ACCESS TO NGA NETWORKS:

NEW WHOLESALE ACCESS PRODUCTS

EaP Meeting, June 2011

Trakai, Lithuania

Jorge Infante

CMT - International Department

2

INDEX

1.The context for NGAs regulation

2. EC Recommendation for NGAs

3. New wholesale access products for

NGAs

4. Case study: Spain

Market 4: Ducts Access, In-building wiring

Market 5: Wholesale broadband Access

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CONTEXT FOR NGAs REGULATION

THE CONTEXT FOR NGAs REGULATION

1. Migration to Next Generation Networks

Substitution of copper by fiber

Evolution to IP and separation of networks and services

High bit-rate application (IPTV, HDTV, video streaming, etc.)

2. Interplatform competition

Docsys 3.0 vs FTTX

3. Cost savings/investments

A single platform for all services.

Reduction of access points (less access switches)

High barriers for passive infrastructure deployment

4. Different technological architectures with different implications

POINT TO POINT VS. POINT TO MULTIPOINT

FTTH, FTTC, FTTB, FTTN

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THE EC RECOMMENDATION ON NGAs

REGULATION

Page 6

EC RECOMMENDATION ON ACCESS TO NGAs

September 2010: European Commission Recommendation on

regulated access to Next Generation Access Networks (NGA)

One of the key tools devised by the EC to fulfill the objectives

established in the EU Digital agenda.

It sets a common framework for NGAs regulation along the EU.

A lot of discussion in the previous versions. Criticism from NRAs: Too

prescriptive.

NRAs obliged to take “outmost account”. Departures to adapt to

national context need to be justified.

Page 6

Encourageinvestment in

NGAs

Safeguardefficient

competition

Ensure a levelplaying field in theEU single market

Balance

EC RECOMMENDATION ON ACCESS TO NGAs: PRINCIPLES (1)

1. Reference wholesale access offer for:

Unbundled local loop

Passive infrastructure (ducts, etc.)

2. Passive infrastructure: implementation of a database accessible to

all operators

Geographical location for each element

Capacity

Other relevant technical characteristics

3. SMP: new WBA products available 6 months before marketing retail

products.

4. Application of the principle of equivalence

Access provided under the same conditions to internal and to third-

party access seekers

EC RECOMMENDATION ON ACCESS TO NGAs: PRINCIPLES (2)

5. Migration path to NGAs:

Inform operators five years in advance

Inform about future network deployment plans.

6. Price regulation for wholesale access

Cost-orientation methodology

Risk-premium incorporated in cost of capital.

7. Definition of sub-national markets/remedies

Diversity in conditions of competition for NGAs

NRAs allowed to define differentiated markets

8. Incentives for joint deployments

When no SMP condition is met

Conditioned to implement duct capacity enough for third parties (to be

used at cost-oriented prices).

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NEW WHOLESALE ACCESS PRODUCTS

FOR NGAs

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NGAs LADDER OF INVESTMENT. NEW WHOLESALE ACCESS PRODUCTS

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MDF/ODF

unbundling

Resale

Bitstream(Ethernet incl. ALA, IP, ATM)

- DSLAM- parent node- distant node

Cabinet

unbundling

Concentration

Access to in-house wiringor equivalent

Access to the end user using own

infrastructure only

Access products

Leased Lines(incl. Ethernet)

Dark fibre

Duct access

Only owninfrastructure

+

Wholesale products to reachaccess point

MDF/ODF

unbundling

Resale

Bitstream(Ethernet incl. ALA, IP, ATM)

- DSLAM- parent node- distant node

Cabinet

unbundling

point unbundling

Access to in-house wiringor equivalent

Access to the end user using own

infrastructure only

Access products

Leased Lines(incl. Ethernet)

Dark fibre

Duct access

Only owninfrastructure

+

Wholesale products to reachaccess point

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fra

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uctu

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Incre

asin

gpro

port

ion

of

ow

nin

fra

str

uctu

re

MDF/ODF

unbundling

Resale

Bitstream(Ethernet incl. ALA, IP, ATM)

- DSLAM- parent node- distant node

Cabinet

unbundling

Concentration

Access to in-house wiringor equivalent

Access to the end user using own

infrastructure only

Access products

Leased Lines(incl. Ethernet)

Dark fibre

Duct access

Only owninfrastructure

+

Wholesale products to reachaccess point

MDF/ODF

unbundling

Resale

Bitstream(Ethernet incl. ALA, IP, ATM)

- DSLAM- parent node- distant node

Cabinet

unbundling

point unbundling

Access to in-house wiringor equivalent

Access to the end user using own

infrastructure only

Access products

Leased Lines(incl. Ethernet)

Dark fibre

Duct access

Only owninfrastructure

+

Wholesale products to reachaccess point

ERG (09) 17 Report on NGA - Economic Analysis and

Regulatory Principles

“the principle of the ladder of investment remains valid

in an NGA environment, but is expected to be a more

sophisticated ladder, with changes in the relative

importance of their rungs and, in general, different

dynamics, as a consequence of a shift in the economic

bottlenecks”

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OVERVIEW NGAS REGULATION IN THE EU

^: only mandated in some cases

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CASE STUDY: SPAIN

CMT REGULATORY OBJECTIVES

Making regulation technologically neutral

homogeneous regulation for fibre and copper…

although challenges posed by the migration to NGA must be addressed

Facilitating innovation and investment by all agents

Fostering sustainable competition

climbing up the ladder of investment towards infrastructure competition

Proportionality of the obligations

tailored to the specific competition problem

Striking the right balance between:

Foster competition Facilitate investments

For the maximisation of benefits for the consumers

CMT APPROACH TO MARKET 4: WHOLESALE PHYSICAL NETWORK ACCESS

Aims Remedies

Improve the competitive

situation in the retail

markets

• of copper-based offers

• of NGA-based offers

LLU & SLU

(facilitating FTTN

unbundling)

RO only for LLU

LLU/SLU of copper

(as in the 1st round)

LLU/SLU of FTTH not included

(not currently viable in a GPON scenario)

Access to passive

infrastructures

(viable substitute for LLU

operators in network

upgrading process)

General access to associated facilities

(as in the 1st round)

Duct Access

(at cost oriented prices)

Dark Fibre

(when ducts not available)

Facilitate the transition

from the traditional to the

NGA network

Control of the migration

process towards NGA

Information with 6 months in advance about

the NGA deployment

Guarantees in the case of exchanges

dismantling

– 5-year transitional period before dismantling

– Begin when >25% of Incumbent’s clients

connected to alternatives to copper

Additional measures with impact on market 4

Decision on symmetric measures imposing the sharing of in-house wiring (at reasonable prices)

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THE IMPORTANCE OF DUCTS ACCESS

Duct access is a facility hardly replicable

Constituting between 60%-80% of the costs related to FTTH deployment

Incumbent’s network is based on ducts

Main regulatory obligations imposed on Telefónica

Access (chambers, ducts, poles)

Collocation

Cost-oriented prices

Reference offer

PolesChambers Ducts

Remedies

Access • Meet reasonable requests for access to infrastructure resources

• When technical barriers arise, Telefonica shall offer alternatives (including dark fiber

rental).

Cost oriented prices

Transparency • Regulated Reference offer

• Provision of information on the technical and physical characteristics of the

infrastructures associated to exchanges, including space availability (6 months after

measures are in force)

Non discrimination • Quality parameters quarterly provided to CMT (for both wholesale and equivalent self-

provided activities).

• Agreements reached between interested parties shall be communicated to CMT.

Incumbent’s reference offer:

On-line information system with cartographic maps of

ducts, manholes, handholes and poles

Procedures and information systems to request

information about space availability as well as request

effective occupation

Technical specifications (rules on space usage and

maintenance, space availability criteria, …)

Economic specifications (prices, …), SLAs, KPIs

CMT APPROACH TO MARKET 4: DUCT ACCESS

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DUCT ACCESS REFERENCE OFFER: EXPERIENCE SO FAR

Two years of duct access in Spain

First experiences in 2008

Final version in place from April 2010

Main features

Access to urban Incumbent’s passive infrastructure

Can be used to deploy fibre/coaxial but not copper

Online application with cartographic information

SLAs and KPIs

Usage so far

1782 km of ducts used in the last 2 years…

… and more than 18.000 chambers

mainly requested for fibre deployments (Vodafone, Orange, Colt)

SYMMETRIC MEASURES IMPOSING THE SHARING OF IN-HOUSE WIRING

Obligations

Access to the fibre network

elements located inside of

close to the building

• The first operator to install the optical equipment/wiring inside the

building shall meet all reasonable access requests

• Regardless the solution implemented, the first mover must ensure

that the sharing is feasible and possible at a proportionate cost and

within a reasonable period

• Obligation to negotiate reciprocal agreements

• Centralised management of the network elements by the first mover

Reasonable prices

Transparency • Provide information about the buildings where the optical wiring has

been deployed

12th Feb 2009: decision adopted

Legal basis: Article 13.2 LGTel (obligations on non SMP operators)

Scope

buildings with no ITC (only of residential and mixed use)

New and already initiated deployments

Symmetrical obligations complement the remedies imposed to

Telefonica in the framework of market 4.

SCOPE FOR THE SYMMETRIC OBLIGATION (I)

Equipment

collocation

Tie cable Ducts, manholes, handhole Symmetrical

obligations inside

buildings

Sala de equipos

Collocation

Exchange Buildings

Reference offer for duct access

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SYMMETRICAL OBLIGATIONS: WHY?

Starting point is equivalent to all operators that intend to

deploy FO inside buildings.

Operators face problems related to usage of (scarce) space

in buildings and obtaining authorizations from the building

owners.

Mechanisms must be established to simplify the operative of

several operators interested in deploying fiber in buildings.

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Obligations are addressed to operators that deploy fiber optics

inside buildings.

Not included operators whose deployment is based in other

technologies (e.g. HFC).

Remedies apply to buildings where no ICT is enabled.

ICT: rules for the deployment of telecom infrastructures inside

buildings (areas for equipment, ducts for copper, coax

and fiber).

Business buildings are out of scope.

SCOPE FOR THE SYMMETRIC OBLIGATION (II)

CMT APPROACH TO MARKET 5: WHOLESALE BROADBAND ACCESS

Aims Remedies

Make regulation

technologically neutral

Wholesale broadband access available irrespective of:

• Copper-based offers

• NGA-based offers

Adapt regulation to the new

needs

“Enhanced bitstream” product:

• covering VDSL and fibre

• valid for VoIP services

Strike the right balance

between fostering competition

and facilitating investments

and innovation

(emphasis on investments by

alternatives on own

infrastructure)

Wholesale broadband access available up to 30 Mbps

(it is considered that for premium offers above 30 Mbps

alternatives can make use of the instruments available in

market 4)

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MARKET 5: NEW ETHERNET BITSTREAM SERVICE (NEBA)

Adopted in November 2010

Stemming from analysis of market 5

Pure Ethernet model both for residential and business costumers

Ensures VoIP reliability

Allows replication of NGA services in bitstream…

… but also differentiation from Telefónica

It emulates the behaviour of an own network Tariffs according to the

speed delivered at the Interconnection Access Point (instead of speed of

every user)

Available in pre-commercial terms in January 2012

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NEBA: HIGHLY FLEXIBLE PRODUCT

BE ORO RT Perfiles comerciales down up down up down up Perfil validación

v1 - 1M 1M - 25M/3M

v2 - - 2M 2M - - 25M/3M

v3 10M 1M - - - - 25M/3M

v4 10M 1M - - 256k 256k 25M/3M

v5 10M 1M 10M 1M 512k 512k 25M/3M

v6 - - 10M 1M - - 25M/3M

v7 - - 10M 1M 256k 256k 25M/3M

v8 - - 10M 1M 512k 512k 25M/3M

v9 25M 1M - - 256k 256k 30M/3M

v10 25M 1M 4M 1M 512k 512k 30M/3M

v11 25M 1M 4M 1M 1M 1M 30M/3M

v12 - - 25M 1M 256k 256k 30M/3M

v13 - - 25M 1M 512k 512k 30M/3M

v14 - - 25M 1M 1M 1M 30M/3M

v15 - - 25M 1M 2M 2M 30M/3M

v16 30M 1M - - - - 25M/3M

v16-2 30M 1M 128k 128k 25M/3M

v17 30M 3M - - - - 25M/3M

v17-2 30M 3M 128k 128k 25M/3M

v18 - - 30M 1M - - 25M/3M

v19-2 30M 1M 128k 128k 25M/3M

v19 - - 30M 3M - - 25M/3M

v19-2 30M 3M 128k 128k 25M/3M

NEBA conceived with a high list of commercial profiles...

...and more can be defined

predefined

profiles

categories

Commercial

profilesValidation profile

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Ethernet aggregation

xDSL: DSLAM IP

GPON: OLT

GigADSL

Internet

ATM aggregation

DSLAM ATM

Ethernet

NEBA

ADSL-IP nationalIP

Other operator

Internet

IP

ADSL-IP regional

OVERVIEW OF BITSTREAM PRODUCTS AVAILABLE

ATM

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Once NEBA will be available, Telefónica will not be mandated to

provide access to GigaADSL nor ADSL-IP (when overlapping of

PoIs)

Service LevelPoints of

Interconnection (PoI)Protocol

GigADSL Regional 109 PoI ATM

ADSL-IPNational 1 IP

Regional 50 IP

NEBA Regional 50 Ethernet

OVERVIEW OF BITSTREAM PRODUCTS AVAILABLE

CMT approachOverview of instruments available to altnets

Optical access

Exchange

Copper access

FTTH

FTTB

FTTN

COPPER

BitstreamLLU

Sub-loop

unbundling

Access to

passive

infrastr.

Own infrastr.

Access to in-house wiring

Dark fibre

Dark fibre

Dark fibre

CABLE

Cable

network

Up to 30 Mbps

Up to 30 Mbps

Up to 30 Mbps

Up to 30 Mbps

Market 5 Market 4

Aim of CMT approach:

Ensure that all the necessary rungs of the ladder of investment

are available to alternatives for all technologies (where viable)

Dark fibre

CMT APPROACH: OVERVIEW OF INSTRUMENTS AVAILABLE TO ALNETS

Thank you

jinfante@cmt.es