Policy & Regulations

Media convergence should be a wake-up call for regulators. Technological change has already changed market conditions profoundly for traditional media and communications, and regulation is lagging behind. Sector-specific legislation and regulation is threatening to stifle development and create unfair market conditions. Several factors are creating a new media market, and media convergence allows several different services to be offered over one network and one device.

Media convergence should be a wake-up call for regulators. Technological change has already changed market conditions profoundly for traditional media and communications, and regulation is lagging behind. Sector-specific legislation and regulation is threatening to stifle development and create unfair market conditions. Several factors are creating a new media market: digitization of information and communication (including IP) in combination with widespread availability of high-capacity access networks; increased processing and storage capacity; and high-resolution screens and other advances in consumer electronics. A tremendous evolution in communication and information systems has fundamentally changed the way we access and consume media services. Previously, they were distributed using different, vertically separated networks and specialized devices. Today, media convergence allows several different services – such as movies, TV, radio and internet – to be offered over one network and one device. As conditions have changed profoundly, policymakers need to reassess policy goals so they do not distort competition in any relevant sector of the market. Secondly, policymakers need to ensure that policy goals are implemented effectively and purposefully in regulatory regimes for converging markets. Sector-specific regulation is fragmented and does not consider implications of regulation and hence is associated with risk such as:

Weakening of regulatory effectiveness if alternative providers in unregulated sectors cannot be regulated
Distortion of competition
Reduced supply or increased cost of bundled goods and services benefiting from internal subsidiesRegulatory flight - companies moving or being taken over by those outside the regulatory jurisdiction
Convergence creating competition among regulators with overlapping remits
Policymakers can harmonize regulation and legislation across converging Telecom, Information, Media and Entertainment sectors, creating a level playing field for market players. This will benefit the market, consumers, service providers, media producers and vendors.

The individualized media experience is about enabling a paradigm shift for the way people consume and interact with media and TV content – with any service, using any device, anytime, and anywhere. It won’t immediately change the way you watch TV today, but it will be a catalyst for how you watch it tomorrow

Media convergence should be a wake-up call for regulators. Technology change has already changed market conditions profoundly fortrational media and communications, and regulation is lagging behind. Sector-specific legislation and regulation is threatening to stifle development and create unfair market conditions.

Europe

Ericsson comments on how the evolving IP based technologies are changing the scope of communications, including the traditional role of broadcasting.

Europe

Ericsson’s official response to the European Commission’s conclusions on the online commerce roundtable on the online distribution of music. The response includes information about the importance of boosting the fledgling EU online market.

August 19, 2009

This PowerPoint on regulatory and market issues about managed TV, media and content was presented to the ASBU and AICTO.

August 21, 2009

This media trend update was presented at the Stockholm Stopover of the Volvo Ocean Race, in June 2009.

Publications

This section contains topical papers related to media convergence, regulation and legislation in the area of Telecom, Media/Broadcast, Internet, Entertainment and Advertising.

The individualized media experience is about enabling a paradigm shift for the way people consume and interact with media and TV content – with any service, using any device, anytime, and anywhere. It won’t immediately change the way you watch TV today, but it will be a catalyst for how you watch it tomorrow

Based on Ericsson Consumer Lab research, this white paper explores how consumer behavior, trends, drivers and barriers – as well as industry regulations –impact the consumption of TV/video. content.

Media convergence should be a wake-up call for regulators. Technology change has already changed market conditions profoundly fortrational media and communications, and regulation is lagging behind. Sector-specific legislation and regulation is threatening to stifle development and create unfair market conditions.

Positions

This section contains Ericsson's official responses on public hearings and studies related to media convergence, regulation and legislation in the area of Telecom, Media/Broadcast, Internet, Entertainment and Advertising.

Europe

Ericsson comments on how the evolving IP based technologies are changing the scope of communications, including the traditional role of broadcasting.

United States

In its comment, Ericsson shares the result of its 2020 Project – its vision of future broadband applications and services.

Europe

Activities

This sections highlights the events and activities that Ericsson are undertaking in the area of regulation.

August 21, 2009

This media trend update was presented at the Stockholm Stopover of the Volvo Ocean Race, in June 2009.

August 19, 2009

This PowerPoint on regulatory and market issues about managed TV, media and content was presented to the ASBU and AICTO.

Ericsson is looking to reward two prizes of 30,000 SEK each to students who submit research papers on one of three proposed topic areas around television and media.

Contributions

From Michael Inouye, Industry Analyst, Digital Home

A battle between content owners and online services continues to wage within our legal framework. Despite this uncertainty, the legal system has worked to establish a baseline; namely if a company’s business model centers on infringing on copyrighted content, then by most accounts it should be deemed in violation of the law. So what about the online video services?

Read the White Paper

This section contains documents from non-Ericsson contributors

Net neutrality may sound like a self-evident concept. It might even seem a bit boring, because almost everybody says they are in favor of it. Yet to judge from the debate on Capitol Hill in Washington DC, the concept has proved to be highly controversial. The heated debate originated as a fairly technical and purely domestic US debate, focused on the ins and outs of the internet per se. However, the debate has already had repercussions in other countries, as well as across the telecommunications market worldwide. Where should the line be drawn between the rights and plights of investors in new telecom infrastructure, and those who choose instead to invest in commercial content using this infrastructure?

From Professor Eli Noam, Director of the Columbia Institute for Tele-Information Columbia University

The question addressed is how to regulate television when it adds the internet and mobile wireless as vehicles. Should the new styles of TV be regulated in the same way as the traditional model? Should traditional regulation be modified? Since the new styles of TV travel over telecom-style infrastructure, what should be the role of telecom regulation in all this? And what are the special concerns for Canada

From OFTA

A presentation from the Office of the Telecommunications Authority, the executive arm of the Telecommunications Authority in Hong Kong.

From Ernst & Young

The TV distribution market is changing rapidly. The change is largely driven by consumers who, by using the internet, are finding new ways of accessing and viewing TV. Television is moving from traditional, linear broadcasting aimed at the passive viewer toward nonlinear, on-demand entertainment for the interactive viewer.

From Matthew Howett, head of regulatory advisory service, Ovum

Ovum analyst Matthew Howett explores the topic of network neutrality, the principle that network operators should give equal treatment to all the traffic on their networks, and how it applies to telecom operators around the world.

Network neutrality is the principle that network operators should give equal treatment to all the traffic on their networks. This can be further broken down to mean (a) access to the last mile and/or (b) intelligent network design. Unfortunately the debate so far has been mostly ideological and political rather than grounded in science and network design, as such keeping to a single definition (Ofcom has proposed as many as eight) is notoriously difficult and therefore in many respects the topic remains ill defined. On one side are those who support the principle of neutrality who argue that without legislation there will be less choice of content and that the innovative environment in which the Internet was created will no longer exist. On the other side, we have those who believe that the Internet needs to evolve and that prioritisation of traffic could benefit both providers and consumers. Made in America The debate started when the US decided to reform their outdated telecom laws in 2003. Since then it has simmered away, largely confined to activist’s Internet blogs. However, recent interest has been reignited following the merger of America’s largest telecom firms. AT&T made a commitment to embrace the principle of network neutrality for a period of two years, or until the FCC legislates – whichever is sooner – in order to win FCC approval of the merger with AT&T and BellSouth Corp. As part of the commitment IPTV and VPNs were to be excluded. Prior to this, in 2004, the FCC unanimously adopted four principles of network neutrality. To encourage broadband deployment and preserve and promote the open and interconnected nature of the Internet consumers are entitled to: · access the lawful content of their choice, · run applications and use services of their choice, subject to law enforcement, · connect their choice of legal devices that do not harm the network, · competition among network providers, application and service providers, and content providers. Adhering to a basic set of principles may be a good way forward. By doing this the regulator has avoided intervening in the policy debate and as such has provided sufficient flexibility for all stake holders to innovate and find an acceptable solution. Nevertheless the FCC has reserved the right to impose access requirements should circumstances warrant doing so. What is the principle? Having divided the issue into either one of access and/or one of network design it becomes clearer what the specifics of the debate are. Concerns over blocking content are largely unfounded. If traffic prioritisation did exist it would run in parallel to existing arrangements and consumers would continue to have access to all content as arrangements stand today. In countries, such as the US, where there is less competition amongst ISPs at a retail level, this part of the debate might me more relevant. The situation in the UK is quite different because there is a greater level of competition at the access level brought on by the requirement of BT to un-bundle the local loop. Even so, competition problems relating to access restrictions at the last mile are relatively easy to fix with traditional regulatory action. For instance, if there is a concentration of market power at this level then the EU may be able to designate providers with SMP (significant market power) and impose obligations to correct this. Unfortunately network neutrality advocates have made this issue the focus of the debate and have largely ignored the more important one of network design. The network design element is concerned with implementing quality of service (QoS). Opponents see a two-tier Internet developing making the Internet as we know it more like a VPN. To a large extent the Internet already operates on a two-tier level - consider the road analogy. Consumers have the choice of the vehicle they buy that gives them access to the roads (you can currently choose the speed of your Internet connection and are charged accordingly – much the same as with cars). However not all roads are B roads, there are A roads, dual-carriage ways and most importantly motorways. People make the choice to use these roads based on the needs of their journey. They can, if they choose, even opt to pay more and take a toll road. It is important to provide consumers with such choices when accessing the Internet. However on both the roads and on the Internet there is often a problem of congestion. This is because when using local roads (or the last mile) there are often too many users with little possibility to accommodate more traffic – at least up to a point. Therefore with roads, innovative schemes such as congestion charging have been introduced. It is also often ignored that traffic conditioning is already relatively widespread in the Internet we know it today and so far this has not hurt consumers and has in fact almost certainly enriched their experience. The Internet we use today has evolved from many different approaches which don’t necessarily work well together. Consumers could potentially benefit from prioritised traffic which needn’t result in exclusions - prioritisation can happen in a transparent way; for instance, by choosing to prioritise by category rather than by provider. New business models As telecoms operators around the world move to upgrade their networks new business models will be required. In making these upgrades there are only two ways to recoup the money – either through charging consumers more or pursuing new business models where Internet firms and content providers also pick up some of the bill. Network neutrality would seriously hamper the development of such models. The very future of the Internet depends on there being some level of discrimination. For instance if IPTV is to be successful it requires a minimum QoS guarantee. What should regulators do? The way the Internet is used and what is sent over it has changed dramatically since its creation. It is now much more about media content than simply peer-to-peer communication. At the same time the rules governing the Internet have not kept pace. In the UK, Ofcom have kept relatively quiet about the issue but have made it clear that it’s not their intention to introduce lots of ill thought-out ex-ante regulation simply as a knee-jerk reaction. In doing this they are following a strict principle of not intervening in making policy decisions. However, as a regulator, they have a duty relating to competition, to investment, and to innovation. If action is needed it can be done under the current European Framework of defining markets and establishing whether any providers have SMP and then puts in place remedies such as requiring dominant operators to not discriminate. However, the presence of competition significantly reduces the ability of network owners to use exclusivity arrangements since disgruntled customers can simply transfer their subscriptions to another network – the much touted ‘public backlash’. Market forces should determine regulation In the UK, the debate over access to the last mile and therefore blocking of content is largely irrelevant. Whilst this might be more of a concern in the US, competition law and the perceived public backlash may be enough to prevent regulation. Instead, opponents of net neutrality believe, and rightly so, that if consumers are willing and able to pay for a higher class of service they should be given this choice. We agree that safeguards need to be put in place but these can be best provided by competition policy. Regulation is particularly problematic especially when designed to prevent something that hasn’t yet happened. It should be market forces not regulators that determine what innovation there should be in the industry. If pro-network neutrality legislation were introduced it would be nothing more than a solution in search of a problem. Ovum does not endorse companies or their products. Ovum operates under an Independence Charter. For full details please read more here For full details of Ovum's citation policy, read it here Whilst every care is taken to ensure the accuracy of the information contained in this material, the facts, estimates and opinions stated are based on information and sources which, while we believe them to be reliable, are not guaranteed. In particular, it should not be relied upon as the sole source of reference in relation to the subject matter. No liability can be accepted by Ovum Europe Limited, its directors or employees for any loss occasioned to any person or entity acting or failing to act as a result of anything contained in or omitted from the content of this material, or our conclusions as stated. The findings are Ovum's current opinions; they are subject to change without notice. Ovum has no obligation to update or amend the research or to let anyone know if our opinions change materially.

Links

Economic Impact of Copyright for Cable Operators in Europe
European Commission (EC)
Audiovisual and Media Services, Creative Content Online
DG Competition, Media
European Cinema Online
Interactive Content and Convergence
Internal Market Copyright Study
The INDICARE Project
The Information Technology and Innovation Foundation
ITU ICT Regulatory Toolkit on IPTV
Organization for Economic Co-operation and Development (OECD)
Digital Content
Shaping Policies for the Future of the Internet Economy
Piracy of Digital Content