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The UK Approach to NGN Interconnection
Ovum, Aug 2007, Pages: 26
Stefano Nicoletti and David James analyse the UKs unique approach to ensuring that the next-generation networks being rolled out across the UK will interconnect. We also suggest what other countries can learn from the UK approach.
NGNuk in particular, and the UK experience in general, seem to be unique around the world, both in terms of the breadth of what it is trying to cover and the forward-looking commercial approach. From the point of view of the institutional architecture, NGNuk is an interesting solution, as it tries to find a delicate balance between an ‘incumbent-led’ solution (as with BT’s Consult21 programme) and a ‘regulatory-led’ solution, where the regulator simply dictates the rules after a traditional consultation process.
NGNuk is independent, created by the regulator but funded by the industry. It is open and transparent, but also has a double-level membership structure and decisional body. It has all the elements necessary to address issues independently, but in a transparent manner. We believe that NGNuk is therefore a creative solution that could be exported to other countries, as it has advantages from multiple points of view.
From the regulatory point of view, it enables the regulator to understand and capture the industry dynamics in a next-generation world without having to conduct costly studies or having to learn through a dispute resolution process. On the other hand, it saves the regulator from immediate intervention in a context where its knowledge is fundamentally constrained and necessarily lower than that of any other stakeholder. Essentially, it enables the regulator to ‘learn’ about NGNs and to ‘gain time’ before making decisions.
From an incumbent perspective, again it has the advantage of learning about NGNs and different stakeholders’ positions without having to face them directly in the market through costly and lengthy confrontations with the regulator. It also enables the regulator to ‘sanity check’ without the need for an ex-post revision process that could also be costly and time-consuming.
From the alternative operator’s point of view, they have different incentives depending on the role that they wish to play in the market. Overall, we believe that it provides a chance to ‘start an active negotiation’ with the incumbent and to somehow be protected by the presence of the regulator as an active listener.
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