Boletín electrónico / Número 39 - Septiembre, 2007

English Version

Los desafíos y las implicancias de la convergencia

Convergencia es un término que significa la creciente tendencia de las firmas en segmentos tradicionalmente segmentados del sector de tecnologías de la información, telecomunicaicones y radiodifusión de ofrecer múltiples servicios. La disposición de “multiple play” sobre una red de acceso único se debe en primera instancia a la proliferación de las redes del Protocolo Internet (IP). Mientras las tecnologías de redes tradicionales enlazaba inexorablemente los servicios y las facilidades, IP separa la facilidad del servicio. Tal como sucede en Internet, es posible para la televisión por cable o la red telefónica el transportar voz, video, y datos. Esto permite que las firmas en sectores tradicionalmente separados ofrezcan una combinación de servicios, que los lleva hacia la convergencia.

Nota del editor: Artículo sólo disponible en inglés.

Convergence is a catchall term signaling the growing trend of firms in traditionally segmented sectors of IT, telecom, and broadcasting offering multiple services. Such provision of “multiple play” over a single access network is primarily due to the proliferation of Internet Protocol (IP) networks. While traditional network technologies inexorably linked services and facilities, IP separates the facility from the service. As with the Internet, it becomes possible for a cable television or telephony network to carry voice, video, and data. This allows firms in traditionally separate sectors to offer a combination of services, driving them forward towards convergence.

Convergence is important for the additional investments it is expected to bring, and the increased competition it allows. Between 1990 and 2005, Latin America and the Caribbean attracted 41 per cent of worldwide private investment in the telecoms sector, totaling $194 billion. Much of this was a response first to privatization, and then mobile communication. It is likely that convergence will drive the next wave of investments as carriers upgrade their networks and offer new services. Analysts expect that investments will cross US$300 billion over the next five years. Apart from attracting investment, convergence also allows immediate facilities competition. In the United States and Europe, cableco entry into telephony through VoIP has significantly altered the voice market. For example, 80 percent of VoIP subscribers in Switzerland obtain their service from cablecos, while US cablecos are now the leading providers of IP-based voice services.

Yet, the benefits of convergence are not only going to flow from technical or market developments. A number of regulatory issues will need attention in order that a stable and predictable regime can attract sustained investments. The fundamental problem is that convergence blurs the boundaries between sectors that have had very different regulatory treatments in the past. Broadcasting regulation heavily focused on content, while telecom regulation focused on carriage. Further, the computing and IT sectors often had little regulatory oversight, with the Internet developing in a regulatory space created by exception. Now, these rules and their institutions overlap or even conflict, increasing regulatory risk and the cost of capital. This not only slows down investment; it also blocks competition in facilities and services from fully expressing itself. An uncertain regulatory environment can thus minimize the rewards that may otherwise flow.

A telling example here is the current debate over rules for IPTV worldwide. In South Korea, a dispute between the telecom ministry and broadcasting regulator about who can control IPTV has delayed its introduction. Similarly, it is uncertain whether India’s cable television or telecom laws apply to IPTV, and the service may or may not be considered legal depending on the interpretation. However, some telcos have already begun deployment, and with private investment tied up, regulatory intervention will now be costly. Different rules are creating conflict in the US. After a legal battle, a court in Connecticut classified IPTV as a cable service, requiring it to go through franchise licensing at city level. Unsure of embarking on this slow and expensive process, AT&T has had to delay its rollout plans.

It is possible to identify some of the trends in regulatory responses to convergence. Countries have begun to move to open and flexible licensing regimes, permitting operators to use any technology to offer a wide range of services. While Malaysia permitted full flexibility, India has implemented technology neutral licensing and has plans to evolve to service neutrality. Some countries, especially in the EU, are de-licensing – preferring automatic authorization for operators who do not require spectrum or numbers. Interconnection arrangements will also have to consider PSTN-VoIP or cableco-telco links, and as networks move to IP technology, interconnect will have to move from switch-based to Internet-style. Spectrum management will also have to consider the possibility of multiple services and technologies in bands that earlier would be specifically licensed. With the digitization of wireless communications, the flexible uses of spectrum will allow the “digital dividend,” the increase in potential capacity, and innovative services like wireless triple play. Apart from increasing access, such services may succeed where stand-alone offers might fail.

One of the critical issues is to reconsider universal service policies. The scope of these programs has begun to go beyond voice telephony, bringing more services into their funding ambit. India redefined universal service to include mobile and broadband in 2006, and Australia has a program to subsidize ISDN speed data connections. The scope of collections has also widened, for example in the US, where the FCC asked VoIP providers to pay into the fund.

Even as these global trends form, it is clear that each country will have to identify the regulatory issues and determine responses that are most important locally. As new technical and market possibilities intersect with traditional regulatory frameworks, the underlying principle in addressing these challenges should be to remove the regulatory asymmetries of the past. With sectors merging, rules will need to be sector-neutral. Any variation will lead to a distortion, hindering innovation and investment, an outcome that policymakers and regulators should seek to avoid.

 

Siddhartha Raja & Juan Navas-Sabater
Global ICT Policy Division
The World Bank

 

Información adicional: xxxxxxx

 


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