for choosing CPE (white list)
6. Service hand-over at MDF (or similar PoP in the NGA)
7. Third-party service hand-over
8. Configuration access for all relevant connection parameters or non-overbooked bandwidth between customer and PoI
9. To be offered in NGA areas only
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Technical Concept of VULL Reference Offer
Bandwidth (HP/LP)Netz ANB
CPE
CPE
CPE
CPE Bandbreite
Bandbreite
Bandwidth
Bandbreite
DSLAMBandbreite
Bandbreite
Bandwidth
Bandwidth
Bandwidth
NetworkOLO
POI
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Reference Offer by A1 Telekom Austria Modular layer 2 bitstream product based on Ethernet technology
Access part: VDSL2 on copper loop with 3 bandwidths to choose from (8/20/30 MBit/s) Ordered per customer
Backhaul part: Ethernet with 16 bandwidths to choose from (2 … 800 MBit/s) allowing OLOs to choose
degree of overbooking – even allowing non-overbooked services Ordered per DSLAM
Quality of Service: Service priorisation of Ethernet Frames using p-Bit p=5: Voice / p=4: Video / p=1: Business Internet / p=0: Residential Internet 50% of Link: high priority quality guaranteed / Remainder: low priority quality
Customer Premises Equipment (VDSL2 Modem/Router) No modem included – to be chosen by OLO Minimum modem requirements defined Modem whitelist with modems tested, being qualified as properly working and guaranteeing
defined service performance parameters
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Reference Offer by A1 Telekom Austria
Service hand-over for several DSLAMS at MDF location in NGA roll-out areas 1 GbE and 10 GbE
Service hand-over to third party provider possible Transparency for multicast services Pricing issues
Margin squeeze free
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Final considerations
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Final considerations
The telecoms landscape is changing – so are regulatory interventions Some of yesterday‘s remedies may not be appropriate any longer Such remedies may have to be phased out with new remedies being
carefully introduced order to support today’s regulatory intentions Virtual Unbundling is such a new remedy that could even replace several
of today’s remedies in a medium to long term perspective, e.g. Classical Unbundling Classical Bitstreaming Terminating Segments …
… which could make life easier for incumbents, alternative operators, customers and regulators alike … leading to …
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… a happy ending !!
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Ensuring effective regulation of NGA networks in Austria
Kurt ReichingerAustrian Regulatory Authority for
Telecommunications and Broadcasting
The opinions expressed in this presentation are the personal view of the author and do not prejudge decisions of the Austrian regulatory authorities.