Transcript Regulating new IP Services and applications - ITU

Regulating IP Services
ITU
CoE/ARB
Abdelfattah ABUQAYYAS
Coordinator
Arab Centre of Excellence
[email protected]
ITU BDT
IP Application and Digital Divide Workshop
Tunis/Tunisia 17 – 19 June 2003
Goals of Regulation
ITU
CoE/ARB
 Traditional static goals

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
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Ensure widespread access to affordable service
Promote economic development/growth
Limit suppliers’ exercise of market power
Emulate the results of competition:
• efficient pricing
• new services
 Current dynamic goals
 Help genuine competition to emerge
 Encourage rapid introduction of new technologies
 Encourage rapid widespread availability of new
services
IP Application and Digital Divide Workshop
Tunis/Tunisia 17 – 19 June 2003
Development of the Internet
ITU
CoE/ARB
 What is the Internet?
A collection of interconnected networks
using the Internet Protocol (IP) which
allows them to function as a single,
large virtual network.
ITU definition, world wide web reference
http://www.itu.int/sancho/definitionsAS.htm
 Technical characteristics of the
Internet
Distributed network.
Interoperability.
Switched packet networks.
IP Application and Digital Divide Workshop
Tunis/Tunisia 17 – 19 June 2003
Global Technological Scheme
ITU
CoE/ARB
OSI and TCP/IP reference models, mainly Internet
protocols
Backbone
providers
Internet Service
Providers ISPs
IP Application and Digital Divide Workshop
Tunis/Tunisia 17 – 19 June 2003
End
Users
Benefits and limitations of the Internet
ITU
CoE/ARB
 Benefits
 New services for the public.
 Contribution to enhancement of corporate
processes.
 Free public access and greater availability of
information.
 Limitations
 Deficiencies in bandwidth capacity.
 Service quality.
 Protocols (IPv44, IPv6).
 Structural limitations:(Cost of computers,
Subscriber loop costs, Circuit leasing costs)
IP Application and Digital Divide Workshop
Tunis/Tunisia 17 – 19 June 2003
The Internet in figures
ITU
CoE/ARB
Annual growth rate
Pace of diffusion
Total
number of
Telephone
lines,
Internet hosts
A
worldwide as of
m
2001,
e
r
i
Mobile
c
subscribers
Europe 15,33
a
s
Asia 10,55
1
1
Oceania 2,73
2
.
Internet
Africa 0,27
5
hosts
IP Application and Digital Divide Workshop
Tunis/Tunisia 17 – 19 June 2003
Years it took
for the
Internet to
reach
approximate
ly 50 million
users
compare to
telephony,
television,
and radio.
The Internet in figures
ITU
CoE/ARB
A
m
e
r
i
c
a
s
1
8
2
,
5
Internet users
worldwide as
of 2001,
A
s
i
a
1
5
6
,
5
E
u
r
o
p
e
1
4
4
,
4
O
c
e
a
n
i
a
A
f
r
i
c
a
8
,
5
6
,
9
A
m
e
r
i
c
a
s
1
1
2
.
5
Total number of
Internet hosts
worldwide as of
2001,
Europe 15,33
Asia 10,55
Oceania 2,73
Africa 0,27
IP Application and Digital Divide Workshop
Tunis/Tunisia 17 – 19 June 2003
New business model
ITU
CoE/ARB
 Monopolistic/exclusive
access
 Rebalancing (subsidies
among services)
 Technical equipment:
telephone apparatus
 Important variable at
time of communication
 Customer pays for
communication time
 Essentially supports
basic services
 Open/competitive access
 Access subsidized by
services
 Important variable in
services and the customer
appreciate the bandwidth
 Customer communications
subsidized by content,
advertising, and services.
 Essentially supports
multiple services
Households: (TV, telephony,
Internet, e-business)
Companies: (telephony,
Internet, data, e-business
IP Application and Digital Divide Workshop
Tunis/Tunisia 17 – 19 June 2003
services are converging towards IP technology.
ITU
CoE/ARB
Growth of integral
corporate
applications
Interoperability
based on
Internet
technologies
•ERP (SAP, Oracle,
PS)
TCP/IP
•Knowledge
Management (Lotus
Notes)
HTTP
HTML,XML, Java
The death of distance
Global competition:
•Deregulation and
privatization;
Opportunities:
•Global LAN
•Globalization
•Growth of e-business;
•Emerging markets
•Corporate
specialization
•Global services
•Fiber optic as a
physical medium
•transmission
technologies (SDH,
Sonet)
•Switched packets
(frame relay/ATM, IP)
IP Application and Digital Divide Workshop
Tunis/Tunisia 17 – 19 June 2003
Change in Paradigm
ITU
Traditional World 0f Telephony
CoE/ARB
Traditional World 0f Telephony
Technical Paradigm
Networks specialized by
service
Multi-service networks
Network intelligence
More intelligence in server
terminals
The service and the network
have a clearly defined
“responsible party”
Club of interconnected
providers
Service subordinate to
technology
Technology subordinate to
service
Switched circuits
Switched packets
Quality guaranteed
Support lower quality “best
offers”
Hierarchical routing
Dynamic
IP Application and Digital
Dividerouting
Workshop
Tunis/Tunisia 17 – 19 June 2003
Change in Paradigm
ITU
CoE/ARB
Traditional World 0f
Telephony
Traditional World 0f
Telephony
Tariff Paradigm
International rules negotiated in
the frame work of ITU
Rules on usage and custom
Between operators: distribution
and interconnection rates
Between operators: according to
size (peering…)
For users: tariff as a function of
distance, time and volume
For users: Access cost plus ISP
costs
Government interventionist paradigm
Direct participation in
international regulatory and
standardization
Regulations and standardization
assumed by private entities
Different areas of domestic
market orientation
Deregulated markets
User protection based on
consumer protection legislation
Broader citizen protection based
on fundamental rights
IP Application and Digital Divide Workshop
Tunis/Tunisia 17 – 19 June 2003
How does the Internet differ from telephony?
ITU
CoE/ARB
 Telephony has been provided by vertically integrated
companies who own and operate the network and provide
all the services they choose to offer
 The Internet is a set of interconnected networks and
computers using the IP protocol
 Many companies specialize in certain aspects of the
business
 Users deal with internet service providers, application
service providers, portals, content providers, each other, .
..
 Each may be paid separately, by the user or by third
parties, or by the sale of information, or by exposure time
and screen space
 Services are provided across the internet, almost
independently of national and network ownership
boundaries
IP Application and Digital Divide Workshop
Tunis/Tunisia 17 – 19 June 2003
Impact of the Internet on Telecommunications
ITU
CoE/ARB
 Internet users demand new capabilities from the
PSTN
 Call duration changes, higher quality circuits are
demanded
 Traffic patterns change (ISP dial-up and bypass)
 Internet applications compete with PSTN
services (direct substitution)
 Voice over IP, fax over IP, new kinds of call-back
 Internet applications can supersede PSTN
services
 video over IP, multicasting and streaming media,
personalization
 shared data and E-commerce
IP Application and Digital Divide Workshop
Tunis/Tunisia 17 – 19 June 2003
Regulation vs Deregulation
ITU
CoE/ARB
IN FAVOR OF REGULATION
OPPOSING
Regulation will protect consumers
and seek fair prices for users and
reasonable income for the monopoly.
Deregulation should be promoted, as the
more deregulated the markets, the greater
the benefit to society.
Regulation will make it necessary to
improve the technological
infrastructure
In some countries, wherein the internet
services is considered to be value added , and
account is not taken of the emergence of
internet telephony and general broadcasting
activities via the Net, now being developed
on a large scale. These services will be highly
regulated
Regulation will enable income
(royalties, tariffs, etc.) to be
redistributed
Regulation will prevent established
telecommunication operators from becoming
Internet Service Providers
Regulation will seek to optimize
opportunities so that Internet-based
services spur the general level of
competition in the telecommunication
market.
Regulation will restrict the accelerated pace
of transition to full competition in response
to concerns regarding information content.
IP Application and Digital Divide Workshop
Tunis/Tunisia 17 – 19 June 2003
Regulatory Approaches of the Internet
ITU
CoE/ARB
 According to the ITU’s “Challenges to the Network: Internet for
Development,” there are four possible approaches to Internet
regulation:
 Statutory control, whereby governments implement laws and
regulations pertaining to the Internet
 Independent regulation, the notion that bodies created by the
industry itself should regulate the Net
 Self-regulation, including a body with power to impose
sanctions
 No regulation at all.
 A more useful approach and one which seems to be increasingly
adopted by governments, is to determine which aspects of the
Internet do require regulation and which do not
 Regulatory approaches are now taking up many informationrelated issues and terms, such as content, intellectual property,
privacy, domain names
IP Application and Digital Divide Workshop
Tunis/Tunisia 17 – 19 June 2003
Content Regulation
ITU
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Content is one of the key factors in producing the evolution of national
civil, government, and business communities towards the information
and knowledge-based society.
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One of the most complex problems faced in regulation of new Internet
CoE/ARB
services is the control of content disseminated.
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The regulation of “content” in Internet communications requires a
delicate balance by all parties concerned.
 Copyright policy is an important element of the discussion on
content.
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In favor of and against Internet content regulation in Argentina and
Canada, 1998
Argentina
NO
Canada
NO
IP Application and Digital Divide Workshop
Tunis/Tunisia 17 – 19 June 2003
Intellectual property/copyright
ITU
CoE/ARB
 Only regulation at the international level can protect work in the
different countries able to access it.
 Intellectual property law must strike a balance between
dissemination and restriction of the flow of ideas.
 When and in what circumstances the copyright of work
disseminated via the Internet is protected;
 Whether companies transmitting such information via the Internet
will incur any liability when copyright is infringed through such
transmissions.
 Two treaties were proposed by The World Intellectual Property
Organization (WIPO):
 The first, on the right of reproduction, extends copyright to include
temporary reproductions of a work.
 The second, that any party involved in communication, including
companies providing only infrastructure, may be prosecuted for
copyright violations.
 In what circumstances and jurisdictions does the use of a
trademark constitute a trademark violation?
IP Application and Digital Divide Workshop
Tunis/Tunisia 17 – 19 June 2003
Domain names, Privacy and Jurisdiction
ITU
CoE/ARB
 Domain names: As domain names are a topic of international
discussion, courts in some countries have begun to develop case law in
this area.
 Privacy is deemed by the developed countries to be one of the most
negative aspects of the Internet
 It is essential to build user confidence by developing sound legislation that
makes provision for powerful encryption techniques.
 One of the most effective ways of protecting on- line privacy is the
enactment of on- line privacy protection laws.
 Jurisdiction: Any discussion of Internet regulation must include
the question of jurisdiction.
 The global nature of the Internet and the fact that the ISPs, content
providers, and servers are often located at different places around
the world, make it difficult for a country’s courts to exercise
jurisdiction over a part of the Internet located in another
jurisdiction.
 The fact that the international community is far from having found
a viable solution to the problems posed by the Internet as regards
jurisdiction.
IP Application and Digital Divide Workshop
Tunis/Tunisia 17 – 19 June 2003
The Internet and Competition Policy
ITU
CoE/ARB
 Competition is an important aspect of the issue of Internet
regulation.
 There is concern regarding the trend toward concentration in
certain Internet areas, such as IP and domain name registration,
provision of “backbone” (wholesale market), and even in the
retail market.
 Although there are over 17,000 ISPs worldwide, there are
probably fewer than 50 “backbone” providers, most of which are
in the United States.
 While the number of retail market players continues to grow, the
model has been toward concentration and consolidation in the
“backbone market.” C&W USA (formerly MCI), WorldCom
(incorporating UUNET, ANS, and CompuServe), and Sprint,
which control up to 73% of the total market.
 Interconnection agreements will become increasingly
hierarchical, with the larger ISPs imposing charges on other,
smaller, ones.
IP Application and Digital Divide Workshop
Tunis/Tunisia 17 – 19 June 2003
Top 10 Backbone Providers 1998
ITU
30
25
20
% 15
10
GTE
AGIS
Digex
CRL
Winstar Goodnet
SAVVIS
1
2
3
4
5
6
7
8
9 10
Verio Networks
Sprint
0
WorldCom
5
C&W USA (formerly MCI)
CoE/ARB
Providers
IP Application and Digital Divide Workshop
Tunis/Tunisia 17 – 19 June 2003
Unbundling
ITU
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CoE/ARB
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Unbundling is the separate provision of network facilities, functions, or
services.
Unbundling enables anyone to obtain network elements à la carte,
paying only for the installations or functions they need.
Unbundling today means access to local loops for their use in providing
advanced IP services utilizing Asymmetrical Digital Subscriber Line
(ADSL) and other xDSL technologies.
In the United States, unbundling has been accepted as one of the three
basic mechanisms to promote competition for local services.
Unbundling remains a controversial topic, many countries, initially
rejected unbundling as a mechanism to promote competition because:
 Inadequate telecommunication infrastructure
 Detrimental to established operators,

Views on unbundling began undergoing rapid transformation in the late
1990s,
 As awareness grew that advanced services such as xDSL
 As a way to counteract the perceived dominance of the United States in
Internet access and advanced services
IP Application and Digital Divide Workshop
Tunis/Tunisia 17 – 19 June 2003
Interconnection
ITU
CoE/ARB
 Interconnection is one of the keys to viable competition
which, in turn, is the driving force of telecom market
growth and innovation.
 Influencing factors:
 Regulatory bodies have been only minimally involved in
Internet development.
 A spirit of cooperation in Internet development persists,
which sometimes serves to counteract commercial influence
on Internet policy and regulation.
 The lack of regulatory intervention in the Internet
interconnection area has been viewed as conducive to
development of the Net.
 Use of the same interconnection models as those used for
telephone traffic could have negative repercussions for
Internet growth.
 But the lack of regulatory supervision may make it
possible for only one Internet Service Provider to occupy
a dominant market
position,
even
forWorkshop
policy guidance to
IP Application
and or
Digital
Divide
Tunis/Tunisia 17 – 19 June 2003
Internet Interconnection Challenges
ITU
CoE/ARB
 How to determine value that the
interconnecting parties bring to
a particular communications
 How to control the dominance
of back-bone Internet providers
 How to control the dominance
of US-based Internet providers
IP Application and Digital Divide Workshop
Tunis/Tunisia 17 – 19 June 2003
Regulation of IP Network Interconnection
ITU
CoE/ARB
 The Internet interconnection policy scene
 In 1996, an interconnection policy (known as “peering
policy”) began to be developed.
 At present, if the smaller operators wish to use the
regional and international networks of the larger
operators, they must pay them traffic-based tariffs,
sometimes called “transmission” charges.
 There is an apparent trend towards bilateral traffic
exchange arrangements.
 Trends in interconnection regulation
 Where the regulatory body’s profile is more political
than technical, it will probably adopt rules similar to
those in place in developed countries (regulatory
benchmarking).
 Another trend is to see competition as an end in itself.
IP Application and Digital Divide Workshop
Tunis/Tunisia 17 – 19 June 2003
Interconnection Relationship
ITU

ISP-user relations
 The most common type of interconnection the customer pays the
ISP and obtains Internet connection.
 When a smaller ISP pays for connection to a larger ISP, a de facto
interconnection arrangement is reached between the two.
 Typical arrangements include:
CoE/ARB
•
•
•
•

A single interconnection charge “port”
A fixed monthly payment for connection. A
A traffic-based charge.
The process occurring with ADSL modems is similar to that of telephone
modems,
ISP-ISP interconnection
 Network operators of similar size under the traditional peering
arrangement.
 Networks of different size are connected, the bilateral interconnection
arrangement is more common.

Determination of value
 At present, there is a trend in interconnection arrangements for the
larger of the interconnecting ISPs to be compensated.
 A value may be assigned to the traffic flowing in each direction.
IP Applicationdirectly
and Digital
Divide
Workshop
Value may not correspond
to the
volume
of traffic flowing in
Tunis/Tunisia 17 – 19 June 2003
Electronic Commerce
ITU
CoE/ARB
 The Organization for Economic Co -operation
and Development (OECD) defines electronic
commerce as “commercial transactions occurring over
open networks, such as the Internet.”
 According to WTO, three types of Internet
transaction have been identifies :
 transactions involving Services provided via the Internet at
all stages of the marketing process,
 transactions involving Delivery services. Services are selected
and purchased on-line, but delivered by conventional means.
 transactions involving Telecommunication transport
functions, including services provided via the Internet.
 E-Commerce activities:
1- Business to business (B2B) 2- Business to consumers (B2C)
3- Business to government (B2G) 4- Consumer to government
(C2G)
IP Application and Digital Divide Workshop
Tunis/Tunisia 17 – 19 June 2003
Electronic Commerce: Regulatory aspects
ITU

CoE/ARB
E-commerce-related issues in areas of commercial,
legal, and social policy are:
1.
2.
3.
4.
5.
6.
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Data security
Commercial law and corresponding regulations
Intellectual property
Oversight
Privacy
Content-related issues
Coordinated policies are needed to ensure that
transactions are secure and private and that a means
is always available to demonstrate origin, receipt,
and integrity of information received.
regulation must be designed to promote competition
and ensure that service providers can access users
and link them to one another in a nondiscriminatory manner, on reasonable terms.
IP Application and Digital Divide Workshop
Tunis/Tunisia 17 – 19 June 2003
Internet Security and Regulation
ITU
CoE/ARB
 The following are essential to e-commerce:
 Confidentiality; Integrity; Authentication; Authorization;
Security; Privacy
 E-commerce’s first four requirements may be satisfied
by technological means, but security and privacy
needs also respecting laws that protect customers.
 Framework regulations must ensure authentication,
and facilitate the development and dissemination of
existing authentication technologies.
 Most international legislations are based on the
UNCITRAL Model Law. The purpose of the Model
Law is to provide national legislators with a series of
internationally accepted rules to enable them to create
the legal framework most appropriate for the
development of electronic commerce.
IP Application and Digital Divide Workshop
Tunis/Tunisia 17 – 19 June 2003
Should IP Telephony be Regulated??
ITU
CoE/ARB
IP Application and Digital Divide Workshop
Tunis/Tunisia 17 – 19 June 2003
Benefits of IP Telephony
ITU
CoE/ARB
 More efficient use of bandwidth (8-16 times more
efficient than traditional PSTN)
 Cheaper telephone calls
 Integration with Internet and Internet based
applications
 Support convergence – voice, data, image
 Provides potential for many new telecom service
providers and growth of the industry and
economy
 Technology of the future
So IP Telephony is in the consumer and industry
interest
IP Application and Digital Divide Workshop
Tunis/Tunisia 17 – 19 June 2003
How to treat IP Telephony?
ITU
CoE/ARB
 Essentially 3 camps with the following
views:
 Does not need to be regulated – either
because it is not same as PSTN voice or
because it is more beneficial not to regulate it
USA, Europe plus many others
 Partial regulation – regulate some aspects of
IP Telephony
Canada, Malaysia, Singapore, India
 Not permitted or banned pending decision
The majority of developing countries
IP Application and Digital Divide Workshop
Tunis/Tunisia 17 – 19 June 2003
Recommended Rules for IP Telephony Regulation
ITU
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Principle of minimum regulation
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CoE/ARB
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Let the competition do the work of the regulator
Adopt self regulation – through industry and discussion forums
Only intervene if competition or the consumer interest is threatened
Maximum flexibility whilst protecting the consumer interest
Adopt technology& service neutral approach
 Technology is changing rapidly – so regulating on the basis of
technology is risky and prevents new services from being launched
 Services are also rapidly changing – with convergence a reality now
– what is Email on a TV set? Or TV on the computer delivered
through the Internet?
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
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Adopt the horizontal layered approach: Regulating by
layers:Content layer; Application Layer; Service Layer; Facilities
layer
Un-bundle the local loop - Global experience tells us that without
LLU, the Monopoly of the incumbent operator remains just that –
a monopoly!
Transparent & fair interconnection
IP Application and Digital Divide Workshop
Tunis/Tunisia 17 – 19 June 2003
Regulation of Convergence
ITU
CoE/ARB
Telecommunicatio
ns Act.
Broadcasting
Act.
Legal principles applicable
to the new services
Intellectual Property
Act.
Business
Act.
IP Application and Digital Divide Workshop
Tunis/Tunisia 17 – 19 June 2003
Trends in regulation of convergence
ITU
CoE/ARB
 According to the ITU, regulation of convergence involves
three stages:
 Legislative reform
• Introduction of competition, the establishment of a
regulatory entity and the privatization of the principal
operator.
• Necessary modification for adjusting the regulation to
convergence.
 Establishment of the regulatory entity
• Decision-making autonomy of government and industry.
• Wide-ranging technical capacity.
• Formulation of regulation based on the active
participation of all info-communication sector players.
• A regulatory intervention style focusing on supervision.
• Transparency, flexibility and participation in regulatory
decision making.
 Institutional convergence
• The convergence of services and markets requires the
convergence of different laws,
IP Application and Digital Divide Workshop
Tunis/Tunisia 17 – 19 June 2003
Conclusion
ITU
CoE/ARB
 The Internet threatens the traditional regulatory
framework
 There may be a need to manage emerging
dominant players – AOL, Worldcom-Sprint . . .
 More complex to regulate the Internet than the
PSTN
 Internet applications may reduce the need to
regulate the PSTN
 PSTN providers lose monopoly power over long
distance calls etc.
 PSTN network loses importance to the nation as data
network grows around it
 A multinational approach may be the only way
forwards if regulation is needed
IP Application and Digital Divide Workshop
Tunis/Tunisia 17 – 19 June 2003
Regulating IP Services
ITU
CoE/ARB
Thank you
Abdelfattah ABUQAYYAS
IP Application and Digital Divide Workshop
Tunis/Tunisia 17 – 19 June 2003