The Department of Business, Enterprise and Regulatory Reform (BERR) in the UK announced in late February that it would review the country’s future broadband provision. The announcement is a result of concerns about the impending transition to ultrafast IP broadband access. Such access is part of the global move to telecoms next-generation architecture, which will provide converged multi-service networks based on a mix of Ethernet, fibre, IP and wireless technologies.
BERR is reacting to growing concerns that the UK is falling behind some other parts of the world in the development of such ultrafast broadband access networks. The relative immaturity of these networks could adversely affect the country’s international competitiveness in knowledge-based and media industries, for example, and also hamper a wide range of policy goals and initiatives, such as e-government and the elimination of digital exclusion among the poorer sections of society.
Such concerns are not limited to the UK. Australia, the USA and various European countries, for example, have voiced similar fears, and point to the much faster roll-outs in a number of countries, including France, Germany, Japan and South Korea.
In a new report, Regulatory Headaches in the Transition to Next-Generation Networks, Analysys Research concludes that current telecoms regulation may be unsuited to overseeing and encouraging the construction of telecoms next-generation architecture. Current telecoms regulation has been designed largely to introduce competition into an existing and relatively stable industry environment, rather than to oversee and encourage the construction of an entirely different network and service environment.
The move to next-generation architecture is both a huge investment and a major change for the telecoms industry, and puts new pressure on competitive telecoms service provision. The report argues that the next five to ten years or more will present regulators and the industry with some difficult and fundamental issues, and that some regulatory decisions will have a correspondingly difficult and fundamental effect on some players and their business models. Players of all types should therefore be very concerned about the increased potential of regulators to adversely affect their businesses.
Three very broad, but fundamental, areas of regulatory concern emerge in the initial transition to next-generation architecture.
- Encouraging next-generation investment in the face of huge costs and uncertain rewards in a competitive environment.
- Handling fully converged services that bring together historically separate industries and players, such as telecoms, media, Web 2.0 companies and applications providers.
- Supporting general policy and socio-economic goals as next-generation architecture becomes an increasingly critical element of national infrastructure and source of national services.
While many of the issues are entirely new, and introduce new types of risk into the affairs of both the regulators and the regulated, others are continuations of earlier debates, but are given a new direction and intensity in the next-generation environment.
Regulatory approaches to these problems could fail if they are based on a historical view of telecoms competition. Policymakers need to decide on what degree and type of competition they wish to see emerge in the next-generation environment. There are various options – for example, the intention could be to maximise the opportunities for new players to enter the market, or to facilitate the development of next-generation access, or to enable competition in next-generation access – and much of the future of telecoms will depend on which is chosen.