1. Next Generation Access: A Global / Policy Perspective Maury D. Shenk 27 June 2007

2. The Big Question  Is telecommunications network access a natural monopoly or a field ripe for competition?

3. Where Have We Been?  In the beginning, telecoms access was a monopoly  Facilities-based access competition: UK – Mercury / C&W Cable networks in various countries Wireless networks around the world  Access competition through regulation: Local loop unbundling Wholesale resale obligations UK – BT equivalence undertakings US – Telecommunications Act of 1996  These have been partial solutions for access monopolies

4. Where Are We Going?  Growth of the Internet has generated broadband requirements that are exceeding the capacity of copper networks.  But will the building of new networks generate any different result from a competition perspective than for existing copper networks?

5. Some Concerns  BT-sponsored competition study (June 2007): “The future development of telecoms, with Next Generation Access (NGA) and Next Generation Network (NGN) network architectures, will tend to entrench and extent the uncompetitive element of the network further from the customer. However, it will potentially increase the scope for a services layer, which is geography and network independent, provided this is anticipated and supported by appropriate regulation.”  European Regulators Group NGA consultation (May 2007): “With the deployment of NGA networks, regulators need to consider whether these new networks result in a fundamental change in the underlying economics of wireline local access networks as a result of the roll-out of new infrastructure that may impact on the competitive dynamics of the relevant market(s). Traditionally, current fixed local access networks have constituted a non-replicable asset.”

6. Fibre to the Home / Building  “State of the art” for next generation access  Highest-cost option  Examples: France – France Telecom US – Verizon Japan – NTT

7. Fibre to the Node / Cabinet  Less-expensive than fibre to the home / building  Typically involves VDSL over copper to the home  Examples: Germany – Deutsche Telekom Netherlands – OPTA US – AT&T  Can co-exist with current ADSL, but technical issues can exist

8. IP at the Network Layer  Next generation access at a different layer of the network TCP / IP instead of TDM Can co-exist with various physical layer technologies  Example: BT – 21CN

9. Cable  Existing option, but co-axial cable has higher bandwidth than twisted copper pairs  Can’t deliver the bandwidth of fibre  Examples: UK – NTL Various other countries have higher penetration

10. WiMAX  WiMax = Worldwide Interoperability for Microwave Access  Greater range than Wi-Fi offers prospect of broad coverage  A wildcard for facilities-based competition for next-generation access

11. Conclusions  Commercial evolution will drive regulatory evolution  Key issue is the viability of multi-network, facilities-based competition for next-generation access  It’s too soon to say whether the situation will be different than for copper networks  How many competitors is enough?  Wireless is the wildcard