DSTI/ICCP/CISP(2007)2/FINAL
14
These features may foster the development and provision of new services and constitute a new
opportunity for innovation, allowing different market players to create value at the separate functional
levels of access, transport, control and services.
However, while initially it was a common assumption that this layered structure would lead to a
market model where services could be increasingly provided across the value chain, in a more
decentralised manner, today it appears that the network provider will decide whether the “horizontal”
model will prevail, or whether they will simply (commercially) vertically integrate transport and services
across functional levels, offering bundled services.
20
Currently, bundling of a variety of services is a key trend in the sector, bringing greater competition
between formerly distinct sectors. Bundles include all sorts of combinations of fixed and mobile voice
calls, Internet access and media/entertainment services (see section 4 below on broadcasting). With
services and transport commercially integrated at the vertical level, customers are somehow “locked-in” in
a vertical relationship with a single operator. This is not negative in itself, as packages are often more
convenient, or easier to use, at the same time it is important to maintain the possibility for users to choose
which services they want to purchase, and to have clear information about the cost and characteristics of
these. The risk would be to create a situation in which the network provider may limit the possibility of
users to access IP-based services and applications provided by third parties.
Considering the economic drivers behind the shift towards next generation networks, there is an
incentive for the network provider to also become an integrated market player, in order to maintain/extend
their user base or benefit from a privileged relationship with subscribers. This raises questions regarding
obligations for access to networks by service providers and issues of traffic prioritisation.
21
In this context
access plays an important role for all service providers to be able to provide their content, services and
applications to end users.
One essential feature of next generation networks is the capability to support “generalised mobility
which will allow consistent and ubiquitous provision of services to users”.
22
Although core next generation
networks tend to be on a fixed infrastructure, the possibility to improve interconnection with mobile
networks is being explored, and standardisation organisations as well as operator and manufacturers
associations are working to the development of appropriate standards. In addition, the deployment of
wireless infrastructures facilitates access to IP networks, and the adoption of increasingly sophisticated
devices and handsets will allow an easy access to IP services from anywhere.
The migration process towards IP-NGN potentially entails several structural changes in the core
network topology, such as the rearrangement of core network nodes and changes in the number of network
hierarchy levels. As a result, an overall reduction in the number of points of interconnection will take
place, especially with regard to interconnection points at the lowest level. This could negatively affect
alternative operators whose previous interconnection investment may become stranded.
23
For example, BT
today has some 1 200 exchanges at which competitors have installed DSLAM’s, using local loop
unbundling to provide broadband and bundled services. In addition, BT has over 700 exchanges at which
competitors can connect their voice services. The number and location of points at which competitors
could connect their networks to BT’s voice services is expected to reduce substantially to at most 108
Metro-node sites, and probably to a subset of these which could number as few as 29, while the number
and location of exchanges at which local loop unbundling is likely to be possible are not expected to be
affected by the roll-out of 21CN.
24