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

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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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Presentation Transcript
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ENCORE workshop:

Calling Party’s Network Pays

vs. Bill and Keep

INTRODUCTION

Stein Smeets

April 22nd 2008

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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

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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

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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.

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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?
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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?
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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?
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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?
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