A debate where nobody is wrong (or right) - Momento Editorial · A debate where nobody is wrong (or...
Transcript of A debate where nobody is wrong (or right) - Momento Editorial · A debate where nobody is wrong (or...
Net Neutrality
Mario Girasole Regulatory, Institutional and
Press Relations
June10th, 2015
A debate where nobody
is wrong (or right)
Inclusion: a moving target Social
Economic
Digital
Infrastructure Cost of Service Cost of Devices Digital Literacy Content Solutions
+ Affordable
Share of Smartphones in Devices Sales
2013 2014 Feb/2015
Mobile industry removing barriers
+33 pp
+ Available
Spectrum
Fiber
HetNets
Coverage
+ Competitive
HHI Index as of 4Q14 Source: Bank of America / Merrill Lynch
Mobile Market Revenues Evolution (% of Revenue in Mobile Service Revenue Mix)
A great transformation in
progress 2018/2020E
2010
Internet
SMS
Outgoing Voice
Incoming Voice
12%
4%
57%
27%
The rise and fall of Regulation
New Rules of engagement in the digital business value chain New Relation between State and Market
From TLC Regulation...
Paradigms shift
to Digital Public Policies
Back to basics
TLC is a Paid Service
TLC is not an Utility
Same Service, Same Rules
Digital Transparency Perspective
Back to basics
TLC is a Paid Service
TLC is not an Utility
Same Service, Same Rules
Digital Transparency Perspective
Back to basics
TLC is a Paid Service
TLC is not an Utility
Same Service, Same Rules
Digital Transparency Perspective
Paid Service: two-sided market governance
Paid Service: two-sided market governance
CADE, P.A. n.º 08012.00850112007-91, Cons. Ana Frazão: “(...) não veracidade da premissa de que o VU-M deve corresponder ao custo de uso da rede em casos de interconexão, já que o próprio regulador reconhece que o VU-M tem a finalidade de cobrir custos fixos e variáveis das operadoras móveis e ainda possibilitar a expansão da telefonia móvel e o cumprimento de metas e objetivos da política regulatória específica.”
Users (Price) TLC “Voice” Operators (ltx)
EBITDA Margin (4Q14) (41st of 47 countries)
Source: BofAML Global Wireless Matrix, 30.Apr.2015, 4Q industry snapshot
Paid Service: two-sided market governance
Users (Price)
TLC “Data”
Contents / Applications (OTT)
NETFLIX Contribution to Anatel Public Consultation 08/2015:
“(...)o regulador deveria assegurar, não só o direito de acesso (já protegido pelo Artigo 61 da LGT), mas também garantir que esse acesso seja gratuito.”
?
Revenues
Price x User Base
(ex. Zero Rating)
Traffic technical discrimination
Dominant position
Vertical integration
Exclusivity agreement
Art. 9º O responsável pela transmissão, comutação ou roteamento tem o dever de tratar de forma isonômica quaisquer pacotes de dados, sem distinção por conteúdo, origem e destino, serviço, terminal ou aplicação. § 2º Na hipótese de discriminação ou degradação do tráfego prevista no § 1o, o responsável mencionado no caput deve: IV - oferecer serviços em condições comerciais não discriminatórias e abster-se de praticar condutas anticoncorrenciais. (Marco Civil, art. 9º)
Zero Rating
What’s the problem?
Yes No
Yes No
Yes No
Long term
Short term
Antitrust
ZRT 1
ZRT 2 Beyond Behind
ARPU (US$)
GDP/capita (US$)
Population (MM)
MTR (US$) Source: BofAML Global Wireless Matrix, 30.Apr.2015, 4Q industry snapshot
4Q14
29.27
34.758
17
0.014
7.91
10.268
200
0.103
The Netherlands X Brazil: a “not-neutral” dispute
Regulatory measures cannot be
one-size-fits-all
Zero Rating ban
Paid Service: two-sided market governance
Users (Price)
TLC “Data”
Contents / Applications (OTT)
NETFLIX Contribution to Anatel Public Consultation 08/2015:
“(...)o regulador deveria assegurar, não só o direito de acesso (já protegido pelo Artigo 61 da LGT), mas também garantir que esse acesso seja gratuito.” ARPU (US$)
GDP/capita (US$)
Population (MM)
MTR (US$)
Source: BofAML Global Wireless Matrix, 30.Apr.2015, 4Q industry snapshot
4Q14
29.27
34.758
17
0.014
7.91
10.268
200
0.103
?
Fast Lane Partnerships? Specialized Services? Specialized Networks? State Aid?
Revenues Price x User Base (ex. Zero Rating)
Back to basics
TLC is a Paid Service
TLC is not an Utility
Same Service, Same Rules
Digital Transparency Perspective
So... what about neutrality?
State Market
Pragmatic NN
Dogmatic NN
Private Investments Innovation
Competition Partnerships
Free riding Low margins/investments Concentration ( prices)
Public funding “Free lunch”
Back to bureaucracy
Regu
latory Fram
ewo
rk
Institutional Framework
Incentive to investments Formulate digital public policies
Rules for market failures
“Business flexibility that makes the networks work properly for consumer benefits, in a fair competition.”
“Everything is forbidden, except the dumb pipe.”
Net Neutrality Frameworks
Conclusion
TLC is a Paid Service
TLC is not an Utility
Same Service, Same Rules
Digital Transparency Perspective
Beyond the “Neutrality Trap”...
…from a debate where nobody is wrong (or right)…
Source: J. Scott Marcus, Nov. 2014
Network Neutrality
Anticompetitive behaviour
Innovation
Freedom of expression
Consumer awareness
Privacy
… to a Customer-centric policy debate
Customer
Competition/
Investments
(OTT vs. TLC)
Digital Transparency
(Regulation 3.0)
Traffic Management
(“best effort” vs.” specialized services”)
Digital Public Policies
(Education, Health, Smart
Cities, etc.)
Privacy/Security
(ex. the encryption issue)
Thank You!
Mario Girasole Regulatory, Institutional and
Press Relations