NETWORKNEUTRALITYIN JAPANTOSHIYA JITSUZUMIKYUSHU UNIVERSITY
2      IP traffic explosion      “IP traffic will grow at a      compound annual growth      rate (CAGR) of 32 percent    ...
3   Internet penetration and   Broadbandization in Japan       Internet Penetration              Home access100%          ...
4     Mori’s Law, not “Moore’s Law”                                                    Daily average of download traffic s...
5  Japan’s “best-effort” quality                                               72%Demand of customers                     ...
6   Users are not happyLevel of satisfaction (Jan. 2011)                         5%                                9%     ...
7  Japan as No.1 ……  ….from the bottom                      0%   20%    40%     60%       80%     100%JAPAN (Nov. 2009)   ...
8Essence of the Net Neutralityproblem                          Too much                       demand for the              ...
9In theory……             •   Congestion fee Manage      •   Smart market    IP       •   Metered ratecongestion   •   Dire...
10  Uniqueness of Japan’s BB  market                     Structural separation required                              by NT...
11    Uniqueness of Japan’s BB    market                                    Japan                        Estimated market ...
12    Uniqueness of Japan’s BB    market                                     Japan                         Estimated marke...
13Japan’s Net Neutrality Report(September 2007)We must cope with the rapidly changing Internet marketand achieve the situa...
14For fighting IP congestion  IP traffic explosion         Analyzed a list of options         for building “scalable” netw...
15No micromanagement
16Competition will decide
17Co-regulation?                                             Enforcement             Auditing      GUIDELINE              ...
18“Co-regulation”-like rule                                           Japan Internet Providers Assoc.      GUIDELINE     ...
19“No taxation withoutrepresentation”
20Let the users be involved?
21 Consumers’ knowledge on actual QoSIs the actual download speed importantfor your Internet experience?No            Dont...
22  Happy overestimation         More         than                    More             0%   25%    50%     75% 100%       ...
23Involvement of uninformed users
24  Rules for “disclosure”                                    FCC rule (Dec. 2010)   Article 26 of TBAWhen any            ...
25Providing detail information isnot enough
26Not everybody is perfect• Jitsuzumi (2011) suggests that there  is a group of people who need more  effort and cost to b...
27“ISP Sommelier” wantedGérard Basset, the Best Sommelier of the World in 2010http://www.sommeliers-international.com/Imag...
28Thank you for your attention.                      Toshiya Jitsuzumi                      Professor, Kyushu University  ...
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Mr Jitsuzumi Kyushu Univ Net Neutrality in Japan

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Mr Jitsuzumi Kyushu Univ Net Neutrality in Japan

  1. 1. NETWORKNEUTRALITYIN JAPANTOSHIYA JITSUZUMIKYUSHU UNIVERSITY
  2. 2. 2 IP traffic explosion “IP traffic will grow at a compound annual growth rate (CAGR) of 32 percent from 2010 to 2015.”Source: Cisco VNI (2011)
  3. 3. 3 Internet penetration and Broadbandization in Japan Internet Penetration Home access100% at the end of 2010 78% Narrowband80% 11%60% BWA FWA40% cable FTTH20% xDSL 0% Broadband 89%
  4. 4. 4 Mori’s Law, not “Moore’s Law” Daily average of download traffic speed of broadband users in Japan (Gbps) 1,515 1500 1,363 1,2071,236 1,101 1000 939 Mr. Kiyoshi Mori 799Former Vice Minister of MIC 708http://www.ptcj.org/committee/ptcj_1.html 630 540 459 500 344 391 257 0
  5. 5. 5 Japan’s “best-effort” quality 72%Demand of customers 69% 26% Average 27% 41%ADSL, up to 20 Mbps 42% 19% ADSL, 20-35 Mbps 25% 13% ADSL, over 35 Mbps 19% 37% Cable 36% 23% Nov. 2009 FTTH 24% Jan. 2011 0% 25% 50% 75% 100%
  6. 6. 6 Users are not happyLevel of satisfaction (Jan. 2011) 5% 9% 26% Satisfied 32% Little satisfied Neutral 28% Little dissatisfied Dissatisfied
  7. 7. 7 Japan as No.1 …… ….from the bottom 0% 20% 40% 60% 80% 100%JAPAN (Nov. 2009) 26%JAPAN (Jan. 2011) 27% USA (average) 51% USA (median) 44% UK (May 2010) 46%Australia (2008Q4) 66% Ireland (2008) 60% http://www.flickr.com/photos/tim_norris/2789759648/
  8. 8. 8Essence of the Net Neutralityproblem Too much demand for the existing Internet infrastructure 1. Kill “bandwidth hogs” 2. Motivate ISPs to invest 3. Control monopolistic ISPs http://www.flickr.com/photos/vshioshvili/388221237/
  9. 9. 9In theory…… • Congestion fee Manage • Smart market IP • Metered ratecongestion • Direct subsidy Control • SMP regulationdominant • Anti-trust law ISPs
  10. 10. 10 Uniqueness of Japan’s BB market Structural separation required by NTT Act Japan U.S. BB ISP market ISP ISP ISP ISP Service Equal treatment -based Operators Service -basedBB access market Access Operators Wholesaler Facility-based Operators (cables) BB access line Facility-based Facility-basedwholesale market NTT-east/west Operators Operators (telco) Local Loop Unbundling Local Loop Unbundling (dry copper) Local loop unbundling (including fibers) (dark fiber, dry copper, and line-sharing) Structural Separation Telecom. Business Act required by Non-discrimination required by Telecom. Biz. Act
  11. 11. 11 Uniqueness of Japan’s BB market Japan Estimated market share in Japan U.S. Estimated market share in the US BBBB ISP market ISP market 29.1% ISP 3.8% ISP ISP 36.3% ISP 44.2% Others Others Service -based Operators Service -basedBBBB access market access market Access 49.1% 5.8% Operators 36.7% 53.9% Wholesaler Other telcos Facility-based Powercos Operators (cables) BBBB access line access line Facility-based Facility-based wholesale marketwholesale market NTT-east/west 78.6% 13.5% 43.6% Operators 53.9% NTT Group Operators (telco) RBOCs Cablecos 0% Local Loop Unbundling 20% 40% 60% 80% 100% 0% Local Loop Unbundling (dry 60% 20% 40% copper) 80% 100% (dark fiber, dry copper, and line-sharing) Cablecos Estimated market share Estimated market share Structural Separation Municipalities NTT group Power company CablesSource: Created on the basis of MIC (2008), FCC (2008a, 2008b), and Noam (2009) RBOC Other telcos Municipalities Others Cables OthersNote 1: ISP shares in the US are based on revenues in 2006 (Noam, 2009), which include satellite Internet; the shares in other markets are based on the FCC’s line count and include fixed lines only.Note 2: RBOCs stand for Regional Bell Operating Companies, telcos for telecommunications companies, powercos for power
  12. 12. 12 Uniqueness of Japan’s BB market Japan Estimated market share in Japan U.S. Estimated market share in the US Merger guidelines of Japanese FTC BBBB ISP market ISP market 29.1% ISP 3.8% ISP ...., when the company group after ISP 36.3% ISP 44.2% Others Others Service the business combination falls under -based Operators either ofServicefollowing standard..., it the -basedBBBB access market access market Access 49.1% 5.8% is normally considered that the effect Operators 36.7% 53.9% Wholesaler Other telcos of a horizontal business combination HHI = 1,289 Powercos Facility-based may not be substantial to restrain Operators (cables) BBBB access line access line (as of March 2011) Facility-based competition,... Facility-based wholesale marketwholesale market NTT-east/west 78.6% 13.5% 43.6% Operators 53.9% NTT Group Operators (telco) RBOCs Cablecos Local Loop Unbundling (a) HHI after the business 0% 20% 40% 60% 80% 100% 0% Local Loop Unbundling (dry 60% 20% 40% 80% 100% (dark fiber, dry copper, and line-sharing) Cablecos combination is notcopper) than more Estimated market share Estimated market share NTT group Structural Separation Power company Municipalities Cables 1,500. Other telcos Municipalities Others (b) ...Source: Created on the basis of MIC (2008), FCC (2008a, 2008b), and Noam (2009) RBOC Cables OthersNote 1: ISP shares in the US are based on revenues in 2006 (Noam, 2009), which include satellite Internet; the shares in other markets are based on the FCC’s line count and include fixed lines... (c) only.Note 2: RBOCs stand for Regional Bell Operating Companies, telcos for telecommunications companies, powercos for power
  13. 13. 13Japan’s Net Neutrality Report(September 2007)We must cope with the rapidly changing Internet marketand achieve the situation that satisfies the networkneutrality. Principle 1 Unrestricted Internet experience Principle 2 “Carterfone” rule Principle 3 Non-discrimination and reasonable price
  14. 14. 14For fighting IP congestion IP traffic explosion Analyzed a list of options for building “scalable” networks or ensuring “efficient” network management Fairness in Cost Sharing Proposed a general direction for solving the net neutrality problem In most cases, it recommended to trust the outcome of market competition
  15. 15. 15No micromanagement
  16. 16. 16Competition will decide
  17. 17. 17Co-regulation? Enforcement Auditing GUIDELINE Mechanism Mechanism FOR PACKET SHAPING “…., the Guideline is not legally Japan Internet Providers AssociationTelecommunications Carriers Association Telecom Services Association binding, and whether to observe it or Japan Cable and Telecommunications Association not is at the discretion of individual May 2008 telecommunications carriers.”
  18. 18. 18“Co-regulation”-like rule  Japan Internet Providers Assoc. GUIDELINE  Telecom. Carriers Assoc. FOR  Telecom Services Assoc. PACKET SHAPING  Japan Cable and Telecom. Assoc. What are reasonable packet shaping practices? Japan Internet Providers AssociationTelecommunications Carriers Association Telecom Services Association Japan Cable and Telecommunications Association May 2008 Voice of users
  19. 19. 19“No taxation withoutrepresentation”
  20. 20. 20Let the users be involved?
  21. 21. 21 Consumers’ knowledge on actual QoSIs the actual download speed importantfor your Internet experience?No Dont2% know 16% Yes, 38 % Very No, 5 much Little 54% 3% Only 28% know the name, 9 % Have you known what “best-effort” means?
  22. 22. 22 Happy overestimation More than More 0% 25% 50% 75% 100% once in than a week once in 1% a month 5% 24.5% FTTH 61.1% Several Never times in 39% a year 30.5% ADSL 24% 58.6% Seldom 36.8% 31% Cable 64.0%How often have you measured your Actual DN speed User estimationactual download speed before?
  23. 23. 23Involvement of uninformed users
  24. 24. 24 Rules for “disclosure” FCC rule (Dec. 2010) Article 26 of TBAWhen any 1. Transparencytelecommunications carrier 2. No Blockingor any person who engagesin acting as an 3. No Unreasonable Discriminationintermediary, agency oragent for concluding a BEREC proposal forcontract… intends to Transparency (Oct. 2011)conclude a contract, …, they 1. Accessibilityshall, …, explain to the 2. Understandabilityperson an outline of the 3. Meaningfulnesscharges and other terms 4. Comparabilityand conditions for the 5. Accuracyprovision of the andtelecommunications • Proportionalityservices.
  25. 25. 25Providing detail information isnot enough
  26. 26. 26Not everybody is perfect• Jitsuzumi (2011) suggests that there is a group of people who need more effort and cost to be as QoS literate as others. It is not optimal and cost effective to make everybody equally QoS literate. Previous studies (Candeub & McCartney, 2010; Henze et al. 2010) showed that if detail information about the actual QoS is available for high-literate end-users, all end-users including low-literate group may be better off. http://farm7.static.flickr.com/6237/6301178811_9cbb30c6d3_o.jpg http://farm4.static.flickr.com/3033/2438910842_3faff2e1c7_o.jpg
  27. 27. 27“ISP Sommelier” wantedGérard Basset, the Best Sommelier of the World in 2010http://www.sommeliers-international.com/Images/Articles/SI%20129/concours-MSM-4.jpg
  28. 28. 28Thank you for your attention. Toshiya Jitsuzumi Professor, Kyushu University jitsuzum@en.kyushu-u.ac.jp

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