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Saturday, September 9 • 9:00am - 9:33am
Policy Alternatives for Better and Wiser Use of the NGN: Competition, Functional Separation, or What?

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Background
To cope with increasing traffic and meeting various ISPs services, NTT East and West (NTT locals) initiated an NGN (Net generation network) service, which enables rapid and large-volume data transmission, in 2008. The NGN network is different from FTTH, since not only is it a bandwidth guaranteed network but QoS can also be controlled. It is the most advanced network. The number of NTT local NGN subscribers amounted to 18 million as of March 2016.
Contents become richer and richer, and the migration of PSTN to the IP network has started to be discussed and NTT locals are proposing that PSTN be accommodated by NGN. Although FTTH is the best-effort type, NGN guarantees that the bandwidth and can handle voice data as well. Regulations of NTT’s FTTH related to unbundling and connection charges were already fully implemented. This has caused its rapid diffusion in Japan. NGN has been less utilized by competitors and thus, except for the unbundling of minor services, the above issues were not focused on.

NGN Policy issues
Because of the increase in demand for NGN, competitors including carriers, broadband providers, and ISPs have been asking for the same regulations as FTTH by recognizing NGN as an essential facility. Not all countries implement unbundling, since it kills carriers’ incentive to deploy FTTH networks. The areas covered by FTTH networks currently amounts to 95% of Japan, and the rate of growth of FTTH subscribers has been declining, implying that it is approaching satiation level. NTT’s share of subscribers is 70%, and that of facilities is 78%. In the case that PSTN is accommodated by NGN, its total share will surely increase, because the number of legacy subscribers is 23 million and NTT’s share is 99.8%. With the process of migration, NTT’s share is expected to rise. In this sense, the implementation of competition policy to NGN is one possible alternative.

Another alternative?
Toward policies for NGN, the keys are the share of NTT and the essentiality of NGN. However, there is one more option; functional separation. Accounting separation and functional separation were already implemented with NTT’s FTTH, and further operational separation and ownership separation are alternatives. Regarding functional separation, the issues include incentives for deployment, promotion of competition among firms for access to NGN, and the efficiency of vertically separated networks. These are crucial.
The policy alternatives mentioned are two extremes; unbundling and functional separation, but other options exist between these two. This study aims to find the policy particularly by considering policy goals and policy evaluation. The traditional market shares are not enough anymore in the current telecommunication circumstances. NGN should be for all entities to access and utilize it for various applications leading to new economies such as industry 4.0, telecommunications 4.0, or telemedicne 2.0. This study thus focuses on how NGN can be utilized fully and wisely was we move toward the age of IoT and 5G.

Moderators
Presenter
MT

Masatsugu Tsuji

Professor, Kobe International University

Author
BE

Bronwyn E. Howell

Victoria University of Wellington
SS

Sobee Shinohara

KDDI Institute, Inc.

Saturday September 9, 2017 9:00am - 9:33am
ASLS Hazel Hall - Room 332

Attendees (5)