Letter of Transmittal by yantingting

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									                                   ECTEL
                           CONSULTATION DOCUMENT

     Recommendation of the Eastern Caribbean Telecommunications Authority
                                     (ECTEL)
     To the National Telecommunications Regulatory Commission to consult on
            Development of a Policy on Convergence and related matters

                                Consultation Document

                                          /N0.

                                    September 2006

    1. The National Telecommunications Regulatory Commission is in receipt of a
       submission from ECTEL containing ECTEL‟s Consultative Document for the
       development of a Policy on Convergence and related matters in [Member State].

    2. The Consultative Document is herein attached.

    3. The initial comments period will run from 15th September 2006 to 15th October
       2006.

    4. Reply comments from 20th October 2006 to 10th November 2006.

    5. Following the Reply Comments period, ECTEL will finalize and submit the draft
       Policy to the ECTEL Council of Ministers for its recommendation for adoption in
       the ECTEL Member States.

    6. All responses to this Consultative Document should be written and sent by post,
       fax or email to: -

                 Managing Director
                 ECTEL
                 P.O. Box 1886
                 Vide Boutielle
                 CASTRIES
                 St. Lucia
                 Fax: 1-758-458-1698
                 ConvergenceConsultation@ectel.int




Convergence Consultation                                               September 12, 2006
Disclaimer

This consultative document does not constitute legal, commercial or technical advice.
The consultation is without prejudice to the legal position of ECTEL to provide advice
and recommendations to the Ministers with responsibility for telecommunications and the
National Telecommunications Regulatory Commissions.


RATIONALE

In this paper:
Convergence is the intentional use of technology to integrate the devices necessary to
accomplish certain tasks. Broadly speaking there are three forms of convergence relevant
to this paper. These are digital, technological and telecommunications convergence.

Digital convergence is the process where all forms of information is being recorded,
stored, manipulated and transmitted in digital formats.

Technological convergence is the trend within the communications media where
through the application of digitalization and other technologies, all forms of media are
now being offered on single integrated platforms. We now have newspapers and radio on
the Internet, Personal Digital Assistants (PDAs) with in-depth reports from news houses
and phones with regular update from media sources.

Telecommunications convergence is the merger of the traditional legacy-based time
division multiplexing (TDM) architecture with today‟s packet-switching technology and
call-control intelligence, which allows commercial carriers and service providers to
consolidate voice and data networks to provide integrated communications services.
Telecommunications convergence has been fuelled by the use of the Internet Protocol
standard and technologies such as Voice over Internet Protocol (VoIP).

The Telecommunications Act1 in each of the ECTEL Member States outlines as one of its
principal objects of the regulation the telecommunications sector. However, whilst the
media of telecommunications are converging, the Telecommunications Acts2 of the

1

Section 2 of the Telecommunications Act, 2000 Laws of Grenada
Section 3(1) of the Telecommunications Act, 2000 Laws of the Commonwealth of Dominica
Long title of the Telecommunications Act, 2000 Laws of Saint Kitts and Nevis
Section 3 of the Telecommunications Act, 2000 Laws of Saint Lucia
Long title of the Telecommunications Act, 2001 Laws of Saint Vincent and The Grenadines

2

Section 5(1)(a)) of the Telecommunications Act, 2000 Laws of Grenada
Section 6(1)(a) of the Telecommunications Act, 2000 Laws of the Commonwealth of Dominica
Section 4(2)(a) of the Telecommunications Act, 2000 Laws of Saint Kitts and Nevis
Section 6(1)(a) of the Telecommunications Act, 2000 Laws of Saint Lucia
Convergence Consultation                         2                       September 12, 2006
ECTEL Member States explicitly excludes broadcast content from the scope of its
authority.

This exclusion in itself raises a critical issue because it prevents the ECTEL Member
States telecommunications regulator from including in its scope any broadcast content.
The benefits of the current ECTEL regulatory framework to its Member States should be
considered across the broader information and communication technologies and services
(ICT) sector. Conceptually, such a structure would be responsible for the regulation of
telecommunications, radio spectrum and broadcast content. Such a framework is aimed at
providing greater simplicity, flexibility and responsiveness in regulating in a converging
sector.

Also, as is noted above, the various telecommunications systems are converging yet the
policies and laws in place are designed to treat the various media separately. Previously,
different telecommunications services were provided on separate platforms. In the
converged environment, all telecommunications services can be provided on a single
platform which enables the provision of any type of content, including broadcast content,
if it is digital. This convergence is as a result of the emergence of New Generation
Networks.

In a converged world, a revision to the established regulatory categories may be required.
ECTEL is therefore seeking to develop policy that would address the issues of
convergence and the related regulatory matters. ECTEL has prepared this consultation
document to identify the issues and implications of convergence and to propose the
development of a Policy on Convergence. The Policy will address specifically the issue
of the change from a circuit switched environment to a packet switched one, and the
related issues such as Voice over Internet Protocols (VoIP).

ECTEL is conducting this Public Consultation on Convergence with the objective of
identifying and examining the regulatory ramifications of telecommunications
convergence and to formulate any consequential Policy Framework for regulation in a
convergent paradigm.

Question (i)
    Do you consider ECTEL’s decision to review the legislative framework and
    develop a policy that takes into account telecommunications convergence to be
    both timely and appropriate? If not, why not?




Section 3(1) (a) of the Telecommunications Act, 2001 Laws of Saint Vincent and The Grenadines.




Convergence Consultation                          3                        September 12, 2006
Question (ii)
    (a) Do you agree that the regulation of broadcast content should be brought
          under the telecommunications legislation?
    (b) If yes, what are the specific issues to be addressed in that framework?




1.0        THE CONVERGENCE DILEMMA

The problem to be addressed is whether the current regulatory framework is ideally
suited to govern the licensing of telecommunications networks and the provision of
telecommunications services in a converged environment. The telecommunications
networks in a converged environment are New Generation Networks (NGNs) are
converged networks and systems and are characterized by having four layers. These
layers are:

      1.   The network infrastructure facilities;
      2.   The network management;
      3.   The communications services; and
      4.   The information services.

The current ECTEL Regulatory Framework addresses the first three of the listed layers.
However, the information services are explicitly excluded from the scope of its authority.
The effect is that the operation of networks and provision of services are converging
while their regulation takes account of them in a discrete and divergent manner. The
above is evidenced in the ECTEL Member States, where, for example, if an established
cellular provider wishes to use a specific network management tool on its existing
infrastructure to provide fixed wireless services, it is required under the current regime to
file an application for separate fixed public licence. And, should he wish to provide
Internet service, he will be required to file yet another licence application. Therefore,
while the provider wishes to utilize his existing network infrastructure facilities with
appropriate network management tools to provide different communications services, in
order to comply with the current regulatory framework he requires three separate
licences. And in order to obtain these licences he must file three separate applications.

Where this same provider wishes to provide information content, he requires a separate
permission, which is not provided for under the current telecommunications regime. In
this context, information content includes video streaming, Internet radio, database access
and multimedia.




Convergence Consultation                            4               September 12, 2006
Background
In preparing this Consultation Paper, ECTEL noted the following:

   i.     The digitalization of telecommunication networks and all forms of
          communication and information content facilitates the convergence of
          formerly     discrete    telecommunications    services   on   a  single
          telecommunications network. Networks carrying all form of communications
          on a single platform are called New Generation Networks (NGN).

   ii.    The substantial amount of revenue derived from licence fees are paid as a
          percentage of gross revenues. Therefore if the licensing regime follows the
          manner in which telecommunications services are provided in a converged
          environment, then one can have a single licence to provide all
          telecommunications services. The result will be that instead of the revenue
          collector collecting the fees from several licences, the application of the
          percentage will be to a consolidated gross, with the net result being
          unaffected. In fact, such an arrangement will simplify the collection of fees
          because the targeted revenues will be in respect of one licence.

   iii.   With respect to frequency authorization administration, the regime is expected
          to remain the same. In fact, such a change in licensing arrangements may
          make the regime more transparent as the holder of the single licence will use
          its frequency authorization in connection with all of the services under that
          single licence. Whereas under the current regime, by legislative definition, a
          frequency authorization permits the holder to use radio frequencies in
          connection with the operation of a network or the provision of services under
          an individual or class licence or otherwise. Where there is a single licence to
          provide telecommunications services, the same frequency authorisation may
          be used to provide telecommunications services now being provided under
          several licences.

   iv.    Based on the above initial observations, it may be appropriate to revise the
          current licensing regime to provide for two main functional classes of
          operators. Such a revision may provide for facilities based operators (FBO)
          and service based operators (SBO) where the FBO is an operator that deploys
          any form of telecommunication networks, systems and facilities to offer
          telecommunication switching and/or telecommunication services to other
          licensed telecommunication operators, business, or consumer; while the SBO
          is an operator that leases telecommunication network elements such as
          transmission capacity, switching services, ducts and fibre from any FBO to
          provide telecommunication services to third parties or resell the
          telecommunication services of FBOs.

Question 1
Do you think that the above is sufficient justification for revising the current
licensing regime?
Convergence Consultation              5                    September 12, 2006
      (a) If yes, do you think that the suggested licensing regime with two types of
          licence is justified?

      (b) If no to either of the above, why not?

      (c) Should the ECTEL regime be modified to provide licences that recognize
          that the operation of networks and the provision of services are now done in
          a converged manner?
      (d) If yes, should the holder of a licence that allows the establishment and
          operation of facilities, be required to hold a separate licence to provide
          services that are intrinsic to those facilities?



2.0      Regulatory Issues

This Consultation Document identifies nine (9) critical regulatory issues for
consideration:

         (i)     Licensing
                 (a)    Regulation of separate services on convergent networks
                 (b)    Companies with deployed convergent networks being subject to
                        regulation of various services separately
                 (c)    Market conception and definition

         ii)     Jurisdiction and Legality

         (iii)   Public Resources
                 (a)    Spectrum
                 (b)    Numbering
                 (c)    Domain Names

         (iv)    Public service requirements
                 (a)    Emergency calling and positioning
                 (b)    Security and consumer protection

         (v)     Network Interconnection and Access

         (vi)    Revenue Settlements and Price Regulation

         (vii)   Universal Service/Access

         (viii) Quality of Service

         (ix)    VoIP Issues
Convergence Consultation                     6                 September 12, 2006
3.0       AN OVERVIEW OF CONVERGENCE

The combination of the development and increasingly pervasive applications of
information and communication technologies and services on the one hand, and the
worldwide movement to market liberalization and restructured regulation on the other,
are opening new opportunities for participation in the ICTs sector and the application of
communication-based services throughout the economy. Applications of Internet
Protocols (IP) have permitted the convergence of services on the Internet to include data,
pictures, music and video and also voice communication, including public voice services.
Voice over IP (VoIP) is the latest major step in a convergence process that has been
underway for three decades. It means that now all types of services can be provided in an
integrated manner over the Internet using IP. The Internet services in turn are provided
over the digital network facilities of telecommunications operators. The convergence of
telecommunications services using IP also completes a technical unbundling process that
allows for a clear separation of facility network capacity from the services supplied over
those facilities.

Four (4) layers characterize the New Generation Networks. These layers are:

         The Network Infrastructure Facilities that includes the cables, wires,
          microwave towers, mobile cells, and satellites that provide the raw capacity that
          enables telecommunications connections.
         The Network Management, (protocols and standards for routing & service
          quality) the standards and protocols that permit the routing and determine the
          technical quality of network services.
         The Communication Services providing basic, value-added & access to
          information services. This was previously referred to as the “Value-added”
          services layer.
         The Information Services where content is being provided.

The new structure of the overall market for telecommunication services is now a
horizontally structured market consisting of distinct submarkets for network
infrastructure capacity, network management, communication services and information
services.

This means that all telecommunications services are provided on common network
infrastructure facilities and the network management does the differentiation. This allows
for any type of content provision as long as it is digital. When this type of service
provision is coupled with a lowering of cost through the application of technology then
we are closer to the universal service access aim of “any service anywhere at anytime.”



Convergence Consultation                      7                    September 12, 2006
IP was developed for, and initially applied on, the Internet. The new trend however sees
the incumbent telephone operators being the largest users of IP around the world. Their
conversion of their entire telecommunications systems to IP is fuelled by the potential of
enormous cost reductions to be achieved and for the provision of new converged services
in the future information economy. These new services include e-commerce, e-
government and other e-application services. The establishment of new generation
networks is a reality in the ECTEL Member States.


3.1       Regulatory Implications
           Any regulatory framework should facilitate the realization of the full benefits of
           IP convergence in network and services development.

      3.1.1    Licensing

              a)   Regulation for separate services
                   During the early stages of telecommunication market liberalization, the
                   preferred method of sector reform was the licensing of
                   telecommunications operators and service providers. Additionally,
                   licences were granted for separate types of services including the operators
                   of licensed network. These licences defined the terms and conditions for
                   providing services, and required payments to governments for the
                   privileges associated with the license. Given that a converged network is
                   capable of providing all telecommunications services the justification for
                   separate licences is diminished.

              b)   Converged networks
                   Converged networks are capable of providing all telecommunications
                   services. The differentiation in provision of these services is done through
                   its network management. The implication therefore, is that where the
                   network is licensed the licencee should be allowed to provide as many
                   services as the network protocols can generate.

                   In these circumstances, the licences would be focused on the terms and
                   conditions of operations by the licencees whilst the legislation would
                   provide for the regulation of the sector including the activities of the
                   operators.

              c)   Market definition
                   Traditionally, markets were defined by geographic territoriality, geo-
                   economic policy and substitutability of services. However, convergence
                   through the use of protocols for the provision of an integrated supply of
                   different telecommunication services, defies physical boundaries and other
                   conventional limitations associated with telecommunications services
                   markets.

Convergence Consultation                        8                     September 12, 2006
    3.1.2        Jurisdiction and Legality
                 The Telecommunications Act3 prohibits the establishment or operation of
                 a telecommunications network or the provision of a telecommunications
                 service in the territory without a licence.
                 As noted above, IP convergence has enabled the breakdown of the
                 traditional boundaries with regard to provision of telecommunications
                 services. Critical to that breakdown is the pervasiveness of the Internet.
                 Digitalization of voice and the application of Internet protocols have
                 allowed for the transmission of voice telephony outside of the circuit
                 switched network. The various methods for the provision of voice
                 telephony using IP are as follows: computer to computer; computer to
                 phone and telephone to telephone.

                 These technological innovations have created a new form for the provision
                 of voice telecommunications where the „telecommunications provider”
                 provides a voice service without needing to establish an extensive
                 network.

                 The legislation requires that for someone to provide a telecommunication
                 service he must have the requisite licence. However, technology permits
                 the use of service without the physical presence of the provider in the
                 territory.

                 Three scenarios have developed. (1) Where the service is utilized, but
                 neither the provider of the service nor solicitation of business is in the
                 territory. (2) Where the service is available and the provider is not present
                 but is soliciting business in the territory. (3)Where the provider is not
                 present in the territory but a third party is present and soliciting business in
                 the territory.

Question 2
    a) Does the provider of the service fall within the jurisdiction of the regulator
    when there is neither presence nor solicitation in the territory?

      b) Does the provider of the service fall within the jurisdiction of the regulator
      when there is no presence but there is solicitation in the territory?

      c) Is the third party who is present in the territory and soliciting business on
      behalf of an absent ‘provider’ providing a telecommunications service?



3
 Section 29 of the Telecommunications Act 2000, Laws of the Commonwealth of Dominica
Section of the Telecommunications Act 2000, Laws of Grenada
Section of the Telecommunications Act 2000, Laws of Federation of St. Kitts/Nevis
Section of the Telecommunications Act 2000, Laws of the Saint Lucia
Section of the Telecommunications Act 2001, Laws of St. Vincent and The Grenadines
Convergence Consultation                        9                      September 12, 2006
The „non resident providers‟ compete with the licensed providers in the supply of
telecommunications services, particularly in the international calls market. ECTEL is of
the view that this competition has resulted in lower international calling rates. This no
doubt redounds to the benefit of the consumers and brings us closer to one of the goals of
ECTEL, “to provide affordable … telecommunications services to the people of the
Contracting States.”4 Notwithstanding this obvious benefit, ECTEL is of the view that
such competition from non resident providers should be carefully examined. From a
regulatory point of view, one of the most significant drawbacks is that they make no
contribution to the maintenance of the local telecommunications infrastructure or to
Universal Service Fund in particular or to the national treasury in general. In fact, as a
result of the legal requirements of the host countries of these „providers‟, local users may
be contributing to their Universal Service Funds and national treasuries.

Question 3
In the event that these non-resident providers remain unlicensed, should attempts
be made to have bilateral arrangements with their host governments for some
contribution from them to the local Universal Service Fund?



      3.1.3         Public Resources

              (a)   Spectrum
                    The spectrum allocation and assignment processes in the ECTEL Member
                    States were designed to ensure a secure source of funding for the
                    regulation of the telecommunications sector.

                    The converged provision of services demands that consideration be given
                    to the assignment of spectrum to a telecommunications network provider
                    who may then use the assigned spectrum for the provision of any service
                    by that network.

              (b)   Numbering
                    Convergence has facilitated the establishment of Mobile Virtual Networks
                    (MVN) which are operated by companies that do not own licensed radio
                    spectrum but resell wireless services under their own brand name, using
                    the network of other mobile telephone operators. In the ECTEL Member
                    States, current policy limits the assignment of numbers to actual network
                    operators. However, in its drive to achieve the full benefits of
                    liberalization, consideration should be given to licensing of Mobile Virtual
                    Network Operators (MVNO). If it is implemented then these new
                    licensees, who do not have actual networks, would require numbers for
                    their operations. They may acquire numbers from the regulator or from an
                    actual network operator. If an MVNO is required to obtain numbers for its

4
    ECTEL Treaty Preamble.
Convergence Consultation                         10                    September 12, 2006
                 operations from actual network operators it would be dependent on such
                 operators for network usage, spectrum use and numbers.              Such
                 dependency will no doubt have a negative impact on its competitiveness.
                 In order to minimize that negative impact, if the licensing of MVNOs is to
                 be adopted, consideration should be given to changing the policy with
                 regard to assigning numbers to only actual network operators.

Question 4
Should the licensing of MVNOs be adopted? If so, should the regulator be required
to provide such operators with their own numbers?



           (c)   Number Portability
                 Number portability is a telecommunications network feature that enables
                 end users to retain their telephone numbers when changing service
                 providers, service types, or locations. Convergence facilitates the
                 provision of several service types indistinct of location or service provider.
                 In a converged environment, a single number can be used for all of the
                 users‟ services even if they are from different providers. Convergence
                 therefore facilitates all of the above outlined types of number portability.

Question 5
Should number portability be made mandatory between service providers, service
types and/or locations?


          (d)    ENUM
                 Electronic Numbering (ENUM) is a technology that allows users to
                 combine the resources of the Internet with traditional telephony, uniting
                 the two worlds of telecommunications and thereby enabling a whole new
                 range of communications applications. These applications include
                 geographical roaming for any type of service using a single number,
                 moving between services using the same number, and users accessing
                 multiple services again using the same number. In summary, with ENUM,
                 all telecommunications services will be available everywhere and
                 accessible through a single number.

                 ENUM is a new numbering scheme that maps conventional telephone
                 numbers to the Internet addresses thereby facilitating the treatment of
                 traditional telephony as an IP service. This treatment is a technological
                 convergence and enables the provision of a host of new services based on
                 the applications outlined above.



Convergence Consultation                      11                      September 12, 2006
Question 6
Should ECTEL recommend the adoption of ENUM? If so, should it be a phased
adoption?



         (e)     Domain Name

                 Domain name is a name that is entered into a computer and then looked
                 up in the global Domain Name System which informs the computer of the
                 IP address (es) with that name. Every domain name ends in a top level
                 domain name, which is always either one of a small list of generic names
                 (three or more characters), or a two characters territory code based. A top
                 level country domain name is one that ends in the acronym representing
                 that country.

                 In a converged world where the Internet Protocols and the Internet take
                 prominence, the top-level country domain name then becomes a national
                 resource of paramount importance. As with other vital national resources,
                 additional attention needs to be paid to the administration of the top level
                 country domain name. The Telecommunications Act5 mandates that the
                 National Telecommunications Regulatory Commission is to be
                 responsible for the registration and management of Internet domain
                 names.

Question 7
Should the Commissions in conjunction with ECTEL, as a matter of urgent national
importance, begin the administration of the top level country domain names in the
respective ECTEL Member States?



    3.1.4        Public Service Requirements
                 As discussed above, the traditional ways of providing various
                 telecommunication services have changed significantly with convergence.
                 However, some of the critical public service provisioning under the
                 traditional telecommunications systems need to be maintained even in the
                 newly converged environment. These can be generally referred to as
                 public service requirements and the two main ones are emergency calls
                 and positioning, and security and consumer protection.

5
    Section 53 of the Telecommunications Act 2000, Laws of the Commonwealth of Dominica
    Section 52 of the Telecommunications Act 2000, Laws of Grenada
    Section 52 of the Telecommunications Act 2000, Laws of Federation of St. Kitts/Nevis
    Section 53 of the Telecommunications Act 2000, Laws of the Saint Lucia
    Section 51 of the Telecommunications Act 2001, Laws of St. Vincent and The Grenadines
Convergence Consultation                        12                       September 12, 2006
       (a)     Emergency Calling and Positioning
               Conventionally, over a circuit switched network each telephone number is
               associated with a physical location and when a call is made from that
               number the switch knows the number calling and by extension the location
               of the caller. Therefore, when fixed line calls are made on a circuit
               switched network to emergency services the number and location of the
               caller is immediately and automatically known. In the case of a mobile
               call the location of the caller can be traced to within the nearest cell site of
               the caller. Currently, in the case of a converged network, the location of
               the caller cannot always be determined with any level of certainty. Where
               the caller is utilizing Internet access to facilitate the call that call can be
               made from any location in the world. However, network will place him at
               the location in the information given to the service provider. It is therefore
               readily apparent that the provision of emergency telecommunications in a
               converged world raises serious issues involving life and property.
               Consequently, whilst convergence brings many benefits, these benefits
               should not override the responsibility of telecommunications providers to
               ensure that their service includes the above outlined advantages of
               traditional emergency services. One solution is to require licensed
               providers of converged services to ensure that their service includes the
               call origination positioning functionality for emergency services or to
               make it clear to users of their service that such functionality is unavailable
               on their network.

Question 8
Should licensees be provided with such an option or be required to provide a
technical solution which includes access?



       (b)       Security and consumer protection
                 As discussed above, VoIP has revolutionized voice telephony. It enables
                 lower calling costs, online storage of voice messages, increased flexibility
                 for conference calling, and international accessibility of personal voice
                 telephony services. On the other hand, there are certain security risks
                 associated with using this technology. Some of these are theft where
                 hackers can access stored data and use the VoIP account to make free
                 calls; and, VoIP servers are prone to attacks from viruses which may result
                 in loss of telephone services and may also affect other computers
                 connected to the system; caller identification spoofing where a false caller
                 ID is displayed to deceive call recipients with the objective of committing
                 fraud. These security risks arise because there is no one to-one relation
                 between the service and the physical infrastructure. Convergence allows
                 voice telephony to be provided as an IP service on the Internet. But,
                 anyone with access to the Internet can tap the signal and actively damage
Convergence Consultation                       13                    September 12, 2006
                 the integrity of the message. To prevent this threat, VoIP providers
                 generally implement end-to-end encryption. Such encryption, though not
                 100% secure, can establish security levels comparable to those of regular
                 telephony. It is noteworthy that where the medium for transmission uses
                 VoIP, encryption will hinder law enforcement authorities lawfully tapping
                 someone‟s telecommunications message.

Question 9
Should ECTEL develop policies to require that telephone service providers ensure
security and consumer protection whilst allowing law enforcement authorities to
lawfully tap telecommunications messages where the medium for transmission uses
VoIP?



        3.1.5    Network Interconnection and Access
                 Convergence is changing the traditional approach to interconnection.
                 Circuits are neither connected nor provided. Neither distance nor time, is a
                 determining cost factor. New measures relating more to increments of
                 bandwidth, quality of service and other claims on network capacity are the
                 more applicable standards of measurement. Consistent with this changing
                 face of interconnection and access, ECTEL is currently developing a new
                 interconnection regime which includes the publication of revised
                 Telecommunications (Interconnection) Regulations, Telecommunications
                 (Wholesale) Regulations, Reference Interconnection Offers (RIO) and
                 Long Run Incremental Cost (LRIC) Models. Public consultation on the
                 revised Interconnection Regulations has been completed, whilst a similar
                 consultation for the Wholesale Regulations is ongoing. It is anticipated
                 that there will soon be public consultations on the RIOs and LRIC Models.

Question 10
Are there other instruments which can be used separately or with those outlined
above for a more efficient regulation of an interconnection regime in a converged
environment?



        3.1.6    International Revenue Settlements
                 In traditional circuit switched networks, it is easy to calculate settlement
                 payments for the volume of minutes passing between two networks for
                 international telephony traffic. The bedrock of the existing method for
                 revenue settlements for international traffic is the ease of calculation of
                 these traffic volumes. International settlement payments are the major
                 source of revenue for the major telecommunications providers in the
                 ECTEL Member States.

Convergence Consultation                      14                    September 12, 2006
                 Convergence however has shifted the focus from the calculation of traffic
                 volumes to consideration of flat payments for allocated bandwidth.

                 In respect of the effect of convergence on revenue settlements the
                 following must be also noted.

                 1. As outlined in 3.1.2 above, several non-resident „telecommunications
                    providers‟ offer service that is purchased by local residents. These
                    payments include contributions to Universal Service Funds.

                 2. There has been increased usage of Internet „telephony‟ which may
                    have already caused a significant decrease in the use of traditional
                    circuit switched international calling with the related impact on
                    revenues from such calling. This would have a concomitant negative
                    impact on the revenue base for contributions to the Universal Service
                    Funds in the ECTEL Member States.

Question 11
Should ECTEL advise its Member Governments to seek mutually beneficial
arrangements with the Governments of the ‘non-resident telecommunications
providers’ regarding contributions to the Universal Service Funds in its Member
States?



        3.1.7    Universal Service/Access
                 The ECTEL Member States require that all licensed telecommunications
                 providers make a contribution to the Universal Service Fund. ECTEL‟s
                 enabling Treaty includes, as part of its mandate, the provision of
                 universally available telecommunications service. Before the advent of
                 convergence, the provision of universal service required significant build
                 out of infrastructure with a large capital outlay by the licensed network
                 operators. Through the marriage of various technologies on a common
                 platform, convergence allows for cost-effective IP based solutions. One of
                 the most important solutions is that the previously capital intensive build
                 out of infrastructure is minimized by the provision of access to
                 telecommunications in remote areas utilizing wireless technologies. This
                 cost effective solution is enabled by New Generation Networks which
                 facilitates the mix of the already established wireline with both wireless
                 and IP based technologies on the same platform. With such cost effective
                 solutions, licensed providers are now able to provide access to
                 telecommunications in areas which were previously considered
                 uneconomical to do so.



Convergence Consultation                     15                     September 12, 2006
Question 12
In a converged environment, which services should the Universal Service Fund
focus on?




        3.1.8    Quality of Service
                 Although convergence has given us new and cost effective technologies
                 such as VoIP, it should be borne in mind that in a typical VoIP based
                 telephone service there is limited “end to end” control of the network. This
                 lack of “end to end” control renders the maintenance of Quality of Service
                 standards difficult. However, new protocols like IPv6 offer hope for
                 increased quality standards but are yet state of the art. Bearing in mind the
                 aforementioned, consideration must be given to setting standards for
                 network operators in their provisioning of service to resellers and
                 consumers.

Question 13
Should quality of service standards be established for both telecommunications
network operators and for resellers?



4.0      CONCLUSION
        A new regulatory policy may be required to appropriately address the new
        paradigm created by technological convergence. Any new policy for the new
        convergence in telecommunications must address all of the issues indicated herein
        and should include a strategy for managing any required transition process, and
        developing plans and procedures for the effective implementation of the new
        policies.




Convergence Consultation                      16                     September 12, 2006

								
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