Thursday, June 02, 2005

ECTA, NGN and the Floriani Principle 

A native saint in Austria is Saint Florian, martyrium in 304 AD in Lauriacum, patron of Upper Austria, Poland and also of fire brigades (no, this entry is not about E911) and helper against fire and drought. The German Wiki is here.

The Floriani Principle is named after a (somewhat cynic) prayer "O heiliger St. Florian verschon mein Haus, zünd andre an" which means "Dear Saint Florian, spare my house, cindle others".

The term Floriani Principle is used in discussions on where to built highways or waste disposal sites (normal, chemical, nuclear, ...) etc. The answer is always: This is very important and necessary, but not HERE.

What has this to do with telecommunications?

James Enck pointed to a recent position paper on NGN from my special friends from ECTA which reminds me of the Floriani Principle: "Dear Saint Regulator, do not regulate me, but all others".

Whos is ECTA?
  • ECTA is NOT the European Communities Trade Mark Assoc.,
  • it is also NOT the European Clinical Trial Associates (as some may suspect),
  • it is the European Competitive Telecommunications Asssoc. or in Washington DC speak the Brussel lobby of the non-incumbents.
Why special friends?

I already had a discussion with ECTA members at a Telecoms Regulation & Competition Law Conference in October last year in Brussels (Martin is correct: good food and no laptops - I had a deja vu reading his entries on this conference ;-) e.g. with the chair of the ECTA broadband group ranting all two days that there have to be much more remedies on incumbents e.g incumbents should not be allowed to offer triple-play (guess his real affiliation: Time Warner Cable).

He was supported by a representative from Austria from Hutchinson 3G, ranting about the plans of the commission and also the Austrian regulator to reduce the terminating fees to mobile operators by regulating the prices by declaring that every operator has (logically) significant market power (SMP) for calls terminating in his network.

The basic philosophy of ECTA is: We want to gain new subscibers by offering them cheaper tariffs than the incumbent. Since there is a danger to go bankrupt, because somebody finally has to pay, the best way to prevent this is to find a way (with the help of the regulator posing remedies on the incumbent) that the remaining idiots - ah subscribers of the incumbent are subsidizing the low tariffs I offer to my clever subscribers. Since we cannot say this in public, we have to find another argument: we are so small and poor and need help to compete against the evil incumbents on the dark side.

This leads to situations that a big company on European scale (e.g. Tele2) is considered small and not having SMP compared with a "big" company such as Telekom Austria. You should also hear the Cable Operator in Vienna squeak (reaching 70% of the households and having twice as much broadband connections in Vienna than Telekom Austria) if somebody even raises the question why the cable operators have NOT the obligation to provide bit-stream unbundling?

Representatives from the EU at the above mentioned meeting of course denied any plans by the commission to follow these request, but as one has seen recently in Canada, the devil is never sleeping. I think some members of ECTA (especially the cable operators) got an orgasmus when they heard about the Canadian decision to put remedies on incumbents if they provide VoIP..

See Mark Evans on the the presenation of Darren Entwistle, Telus CEO, at the Canadian Telecom Summit, where Darren Entwistle stated (better than I could, but he is a CEO and I am not):
Calling the decision "disappointing" he questioned the regulator's belief it needs to protect cablecos from ILECs given they have well-established infrastructures and brands, as well as millions of customers. "Are the cable operators really the Davids who need regulatory protection from the telco giants? The answer is no," he said during a keynote speech at the Canadian Telecom Summit. Perhaps the line of the conference was Entwistle's contention the cablecos are deserving of a "theatrical award" for their work in positioning themselves as the underdog.
I like the "theatrical award", because I know now what the chair of the Austrian leg of ECTA (the VAT) Dr. Achim Kasper for some of his statements deserves. Members of the VAT are basically little start-ups in need of protection such as T-moble, T-systems, Hutchinson, Colt, Tele2, MCI (ok - at least they may need protection) against Darth Telekom Austria.

I think I am getting carried away: So what is the newest position from ECTA about?

One would not believe it, it is about the NGN. Although nobody knows what an NGN is and if THE NGN and especially IMS will ever fly (there are some serious doubts - including myself), ECTA is already seeing a danger if incumbents are going to implement NGN (this is of course mainly against BT and its 21stCN) without a remedy to give the underdogs again a free ride.

BTW, NGN and IMS was also a big issue at the VON, an excellent summary is given by Guy Kewney at

Back to the ECTA position - Executive Summary:
The move to NGNs represents the next, logical and evolutionary step in technological progress under which existing telecom networks are upgraded with more modern and efficient technology.

If consumers are to enjoy the benefits of NGN-based services - such as genuine choice, lower prices, higher quality and more innovative services - real and effective competition will have to be ensured. Failure to act will enable incumbent operators to build networks that foreclose competition reducing choice and innovation for consumers and businesses for years to come.

Incumbents have argued that NGN investment is risky and that regulation would deter them from making this investment. However, the real risk is that, if incumbents can escape regulation by upgrading their core networks to reflect efficient modern technology already used by many other operators, competition will be irreparably damaged and, as a result, future investment by both incumbents and market entrants will be jeopardised.
Emphasis by ECTA so that the dumbest regulator gets it.

The rest of the document is a bit confusing to read so I do not completely get what they really want, but from my experience with ECTA this parses to:

There is a danger that incumbents may be clever enough not to built an NGN if they are regulated. We parasites are of course not so stupid to built one by ourselves. But we parasites will need something to suck blood on, so we need somebody stupid enough to build the NGN, not only for voice but also as IP backbone and core network. So please Saint Regulator, first force the incumbent to build an NGN if he does not want to build one and then force him to give us a free ride ah - introduce remedies on the incumbent. Incumbent is defined as the little local (national) operator in competition with global acting "small" startups regardless of size.

Of course they do not want a horizontal regulatory model split in access, transport, services and applications, because in this case they would have real competition and would have to pay like anybody else.

Nicy try, or?

BTW, has anybody out there an idea why France and the Netherlands said NON and NEE to the European constitution?

Great job on your talk on internet connections. I have a internet connections secrets blog if you wanna swing by my place!
I really enjoyed your content on Time Warner Cableand will be back very frequently! I actually have my own Time Warner Cable Exposed blog with all kinds of stuff in it. You�re welcome to com by.
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