Telecommunications Regulation

Telecommunications Regulation examines the background to regulation and the work of the regulator. It discusses typical regulatory rules and the legal and administrative framework for regulation, and looks at regulatory strategies, market structures and approaches to price control. The book includes a number of case studies which show how regulators engage with such topical issues as interconnection and loop unbundling, and also features technical coverage of both numbering and number portability. Finally, it looks at new products and services such as virtual network operators, intelligent networks, radio spectrum and next generation networks, and considers the impact these might have on the future of regulation.

Publication of this book is very timely since it includes coverage of the four new European Directives on Telecommunications Regulation (the Framework Directive, the Access and Interconnection Directive, the Authorisation Directive and the Universal Service Directive) which came into force on 23 July 2003.

A comprehensive, in-depth guide to the subject, this book will be a valuable resource for engineers and managers in the industry, as well as lawyers and economists needing an insight into current telecommunications regulation.

Foreword
Preface
Acronyms

Chapter 1 : Competition and Privatisation: The Background to Regulation
1.1 Overview
1.2 The Economics of Markets
1.2.1 Market Economies
1.2.2 Demand Economics
1.2.3 Supply Economics
1.2.4 The Price System Under Perfect Competition
1.2.5 Market Structures and Market Failure
1.2.6 Monopoly
1.3 Privatisation of Publicly-Owned Enterprises
1.3.1 The Political Basis of Privatisation
1.3.2 Government Spending and The Public Purse
1.3.3 Commercial Aspects of Privatisation
1.3.4 Cultural Factors in Privatisation
1.3.5 The Morality of Privatisation
1.3.6 Forms of Privatisation
1.4 Regulation: A Guide to This Book
1.5 Notes
1.6 References

Chapter 2 : The Task of Regulation
2.1 Why Regulate?
2.1.1 Mission and Goals
2.1.2 Reasons for Intervention
2.1.3 Reasons for Sector-Specific Intervention
2.1.4 Outcomes of Regulation
2.2 Markets and Market Failure
2.2.1 Classic Causes of Market Failure
2.2.2 Classification of Markets and Market Power
2.2.3 Working Definitions of Market Power
2.3 Abuse of Market Power
2.3.1 Overview
2.3.2 Predatory Pricing
2.3.3 Margin Squeeze
2.3.4 Discrimination
2.3.5 Bundling or Linkage of Sales
2.3.6 Exclusive Dealing Arrangements
2.3.7 Cross-Subsidy
2.3.8 Intellectual Property and Information Sharing
2.4 The Rules of Regulation
2.4.1 Overview
2.4.2 Administrative Rules
2.4.3 Service Obligations and Social Regulation
2.4.4 Consumer Regulation
2.4.5 Regulation to Promote Competition
2.4.6 Controls on Operators Without Market Power
2.5 Notes
2.6 References

Chapter 3 : The Framework for Regulation
3.1 Legal Frameworks
3.1.1 Regulation and The Law
3.1.2 Sector-Specific Regulation
3.1.3 Ex-Post and Ex-Ante Regulation
3.1.4 Relationship with Competition Law
3.1.5 Principles of Administration
3.1.6 Relevant Adjacent Laws
3.2 Styles of Regulation
3.2.1 Introduction
3.2.2 Intrusiveness of Regulation
3.2.3 Self-Regulation
3.2.4 Co-Regulation
3.2.5 Formal Regulation
3.3 Instruments of Regulation
3.3.1 Authorisation
3.3.2 Licence Conditions, Rules and Orders
3.3.3 Determinations and Consents
3.3.4 Guidelines
3.3.5 Consultation
3.3.6 Judicial Review
3.4 Enforcement
3.5 Funding and Accountability
3.5.1 Funding
3.5.2 Independence and Accountability
3.6 National Frameworks
3.6.1 UK and Europe
3.6.2 USA
3.6.3 New Zealand
3.7 Dangers of Regulation and Operational Aspects
3.7.1 Regulatory Hazard
3.7.2 Regulatory Paralysis
3.7.3 Skill Requirements
3.7.4 Information Asymmetry: The Knowledge Gap
3.7.5 Regulatory Capture
3.7.6 Regulatory Culture
3.8 Notes
3.9 References

Chapter 4 : Regulatory Strategy and Price Controls
4.1 Appropriate Regulation and The Need for Discretion
4.2 Market Strategies
4.2.1 The Need for A Regulatory Strategy
4.2.2 Is Telecommunications A Natural Monopoly?
4.2.3 Competitive Arenas in Telecommunications
4.3 Market Structures
4.4 Price Control
4.4.1 Principles of Price Control
4.4.2 Rate-Of-Return Control
4.4.3 Direct Price Control
4.4.4 Cost-Based Price Control
4.4.5 Strategies for Price Control
4.5 Engineering and Technology
4.5.1 Technological Neutrality
4.5.2 The Role of Engineers
4.6 Notes
4.7 References

Chapter 5 : Interconnection
5.1 Definitions and Overview
5.2 Physical Arrangements for Interconnect
5.2.1 Methods of Interconnection
5.2.2 Interconnection and Operator Network Architectures
5.3 Access Interconnection
5.3.1 Methods of Access Interconnection
5.3.2 Direct Ownership of Access Network
5.3.3 Leased Lines
5.3.4 Indirect Access
5.3.5 ‘Easy’ Access
5.3.6 Carrier Pre-Selection (CPS)
5.4 Commercial Aspects of Interconnect
5.4.1 Incremental Cost Basis for Interconnection Price Control
5.4.2 Partial Private Circuits (Ppcs)
5.4.3 Interconnection Call Charge Dynamics
5.4.4 Interconnection Call Price Structures
5.4.5 Interconnection Accounting
5.5 Technical Interfaces for Interconnection and Interoperability
5.5.1 Basic Issues and Regulatory Approaches
5.5.2 Interoperable Service Types
5.5.3 Technical Interfaces and Market Power
5.5.4 Regulatory Strategy
5.6 International Interconnection Accounting
5.7 Interconnection, Service Quality and Network Integrity
5.8 Interface Regulation and The ISO 7-Layer Model
5.9 Notes
5.10 References

Chapter 6 : Telecommunications Numbering
6.1 Conceptions and Misconceptions About Numbering
6.2 Numbering Fundamentals
6.2.1 Growth Pressure
6.2.2 Numbering Requirements
6.2.3 Features of Numbering Systems
6.2.4 Numbering for New Services
6.2.5 Numbering for Competition
6.3 Management of Numbering
6.3.1 First Principles: Construction and Evolution
6.3.2 Capacity: The Demand Side
6.3.3 Capacity: The Supply Side
6.3.4 Area Coding Schemes
6.3.5 Management of City Numbering Schemes Close to Exhaustion
6.4 Administration of Numbering
6.4.1 Role of The Regulator
6.4.2 National Numbering Scheme Definition
6.4.3 Day-To-Day Administration
6.4.4 Case Study: 0800 Numbers in The United Kingdom
6.5 Recent Issues and Broadband Numbering
6.6 Notes
6.7 References

Chapter 7 : Number Portability
7.1 Introduction
7.1.1 Types of Number Portability
7.1.2 Service Provider Portability
7.1.3 Ownership of Numbers
7.2 The Costs and The Benefits of Number Portability
7.3 A Functional Specification for Number Portability
7.3.1 Basic Entities and Rules
7.3.2 Call Routeing to Ported Numbers
7.3.3 Number Portability and Service Areas
7.3.4 Operational Processes
7.4 Technical Implementation of Number Portability
7.4.1 General Themes: in and Onward Routeing Solutions
7.4.2 Geographic Number Portability
7.4.3 Non-Geographic Number Portability
7.4.4 Mobile Number Portability
7.5 Regulatory Strategy for Number Portability
7.5.1 Background
7.5.2 The Terms of The Portability Requirement
7.5.3 Choice of Technical Solutions
7.5.4 Commercial Arrangements
7.6 Notes
7.7 References

Chapter 8 : Local Loop Unbundling and Broadband Services
8.1 Definition and Overview
8.2 DSL Technology and Applications
8.2.1 DSL Technologies
8.2.2 The DSL Family
8.2.3 DSL Applications
8.2.4 Alternative Technologies for Broadband
8.3 System Architectures
8.3.1 Basic DSL Service Architecture
8.3.2 Co-Location and Distant Unbundling
8.3.3 Full Unbundling, Sub-Loop Unbundling and Line Sharing
8.4 Commercial Aspects
8.5 Regulatory Approaches
8.5.1 Requirement for Unbundling
8.5.2 Strategic Issues
8.5.3 The Access Network Frequency Plan
8.5.4 Co-Location Space Allocation: A UK Case Study
8.6 Notes
8.7 References

Chapter 9 : New Products and Services
9.1 Regulation in A Changing World
9.1.1 Change and Stability
9.1.2 Basis for Regulatory Intervention
9.2 Dial-Up Internet Access
9.3 Mobile Virtual Network Operators
9.4 The Intelligent Network (IN)
9.5 Next Generation Networks and Services
9.5.1 Voice Over Internet Protocol (Voip)
9.5.2 Next Generation Network Technology
9.5.3 Regulation and Next Generation Networks
9.6 Other Issues
9.6.1 Radio Spectrum
9.6.2 Location Services
9.6.3 Roaming and Call Terminating Charges
9.6.4 Premium Rate Services
9.6.5 Telemarketing and Automatic Call-Making Devices
9.7 Notes
9.8 References

Chapter 10 : Regulation and The Future
10.1 Progress Report
10.2 Future Regulatory Strategy
10.2.1 The Goal of ‘Light Touch’ Regulation
10.2.2 The New European Framework
10.2.3 Price Control Paradigms
10.2.4 Vertical Separation
10.2.5 Operator Bankruptcy
10.3 New Technology
10.3.1 Mobility
10.3.2 Next Generation Networks
10.4 Note
10.5 References

Appendix : The New European Framework
A.1 Existing and Historic Directives
A.2 The European Regulatory Framework
A.3 The Framework Directive
A.4 The Authorisation Directive
A.5 The Access and Interconnection Directive
A.6 The Universal Service Directive
A.7 References
Index