International Insights – December 2009
An Update on Global Communications Issues
Common Agenda Worldwide – Broadband is the new Electricity
November and December have been very busy months on the international scene in telecommunications, reflecting remarkable consistency in the agenda of organizations around the world.
Governments have acknowledged the key role that very high speed broadband can play in economic recovery and social inclusion, but have been challenged by the political reality that budget deficits hamper their ability to fund what is needed.
Nevertheless, some claim it will transform business processes and public services as much as electricity did, and a few governments have actually committed large sums of public money to get their nation fully up to speed with new Internet-based opportunities.
Australia with US$32B, Japan with US$28B and the US itself with $7B lead the way.
Regulation of Broadband Services Will Be Crucial for Business Customers
But investment in ultra high-speed broadband capacity must be efficient and effective, as must the use by public and private enterprises. In the debate on how best to achieve this, two service issues have been of particular importance for international business users:
a) Can wireless or mobile broadband be considered a viable alternative to fixed networks? This has major implications for regulated market definition and assessment of dominance. Austria decided it is a substitute for the consumer market and the European Commission has accepted their case.
b) What performance characteristics are appropriate for judging if a service is suitable for business use? Upstream capacity is important for businesses. Symmetric services are needed, and latency and contention ratio of offerings are critical. In addition, the headline downstream capacity is not what is actually delivered anyway. It would be a dangerous precedent if regulators combined wireless and fixed broadband in a single market for all customers, potentially leaving business users with no choice at all.
Independent Study Demonstrates Competition Brings Benefit to All
A study for the European Competitive Telecommunications Association (ECTA) has shown conclusively that competition encourages investment, rather than the reverse as claimed by some incumbent operators seeking regulatory forbearance as a condition for building Next Generation Access Networks. The study shows that competitors make a substantial contribution to investment, boost broadband deployment and accelerate service take-up.
Markets with open access for competitors actually have higher investment in telecoms, which drives economic growth and lowers risk to investors, whereas fiber investment in markets where ex-ante regulation is relaxed, is lower than the EU average. It is also clear such regulation doesn’t impact incumbents’ financial performance, nor do ex-post fines.
Incumbents are still considerably more profitable than rivals and are gaining market share. The study also confirmed the findings of a Wik study that expensive fiber nets cannot be profitably duplicated and hence the pursuit of infrastructure competition per se is wrong. These findings are likely to be applicable to other parts of the world with similar situations.
Cloud Computing Moves to Center Stage
Many pressures have attracted clouds over the horizon.
Economic pressures have forced international companies to consider going one step further than plain outsourcing deals.
Political pressures have driven governments to consider more coherent “joined-up” public procurement and ICT strategy between sectors, to reduce costs and facilitate e-services, for example in health and education.
Technical pressures have produced a generation of Unified Collaboration and Communication (UCC) tools, many of which are already offered on a virtual basis, like Google mail. Cloud computing can bring lower capital expenditure (currently in short supply or non-existent), faster introduction of new services, and more flexibility in the use of applications and devices.
However, fears of customer lock-in, privacy, security, interoperability, and the relative immaturity of suppliers and services, makes decisions in this area worthy of serious examination before major commitments are made. Current experience, confirmed by an EVUA survey, suggests that most take up is by smaller companies for non core applications, and that multinationals remain cautious.
IPv6 and new TLDs on Internet Governance Forum (IGF) agenda
The penultimate gathering of the IGF in Sharm-el-Sheikh, Egypt debated Internet address exhaustion, the need for transition from IPv4 to IPv6, and new Top Level Domains (TLDs) where those using non-Latin characters have already been announced.
The Forum also considered the way forward as it approached the end of the five-year deadline for deciding how best to govern the Internet. The final meeting will be in Vilnius, Lithuania.
The Forum was attended by 1800 delegates and also discussed data security, openness and privacy, the contextual integrity of data in social networks, and human rights regarding access, including finding ways of allowing for diversity, disabilities, and multiple languages.
International Roaming, Broadband and Geographic Segmentation on OECD Agenda
The Communications Infrastructure and Services Policy (CISP Committee of OECD), on which INTUG is an expert participant, is also addressing similar priority topics to those in other international fora. The future of fixed and wireless broadband was discussed at the December meeting to define how best to track service deployment and pricing. Global action to reduce international roaming charges remains a priority topic.
The meeting also considered the impact of sub-national or geographic segmentation of relevant markets. This is a concern for business users, since it presents them and their service providers with the prospect of a mixed environment where some of their sites are deregulated for access, resulting in a risk that their service providers may not be able to deliver access.
Europe: New Commission, Framework Adopted, IPR Compromise Reached
New Commissioners have been nominated for the next 5 years, with changes to the scope of the portfolios. Subject to final MEP questioning their appointments are being confirmed.
Ex-Information Society Commissioner Viviane Reding becomes 2nd Vice President and will head up the Justice Commission, which will include oversight of human rights. Former Competition Commissioner Neelie Kroes becomes 5th Vice President and will lead the Digital Agenda Commission, which includes most of the telecommunications regulation.
The revised Framework was approved at the “eleventh hour”, much to everyone’s relief. The Commission said this would give:
- fixed/mobile number port in 1 day;
- better customer information;
- user rights to an open and neutral Internet;
- better user protection against data breaches/spam;
- better emergency service access;
- more NRA independence with greater consistency;
- more Commission power over remedies;
- a new functional separation remedy;
- acceleration of broadband roll-out; and
- enhanced NGA competition and investment.
Following heated debate between Council, Parliament and the Commission over the “right” compromise between the right to access and intellectual property rights, which focused on what was known as “Amendment 138”, there will need to be close collaboration between the Justice and Digital Agenda Commissions to ensure the “right” balance is maintained.
New Regulatory Body to be formed and new 5 year ICT Strategy for Europe
The former European Regulators Group (ERG) will transform into the Body of European Regulators of Electronic Communications (BEREC). Key appointments in BEREC will be made during the first half of 2010, and will be crucial to a successful transformation.
With the help of INTUG, ERG completed a survey of business user requirements (which attracted 154 responses) and has now published the findings for public consultation prior to a workshop on 29 January 2010. The survey appeared to be inconclusive regarding the key question of whether adequate effective competition exists for international services.
Following a conference in Visby as part of the Swedish Presidency, a strategic agenda was drawn up for development during the Spanish Presidency in the first half of 2010, when a Granada Strategy will launch “2015.eu” replacing “i2010” as the new 5 year plan.
INTUG believes that the key elements of ICT strategy, which applies not just to Europe, should include increased competition and choice for businesses and citizens, roll-out of Next Generation Access Networks with ubiquitous broadband, enabling of a dynamic mobile society and economy with more coordinated use of spectrum, and leveraging of communications tools to release enhanced business productivity for economic recovery.
International Mobile Services Remain Inadequate for Business Users
INTUG has produced a draft position paper analyzing shortcomings of the international market for business users of mobile services. The paper will be published early in 2010.
The draft conclusions state that International Mobile Service operators are not providing appropriate services for the enterprise customer segment. Buyers of mobile services have to deal with a patchwork of national mobile operators offering different pricing schemes, service offerings and service level agreements. There is a lack of effective transnational mobile virtual network operators (MVNOs). The paper will make specific recommendations for action by service providers, regulators and by multinational companies themselves.
A position paper on Cloud Computing is also being prepared for consultation.
INTUG Report
INTUG reviews Global agenda and priorities in Paris
Board member Jacob van Kokswijk, from Dutch User Association BTG, represented INTUG at the IGF mentioned above, and Chairman Rosemary Sinclair from Australian User Group ATUG represented INTUG at the meeting of the Internet Corporation for Assigned Names Names and Numbers (ICANN) in Seoul, South-Korea. This was INTUG’s first appearance, and Rosemary has joined the Board of Non-Commercial Organizations.
She also spoke at ECTA’s annual regulatory event in Brussels, prior to INTUG’s own meeting in Issy-les Moulineaux, Paris, hosted by French User Association CRESTEL.
The INTUG meeting focused on France, Cloud Computing and Unified Communications, and also reviewed INTUG priorities guided by the common agenda from the international organisations referred to above. Leonard Pera from Spanish User Group AUTELSI, Jon Neville from EVUA and Rob Matthijssen from BTG were elected to the INTUG Board.
The next INTUG meeting will be in Spain in May 2010, hosted by AUTELSI.
INTUG Progresses Memoranda of Understanding with International Organizations
Discussions are progressing to enhance collaboration between INTUG and the recently formed Open Computing Alliance (OCA), building on the shared objectives of open access, open networks and interoperability. INTUG already has a Memorandum of Understanding with the Commonwealth Telecommunications Organisation (CTO) and sees benefit in working with other organizations, such as the Internet Society (ISOC).
INTUG wishes all its members and readers Happy Holidays and a Happy New Year.
This newsletter was coordinated by Nick White, Executive Vice President, INTUG