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SEPARATING THE TRANSPORT LAYER, LEVELING THE PLAYING FIELD?

SEPARATING THE TRANSPORT LAYER, LEVELING THE PLAYING FIELD?. Chris Witteman, Staff Counsel* California Public Utilities Commission wit@cpuc.ca.gov *These comments do not necessarily represent the views of the Division or Ratepayer Advocates or the CPUC.

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SEPARATING THE TRANSPORT LAYER, LEVELING THE PLAYING FIELD?

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  1. SEPARATING THE TRANSPORT LAYER, LEVELING THE PLAYING FIELD? Chris Witteman, Staff Counsel* California Public Utilities Commission wit@cpuc.ca.gov *These comments do not necessarily represent the views of the Division or Ratepayer Advocates or the CPUC.

  2. Special Access - U.S. – Sometimes referred to as Middle Mile

  3. Last Mile – US

  4. Middle and Last Mile:U.K. (pretty much the same)

  5. Keep it Simple?Base and Superstructure • At its most basic level, the Internet runs on wires (PSTN): • Application • Physical Transport

  6. Internet Protocol, the new Lingua Franca Electronic communications networks are becoming  packet switched, mostly or completely based in the IP [Internet Protocol].  They will be multi-service networks, rather than service specific networksfor audio (including voice), video (including TV-services) and data networks -- allowing a decoupling of service and transport provision… European Regulators Group Consultation Document On Regulatory Principles of IP-IC/NGN Core (2008)

  7. Apropos Layers • A crucial point is the adoption of open and standardized interfaces between each functional level in order to allow third parties to develop and create services independent of the network. • European Regulators Group Consultation Document, supra

  8. The BT/Ofcom solution

  9. Openreach’s self-description • The local access network – the wires and fibres that connect tens of millions of homes and businesses to local telephone exchanges is one of the UK’s most important assets, and Openreach was created to give communications providers equal access to it. • Our customers are Communications Providers  - the companies end users choose to provide telephone, internet, and more recently television services to their home or business. openreach.co.uk

  10. Scope of Openreachlimited to areas of SMP Customer premises ~26m homes Local Telephone Exchange 5,600 Core Node. DistributionPoint (DP)~8m poles Main Primary Distribution Secondary Connection Point Connection Point CP Core Node Frame ~90,000 cabinets LLUO Space Line Card Overheadand underground distribution BTW Core Node E-side Cables D-side Cables Backplate of NTE Backhaul products Copper Cables openreach Openreach is also responsible for all duct, access fibre and copper & fibre backhaul Regulated asset value c.£ 9.6 billion Demarcation Points

  11. In U.S.: Incumbent’s view

  12. And why is it imprudent?

  13. Ofcom Result – Greater Competition

  14. Result - lower price

  15. X Degrees of Separation – US History • Kingsbury Commitments (1913) – separation of telephone & telegraph, mandatory interconnection • Carterfone (1968) – separation of network from end-user equipment) • Whitehead Report (Nixon White House 1974) – separation of cable network and content • Computer II (1980) – structural separation

  16. The Great Unravelling of the concept of competition and open access • Computer III (1986) • non-structural “safeguards” • 1996 Telco Act – • Unbundling and wholesale access as substitute for separation (didn’t work) • 2003 Triennial review • Eliminated fiber unbundling • DC Circuit USTA II 3/2/04 • Effectively eliminated UNE-P, precipitated mergers • Cable Modem/Brand X – • No telco, common carrier, unbundling requirements for broadband

  17. Google’s “Range of Tools” • 6 Proposed NN Rules (or 5 Rules only, or Disclosure only) • More Detailed Openness Rules – re, e.g., QoS • More Detailed Access Rules – UNEs, Dom Carrier Pricing… • Non-Structural Sep’n – Access as Telco Serv (vs Info Serv) • Computer III – “Comparably Efficient” • [Functional Separation] • Structural Separation – Computer II • Ban: No Cross Ownership

  18. is Openreach going to do fiber? • Next Generation Access (NGA) is the Openreach programme dedicated to shaping tomorrow's communications environment. We're working with our customers, the regulator, industry and other stakeholders to ensure that we build a clear picture of an access network that's fit for the future. www.openreach.co.uk • Fibre to the Premises • Fibre to the Cabinet • Generic Ethernet Access

  19. OK, What’s the Catch? • ILECs - “Not going to use my pipes” • Argument: Cable Cos - Different History • Argument: Doesn’t apply where cable-telco competition • Argument: Difficult to apply to fiber • Argument: Requires rate-setting on basic network services

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