Policy and Regulatory Challenges Facing the NGN

Abstract

This article provides an overview of the talk given by Mr. Bill McCrum at the ITU/CITEL Workshop on “Interconnection and Next Generation Networks: Addressing the Regulatory Challenges” in Buenos Aires, on September 11, 2006.

The Network Economy

Information and Communication Technologies (ICTs) are the central nervous system of the Twenty-First Century economy. The most valuable commodity in this economy has become information, and the economics of networks applies to almost all information products and services. Information can be consumed by more than one person. Most importantly, the total social value of information increases as it is shared with more consumers. Consumers of computers and software applications, wireless devices, faxes, TV, and Internet services all have more valuable products as the use of the products by others increases. Whether we call this an "information society", the “network age”, or a "knowledge economy," the implication is the same.  Network economics accounts for an increasingly larger share of the economy and is the driving force behind much of the innovation and technological change.

The Next Generation Network

Telecommunications have undergone unprecedented changes at tremendous speed in recent years driven by major technology shifts, business opportunities, new user demands and government promotion. With the Internet now deeply rooted in all aspects of life, broadband penetration steadily increasing, and the widespread use of wireless devices, the telecommunications industry is definitely on its way to convergence, as a multitude of different network platforms begin to carry essentially similar applications and services (e.g., voice, video and data), and the functionalities of consumer devices such as phones, PDAs, computers and televisions become homogenized.  In the face of these changes the concept of a converged multimedia, multi-service network that operates in a multi-vendor environment has emerged and has been labelled next-generation network (NGN).[1]  NGN is the ultimate transformative instrument of the new Network Economy – the baseline requirement for the new way of doing things.

It is clear that convergence of all of these technologies, will lead to new opportunities for business to advance. This will allow products to be rolled out more easily, faster and more efficiently, therefore helping the economy at large.  Network convergence and the new service environment also mean that new standardization and interoperability requirements emerge – mainly in relation to interfaces between networks and services.

Policy and Regulatory Challenges

In addition to the impact on business and standards, convergence in the industry is beginning to have policy implications, and this will only increase. Challenges in Canada and around the world include, among others, regulation of IP networks and the provision of voice-over-Internet-protocol (VoIP), the availability of spectrum for advanced services, network security and critical infrastructure protection, consumer issues (connectivity, privacy, security), and intellectual property rights or digital rights management.

VoIP

Voice over Internet Protocol, a technology that allows voice to be transmitted over the Internet via a customer-owned gateway device had been in test mode in Canada as far back as 2001. It was not until 2003 that the technology was considered sufficiently sound for mass-market consumption and only in 2004 did service come to Canada.  A major factor that has led Canada to a heightened level of competition is the entry by the cable companies into the local telecom market. All of the major Canadian cable companies had launched by mid-2005, with an emphasis on bundling TV, Internet and, the last piece of the triple play puzzle, local phone service. Some cable companies also compete on a fourth flank – wireless services and yet others provide security as a fifth service into the household.

As VoIP continues to capture the residential telephone market, ILEC market share is expected to decrease. The Canadian Radio-television and Telecommunications Commission (CRTC) has recently ruled that VoIP services by ILECs should be governed by the same regulations as traditional services. The VoIP ruling has sparked controversy because it limits what the ILECs can charge for the leading-edge Internet technology, while their rivals are free to levy whatever price they see fit. It is expected that the Canadian government will pronounce on this matter shortly.

Telecom Policy Review Panel

Recognizing that the telecommunications policy framework needed to reflect the age we live in and that periodic fine tuning will be necessary, the Canadian government appointed an independent panel of experts to the Telecommunications Policy Review Panel in 2005. The Panel issued its recommendation (127) in March 2006. One of its main recommendations is that the industry should be governed by market forces to the "maximum extent feasible." More information can be found at www.telecomreview.ca

Spectrum Management

Spectrum policy is rapidly evolving today. Canada, as many other countries, has increasingly emphasized spectrum management based on market principles, using models akin to property rights, in lieu of traditional “command and control” systems. In parallel with this evolution is an increased interest in improving the effectiveness of spectrum utilization. The emergence of software defined radio (SDR) offers the promise of greatly enhanced real time optimization of spectrum resources.

Currently, Canada is going through a spectrum policy review and the opening of new bands. In addition, public discussion on new technologies such as Radiofrequency IDs (RFID), Ultra Wide Band (UWB), and Broadband over Power Line (BPL) and the opportunities and challenges they bring is an ongoing activity within the Canadian government.

Consumer Issues (Accessibility, Content, Privacy and Security)

Maintaining the trust and confidence in our networks is critical. Confidence will be lost if networks cannot be protected from attacks, services from abuses or if the quality of communications services cannot be assured or communication sessions are insecure and private information is compromised.

Technology is a double-edged sword. For most people, technology makes things easier - for persons with disabilities, it can make things possible. When improperly implemented, however, technology can raise barriers to the productive potential of citizens with disabilities and severely curtail their opportunities. Fifteen percent of Canadians have disabilities and 32% of Canadians between age 64 and 75 have disabilities. Industry Canada has developed the Web-4-All smart card technology which enables a wide range of people, including seniors, people with visual impairment and those with learning disabilities, to access services and information on the Internet.

Content challenges are increasing rapidly. Advancing technology is threatening cultural policy as new developments such as IPTV, P2P networks, satellite TV and satellite radio become widespread.  Although the goals of promoting Canadian cultural products and services may remain unchanged, Canada must now consider whether the tools designed to achieve those goals -- many of which were created in a far different technological environment -- remain appropriate.  Offensive and illegal content, such as child pornography, online luring, child prostitution, child sex tourism and other activities are of growing concern for the Canadian government.  The Canadian strategy to promote safe, wise and responsible use of the Internet considers a multi-stakeholder partnership (ISPs, users and government) for confronting illegal and offensive content.

Privacy and Security

Despite the fact that a significant number of Canadians are increasingly going online to carry out their banking, and shopping transactions, it seems that concerns about privacy and security are becoming more, not less pervasive. In order to build consumer trust and confidence in conducting e-business in Canada the Government of Canada is committed to establishing clear rules to protect the privacy of personal information in the new 'virtual' marketplace. This is being done through the implementation of federal privacy legislation, and through development of a national policy on unsolicited consumer e-mail, otherwise know as SPAM.

Challenges Ahead

Recent worldwide telecommunication development and technological progress have been truly dramatic, a trend certain to continue and even accelerate in coming years.  The telecom industry is rapidly moving toward a fundamental change - seamless communications - which will be ushered in by network convergence. NGN represents a significant step towards the evolution of the world’s information and communications technologies (ICT) networks.  

NGN also represents a potentially significant departure from the current policy and regulatory environment. Indeed, in the current environment where, in most countries, voice and data networks significantly differ from the policy and regulatory standpoint, it is difficult to believe in a successful evolution to NGN without significant policy and regulatory changes.  In the new environment where the distinction between voice, data and video only becomes apparent at the subscriber terminal, new and innovative thinking on the part of policy makers and regulators will be required to ensure a graceful evolution from dedicated networks to the NGN solution.

Today, much progress has been made in defining and developing the overall framework of the NGN concept, but there still remain several important issues that need to be addressed such as timeliness to meet new technology needs, solving the interoperability problems, inclusion of the user (security, protection and privacy) and needs of the disabled.   

The NGN has been defined by open standards and although it is clear that these standards are converging; there is still a need for harmonization of different approaches and perspectives to NGN architecture.  It is expected that SDOs across the world will continue to collaborate on new standards to shape the NGN. In addition, it is necessary to develop IPR policies for SDOs that inhibit IPR ambushing.