Transcript Presentation

Liberalisation and regulation in the
telecommunication sector:
Theory and empirical evidence
Week 5
Universal Service Obligation
Overview of presentation
History of USO.
Which Services.
How is Supported.
What is the Cost of providing USO?
Non profitable areas, users, booths.
The next genaration services and USO.
What next?
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History
USO and Competition
The first use of the term Universal
Service:
‘One system, one policy, universal
service’ (Theodore Vail, President, AT&T)
Universal Access
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Which services?
 Basic POTS
Basic Telephony with standard quality
Free access to emergencies
Catalog services
Card and coin phones
Operator assistance
 Reasonable prices
One price list for the entire country
Soft disconnection
Special prices for low usage users
 Services for special groups
Special devices for such groups
Special Telephone booths
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How is USO supported?
Pay or Play
Balance between extended and basic
services
Information Society throughout the
country vs. high cost/price
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Basic USO Properties
Dynamic concept changing as services
extend
Indexes needed for the level of services
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USO Cost
USO Cost = Cost of services – Non
financial benefits (advertisement, brand
name etc.)
Cost of services = Financial benefits –
Long run avoidable cost
Non financial benefits
Brand name recognition, reputation
Access to usage data and customers habits
Customer cycle (a non profitable turns to profitable)
Economies of scale
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Methodology for recognition of non
profitable areas
Classes/Zones of areas based on density
Modeling of a typical customer access line for
each area based on:
Mean length of the local loop (“Last mile”)
Type of cables, technologies used
Demographical data
Equipment used for different types of landscape
and density
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Methodology for recognition of non
profitable areas
Network usage cost for each class
Financial benefits for each area for:
Monthly rental
Network usage
Net cost calculation for each class
Adjustment for non financial benefits
Non profitable areas recognition
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Methodology for recognition of non
profitable users
No data available to model non
profitable users in a profitable area.
Calculation based on a rule of thumb
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Non profitable telephone booths
Similar methodology with the non profitable
areas
Data needed:
Investment cost
Usage statistics for the telephone booths
Operating cost
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IP traffic – market structure –
network provisioning
IP traffic and multiplexing. Gain as the
number of users/customers increase.
Multiplexing and the structure of the
market
Vertical Market.
Small number of big ISPs.
Provisioning of services in small cities is
unprofitable
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Market size, need for aggregation
On – off 1% duty time (max = 100 x average)
No Buffering or 100ms buffering
Sources 100 – peak 8,4Mbps – utilization 12%
Sources 100 – peak 4,4Mbps – utilization 23%
Sources 1000 – peak 30Mbs – utilization 33%
Sources 1000 – peak 17Mbs – utilization 59%
Sources 10000 – peak 170Mbps – utilization 59%
Sources 10000 – peak 120Mbps – utilization 83%
Effective provsioning > 5000 customers (20% online)
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ISPs Market today
Big number of ISPs
Provisioning to isolated areas, small cities.
Dial-up users => max 56kbps
On – off 30% duty time (max = 3,3 x average)
Sources 700 – peal 8,7Mbps – utilization 80%
!!Provisioning is profitable for a small number
of customers!!
Income for the ISPs from the regulatory
framework.
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Introducing xDSL
Access bottleneck removed. The customer – user
can have an average of 50kbps with 1Mbps peak
(1/20)
New customes. Allways-on, p2p.
How does p2p traffic look like?
Q1 2002 51% of the abilene traffic + 18% unidentified
of a total of 157,6Tbytes/week
60% for the NRNs
Today (2003) 13,82% p2p + 44% unidentified of a total
of 271Tbytes/week (new apps, hide p2p apps)
P2P Signaling traffic is NOT Self Similar (good news)
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xDSL – Market Structure
2000 concurrent xDSL users (~10000
customers) for effective provisioning!!!!
Is it possible to provide services in small
communities?
Vertical market.
Regulation is needed!!! Where is the
Interconnection of xDSL Access with the
ISPs taking place?
Cost of national core networks is critical for
competition.
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What’s next?
Need to understand the traffic
characteristics of p2p networks (not only
signalling but file transfers too).
A model to calculate the number of
customers for effective provisioning.
Scenarios for the interconnection points,
cost of core network, regulation initiatives.
Municipality nets.
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