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ECCT hosts 2014 ECCT EU-Taiwan Telecommunications Forum

On 8 April, the ECCT's Telecommunications, Media and Content (TMC) committee hosted the bi-annual 2014 ECCT EU-Taiwan Telecommunications Forum. The event featured four presentations by TMC policy and industry experts and was attended by around 70 guests. ECCT CEO Freddie Hoeglund formally welcomed all guests and opening remarks were given by Mike Wang, TMC committee Co-chair; Yu Hsiao-cheng, Vice Chairman of the National Communications Commissioner (NCC) and Borja Morales Perez, Policy Officer, Political and Economic Affairs, European Economic and Trade Office. Closing remarks at the conclusion of the forum were given by Philip Tseng, TMC Co-chair, which was followed by a networking lunch with all guests.
Session 1
Topic: Connected regulatory reform
Speaker: Oluf Nielsen, Policy Officer, International Relations Unit, Directorate General for Communications Networks, Content & Technology (DG Connect), European Commission 
Nielsen began by noting that the telecom forum provided an ideal opportunity for both the EU and Taiwan to learn from each other on what works and what does not. The forum comes at an interesting time as the European Union is moving towards a single telecoms market, which it aims to achieve by 2015.The EU's telecom market is currently fragmented and there is no single operator in all 28 markets. The aim is to create a single market to allow providers and consumers to act across borders, address remaining barriers with focused measures building on the current framework, maintain market regulation based on competition principles, safeguard an open internet while leaving space for innovation and enable economies of scale to be passed to consumers without prejudicing efficient operators of any size. Key measures will include creating a single consumer space, harmonising end-user rights and easier switching, maintaining an open internet (net neutrality), phasing out roaming charges and fostering competition.There is significant consensus in the European Council and the European Parliament on the need for the single market and how to achieve it. It is now agreed that it must be easy for consumers to switch operators. Roaming was a good business model in the past but it has no place in the future and therefore there is strong support for gradually phasing out roaming by 2015. Member states will still have final control of spectrum but there must be EU wide coordination on spectrum harmonization.Reducing costs will be challenging. Rolling out high-speed communication networks is expensive and cumbersome. 80% of the costs are linked to civil engineering but these costs are unnecessarily high due to the presence of various bottlenecks and economic inefficiencies but the EU plans to adopt broadband cost reduction regulations during the current Greek presidency of the EU (from January-June 2014).

On the subject of internet governance, there is a risk of a fragmentation of the internet, which would be bad for business and consumers. It is therefore crucial to provide a free and open internet in a safe and secure way. TMC regulators, including EU Commissioner for Digital Agenda, Neellie Kroes, will be meeting in Sao Paolo, Brazil to talk about global internet governance from 23-25 April. The EU's position is that sustainable governance which involves all stakeholders is essential in order to preserve the benefits of the internet.

Internet governance involves a wide variety of organisations, and is broadly understood to refer to the development and application by governments, the private sector and civil society, in their respective roles, of shared principles, norms, rules, decision-making procedures, and programmes that shape the evolution and use of the internet. The European vision for internet governance is to defend and promote fundamental rights and democratic values, and multi-stakeholder governance structures that are based on clear rules that respect those rights and values as a single, un-fragmented network, subject to the same laws and norms that apply in other areas of our day-to-day lives; and where individuals can benefit from their rights and from judicial remedies when those rights are infringed.

Following recent high profile cases of privacy violations by US security agencies, other countries have called for greater national control of the internet but the EU is calling for the internet to be governed by a genuine multi-stakeholder model where the necessary inter-governmental discussions are anchored in a multi-stakeholder context in the full understanding that the internet is built and maintained by a variety of stakeholders, as well as governments where decisions are taken on the basis of principles of good governance, including transparency, accountability, and inclusiveness of all relevant stakeholders. The business community is of course one of the major stakeholders since future services and business models will depend on a free internet. The EU is calling for a strengthened and reformed Internet Governance Forum and a globalised Internet Corporation for Assigned Names and Numbers (ICANN) and Internet Assigned Numbers Authority (IANA). Following the security scandals the US has indicated that it will support a multi-stakeholder governance but the details will still need to be worked out.

Nielsen concluded that the internet should remain a single, open, free, unfragmented network of networks, subject to the same laws and norms that apply in other areas of our day-to-day lives. Its governance should be based on an inclusive, transparent and accountable multi-stakeholder model of governance, without prejudice to any regulatory intervention that may be taken in view of identified public interest objectives such as to ensure the respect for human rights, fundamental freedoms and democratic values as well as linguistic and cultural diversity and care for vulnerable persons. A safe, secure, sound and resilient architecture is the basis for trust and confidence of internet users. At the same time, the innovation power of the internet must be maintained with the full participation of the European internet economy, building on a strengthened digital single market interconnected to the world.

Session 2
Topic: Tiered pricing mechanism from an EU perspective
Speaker: Dr CW Cheung, Research Fellow and Consulting Director, Ovum Limited Asia Pacific
The current hot regulatory issues are unlimited data pricing (the all-you-can-eat model), Fair Usage Policy (FUP) and net neutrality. Price cap controls were useful in the early days of telecom monopolies to make services more widely available, to support telecom innovation and spur investment. But things have changed a lot since the early days. Since Taiwan is an established mobile market with sufficient competition, price cap controls are no longer necessary. Given that a safety net has been provided for basic services, there is now a shift away from retail pricing controls in favour of a trend towards market principles whereby regulators do not interfere except to tackle monopolies, cartels or other anti-competitive activities. The worldwide trend is expanding control at wholesale level and phasing out retail pricing controls and focus on players that are dominant in the market. The objective should be to strike a balance between market players and consumers.

While the Taiwan focus on pleasing consumers may seem reasonable, there are consequences that can be harmful to industry development. If operators cannot make reasonable profits, they will be unwilling or unable to build enough infrastructure to meet rapidly-expanding demand. Insufficient infrastructure will affect the quality of service for consumers. There needs to be a balance between prices (and profitability of operators) and the level of service provided.

While a lot of mobile operators advertise unlimited data packages, most plans are actually limited and subject to maximum usage. Many operators impose usage limits but claim to be unlimited. Cheung offered the best practices for "unlimited data offerings": Operators should not use the term unless no usage or speed limits are imposed. Price tariffs should be based on average user consumption with a modest premium for unlimited usage. Any usage restrictions should be clearly presented in sales and marketing literature and no application restrictions should be applied.

Operators the world over are facing the problem of a huge growth in global traffic volume, which, already growing at around 70% per annum, will continue to grow explosively, fuelled by enhanced network technology & capability. Growth is also being driven by better devices and better content. Network owners have argued there is a fundamental structural problem in that pricing on both sides of the market does not currently incentivise efficient network usage. For example, companies like google and Facebook generate significant traffic but don't have to pay the bill. At the current rate of growth the mobile industry cannot be sustained. While the unlimited usage model is attractive for consumers and it will be hard to change habits, the long term problem will be a lack of network infrastructure. Operators need to cover their costs and earn reasonable returns.

There are many tiered pricing alternatives to the unlimited data option. According to Cheung the most promising solution is a data cap + Fair Usage Policy (FUP) but other alternatives such as peak and off-peak plans, dynamic pricing based on network performance or applications or Valued Added Services (VAS) whereby pricing depends on applications or VAS services being accessed or consumed. A shared data plan is seen as the "future pricing plan of LTE" whereby there is a large "data bucket" with usage discretion for customers. Such a plan would have the following "bundled" features: Free voice and text, sharable data amongst a number of user connected devices, data cap and speed (with additional usage at a discount), "freemium" (eg movies, network games, music, e-books, etc.) and innovative applications including virtual goods trading, m-commerce applications, etc. Many operators in Europe and the US are following this option.

Cheung concluded that spectrum is a finite and scarce resource. Capacity is a shared resource and low volume users are subsidising the heavy ‘bandwidth' users, which is unfair. To address this, excessive data usage must be paid for. A mechanism to do this already exists - The "Fair Usage Policy". However, operators are "reluctant" to enforce the mechanism.

Session 3
Topic: Enabling networks for the digital agenda 2020
Speaker: Dr Asimakis Kokkos, Head of China Industry Environment, Technology and Innovation, Nokia Solutions and Networks (NSN)
Kokkos spoke about how to enable networks to meet the challenges of the EU's digital agenda. The digital agenda has seven priority areas: 1) Creating a new and stable broadband regulatory environment;
2) Developing new public digital service infrastructures; 3) Launching a grand coalition on digital skills and jobs; 4) Proposing an EU cyber-security strategy and directive; 5) Updating the EU's copyright framework; 6) Accelerating cloud computing through public sector buying power and 7) Launching a new electronics industrial strategy.

Users need a single digital single market and harmonized regulatory environment. Internet connections need to be fast and available everywhere in the EU. Interoperability is important to be able to use the services in the digital world and the experience needs to be seamless to allow users to be able to use services easily. Trust and security also needs to be beefed up. According to Kokkos, only 12% of EU users feel confident about using some services. This highlights the need to make the digital world more trustworthy. This can be done by coordinated EU response to provide security.

The EU's goal is to provide high speed internet that is continuous and available everywhere. This can be achieved by encouraging investment and harmonizing spectrum policy. Another important goal is to increase access to the internet for the number of people currently not using the internet at all. This will require enhancing the technical skills of the disadvantaged and elderly. Another objective is go beyond ICT, such as using ICT to save energy, support aging citizens, promote e-government and e-health services.

Like other presenters, Kokkos also alluded to the need for a balance between consumer and business interests. Based on current trends, he said we will need 1,000 times more capacity than we have today. We will need to reuse older spectrum bands and take advantage of technology to make better use of available spectrum. Using small cells will also help to increase capacity.

We also need to create networks that are "self-aware" or smarter so that they can respond to dynamic changes and provide truly personalized network experiences. The network should understand user needs and provide customized services that add value for the end user. This can be done by big data analysis.

Cost is a big issue but moving to the cloud will bring big savings. Another challenge is to reduce energy consumption. Base stations, for example, use a lot of power. In conclusion, the digital agenda is ambitious and making it a reality efficiently and cost-effectively will be challenging. Success will require collaboration and agreement on spectrum and harmonization.

Topic: 4G promotion
Speaker: Dr San-Yong Kim, Research Fellow for the Telecommunications and Spectrum Research Division at the Korea Information Society Development Institute
The speaker gave an overview of Korea's telecom history and current status. Korea started its first car phone service in 1984. In 1988 the country's first personal cell phone service was launched. 1996 saw the start of 2G services. Korea selected its 3G operators in 2000 and launched 4G (LTE) in 2011.

There are three Korean operators providing LTE. Korea has 55 million mobile subscribers. With a total population of only 51 million people, this means the penetration rate is 108%. The country has the world's fourth highest mobile penetration rate in the world. It is also one of the most advanced with 29.4 million 4G subscribers and 37.8 million smart phone users (70% of all users).

Mobile data traffic reached 61,636 terabytes (TB) at the beginning of 2014. This represents a 22-fold increase since January 2014. LTE accounts for 80% of total monthly mobile data traffic As of January 2014, the volume of monthly mobile data usage per LTE user was 2,196MB, almost double the volume of the average 3G user (1,192MB).

To promote mobile services, telecom services are evaluated for quality in terms of data communication speed and service. The results of the evaluations are announced publicly. Given that consumers follow the evaluations closely, market players take them seriously and take action to improve their services. This creates a virtuous cycle of boosting competition, industry development and providing consumers with better services. Looking ahead, Korea is working to maximize spectrum bandwidth efficiency. The regulator plans to secure and supply extra bandwidth of over 600 MHz by 2020. It has short, mid and long-term plans to reach this target.