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04 ACCC Regulation Conference 2004

Evaluating the effectiveness of regulation29-30 July 2004

Telecommunications: Competition Regulation and Communication via the Internet

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Our Aims

• Real and effective competition• Genuine choice for users• Lower prices• Higher quality• More innovative services• Constructive co-operation with

– International bodies– Governments – Regulators

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A changing worldIt is not easy to adjust to these changes

• Privatisation• liberalisation• regulation• competition• new technologies• new business models

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Changing Importance of Sectors

IBISWorld: 23/04/02

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Share of GDP by broad sector

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04After the bubble

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120000Nasdaq Telecom. IndexNasdaq Computers IndexNumber of Secure Servers in the United States

E-Commerce and the Internet are still growing

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04Next Generation Network

Converged ArchitectureIP Telephony & Security

Conferencing

Desk top solutions

Contact centre, NLSR& CRM

Security Biometrics

Interoperability & Standards

Foyer Directory

Application Integration& Knowledgebroker

Identity Management

Wireless LAN

Servers, SAN & HPC

Building Management

ECP & IP Telephony

Video Security

Unified Messaging

Web Services & XML integration

Business Continuity andHosted Services

Professional Services

Data Products

Carrier Integration

Reception & PC Based Console Integration

Applications ManagementAnd NOC

CRM

I-invoice & EBPP

2.5 & 3G Services

Converged Infrastructure

Powering of IP Terminals

Converters & Gateways

Implementation Issues

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Yahoo BB

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Examples of Commercial offers:

• www.skype.com• www.stanaphone.com• www.freenet.de/freenetiphone• www.vonage.com

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Peer to Peer

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Issues• Appliances – safety• Applications – content standards,

service features, security:spam, fraud, data protection

• Access – availability, affordability, numbering/addressing, market power, speed.

• Any to Any connectivity – QoS, cost based inter-connection, USO, 000, LLU, IXPs

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04What is the biggest obstacles to the widespread take-up of VoIP

• Consumer Awareness 21.14 % (470)• Broadband Availability 13.41 % (298)• Large Telcos 12.06 % (268)• Government Regulation 12.28 % (273)• Voice Quality 18.71 % (416)• E911 Issues 7.65 % (170)• Interoperability Problems 11.61 % (258)• Other 3.15 % (70)

Total Votes: 2223www.pulver.com

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04 ACCC• XIC - Access Regime• XIB - Anti-competitive conduct

MINISTER• USO• Price Controls• Regional telecommunications

Australia’s Regulatory Regime

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04 ACA• Consumer toolkits• Number portability• Number Plan• Customer Service

Guarantee• National Reliability

Framework• ACIF Code Compliance

Australia’s Regulatory Regime

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ACIF16 Registered codes

11 companies are code signatories7 revised technical standards

IssuesTimeframes

ISPsIndustry based enforcement

Consumer awareness

Self Regulation

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Decision making - MODELSAs taught by Professor Bill Birkett, JCU

• Rational – TSLRIC• Satisificing – Benchmarks• Standard Operating Procedures –

Accounting Separation• Political – USO, NRF, CSG• Incremental – mobile termination• Garbage Can – Internet?

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5 Years On

ATUG Assessment from Corporate Users on the current

state of play in the telecommunications market

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04ACA Telecommunications

Performance Report 2002-03

Estimated incremental benefits in 2002-03 attributable to 1997changes, $AUD

Benefit type Value/growthBenefits per household $759

Total household benefits $5.7 Billion

Growth in economic output More than $12 billion (1.61per cent of GDP)

Benefits to small business About $1.8 billion (1.67 percent growth)

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04ACCC - Price Index services

for all consumers Index for telecommunications services

1997-98 to 2002-03

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04ACCC - Price Index services

for all consumers Year-on-year percentage changes in theindex for telecommunications services,

1997-98 to 2002-03

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User goals keeping moving

The crucial next step in 'future proofing' isto ensure that all Australians have access to affordable broadband services.

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04What is the best practice

regulation for emerging markets?

Full weight vs Forbearance

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Will markets deliver competition?

Will dominance in an existing marketdistort competition in an emergingmarket?

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Line share of new entrants in %

Access

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Business composite basket - domestic, international, F2M

Telephone charges USD PPP August 2002

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Mobile market share %

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Prices – Higher User

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04

02468

101214161820

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Broadband per 100 inhabitants, June 2002Access

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Access prices

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What is the Regulator’s Role?

A level or Even playing field?

The need for Speed

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New Services are Born Global

• Global Service Providers and Users

• National Regulators

• Is SPAM providing a new model of co-coordinated regulation?

• WTO• ITU

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Examples of policy discussions

http://www.intug.net/views/ip_telephony_discussion.html

http://www.acif.org.au/current_activities/industry_facilitation/NGN/ngn_fog

http://www.accc.gov.au/content/index.phtml/itemId/517683 at page 29, 5.4 New and Emerging Technologies

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04

Thank you