J. Scott Marcus

Regulatory Approaches to NGNs: An International Comparison

The emergence of Next Generation Networks (NGNs) raises profound challenges for regulators everywhere. Different regulatory authorities have approached these problems in strikingly different ways, depending in part on the overall regulatory milieu in which they operate, and in part on the nature of the NGN migration envisioned by major market players. Also, the NGN core network raises significantly different issues from those of the NGN access network. The migration to NGN raises many of the same issues that were already on the table as a result of the broader migration to IP-based services, notably in regard to the de-coupling of the service from the underlying network. To these concerns are added profound questions related to the nature of market power. Will NGNs enable new forms of competition? Will competitive bottlenecks remain, especially in the last mile? Will NGN enable new forms of bottlenecks to emerge, especially in the upper layers of the network, perhaps as a result of new IMS capabilities? Regulators in the UK, Netherlands, Germany, Japan and the United States have been forced to deal with these issues due to relatively rapid migration to NGNs proposed by their respective incumbent telecoms operators. Many of the same issues are also visible in the recommendations that the European Commission finalised on 13 November 2007 as part of the ongoing review of the European regulatory framework for electronic communications. In this paper, we compare and contrast the many regulatory proceedings that have been produced by these regulatory authorities.

A Comparison of Network Neutrality Approaches In: The U.S., Japan, and the European Union

In this paper, we compare and contrast the regulatory approaches to addressing Network Neutrality in three countries which represent three roughly different approaches. In the United States, which has suffered the most obvious Network Neutrality problems, the national regulator has promulgated a set of four policy principles aimed at preserving the open characteristics of Internet. These principles ensure Internet users the rights to: access lawful content; run lawful applications; attach lawful and non-harmful devices; and to have competitive alternatives. The U.S. FCC is currently considering extending those policy principles with two new ones. However, it has had significant problems attempting to codify and enforce actionable, legally binding rules. In October 2007, the Japanese MIC introduced Network Neutrality principles as an amendment to the “New Competition Policy Program 2010”. The policy requires that IP networks be accessible to content, to terminal equipment, and equally to all users, at reasonable prices. Network Neutrality also includes the concept of utilizing IP networks with the proper allocation of costs, and without discrimination. This is similar in concept to the “reasonable network management” exception embodied in the U.S. approach. In addition, a working group of four telecom business associations was created in September 2007 to develop a “Guideline for Packet Shaping”. The guidelines cover basic conditions for when packet traffic shaping is permitted, including measures to cancel heavy users’ contracts. Packet shaping should only be allowed in exceptional situations. The guidelines include the basic concept that ISPs should increase network capacity in line with increases in network traffic. As opposed to crafting ex-ante rules which describe the contours of permissible network practices, EU policy seeks to constrain market power by creating sector-specific rules designed to stimulate competition. The intention behind the EU approach is that competition will punish anticompetitive deviations from Network Neutrality.We observe two approaches which seek to ex ante determine the bounds of permissible conduct by IP-based networks and one approach which eschews direct intervention in the problem. We analyse these three approaches, identifying the relative strength and weaknesses of each in the body of this paper.

Drivers and Effects of the Size and Composition of Telecoms Regulatory Agencies

How do the staff size and the skill mix of a regulatory agency affect the manner in which it functions, and its effectiveness in meeting its goals?National Regulatory Authorities (NRAs) for electronic communications differ greatly from one another in terms of the number and the composition of their staff, particularly in terms of the mix between lawyers, engineers, and economists. The U.S. Federal Communications Commission (FCC) has recently acknowledged the need to strengthen its economics and engineering capabilities. What can be said about the “right” size and composition for an NRA’s staff? How do staff size and composition impact the functionality and effectiveness of the agency? Could an NRA improve its effectiveness by achieving a more appropriate staffing level, or a better balance of staff skills?

Structural Solutions and the Evolution of International Mobile Roaming (IMR) in Europe: Where are We Headed?

In response to long-standing European concerns over high prices for international mobile roaming (IMR) within the European Union (EU), the European institutions have imposed progressively more rigorous Roaming Regulations, the most recent of which took effect in July 2012. The support for structural solutions (to enable separate provision of roaming services by firms other than the Mobile Network Operator (MNO) in the Home country) in the Roaming Regulation of 2012 represented a first serious attempt to address root causes of high IMR prices, rather than solely by intrusively regulating wholesale and retail prices. The structural solutions will not come into force until July 2014. Meanwhile, there is considerable doubt about the degree to which market players will offer the services, whether consumers will adopt them, and even if they were to be fully effective, over the degree to which they would actually influence the price of international mobile roaming services. Meanwhile, the Commission’s “Connected Continent” proposal for a Single Market Regulation proposes to phase out structural solutions before they have even begun to come into effect. We assume that the business plans of firms that otherwise might have offered the services have already been impacted, perhaps fatally. Against this backdrop, traffic off-load using public or private Wi-Fi and small cells (e.g. femtocells) is growing in popularity by leaps and bounds. Traffic off-load could conceivably serve as a partial substitute for international mobile roaming, inasmuch as it is primarily suitable for nomadic use (from a changing fixed location) rather than truly mobile service. Despite this and other limitations in its applicability to IMR, it is a promising development in an area where European policy now appears to be in a state of serious confusion.

Improving the Effectiveness and Efficiency of Spectrum Use by the Public Sector: Lessons from Europe

Huge strides have been made in enhancing the efficiency of spectrum use by private commercial users over the past two decades, but only scant improvement in the methodologies and technologies associated with spectrum use by public sector users (including the military, emergency services, and aeronautical and maritime transport.This paper assesses the applicability of a number of emerging European ideas and practices to public sector spectrum management in the United States. Two relevant studies were been completed in 2008, one by the Radio Spectrum Policy Group (the RSPG, an advisory group to the European Commission), the other a consulting study by led by WIK-Consult and conducted on behalf of the European Commission. Both studies examined spectrum management practices in the Netherlands (where periodic re-justification of spectrum assignments is required) and in the UK (where market-inspired techniques are being applied to the management of public sector spectrum).

Geo-Blocking of Goods That Require Cross-Border Delivery: A Preliminary View on EU Policy Considerations

The European Commission has made legislative proposals to address “unjustified geo-blocking and other forms of discrimination based on customers’ nationality, place of residence or place of establishment …�? The Commission’s proposal seeks to address long-standing concerns that relatively few consumers in the EU make e-commerce purchases cross-border within the EU, and that relatively few merchants sell cross-border. The Commission’s legislative proposal avoids imposing restrictions on geo-blocking (i.e. “conditions of access�?) on any goods that require cross-border delivery. The exclusion is understandable inasmuch as cross-border delivery of goods imposes burdens on the merchant – it is clear that prices to the end-user cannot be the same as in the case of domestic delivery. At the same time, this “carve out�? means that a large fraction of e-commerce is outside the scope of the key provisions of the proposed legislation. This paper represents a very preliminary attempt to identify the challenges, and possible responses to them. The challenges regarding shipping costs that initially drew our attention to the problem could potentially be addressed in a fairly straightforward way, but there are numerous additional challenging problems that would need to be addressed, and these are more difficult to gauge.

All But Neutral: Citizen Responses to the European Commission’s Public Consultation on Network Neutrality

Network neutrality is a complex and multi-faceted subject. Not surprisingly, consumer views toward network neutrality appear to be correspondingly complex and nuanced.