NGN Interconnection: far from an agreement

There is no agreement or even a consensus on how NGN interconnection in UK will look like. The current debate is so far from reality that many operators (someone says also BT) do not know even what the problems are. Part of the challenges arises from a general lack of experience in interconnection of a so large and extended set of products and services.

Consultants, regulators and academics have different and divergent views on how to set interconnect rates for NGN. Views essentially spread from bill&keep innovative models to old-fashioned per minute or per service charging.

A possible solution might be to charge per 'contended capacity' and per 'quality of service'. However, even here there is no agreement whether voice needs more or less priority.

Some observers argue that voice do not need more quality as it can be accepted and priced at low quality (see Skype). Therefore regulated voice services will be almost free of charge and priced according to capacity. Others instead argue that voice needs a high prioritisation and should cost more than other services. What is clear from the above discussion is that there is still lot to say and argue about this topic in the future.

Interconnection of NGN can remain billed per minute for quite some time during the transitional phase, even if minutes are not a cost driver for NGN. However, prices probably should be adapted to the costs of an efficient operator (e.g. overcapacity should be reduced) in order to avoid irrelevant costs.

Simplicity and continuity in pricing models (for retail customers at least) are and should remain a must in the near future in order to reduce cases of anti-competitive behaviors and the effect of bottlenecks. Operators should look for a solution that combine the need for stable rates and the request of innovation and profitability from shareholders. Two kings for the same throne!