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ENCORE workshop: Calling Party’s Network Pays vs. Bill and Keep INTRODUCTION

ENCORE workshop: Calling Party’s Network Pays vs. Bill and Keep INTRODUCTION. Stein Smeets April 22 nd 2008. CUSTOMER A. CUSTOMER B. CUSTOMER A. CUSTOMER B. origination. interconnection. termination. origination. interconnection. termination. Important concepts. Interconnection:

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ENCORE workshop: Calling Party’s Network Pays vs. Bill and Keep INTRODUCTION

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  1. ENCORE workshop: Calling Party’s Network Pays vs. Bill and Keep INTRODUCTION Stein Smeets April 22nd 2008

  2. CUSTOMER A CUSTOMER B CUSTOMER A CUSTOMER B origination interconnection termination origination interconnection termination Important concepts Interconnection: the physical and financial linking of different operators’ networks not the same as access! Interconnection: the physical and financial linking of different operators’ networks

  3. bill and keep receiving party pays receiving party pays € € € calling party pays bill and keep € € CUSTOMER A CUSTOMER B calling party pays calling party’s network pays € € origination interconnection termination Important concepts (cont.) Interconnection: the physical and financial linking of different operators’ networks important to distinguish between wholesale and retail

  4. Why the comparison? EU framework directive, section 8.2 The national regulatory authorities shall promote competition […] by inter alia: (a) ensuring that users, including disabled users, derive maximum benefit in terms of choice, price, and quality; (b) ensuring that there is no distortion or restriction of competition in the electronic communications sector; (c) encouraging efficient investment in infrastructure, and promoting innovation.

  5. Why the comparison? - competition • Ensuring that there is no distortion or restriction of • competition in the electronic communications sector • Calling Party’s Network Pays and the termination monopoly • A reason why operators charge above-costs termination • fees?

  6. Why the comparison? – consumer benefit • Ensuring that users, including disabled users, derive • maximum benefit in terms of choice, price, and quality • Per-minute prices • What causes the price difference between Europe and the US? • Calling Party’s Network Pays vs. Bill and Keep? • Handset subsidies • Does Calling Party’s Network Pays result in high handset subsidies? • Pay to call or receive • Will European customers accept Receiving Party Pays?

  7. Why the comparison? - investment • Encouraging efficient investment in infrastructure, and • promoting innovation • Will operators’ incentives to invest be higher under Calling Party’s Network Pays or under Bill and Keep?

  8. Points for discussion • NGNs • What will change with the evolution to IP networks? • Policy implications • Only intervene in case of a real market failure • Does the government have options to intervene?

  9. Stein SmeetsApril 22nd 2008

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