1stReport

The Universal Service

Sergio Ruiz, Eduard Gmez, Beatriz Martnez, Sergio De La Llave Group C - ONO

History
USA

The first concept of the Universal Service appeared in 1908 by the hand of AT&Ts president, Theodore Vail, that begun a national advertisement under the slogan One System, One Policy, Universal Service announcing the solution of how to interconnect each telephone network in the USA [1]. In this advertisement the American Telephone and Telegraph Company considered that the only way was to use their technology because it was the only company able to offer universal service as the constructor and operator of long distance lines it was. With this behavior, all the equipment would have needed to be purchased from AT&T for terms of compatibility getting rid of the competitors. Later, in 1934 it was created the Communications Act by the FCC (Federal Communications Commission) [2] where a simple preamble of the universal service was mentioned: []for the purpose of regulating interstate and foreign commerce in communication by wire and radio so as to make available, so far as possible, to all the people of the United States, a rapid, efficient, Nation-wide, and world-wide wire and radio communication service with adequate facilities at reasonable charges. Finally, in the Telecommunications Act of 1996 of the FCC is where the actual vision of a Universal service was really defined as well as its respective goals: Promote the availability of quality services at just, reasonable and affordable rates for all consumers Increase nationwide access to advanced telecommunications services Advance the availability of such services to all consumers, including those in low income, rural, insular, and high cost areas at rates that are reasonably comparable to those charged in urban areas Increase access to telecommunications and advanced services in schools, libraries and rural health care facilities Provide equitable and non-discriminatory contributions from all providers of telecommunications services to the fund supporting universal service programs

So, the visions idea of the universal service has changed from the Vails thought of one service to call between one phone to other one into a telecom state basic service. Europe In the European scope it was created in the March the 7th of 2002 the Universal Service Directive (Directive 2002/22/EC) by the European Parliament and the Council for the rights related to the electronic communications networks and services, called Universal Service obligations and user rights for telecommunications in the European Union. Spain The first document where is mentioned a service-like universal in Spain dates from the 1987, in the Law 31/1987 LOT (Ley de Ordenacin de lasTelecomunicaciones) [3] under the Title II: De los ServiciosCiviles de Telecomunicacin, 2nd chapter: Servicios finales y portadores, articles 13-19. The Word

universalappear in thearticle 13-1: [..] se podrn incluir entre los servicios finales de telecomunicacin los que sean definidos por los Organismos internacionales de telecomunicacin competentes para ser prestados con carcter universal. And a type of universal servicedefinitionappear in thearticle 16-2: En particular, todos los ciudadanos tendrn derecho a acceder al servicio telefnico, tanto en su modalidad de telfonos pblicos como, de abono en su domicilio, a cuyo efecto se establecern los mecanismos adecuados para garantizar que el ejercicio de este derecho pueda hacerse efectivo en todo el territorio nacional, en el plazo ms corto posible. Later, theLaw 11/1988 LGT1988 (Ley General de Telecomunicaciones) [4] strictly defines the concept of nd universal service in the 2 Section: El servicio universal de telecomunicaciones, articles 37-39. And the last modify of the LGT, the Law 32/2003 [5] follow the same line, but adding the points d,e and f of the article 22-1, and including in the point c the emergency service 112. That means more transparency, more information and more rights for the users.

Financing
Before the start of the liberalization of the telecommunications market, the traditional approach was to impose universal service obligations to the operator established with dominant position. This operator financed these universal service obligations through other cost-effective network services, such as international calls and long distance, and from state subsidies. In addition the operator received a nonquantifiable benefits derived from: 1. Increased brand recognition of the operator as a result of the service. 2. Advantages arising from the ubiquity 3. Commercial benefits that involve access to all data phone service After deregulation, appears competition between operators, so it obviously cannot be established obligations of universal access to a single operator, for the expenses that involve and the advantages mentioned. So we've had to design new alternatives for financing and development of universal access to maintain the evenness between operators. To adapt the financing of universal access has been established a model based on the creation of a fund for universal service and access (FASU) mainly funded by the industry itself. The purpose of this fund is to promote access to telecommunications in the population living in rural or urban areas with difficult access. This fund is financed by it generally through one or more sources listed below [8]: Direct financing under the state revenue (taxes). This is the method that has been used until now, when there was only one operator that depended on the state, and is now rarely used. Contributions to licensed telecommunications operators (e.g. in proportion to their annual income) The benefits of spectrum auctions and / or payments for licenses or concessions. International donation.

In low-income countries and limited resources, is often interesting to consider the financing of FASU through the contributions of different operators. In contrast, countries with more resources might consider assigning a certain amount of state budget for FASU. Other sources are obtained from international donations, no government organizations and business organizations involved in financing and developing public access to telecommunications and ICT projects and applications.

In general, each country has to assess what combination of these sources is most appropriate for the proper development of access to universal service. Spain In Spain the General Telecommunications Law stable Telefnica as the designated operator to provide universal service. Also stable net costs of universal service support by Telefnica should be funded by all operators in proportion to their average share of income. These contributions must be deposited in the National Universal Service Fund. This fund is managed by the CMT, which uses its resources to finance Telefnica when considering that the costs represent an unfair burden for the company that prevents it from competing successfully. The link [7] we can read an article explaining that Vodafone and Orange (the main operators in Spain with Telefnica) must pay the incumbent operator 24.8 million euros as a result of this cost sharing: Telefnica es la empresa designada por el Gobierno para prestar este servicio, pero a partir de 2003 el coste del mismo se reparte entre varios operadores a travs de su contribucin al Fondo Nacional del Servicio Universal.

Scope
The Universal Service is understood as a package of services which are guaranteed for an entire group of final users with three premises, independence of it geographical situation, reasonable price, and a determined level of quality. Then concrete services that should be guaranteed are defined by the government, and in the Spanish case are [5]: 1. All the users may have connection to the landline telephony and access to the service. This connection will allow the user to send and receive voice calls, fax and data with a given bandwidth which allow them to access to the Internet. To have a phone book available to all users, it has to be actualized at least once a year. Furthermore all users will have access to an informative service. Enough offering of public pay telephone devices with possibility of make free emergency calls. That disabled people has the same right in terms of access than the rest of final users. Special packages or offers which are different of the ones that the company offers in normal conditions of the market in order to guarantee that people with social needs has access to the telephony To apply special rates, pricing limitations, geographical equity or other conditions.

2. 3. 4. 5.

6.

The government is the responsible to determine and define the scope of the universal service.

Proposal
NGN & Broadband NGN Analysis

Nowadays there is a new architecture model that is being implemented worldwide in the telecommunications sector: the New Generation Networks (NGN). The aim of this model is to unify or integrate all the telecommunication services (voice, data and media content) in one packet IP-based core network as a substitute or an emulation of them [6].

The advantages (or goals) that provide the NGNs are: lower costs respect traditional models, networks convergence and compatibility, and a simplified and unified management, operation and maintenance

The disadvantages that becomes from the replacement of some traditional services are the guarantees of: Major concerns about QoS, because in the PSTN technology, channels are reserved and the quality was guaranteed. With the NGN where all services share the same channel is more difficult guarantee the QoS With high volumes of traffic, is possible that the capacity of a network its a problem, similar that happen to PSTN (saturation lines) Difficult integration between NGN equipment and the existing PSTN infrastructure Significant investments, if mass deployed ONO, as a cable fiber-based operator has the sufficient infrastructures to provide high speed rates and new innovation services as a result of these large years of investments. Broadband Analysis Europe For Europe, the European Digital Agency of the European Commission has established three main objectives for the European strategy 2020: Spain Nowadays in Spain is approved by the Cabinet Council the proposal for the LES Law (Ley de th EconomaSostenible), with date 4 march of 2011. It establishes the broadband access as a universal service with a minimum down speed of 1Mbps, no matter the technology used to provide the service (wired, wireless, fixed or mobile). Also, the CMT [9] report that either in Spain or in Europe, with the current networks, it is not possible to offer high access speed rates upper than 30Mbps. Voice The ISPs (Internet Service Providers) do have to provide people with a good access to internet with a speed enough to be functional. VOIP technology needs specific connection data infrastructure, and the law makes it compulsory, then its worth analyzing it. We have to bear in mind some things: its penetration rate at present in the society its cost the requirements needed for it to operate The broadband access download speed of 30 Mbps or higher to the 100% of the European citizens The 50% of homes subscribed to high speed connections (100Mpbs) for the 2020. The planning of NGN networks to provide these and higher rates

Voice Analysis The voice over IP penetration in Spain has been very low this year. The important ISPs as such as Telefnica, Orange our Vodafone have avoided the use of this technology. They feared to get lower benefits. As a contrary, in Europe, it spread out, but Spain managed not to do so by providing interesting flat rates. Their directive line makes Spain the country with the lowest percentage of VOIP use in Europe, with an average of 3% in 2008 [10].

Figure 1: VoIP penetration on Europe Cost The installation cost would be the same as that of ADSL. VOIP could be used as a credible alternative to a conventional telephone line that would make us fulfill the universal service obligations. Whats more, it would avoid the need to install 2 lines (one for the voice, one for data), VOIP would do both with one single line. As a result the investment would be less important [11]. VoIP Requirements If we compare it to the conventional telephony system, the VOIP technology allows us a most efficient use of the available resources. The amount of traffic needed for a voice communication is lower, but the voice quality is clearly inferior, and there is no guarantee that the traffic would reach its destination [12]. A major difference from the classic telephony is that VOIP do not reserve a way for the voice communication, instead, it sends bundled together with other internet data. Thats why there can be some bundled missing. However, in spite of these drawbacks, if we manage to guarantee a good band width we would have correct communications.

Conclusions Before any mention, ONO suppose that in the next years the audiovisual content (now the digital TV) and the basic voice service (VoIP in the future) will be considered as universal services. So, in this scenario, ONO is ready to start the NGNs convergence due to its fiber-based infrastructure and the limitations are actually responsibility of the incumbent operator Telefnica and the CMT market regulator. We explain our opinion of why these limitations and what to do to increase the bandwidth speed that will be required in the future. With the LES law, the speed established is obvious the possibility to include other services such the VoIP into the universal service is not possible for the moment, at least in terms of QoS and moreover if there are not yet regulations with the incumbent operator for the interconnection of the NGNs. In that case, ONO consider that one possibility for increase the speed rate is to permit, on those regions where the rates are in average higher, a new universal service (subnational geographic markets). To understand this, lets introduce an example. If Catalonia or Madrid, a well-developed communities could establish an own universal service they would be able to growth in terms of speed, with the choice of implement new services and exploit their infrastructures being ready for the future. This reasoning doesnt mean that the zones with lower deployment couldnt reach such speed, because the wireless technologies (UMTS, WiMAX, etc) can provide it, as they represent an alternative for the NGNs. Then, with this approach, to establish a higher speed rate needed for the new services and the objectives described by the European Digital Agency for the year 2020, the CMT should start to regulate and stimulate what will be the next New Generation Networks. The points that must be considered are the followings: The incumbent operator Telefnica must give access to its new generation network as well as right prices to guarantee the competition (like the actual OBA and OIR regulation). These prices must be lower than the actual ones to inspire confidence for doing investments. For the transition, the complete abandon of the copper infrastructures is not necessary due to can be exploited from the operators as infrastructures for fiber (NGNs), so the incumbent must share their infrastructures in order to encourage the investment in the new technologies. The CMT must take actions in order to regulate the prices and the agreements of management and deployment. To help the transition trough the NGNs it should be facilitated the use of public domain (sewerage, roads, etc.) and the use of the enterprise infrastructures (water, electricity, etc) as well as a pipelines increment. The finance of the Universal Service must include the operators (as it is written actually) as well the neighboring communities and the local and national administrations, a measure that was implemented for the TDT.

As a result, we estimate that in next years the number of lines of access to the internet through mobile network will be growing up for the next years for two main reasons: The necessity to provide up to 30Mbps broadband access in Spain as Universal Service for 2020 The necessity to use other technologies during the process of migration towards the NGNs

Then, the evolution of lines will have the same behavior as these last 2 years. As we can see in the figure 2, the mobile broadband (71% in 2010) is growing up faster even more than the fixed broadband (8.6% in 2010) [9].

Figure 2: Internet access lines evolution

On the other hand, due to the infrastructure that ONO owns, the inclusion of the VoIP into the Universal Service would transform the landline telephony market into a more competent one. The purpose from our side is to consider the VoIP as part of the traditional landline telephony service, which implies a nonspecific regulated scenario. In other words, VoIP should accomplish the same regulatory issues that the traditional telephony does: Allow numeric portability Efficient, objective and non-discriminatory use of the numeration Right to reach contracts Quality commitment Detailed pricing Interoperability and interconnection

This last point, the interoperability and interconnection brings out the concept of universal connectivity between the traditional and the IP telephony. As the interoperability and interconnection of the internet providers has been done with neutral points and without any specific regulation, we propose the same for the VoIP interconnection. So the VoIP providers should be the ones whom take care of the expenses of the interconnection. However, theres another point of view, the regulated one. In this case the interconnection would require some regulation which at least guarantees the quality of the links. Furthermore, it is highly probable that this type of technology will become more important in the future due to the internet improvements.

Bibliography
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[http://www.boe.es/boe/dias/1998/04/25/pdfs/A13909-13940.pdf]
[5]. Ley 32/2003, de 3 de noviembre, General de Telecomunicaciones (LGT2003): [http://www.boe.es/boe/dias/2003/11/04/pdfs/A38890-38924.pdf] [6]. La prxima generacin de redes, NGN, un trayecto hacia la convergencia, Francisco Jos Garca Correa. Fundacin Telefnica: [http://sociedadinformacion.fundacion.telefonica.com/DYC/SHI/seccion=1188&idioma=es_ES& id=2009100116300121&activo=4.do?elem=3188] [7]. Expansion.com, Vodafone y Orange pagarn 24,8 millones a Telefnica por prestacin del Servicio Universal en 2008[http://www.expansion.com/2011/07/20/empresas/tmt/1311156150.html] [8]. Acceso y Servicio Universal (ASU), ICT. Captulo 5: Financiacin del acceso y servicio universal, SonjaOestmann&AndrewDymond [www.ictregulationtoolkit.org/en/Document.3733.pdf] [9]. Informe Anual 2010, Comisin del Mercado de las Telecomunicaciones (CMT). [10]. VOIP penetration in Europe [http://www.itu.int/ITU-D/ict/newslog/CategoryView,category,VoIP.aspx] [11]. Advantages to use VOIP [http://es.wikipedia.org/wiki/Voz_sobre_Protocolo_de_Internet#Ventajas] [12]. Disadvantages to use VOIP [http://es.wikipedia.org/wiki/Voz_sobre_Protocolo_de_Internet#Desventajas]