broadband strategies handbook.pdf - Khazar University

single entity has the ability to connect to all of the networks that form theworldwide Internet, a series of indirect interconnection (transit) anddirect interconnection (peering) arrangements have developed to ensurethat traffic will reach its intended destination. In Internet interconnection,the combined framework of transit and peering, together with theIP packet routing protocols, removes the a priori case for regulationbased on the termination monopoly present in PSTN-PLMN interconnectionunder CPNP systems. For example, if an ISP denies direct interconnection(peering) to another ISP, the latter ISP is generally capable ofaccessing customers of the former, although at different costs, as long as ithas an indirect (transit) agreement with a third party. 15 This same result isnot generally possible in the circuit switched environment. If the PSTN-PLMN provider refuses interconnection, competitors generally cannotterminate calls to its subscribers.Future Charging MechanismsIn the long run, the differences in interconnection charging arrangementswill not likely be sustainable or efficient in a converged NGN environment,where more traffic will be IP based. Price differences between regulatedand unregulated interconnection services result in arbitrage opportunitiesand potential market distortions. Therefore, a uniform wholesalecharging system may be needed for future NGN interconnection. Thiscould be based on the Internet economic model (Marcus and Elixmann2008, 114), the PSTN-PLMN model, or some third option resulting from acombination of both (European Commission 2009a, 32). Others emphasizethat, although NGNs and the Internet use IP as a common technologyand are converging in the marketplace by offering similar or substituteservices, they are organized differently and so remain separate and distinct,even though they share the same transmission infrastructure, suchas fiber networks (Tera Consultants and Lovells 2010, 79–92). Consequently,it is argued that the two types of networks will not converge sincethe Internet is a collection of “open networks” and NGNs are a collectionof “closed” networks (that is, packets cannot be allowed across the interconnectionpoint unless they are authorized), and hence there is no convergence-basedargument in favor of a uniform charging system for NGNsbased on BAK.Despite this, there are some early indications that future wholesale pricemechanisms may resemble IP network pricing, that is, PSTN-PLMN perminute or per second pricing may migrate to pricing based on barterLaw and Regulation for a Broadband World 109