Liberalisation and regulation in the telecommunication sector: Theory and empirical evidence
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Liberalisation and regulation in the telecommunication sector: Theory and empirical evidence Week 5 Universal Service Obligation
description
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? N on profitable areas , users , booths. - PowerPoint PPT Presentation
Transcript of Liberalisation and regulation in the telecommunication sector: Theory and empirical evidence
Liberalisation and regulation in the telecommunication sector: Theory and empirical evidence
Week 5
Universal Service Obligation
03/06/2004 Β. Μerekoylias 2
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?
03/06/2004 Β. Μerekoylias 3
History
USO and CompetitionThe 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 PlayBalance between extended and basic
servicesInformation 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 densityModeling 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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Network usage cost for each classFinancial benefits for each area for:
Monthly rental Network usage
Net cost calculation for each classAdjustment for non financial benefitsNon profitable areas recognition
Methodology for recognition of non profitable areas
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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 provisioningIP 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% on-line)
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ISPs Market today
Big number of ISPsProvisioning to isolated areas, small cities. Dial-up users => max 56kbpsOn – 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.
