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Ensuring effective regulation of NGA networks in Austria
 

Ensuring effective regulation of NGA networks in Austria

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  • The Regulator’s dilemma : Finding a balance between hard-core SMP and new soft law regulation The old Unbundling market as an example : Closing the gap between safeguarding competition and promoting innovation and taking due account of the European Commission's NGA recommendation From the ladder of investment concept to accepted products on the market: Classical Unbundling, Virtual Unbundling and Bitstream Access Final Considerations
  • Safeguarding competition Mandating appropriate wholesale products (remedies) from SMP operator Allowing sufficient margin for alterative and SMP operator Promoting innovation Innovation from incumbent operator with financial strength Innovation from alternative operators

Ensuring effective regulation of NGA networks in Austria Ensuring effective regulation of NGA networks in Austria Presentation Transcript

  • Ensuring effective regulation of NGA networks in Austria Kurt Reichinger Austrian 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.
  • 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
  • The regulator‘s dilemma
  • 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
  • Trying to bridge the gap Safeguarding competition Promoting innovation
  • 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
  • The Austrian unbundling market as an example
  • 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?
  • 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 VDSL2 Glasfaser VDSL2 Glasfaser Glasfaser
  • EC‘s recommendation on NGA regulation (2010)
    •  Addressing the challenge of managing competing (and sometimes conflicting) drivers in the implementation of broadband
    • Securing investment in infrastructure and roll out,
        • Past and future investment in active and passive infrastructure
        • Both from incumbent and alternative operators
    • Promoting competition both at the infrastructure and service layers,
        • Promotion of competition on both infrastructure and service edge possibly conflicting
    • 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
    • Designing a framework for the transition from copper to fibre.
  • 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
  • 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
    01/28/11 Seite
  • 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
    MDF CAB CAB
  • The NGA problem MDF
  • The NGA problem MDF CAB CAB CAB CAB CAB CAB CAB CAB CAB CAB CAB
  • 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
  • Virtual unbundling
  • Virtual unbundling - cornerstones
    • Possibility for a grade of innovation comparable with passive access
    • Highest possible transparency for higher layers
    • Possibility for multicast services
    • Technological neutrality
    • Flexibility for choosing CPE (white list)
    • Service hand-over at MDF (or similar PoP in the NGA)
    • Third-party service hand-over
    • Configuration access for all relevant connection parameters or non-overbooked bandwidth between customer and PoI
    • To be offered in NGA areas only
  • Technical Concept of VULL Reference Offer Netz ANB CPE CPE CPE CPE Bandwidth DSLAM Bandwidth Bandwidth Bandwidth Network OLO Bandwidth (HP/LP) Bandbreite Bandbreite Bandbreite Bandbreite Bandbreite POI
  • 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
  • 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
  • Final considerations
  • 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 …
  • … a happy ending !!
  • Ensuring effective regulation of NGA networks in Austria Kurt Reichinger Austrian 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.