1. A litigious incumbent and a cautious regulator and other reasons why R&E networking is expensive in some countries Marko Bonač ARNES, Slovenia bonac@arnes.si

2. Status in Europe  EC document: Science, Technology and Innovation in EU+ 2002: “Candidate countries posses a huge potential capacity to produce scientific and technological knowledge. Their integration in the European Research Area opens new dimensions and opportunities in Europe”  The researchers all over the ERA would like to do the similar work  There is a big gap in the state of networking infrastructure for R&E between more and less developed European countries.

3. The gap is big and is becoming bigger Comparing research network elements in more and less developed European countries: International capacity: 1: 1000 National links: 1: 5000 Why: Do less developed countries spend less on R&E networks ? Are networks more expensive in less developed countries ?

4. NREN budget per capita 2002 NREN budget per capita in 2002 (TERENA Compendium) 0,5 EUR/cap 1 EUR/cap More than 1 EUR/cap -------------------------------------------------------- ------------------------------------------------------------ --------------------------------------------------------------------------------- France Czech Rep. Ireland Germany Estonia Portugal Italy Lithuania Croatia Spain Latvia Slovenia Denmark The Netherlands Belgium Norway United Kingdom Finland Switzerland Luxemburg It is mainly dependant on size of the country and not on its GDP per capita (as one would expect) !

5. NREN budget per capita/ GDP per capita  France  Germany  Italy  Spain  UK (size = x)  Belgium  Finland  Sweden  Switzerland (size = 2x)  Latvia  Lithuania  Estonia  Croatia  Hungary  Czech Republic  Portugal  Slovenia  Ireland  The Netherlands  Luxemburg (size = 3x – 8x)

6. Networking is relatively more expensive in less developed European countries  GDP per capita in candidate countries is 25 to 70 % of the EU average  Telecommunication infrastructure is missing  Prices for leasing infrastructure are high because –telecommunication market is often not yet liberalized –telecommunication market is too small for real competition  Most of less developed countries are small – this brings additional problems.

7. Running an NREN in a small country is expensive In a small country it is more expensive (calculated per user) to provide the same level of service.  Relatively more international capacity is needed  Low capacity circuits are relatively more expensive  Circuits so the same capacity are often more expensive  The NREN needs the same effort to introduce a new service

8. NREN external capacity (2001) NREN external capacity in Mbps in country per 1 million inhabitants  Germany 12  France 14  UK 13  Slovenia 23  Ireland 32  Switzerland 43  Luxembourg 50

9. NREN external capacity in Mbps per 1 mil inhabitants (2002)  Italy 52  Poland 62  France 84  Germany 118  Estonia 142  Slovenia 155  Czech Republic 175  Ireland 205  Hungary 238  Luxemburg 375  The Netherlands 484  Belgium 573  Switzerland 548  Finland 1135

10. Subscription to GEANT in Mbps per 1 mil inhabitants in 2003  Ireland 641  Luxembourg 388  Switzerland 342  Slovenia 326  Hungary 248  Belgium 243  Lithuania 172  The Netherlands 150  Croatia 141  Czech Republic 120  Greece 116  Estonia 111  Nordunet 103  Poland 65  Spain 62  Italy 43  UK 42  France 42  Germany 30

11. Average traffic received from GEANT July 2002 Average received traffic per capita in Austria, Slovenia, Croatia, Estonia, Greece, Hungary, Lithuania, Luxemburg, Switzerland was at least 6 times greater than in France, United Kingdom, Germany, Spain

12. GEANT cost per 1 mil inhabitants x = the cost for the cheapest country  Germany  United Kingdom  France  Italy  Spain  Poland  Nordunet  Rumania (x – 4x)  Greece  Estonia  Slovenia  Cyprus  Lithuania  Ireland  Malta  Luxembourg (16x – 57x)

13. Price for international circuit is not a linear function of capacity This graph applies to SDH, for DWDM the curve goes even lower

14. Circuits of the same capacity are more expensive For less developed countries  Telecommunication market is often not yet liberalized or it is liberalized on the paper but not in the practice. If the country is also small:  In many cases there is only one operator  There is less demand for high capacity circuits  Telecommunication regulator has not enough staff (but the problems are the same as in bigger countries)

15. What can be done (now) in less developed countries for the realization of “equal opportunities” in ERA ?  NREN can enlarge its user community (connecting schools and libraries) –NREN can double its user community with 20 % additional funds –Access outside towns could be a problem (ISDN, ADSL) –Is this an unfair competition in the ISPs market ?  The government can stimulate real competition in telecommunication infrastructure sector  NREN can get more money from the local sources  NREN can get some support from other NRENs  NREN can get more financial support from the EC