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2009/TEL40/LSG/013

Agenda Item: 5c

Industry Round Table Draft Report

Purpose: Information

Submitted by: INTUG

/ Liberalization Steering Group MeetingCancun, Mexico
28-29 September 2009

APEC TEL 40, Cancun

Industry Round Table

DRAFT REPORT

Friday 25 September 2009, 1900-1230hrs

1.  Welcome and Introduction

On behalf of INTUG which had organized the programme, Mr Ernie NEWMAN welcomed delegates and introduced the Chairman for the Round Table, Mr Jorge ARREOLA of Mexico. Mr Arreola was currently the head of regulation for Telefonica, and had previously served for a number of years as a Commissioner with Mexico’s regulatory authority.

Mr Arreola extended a welcome to Mexico and explained the details of the morning’s programme.

2.  Presentation on: “The Hyperconnected World”

Speaker: Mr Yves POPPE, Business Development Director of Tata Communications, Canada

Mr Poppe outlined the changing trends in telecommunications, beginning with the change in how the telecommunications derived its revenue. He noted that broadband digital access increasingly prevails with DSL, cable, WiFi, WiMax, Fibre to the Premises and 3g. We were approaching the coming of age of “everyone, everything, always, anywhere connected.”

He spoke about some of the drivers of mobile Internet such as the iPhone, Google Android, and Windows Mobile. Technologies of this kind had driven huge growth, one example being that there were now one billion telephone subscribers in China. The old discrete distribution models were becoming blurred and the e-world was blurring carriers’ distribution models. Meanwhile, emergence of mobile Internet had enabled a range of location-based services to emerge, while IPTV and Internet TV would open huge opportunities – he quoted an observation in “The Economist” that advertisers would, for example, be able to target all “Desperate Housewives” fans in a specific location for a premium price.

Mr Poppe went on to speak about cloud computing which he described as currently the most hyped service. He moved on to outline the phenomenon of user generated content including blogging and YouTube. Referring to “the battle of the communicating living room,” he referred to a huge struggle looming for market supremacy between the consumer electronics industry and the computer industry.

Mr Poppe concluded that sensor networks, meanwhile, were becoming a major influence in the market and would be a very important driver of IPv6 services.

3.  Presentation on: “Smart Grids – the Verizon Perspective”

Speaker: Mr Anastacio RAMOS, Director of International Public Policy and Regulatory Affairs, Verizon, USA

Mr Ramos introduced the status of smart grids for energy efficiency. Achieving a pipeline for clean energy would require four components of which smart grid distribution was one – the others being large scale renewable generation, high voltage transmission, and end user efficiency. He defined a smart grid as an electricity grid that employs an overlay communications network to better manage the grid’s electricity “payload”. It had an architecture similar in concept to how railroad networks (the “payload” network) were once managed by telegraph lines (a “control” network).

Mr Ramos stressed that wherever possible economies should leverage existing wireless and broadband communications networks and capabilities rather than spend scarce resources on electric grid distribution transmission. Recreating ubiquitous broadband networks was not sensible.

He argued that the USA communications industry should be leveraged to provide the platform for smart grids. There was huge investment already in place and it made no sense to duplicate an expensive existing infrastructure. This would require Industry-wide use of open standards architectures to achieve economies of scale and sustain manageable interoperability of components.

Verizon, he said, was already providing services to 150 electricity companies and engaging with others with a view to demonstration grants.

4.  Presentation on: “Smart Grids – the AT&T Perspective”

Speaker: Mr Jake JENNINGS, AT&T, USA

Mr Jake Jennings endorsed the comments made by Mr Ramos in general. He stressed that any serious improvement in energy efficiency would require informed participation by consumers. They would need the ability to be informed in real time about the changing price of electricity, and to respond by remotely adjusting their usage – for example, temporarily reducing the temperature of their refrigerator from their workplace. A facility of that kind, Mr Jennings said, could deliver an immediate 5% saving in electricity consumption.

He noted that consumers would also need much more real time information as to their own consumption – for example, “What specific appliance is actually using most of my electricity right now?” That kind of detail could be provided across a smart grid.

There were security issues to resolve, Mr Jennings said. Other people could turn appliances on and off without authority. Or could identify premises where there was little consumption over a period and therefore there was probably nobody home.

Mr Jennings concluded by noting that wireless was a scarce resource. AT&T and Verizon had spare spectrum, but voice calls increasingly had to compete with people such as students downloading MP3 files.

There was a comprehensive discussion period following the above presentations.

5.  Presentation on: “Next Generation Access Networks in Europe”

Speaker: Ms Elena SCARAMUZZI, Cullen International, Italy

Ms Scaramuzzi delivered a comprehensive and informative presentation about the European approach to next generation networks, focusing on the status, deployment plans, and regulatory issues. One group of economies had ambitious deployment plans (Belgium, the Netherlands, Denmark) but limited coverage so far. Investment approaches varied considerably depending on the circumstances of each market. There was a strong policy debate proceeding within the European Regulators Group and European Commission, with some key issues emerging but a general consensus that the current regulatory approach including the “ladder of investment” was a suitable base on which to regulate in the NGN era.

Ms Scaramuzzi noted that the Commission had changed its position from an earlier draft recommendation in which it had recommended that the primary emphasis be put on regulating access to civil engineering infrastructure such as ducts. Its more recent recommendation recognised that access to ducts was not sufficient because in most cases, no ducts are available or the population density is too low for a sustainable business model. The emphasis was now on a full range of passive and active access remedies at cost oriented prices.

The way forward, she suggested, was to recognise the different stages, business models and strategies for NGA development across the EU. There were challenges and opportunities in adapting the EU policies and regulatory framework to stimulate NGA investment, ensure competition and protect consumer interests. Final adoption of the NGA recommendation was expected by early 2010.

6.  Presentation on: “Next Generation Broadband in Australia”

Speaker: Mr Richard BROWN, Department of Broadband, Communications and the Digital Economy, Australia

Richard Brown gave a comprehensive briefing on the Australian government’s plan for a National Broadband Network – using predominately Fibre to the Premises (FTTP) technology but supplemented by next generation wireless and satellite services. A new, company, initially Government owned, will invest up to AU$43 billion in the network. It will be a wholesale only operator, subject to regulatory oversight, and will seek a private sector investor. A lead advisor had been appointed to conduct an implementation study and would report early in 2010. A separate scheme was being developed for the island state of Tasmania.

Already the government has consulted and identified the first six priority locations for fibre backbone rollout, under the AU$250 million Regional Backbone Blackspots Program. It has also received and evaluated responses to the Request for Tender to build, operate and maintain the backbone transmission links in these locations;

The project will require regulatory reforms to the existing telecommunications framework including arrangements to address the vertical and horizontal integration of incumbent Telstra.

Mr Brown noted that the project is about more than a network, it is as much about competition and innovation. It is only competition and innovation, on top of the network that will delivering the benefits over the long run for Australia. The value of the NBN is in what people do with it, it is not in the network itself.

7  Discussion

All sessions generated a considerable amount of interest and discussion.

At the conclusion a vote of thanks was passed to all speakers and Mr Arreola for his chairmanship.

egn 27/09/2009