Regulatory Headaches in the Transition to Next-Generation Networks

SUMMARY

“Policymakers need to decide how much and what type of competition they wish to see emerge in the NGN environment.” Tim Hills, Analysys Associate

Existing telecoms network infrastructures (and their associated services and business models) are now moving to next-generation architectures offering multiple converged services (such as IPTV, video, audio, voice, data and mobility) based on very-high-speed IP access supported by increasingly fibred networks. This move represents simultaneously a major investment and a major change for the telecoms industry of magnitudes unparalleled in the relatively brief history of competitive telecoms service provision.

Current telecoms regulation has been designed largely to introduce competition into an existing and relatively stable industry environment, not to oversee and encourage the construction of an entirely different network and service environment. The next five to ten years or more will present regulators and the industry with some difficult and fundamental issues, and some regulatory decisions will have a correspondingly difficult and fundamental effect on some players and their business models. Players of all types should therefore be very concerned over the increased potential of regulators to adversely affect their businesses.

Regulatory Headaches in the Transition to Next-Generation Networks identifies some of the key issues and potential regulatory developments that next-generation architectures could foster, such as:

• the three broad problem areas
• the different issues raised by next-generation networks (NGNs) and next-generation access networks (NGAs)
• the impact on legacy services and networks
• the fundamental difficulties with competition in next-generation access
• how fully converged services and networks undermine current regulatory categories
• the rising importance of socio-economic concerns
• the changing role of competition in NGNs.

Who should read this report

• Incumbent telecoms operators: understand some of the key issues and potential regulatory developments associated with the implementation of NGNs.
• Mobile operators: understand how potential changes in the regulation of fixed networks could affect their own businesses.
• Other licensed operators: understand potential major changes in the regulatory and competitive environment.
• Investors and analysts: understand why telecoms faces a period of potential regulatory change and risk.
• Regulators: consider how regulatory assumptions may need to be revisited for the NGN environment.

TABLE OF CONTENTS

0. Summary

1. Next-generation networks challenge regulators

• 1.1 Telecoms is evolving
• 1.2 Regulatory philosophy is still evolving
• 1.3 Migration to next-generation architecture creates three regulatory problem areas

2. Building NGNs means balancing risks and rewards

• 2.1 NGNs and NGA networks raise different issues
• 2.2 Where are potential NGN and legacy-network problems?
• 2.3 What might regulators do about NGN and legacy issues?
• 2.4 What might regulators do about access issues?

3. Fully converged services undermine current regulatory categories

• 3.1 Where are the potential problems?
• 3.2 What might the regulator do?

4. NGNs highlight the socio-economic dimension

• 4.1 Next-generation architecture magnifies, and creates, new socio-economic issues
• 4.2 Next-generation telecoms may easily tempt policy intervention