Public consultation on BEREC draft report …...operators in Europe to offer integrated services of...

1 WIND Telecomunicazioni S.p.A. - Società con azionista unico Direzione e coordinamento di WIND TELECOM S.p.A. Sede legale: Via Cesare Giulio Viola 48 - 00148 Roma Sede secondaria: Via Lorenteggio 257 - 20152 Milano

Reg. Imp.: 05410741002 di Roma C.F.: 05410741002 - Partita IVA: 05410741002 R.E.A. di Roma: 884361 - R.E.A. di Milano: 1564660 Cap. sociale euro 147.100.000,00 i.v.

WIND contribution for the

Public consultation on BEREC draft report “Differentiation practices and related competition issues in the scope of Net Neutrality”



SUMMARY

Company Overview ............................................................................................................. 3

Introduction and general remarks ........................................................................................ 4

Wind’s comments: ............................................................................................................... 6

Wind’s comments on the description of the value chain and tendencies described in the report ............................................................................................................................... 6

Wind’s comments on the differentiation practice of VoIP blocking on mobile network ..... 9

Wind’s comments on the differentiation practice of P2P blocking on fixed broadband .. 10

Wind’s comments on the differentiation practice of services to CAPs ........................... 10

Wind’s comments on the conclusion reached in the report............................................ 11



Company Overview

Founded in 1997, WIND Telecomunicazioni S.p.A. is one of the few operators in Europe to offer integrated fixed and mobile telecommunication services and Internet services. WIND is the third largest Italian mobile operator, with 20.8 million subscribers as of September 30, 2011. WIND is also the leading alternative provider of fixed-line services in Italy with more than 3.09 million voice customers, of which 2.35 million direct subscribers, and 2.07 million broadband customers as of September 30, 2011.

WIND was the first Italian operator to launch MMS and video over GPRS handsets: one of the earliest services to be made available was the first ever pocket news broadcast via videostreaming. WIND was the first in Italy to launch a trading on line service via WAP. New technologies such as WAP and GPRS, UMTS, make a substantial contribution to the creation of new services and applications. WIND offers a particularly wide range of data transmission and Internet services, capable of satisfying the needs of all segments of the corporate market.

In February 2001, WIND became the first alternative operator of fixed-line telephony in Italy to provide access to local loop unbundling, offering the possibility to make fixed-line calls without the need to pay any form of line rental. WIND was the first Italian operator, in May 2002, to launch Number Portability, enabling customers to switch operator whilst keeping their existing telephone number. In fixed-line telephony, WIND confirmed its status as the leading alternative to the former incumbent for the activation of a new telephone line. By directly choosing Infostrada as their operator, without involving Telecom, from November 2005 users have been able to set up a new line at a highly competitive price. In 2006 WIND expanded its convergent fixed-Internet product offering, with the introduction of Libero Absolute ADSL, offering bundled domestic calls with only a call-set up charge and a broadband Internet connection for a flat monthly rate. In October 2005 WIND launched the ADSL2+ access network, a new technology offering a considerable increase in connection speed and quality and, consequently, a marked improvement in the fruition of services, especially of the multimedia type, such as audio and video applications.

The WIND Group has a best in class network: more than 21,000 kilometers of optical fiber backbone to 4,440 kilometers of MAN. The company also boasts an extensive and innovative mobile network consisting of more than 12,598 radio base stations and more than 9,000 Node B related to the UMTS coverage. Coverage outside Italy is provided by more than 450 roaming agreements.



Introduction and general remarks

Since its institution, the BEREC increased its presence in the development of the internal market and there is no doubt that especially within the scope of the new regulatory framework its role will continue to be central also in the coming years, assuring a level playing field for market players setting those right regulatory tools to enhance competition and consumers welfare as well.

Wind Telecomunicazioni S.p.A. (“Wind”), the largest Alternative operator in Italy, is one of the few operators in Europe to offer integrated services of fixed telephony, mobile telephony and Internet. Wind is the third Italian mobile operator, with over 20.8 million customers and continues to be the leading alternative operator on the Italian fixed market with over 3.09 million voice customers.

Wind welcomes this public consultation in order to forward its view on the BEREC’s draft report “Differentiation practices and related competition issues in the scope of Net Neutrality”, considering the BEREC as a crucial institution to improve harmonisation and consistency in the application and enforcement of the Regulatory Framework in EU countries.

For what concern the value chain described in the report seems to be an exhaustive analysis of the internet ecosystem even if it seems to be a short-sighted approach considering that in the internet value chain ISPs are probably no longer the most valuable part of it, as a matter of fact the era of internet actuated a substantial change of paradigm in the services and communications eco-system. New markets have developed, taking on increasingly significant size, even comparable with the telecom market (see for example the 2010 IDATE research in Figure 2) and growing more and more faster.

As stated by the BEREC, ISPs have a particular role as a hub, but Wind strongly believes that this not necessary implies a bottleneck for contents, applications and services. In the relationship between the different players among the value chain is important to understand that the ISPs and CAPs depend on each other. Moreover ISPs are not within the most valuable part of the internet value chain but on the contrary are within the most regulated one (see Figure 1), so in a competitive context ISPs should not be burdened by further specific regulation on net neutrality issue, considering also that it is easy to guess that in case of a competitive market if an ISP tries to prevent the business of a “big” CAP (e.g. Google , Facebook or Youtube), the most part of its customers would switch to another ISP almost immediately, on the contrary in case of a “small” CAP an ISP would likely ignore him, so considering that today contents/applications are in the most cases no longer integrated within the network, fostering competition is the best tool to address net neutrality issues.

It’s commonly know that the running trends in the internet see a continuous and accelerating increase in the bandwidth consumed by the upcoming and most popular applications and that a decisive factor to meet this trend in the fixed network would be the development of the New Generation Access Network ( NGAN) in fiber, while in the mobile network a lot of development lies ahead through the implementation of LTE, so from an operator point of view there is an increasing imbalance in the network dynamics due to higher costs for ISPs while CAPs consume more and more bandwidth without de facto proportionately contributing to the investments.



Wind believes that it is necessary to re-think on these dynamics even also from a regulatory point of view and allow the possibility for ISPs to sustain properly the necessary investments to enhance their networks, for example not preventing the development of the two sided market and the possibility to differentiate the quality of service offered to CAPs priced at different levels.

In principle Wind believes that it could be an acceptable practice to provide different commercial offers transparently, some admitting VOIP without restrictions and others restricting VOIP if the pricings are reasonable and not discriminatory. In this view Wind commercially has only one bundle offer (i.e., the entry level one) were VoIP is not included, although technically allowed without extra costs, whilst on all other offers VoIP is included in the bundle of traffic. In any case customers are aware of these offer conditions and restrictions (if any) on all communication channels (e.g., BTL, web, IVR).

Wind strongly remarks that no specific regulation should be introduced regarding differentiation practice on VoIP, because it seems to be a strong limitation of MNO’s commercial freedom and taking into account that it is not true that not all operators don’t avoid VOIP in mobile, once again the competition is the key for end-users to choose between an operator that allows VOIP in mobile or an operator that doesn’t allow it. Wind believes that a non-dogmatic approach is necessary on VOIP encouraging increase in transparency towards end users. In fact it is important to remark that the pricing of VOIP should remain a commercial choice of MNOs coupled with a clear communication to end-users.

For what concern P2P, Wind transparently applies limitation of the P2P traffic at traffic peak hours and only in case of network congestion. This potential limitation is clearly stated in the contracts and is also a common practice in the Italian ISPs market. The objective is not to block the P2P traffic but to limit it in case it would prevent the usability of other types of traffic by end users, this objective can be efficiently reached by fostering competition and transparency tools already available for NRAs, without the need of further regulatory interventions.

Finally Wind agrees with the careful analysis produced in this document, which points out risks and opportunity and does not propose any final solutions or conclusions but proposes itself as a basis for discussion, that should be maintained open, involving all the stakeholders and regulators.

Wind agrees in general that all discriminatory practices are not desirable and believes also that an open and competitive market is the best solution to avoid them. The role of NRAs is important and should not prevent the market to develop with its own forces, intervening only in order to address problems related to SMP operators powers



Wind’s comments:

Wind’s comments on the description of the value chain and tendencies described in the report

The value chain described in the report seems to be an exhaustive analysis of the internet ecosystem even if it seems to be a short-sighted approach considering that in the internet value chain ISPs are probably no longer the most valuable part of it; as a matter of fact the era of internet actuated a substantial change of paradigm in the services and communications eco-system. New markets have developed, taking on increasingly significant size, even comparable with the telecom market (see for example the 2010 IDATE research in Figure 2) and growing more and more faster.

It is a matter of fact that the Internet has become a two-sided market where the apparent gratuitousness of traffic has created a short-circuit between the two sides (namely, service providers and end-users), cutting off from revenues network operators, which lay in the middle. The ultimate effect of this phenomenon is the so-called cloud computing: users feel Internet services to be so close to them and reachable at no additional costs, that they keep on the cloud even their personal files that could fit at no cost in the storage devices embedded in their smart phones. Although such a short circuit has significantly contributed to the diffusion of the Internet and to the development of advanced online services, the model suffers from many weaknesses which make it not sufficient to sustain the exponential development

The exponential growth of IP traffic is the result of many concomitant causes: the ever increasing pervasiveness of the Internet, users’ addiction to network connectivity, the progressive shift of usage patterns towards bandwidth intensive services, the significant improvements in the usability of interfaces, the ubiquitous availability of connected devices, the increasing share of consumer traffic, and the convergence of popular services (voice, TV, video on demand) over IP networks.

As stated by the BEREC, ISPs have a particular role as a hub, but Wind strongly believes that this not necessary implies a bottleneck for contents, applications and services.

In the relationship between the different players among the value chain is important to understand that the ISPs and CAPs depend on each other. Moreover ISPs are not within the most valuable part of the internet value chain but on the contrary are within the most regulated one (see Figure 1), so in a competitive context ISPs should not be burdened by further specific regulation on net neutrality issue, considering also that it is easy to guess that in case of a competitive market if an ISP tries to prevent the business of a “big” CAP (e.g. Google , Facebook or Youtube), the most part of its customers would switch to another ISP almost immediately, on the contrary in case of a “small” CAP an ISP would likely ignore him, so considering that today contents/applications are in the most cases no longer integrated within the network, fostering competition is the best tool to address net neutrality issues.

Generally speaking a bottleneck problem would arise in case of a vertical integrated operator which hold the non-replicable asset necessary to allow competitors to develop their own business and to climb the ladder of investment. Wind believes that this problem doesn’t exist in the internet ecosystem, due to the fact that first of all, to Wind knowledge, ISPs in most cases are not vertically integrated with CAPs (the so called walled garden model is commonly recognized as a not



successful business case), moreover if there is competition at ISPs level the problem of a non-replicable asset doesn’t exist since there are several ISPs that can allow CAPs to make their business and reach Users.

Figure 1. Five key markets of the internet value chain and comparison of source of revenues and regulated segments of the markets – Wind’s elaboration on AT Kearney Research “The Vodafone Policy Paper Series • Number 11 • April 2010”



Figure 2. IDATE Research on internet and source of revenues in 2010

From a technical point of view the BEREC’s report describes very accurately the interactions between ISPs or ECPs, between Users and CAPs.

It’s commonly know that the running trends in the internet see a continuous and accelerating increase in the bandwidth consumed by the upcoming and most popular applications which typically involve video content or P2P traffic. Especially applications with high video content are growing at a pace which makes it critical for operators to follow up with development of more bandwidth in the network.

A decisive factor to meet this trend in the fixed network would be the development of the New Generation Access Network ( NGAN) in fiber. In the mobile network a lot of development lies ahead through the implementation of LTE, which however will also require fiber for backhauling. These developments and particularly the fixed fiber access network entail very high investments with very long envisioned return times.

Currently there is an increasing imbalance in the network dynamics due to higher costs for network operators while at the same time CAPs consume more and more bandwidth without de facto proportionately contributing to the investments. Wind believes that it is



necessary to re-think on these dynamics even also from a regulatory point of view and allow the possibility for ISPs to sustain properly the necessary investments to enhance their networks, for example not preventing the development of the two sided market and the possibility to differentiate the quality of service offered to CAPs priced at different levels.

Finally from a Marketing point of view the report shows a reasonable set of offering models that are important to sustain the ECPs business model specifically considering the evolution toward LTE. In this sense, Wind recommends that BEREC and NRAs will ensure a commercial freedom to ECPs, keeping in mind ECPs role in the ecosystem as the players that invested on infrastructure to address internet evolution.

Wind’s comments on the differentiation practice of VoIP blocking on mobile network

From a technical point of view Wind (has never and) does not currently interfere or block VOIP traffic in any way on the mobile network. In principle Wind believes that it could be an acceptable practice to provide different commercial offers transparently, some admitting VOIP without restrictions and others restricting VOIP if the pricings are reasonable and not discriminatory. In this view Wind commercially has only one bundle offer (i.e., the entry level one) were VoIP is not included, although technically allowed without extra costs, whilst on all other offers VoIP is included in the bundle of traffic. In any case customers are aware of these offer conditions and restrictions (if any) on all communication channels (e.g., BTL, web, IVR).

Wind strongly remarks that no specific regulation should be introduced regarding differentiation practice on VoIP, because it seems to be a strong limitation of MNO’s commercial freedom and taking into account that it is not true that not all operators don’t avoid VOIP in mobile, once again the competition is the key for end-users to choose between an operator that allows VOIP in mobile or an operator that doesn’t allow it. Wind believes that a non-dogmatic approach is necessary on VOIP encouraging increase in transparency towards end users. In fact it is important to remark that the pricing of VOIP should remain a commercial choice of MNOs coupled with a clear communication to end-users.

On the other hand Wind believes that an acceptable practice would be to technically manage the available bandwidth so that it can be equally distributed to the users in the coverage zone avoiding that few users could severely limit the performance of the others.

From a Marketing point of view, according to market needs, dedicated managed VoIP offering could be launched by ECPs, to leverage on Network Infrastructure developments with different price schemes and performances towards Over The Top. Thanks to the full control of the service managed by ECPs a better quality and security could be provided to end user, covering also actual regulatory obligations.



Wind’s comments on the differentiation practice of P2P blocking on fixed broadband

From technical point of view Wind/Infostrada (has never and) does not presently apply blocking of P2P traffic on any commercial offer.

Wind does however transparently apply limitation of the P2P traffic at traffic peak hours and only in case of network congestion.

This potential limitation is clearly stated in the contracts and is also a common practice in the Italian ISPs market. The objective is not to block the P2P traffic but to limit it in case it would prevent the usability of other types of traffic by end users.

It is important to note also that P2P traffic tends to be more symmetrical than traditional browsing or video content traffic thus it affects also the criteria used by operators in dimensioning the network, in the same way sites that collect user’s video bring more symmetrical traffic. In this context again development of NGAN on fiber becomes again crucial to be able to follow the trend of increasing bandwidth and of this bandwidth become more symmetrical.

Wind’s comments on the differentiation practice of services to CAPs

Wind understand concerns related to the issue of the differentiation practice of services to CAPs as this could give rise to discrimination towards weaker CAPs and ECPs.

In this view Wind would underline the fact that today the relationship between the different players among the value chain shows that ISPs and CAPs depend on each other. Moreover ISPs are not within the most valuable part of the internet value chain but on the contrary are within the most regulated one (see Figure 1), so in a competitive context ISPs should not be burdened by further specific regulation on net neutrality issue, considering also that it is easy to guess that in case of a competitive market if an ISP tries to prevent the business of a “big” CAP (e.g. Google , Facebook or Youtube), the most part of its customers would switch to another ISP almost immediately, on the contrary in case of a “small” CAP an ISP would likely ignore him.

Wind agrees that properly fostering an evolution of the interconnection market in a properly manner can have an important role in maintaining the necessary openness of the network as CAPs will not need to have direct relationships with ECPs. As a matter of fact they have both the possibility to optimize their connectivity and enhance the quality of the service they may offer, without involving bilateral negotiations which could give rise to the discriminations mentioned before.

This matter should be addressed carefully and discussed within an international fora with the participations of all stakeholders and with the contribution of international and national regulatory bodies.



Wind’s comments on the conclusion reached in the report

From a technical point of view Wind agrees with the careful analysis produced in this document. The document points out risks and opportunity and does not propose any final solutions or conclusions but proposes itself as a basis for discussion, that should be maintained open, involving all the stakeholders and regulators.

Wind agrees in general that all discriminatory practices are not desirable and believes also that an open and competitive market is the best solution to avoid them, so fostering competition is key.

The role of NRAs is important and should not prevent the market to develop with its own forces, intervening only in order to address problems related to SMP operators powers.

Finally Wind would remarks that there is a need to analyze more in details the increasing imbalance in the network dynamics in favor of CAPs and to support the possibility for ISPs to sustain properly the necessary investments to enhance their networks, for example not preventing the development of the two sided market and the possibility to differentiate the quality of service offered to CAPs priced at different levels.

Finally Wind would stress the concept that commercial freedom is mandatory to sustain the ECPs business model and let the Internet evolution.




Public consultation on BEREC “Guidelines for Quality of Service in the scope of Net Neutrality”



SUMMARY

Company Overview ............................................................................................................................. 3 Introduction and general remarks ........................................................................................................ 4 Wind’s answers .................................................................................................................................... 6

Question 1: What are your views on the criteria proposed for the assessment of degradation of

Internet access service as a whole? (Ref. chapter 4) ....................................................................... 6 Question 2: What are your views on the criteria proposed for the assessment of issues regarding

individual applications run over the Internet access service? (Ref. chapter 5) ............................... 8 Question 3: What are your views on the aspects proposed regarding the conditions and process

for regulatory intervention? (Ref. chapter 6) .................................................................................. 8 Question 4: To what extent are the scenarios described in these guidelines relevant with respect

to your concerns/experience? Are there additional scenarios that you would suggest to be

considered? .................................................................................................................................... 11



Company Overview










Wind welcomes this public consultation in order to forward its view on the BEREC’s guidelines for Quality of Service in the scope of Net Neutrality, considering the BEREC as a crucial institution to improve harmonisation and consistency in the application and enforcement of the Regulatory Framework in EU countries.

Wind suggests to BEREC to clearly state on top of the criteria outlined in its document that in every “proportionate” assessment on degradation of internet access service by an NRA the reference to fixed and to mobile networks cannot be the same.

For fixed networks, it is a key point to understand that the Quality of Service offered by operators (especially an alternative operator, which uses the incumbent’s network) strongly depends on many factors (e.g., the quality of the existing access network of the incumbent and the related wholesale products, the distance from the exchange to the end users’ premises, etc.), which varies country by country across EU.

For what concern mobile networks, it is a key point to understand that in practice it is not applicable a minimum quality of service level, since the mobile access is based on a shared access modality used by customer in mobility.

Moreover, as far as best effort services are concerned, QoS could only be measured on a statistic basis and it is practically impossible for an ISP to guarantee that predefined limits are always respected for all users. That’s why such services (when the network will allow them) should be offered at different/right price.

In general Wind believes that a coherent application of the transparency principle can guarantee a fair development of the market so NRAs have already the power to intervene whether on ISP constantly disregards the terms and conditions set in contracts with his customers.

The introduction of general obligations to ISPs regarding the provision of minimum quality services of course doesn’t hinder misbehaviours and, in case of complaints, any single claim should be equally demonstrated. From a legal standpoint, if the transparency principle is implemented, the introduction of minimum requirements don’t give further power to NRAs to sanction faulty ISPs.

In addition to the above considerations it is necessary to remark that the competition is one of the strongest tools to grant the “network freedom”1 principle for all costumers.

1 Quoting the Wind’s answer to the BEREC’s public consultation on guidelines on Net Neutrality and Transparency, "it

seems that the “network neutrality” principle is confused with the “network freedom” principle. In our opinion,



Confusing the concept of network neutrality with the one of network freedom could lead to hamper the competition dynamics of the service, application and network markets and consequently could prevent the willingness of all interested players to invest in services, infrastructures and innovation.

The scenarios described in the BEREC’s draft guidelines are relevant to guarantee monitoring in the scope of Net Neutrality from ISP “side” of the market, no additional scenarios are suggested in this direction but, considering that the issue of QoS is related to the internet Net Neutrality, this BEREC’s view seems to be a short-sighted approach, considering that in the internet value chain ISPs are probably no longer the most valuable part of it, as a matter of fact the era of internet actuated a substantial change of paradigm in the services and communications eco-system. New markets have developed, taking on increasingly significant size, even comparable with the telecom market and growing more and more faster.

In this view it should be also recognized that the issues at the roots of the net neutrality debate are strictly related to the effective level of competition among Service/Application Providers. In this respect, EU institutions should further speculate on whether a sector inquiry to assess the market power detained by some relevant players (i.e. Google, Apple, Facebook, etc..) is deemed necessary.

Moreover Wind would stress that a proper analysis by an NRA should take into account that content and application providers are primarily affected to prioritise their data delivery and cannot be ignored the fact that today, content and application providers are already offering a different “quality” of products (e.g., Youtube with its HD feature for videos), as is perceived by end users, that not dependent from a differentiated quality of the internet connection but rather it is probably the same contents distributed with different data size by CAPs. In this respect it is clear how ISPs networks are exploited and how they will be potentially burdened by this CAPs conduct, while congestion will be more and more difficult to avoid.

It should be notice that the evolution of application requires actions to be performed, whose identification cannot be identified easily as a EU solution that fits for all. Further discussions and technical checks should be performed. Moreover it’s needed that CAPs produce data consumption estimates per country per macro-service in order to allow the proper dimensioning of all services.

Finally Wind partially agrees with the BEREC approach to the aspects proposed regarding the conditions and process for regulatory intervention, in fact, as also recognized by the BEREC in this document, it is very difficult to draw exhaustive conclusions in these guidelines, due to several aspects outlined and explained below in the specific answer to BEREC’s questions.

following the “network freedom” principle, any European citizen should be free to access any information on the

Internet, with no discrimination from the ISP/Network Operator (NO) based on the nature of that information.”.

Available at the following link: http://berec.europa.eu/doc/net/wind.pdf

http://berec.europa.eu/doc/net/wind.pdf



Wind’s answers

Question 1: What are your views on the criteria proposed for the assessment of degradation of Internet access service as a whole? (Ref. chapter 4)

Wind partially agrees with BEREC’s criteria proposed for the assessment of degradation of Internet access service as a whole and believes that they should be carefully evaluated by NRAs on a case by case basis, first of all taking into account the national circumstances in which they would been applied, but also considering the role of the ISP in the market as well as the nature of ISP (namely if it is a mobile or fixed operator).

Wind suggests to BEREC to clearly state on top of the criteria outlined in its document that in every “proportionate” assessment about the degradation of internet access service by an NRA the reference to fixed and to mobile networks cannot be the same.

For fixed networks, it is a key point to understand that the Quality of Service offered by operators (especially an alternative operator, which uses the incumbent’s network) strongly depends on many factors, including:

the quality of the existing access network of the incumbent

the distance from the exchange to the end users’ premises

the number of subscribers that use, at the same time, the bandwidth

the dependence from wholesale products that are not under the ISP control

the dependence on subscriber’s terminals and operative systems which are outside operators control, parameters which go beyond the control of ISPs, as also recognized by the BEREC in its draft document.

Because of these factors and the difficulty in predict the performance of the single physical access, Wind, for example, allows its own customers to test their speed2 with an Internet Access Measuring tool, available through an official web site (www.misurainternet.it.) monitored by the Italian National Authority. This tool provides to customers an official reference, including all the technical parameters (e.g, uplink bandwidth, downlink bandhtwith, latency) of network performances, and can be used by customers in case of disputes with their operator.

For what concern mobile networks, it is key to understand that in practice it is not applicable a minimum quality of service level, since the mobile access is a shared access used by customer in mobility. This should not surprise considering that the cell sizing is based on statistical numbers which vary cell-by-cell, therefore it does not allow a one fit for all minimum Quality of Service level. Considering these mobile networks limitations, in Italy Wind doesn’t use the maximum speed as a selling point in Wind’s Mobile Internet communications, but rather promotes the benefit of surfing on internet without extra costs. Wind therefore proposes that the mobile broadband market is left to grow freely without any further regulation and

2 following the AGCOM Delibera 244/08/CSP

http://www.misurainternet.it/



also without imposing any minimum level of QoS, due to the fact that this market is still in its early stage.

In this respect it is likely that an effective availability of the 4th generation mobile networks (LTE) on the market will not begin before the next 3-4 years. This new technology not only improves the frequency efficiency of the network (better bit/Hertz ratio), but also, as it is based on a full IP approach, allows for a more homogeneous management of voice and data services, as well as the improvements linked to the refarming of 2G spectrum for 3G purposes.

However Wind is not contrary to the criteria proposed by the BEREC, especially for the fact that are already implemented by WIND, for example in the fixed internet access, through the monitoring tool called Ne.Me.Sys., developed after the AGCom’s Delibera 244/08/CSP. Through this tool, at regular intervals, data regarding the performance of two of the most sold fixed broadband services are published (indeed it can be considered a preventive monitoring); it’s moreover possible for end users to perform a set of measurements in order to verify the QoS of their internet connection, and at the same time for ISPs to analyze the Ne.Me.Sys its reports in order to manage those problems that may arise (namely a reactive monitoring).

Moreover, as also recognized within the BEREC’s draft guidelines, monitoring can be done by checking the contracts and terms of IAS offers; in this view WIND already implements this kind of monitoring, for the fixed internet access, for example through the project related to the AGCom’s Delibera 244/08/CSP, that foreseen a promotion of contractual KPO for each commercial offer that can be used by the final user to compare his final metrics and, in case of malfunction, to eventually complain. Moreover WIND already performs the comparison between the advertised and actual speed, for the internet fixed access, not only in the peak hours but on a 24 hours basis, generating in the meanwhile several measurements (e.g., Perc5, avg, Perc95, stddev).

Regarding specialized and prioritized services WIND remarks that, because of the absence of blocking or throttling techniques in most cases across EU member states, there is no need for a deeper analysis or for further performance comparisons; an NRA should consider well the need of such analysis considering the related costs and benefits and both for operators and users.

Regarding the mobile internet access WIND is already involved in the project defined by the AGCom’s Delibera 376/11/CONS that aims to setting up a database allowing the end user to obtain pre-emptive information on the mobile coverage

Wind also welcomes additional monitoring methods, such as surveys focused on the QoE and investigation on the availability and penetration of IAS offers but always after a careful assessment by the NRA on a case by case basis of costs versus benefits of each methods in order to avoid extra costs for operators and likely overloads of information for customers. Moreover Wind suggests that it should be promoted an analysis of the QoS of wholesale services of the incumbent in order to point out if “equality” of quality occurs between competitors and incumbent’s retail arm.

Finally it should be considered that QoS management is mandatory in order to allow ECPs to compete in the evolution of the TLC market.



Question 2: What are your views on the criteria proposed for the assessment of issues regarding individual applications run over the Internet access service? (Ref. chapter 5)

Generally speaking Wind would stress that as already found by BEREC through its questionnaire on the Traffic Management Techniques, practices of blocking, throttling or prioritization of application or services vary among Member States across EU, but today it seems that no specific regulatory intervention is deemed necessary. However Wind remarks that even with the criteria proposed for the assessment of issues regarding individual applications run over the Internet access service, each NRAs should carefully take into consideration, on top of the criteria proposed in this BEREC’s document, that in every “proportionate” assessment on issues regarding individual applications run over the Internet access service the reference to fixed and to mobile networks cannot be the same.

Moreover Wind would stress that a proper analysis by an NRA should take into account that content and application providers are primarily affected to prioritise their data delivery and cannot be ignored the fact that today, content and application providers are already offering a different “quality” of products (e.g., Youtube with its HD feature for videos), as is perceived by end users, that not dependent from a differentiated quality of the internet connection but rather it is probably the same contents distributed with different data size by CAPs. In this respect it is clear how ISPs networks are exploited and how they will be potentially burdened by this CAPs conduct, while congestion will be more and more difficult to avoid.

It should be notice that the evolution of application requires actions to be performed, whose identification cannot be identified easily as a EU solution that fits for all. Further discussions and technical checks should be performed. Moreover it’s needed that CAPs produce data consumption estimates per country per macro-service in order to allow the proper dimensioning of all services.

Question 3: What are your views on the aspects proposed regarding the conditions and process for regulatory intervention? (Ref. chapter 6)

Wind partially agrees with the BEREC approach to the aspects proposed regarding the conditions and process for regulatory intervention, in fact, as also recognized by the BEREC in this document, it is very difficult to draw exhaustive conclusions in these guidelines, due to several aspects outlined below.

First of all it cannot be ignored the fact that situations differ among EU countries but also within the Member states, so a “one size fits all” solution cannot be established and it should be well clarified by the BEREC that a case by case analysis should be the primarily approach to a proper QoS analysis, on one hand taking into account national specificities and on the other hand the differences among networks which are the object of analysis, in particular, considering that BEREC also admit that the most prominent quality parameter is the access speed,



Wind strong believes that the parameters necessary to test the QoS cannot be the same for fixed and mobile networks, considering for example the fact that they have two completely different ways to transmit the signal, that is a dedicated connection (at least for the local loop) for the first whereas a shared connection for the latter.

In addition to the above it is necessary to remark that the competition is one of the strongest tools to grant the “network freedom”3 principle for all costumers. Confusing the concept of network neutrality with the one of network freedom could lead to hamper the competition dynamics of the service, application and network markets and consequently could prevent the willingness of all interested players to invest in services, infrastructures and innovation.

It should be also considered that the issues at the roots of the net neutrality debate are also strictly related to the effective level of competition among Service/Application Providers. In this respect, EU institution should further speculate on whether a sector inquiry to assess the market power detained by some relevant players (i.e. Google, Apple, Facebook, etc..) is needed.

It would be wrong in principle to impose the same level of QoS to all providers offering the same kind of services. There are in fact too many different nuances of the same service that require different QoS. Considering for example TV and, in general, Video services on IP, a service provider would decide to offer either standard or HD quality and maybe 3D as suitable content and terminal are available; the same holds for gaming as there are games that do not require much bandwidth but need a very quick response time from the network and there are others that have opposite requirements (i.e. large bandwidth, but accept longer delays). The situation is even more complex for mobile networks, where thousands of different applications exist, each of them possibly exhibiting specific network requirements. Considering the emerging nature of the broadband services market, it would be definitely too early to try to draw a significant picture of their network requirements.

It is Wind’s firm belief that each content/application/online service provider should be able to negotiate on fair commercial basis with the ISPs, which kind of QoS (including if not a best effort one) it requires for any specific service.

Wind also believes that setting by NRAs of excessive minimum quality of services requirements may rise several and strong difficulties both for mobile and fixed network operators since this would hinder a market based evolution of tailored retail offers to meet fixed and mobile customers’ needs.

In particular for mobile networks the definition of fixed QoS requirements seems even more problematic given the shared character of the access connection. A paradoxical example of the economic implication of such a measure (setting a minimum fixed level of quality of service) would imply that if the capacity of a given mobile cell is not increased the maximum number of people who could have access at the same time to the cell would be reduced. Such a scenario might be avoided only by huge investments on an operator’s cells resizing but without considering that there are strictly limitations on electromagnetic waves that vary country by country.

3 Quoting the Wind’s answer to the BEREC’s public consultation on guidelines on Net Neutrality and Transparency, "it

seems that the “network neutrality” principle is confused with the “network freedom” principle. In our opinion,

following the “network freedom” principle, any European citizen should be free to access any information on the

Internet, with no discrimination from the ISP/Network Operator (NO) based on the nature of that information.”.

Available at the following link: http://berec.europa.eu/doc/net/wind.pdf

http://berec.europa.eu/doc/net/wind.pdf



Further, in case of minimum quality obligations and in order to be able to defend his points in courts, an ISP would be forced to build up an infrastructure measuring the performance for all the terminations of the network. The cost of this development would be very high and would necessarily increase the cost of the service.

Moreover, as far as best effort services are concerned, the QoS could only be measured on a statistic basis and it is practically impossible for an ISP to guarantee that predefined limits are always respected for all users. That’s why such services (when the network will allow them) should be offered at different/right price.

From the point of view of an alternative operator, which uses the incumbent’s network to reach its customer base, is well known that its quality of service strongly depends on the state of copper of the incumbents itself and also by the length of copper, which in the largest part of the European territory strongly varies country by country.

In general we maintain that a coherent application of the transparency principle can guarantee a fair development of the market. NRAs have already the power to intervene whether on ISP constantly disregards the terms and conditions set in contracts with his customers.

The introduction of general obligations to ISPs regarding the provision of minimum quality services of course doesn’t hinder misbehaviours and, in case of complaints, any single claim should be equally demonstrated. From a legal standpoint, if the transparency principle is implemented, the introduction of minimum requirements did not give more power to NRAs or to end users than they already had to sanction the faulty ISP/NO or to ask for a compensation in a court.

Moreover, there are a lot of free software on the network that can help customers measure the performances of their broadband connections whilst some NRAs have even endorsed some of them. In Italy the NRA has adopted two Decisions concerning measurement of QoS; the one related to fixed broadband has introduced a software customers can download to measure QoS of their line, whereas the one regarding mobile broadband has introduced some drive tests whose outcomes should give the possibility to compare QoS among mobile operators. However, taking into account all the above consideration, Wind continues to believe that no measures can grant certainty of results4.

For all of these reasons Wind believes that the national regulatory authorities should not need to set a minimum quality of service requirements on an undertaking or undertakings providing public communications services, Wind believes that it is still too early to define specific QoS requirements for the internet market. As a matter of fact customers are still offered “best effort” access services; once a multi-level quality of service offer will be available on the network and, consequently, in the market, it will be reasonable to define specific requirements and discuss about how those should be measured and monitored.

Bearing in mind all of the above consideration on one hand Wind agrees with the three dimensions identified by the BEREC (i.e., The distinction between result and effort-based regulatory remedies, the specific type of behavior that is sought from ISPs and the qualitative and quantitative measures) but on the other hand Wind strongly believes that is

4 The AGCom’s Delibera 151/12/CONS on fixed QoS (integrating the Delibera 244/08/CSP) and the Delibera

154/12/CONS on mobile QoS.



mandatory to see at these dimensions gradually, starting from a soft approach, based on results, to quantitative parameters as a measure of last resort, namely avoiding any strict regulatory intervention and conversely fostering competition.

Question 4: To what extent are the scenarios described in these guidelines relevant with respect to your concerns/experience? Are there additional scenarios that you would suggest to be considered?

The scenarios described in the guidelines are relevant to guarantee monitoring in the scope of Net Neutrality from ISP “side” of the market, no additional scenarios are suggested on ISP direction, even if considering that the issue of QoS is related to the internet Net Neutrality, this BEREC view seems to be a short-sighted approach considering that in the internet value chain ISP are probably no longer the most valuable part of it, as a matter of fact the era of internet actuated a substantial change of paradigm in the services and communications eco-system. New markets have developed, taking on increasingly significant size, even comparable with the telecom market (see for example the 2010 IDATE research in Figure 1) and growing more and more faster.

It is a matter of fact that the Internet has become a two-sided market where the apparent gratuitousness of traffic has created a short-circuit between the two sides (namely, service providers and end-users), cutting off from revenues network operators, which lay in the middle. The ultimate effect of this phenomenon is the so-called cloud computing: users feel Internet services to be so close to them and reachable at no additional costs, that they keep on the cloud even their personal files that could fit at no cost in the storage devices embedded in their smart phones. Although such a short circuit has significantly contributed to the diffusion of the Internet and to the development of advanced online services, the model suffers from many weaknesses which make it unsuitable to sustain the exponential development

The exponential growth of IP traffic is the result of many concomitant causes: the ever increasing pervasiveness of the Internet, users’ addiction to network connectivity, the progressive shift of usage patterns towards bandwidth intensive services, the significant improvements in the usability of interfaces, the ubiquitous availability of connected devices, the increasing share of consumer traffic, and the convergence of popular services (voice, TV, video on demand) over IP networks.



Figure 1. IDATE Research on internet and source of revenues in 2010

Furthermore, electronic communications are increasingly characterised by technical and product modularity. It is becoming accepted knowledge that in such a context, platforms arise as central components that enable their owners to operate as gatekeepers of information and value flows.

The emergence of these so-called multi-sided platforms implies that policy makers and regulators should not take for granted that simply allowing and facilitating the convergence between IT, internet, telecommunications and media services and technologies will result in an unbundled, open marketplace in which competition will flourish

Rather, the bottleneck function of platforms may trigger serious regulatory concerns, and may prove to be harder to delineate and to regulate than bottlenecks in the current access operator market. On the other hand, the specific nature of platforms implies that many traditional suspicions against firms setting non-cost oriented prices, introducing cross-subsidies and engaging in collaborations to set a de facto industry standard, lose (some of) their validity in a multi-sided market context.

The rise of platforms in ICT markets invites a reappraisal of regulatory frameworks and practices. As platforms originating in entirely different sectors increasingly compete directly against each



other, regulators ought to address platform competition issues regardless of their sector of origin, and taking into account the specificities of two-sided or multi-sided market business models.

Considering all of the above reasons, Wind believes that a willingness by content or application providers to prioritise their services is more than easy to guess, moreover it is even deducible that these subjects are interested in providing a multi-level quality of service to theirs end-users, assuring at the same time a best effort or enhanced level of quality of service for applications or contents that require it.

Moreover it is Wind’s firm belief that each content/application/online service provider should be able to negotiate on fair commercial basis with the NO, which kind of QoS (including if not a best effort one) it requires for any specific service.

Wind believes that the present framework already regulates the negotiations between different ISPs (either with or without market power) and between ISPs and their end-users. The antitrust regulation has the power to sanction cases where an ISP would either unduly discriminate or refuse to deal.




Public consultation on BEREC assessment of IP-interconnection in the context of Net Neutrality



SUMMARY

Company Overview ............................................................................................................. 4

Introduction and general remarks ........................................................................................ 5

Wind’s answers: ................................................................................................................... 7

Question 1 (Chapter 2): Are any other important players and/or relationships missing? ..... 7

Question 2 (Chapter 2): Do you agree with the classifications of CAPs as outlined above? 7

Question 3 (Chapter 2): Do you agree with the classifications of CAUs as outlined above?9

Question 4 (Chapter 2): Do you agree with the classifications of ISPs as outlined above? . 9

Question 5 (Chapter 2): Do you agree with the classifications of CDNs as outlined above? ............................................................................................................................................. 9

Question 6 (Chapter 3): To what extent are requirements regarding traffic ratios still important in free peering arrangements? ........................................................................... 10

Question 7 (Chapter 3): To what extent does the functioning of the peering market hinge on the competitiveness of the transit market? .................................................................... 10

Question 8 (Chapter 3): Does an imbalance of traffic flows justify paid peering? .............. 10

Question 9 (Chapter 3): Does paid peering increase (number of contracts and volume handled under such contracts)? ......................................................................................... 10

Question 10 (Chapter 3): To what extent does regional peering increase in relevance and affect transit services? ....................................................................................................... 11

Question 11(Chapter 3): Are any important services missing from the list of services provided by IXPs? .............................................................................................................. 11

Question 12 (Chapter 3): Are there any further developments regarding IXPs to be considered? ....................................................................................................................... 11

Question 13 (Chapter 3): Should in future Europe evolve to have more decentralised IXPs closer to CAUs? ................................................................................................................. 12

Question 14 (Chapter 3): Will traffic classes ever become available in practice on a wide scale? ................................................................................................................................ 12

Question 15 (Chapter 3): Will interconnection for specialised services be provided across networks? .......................................................................................................................... 12

Question 16 (Chapter 3): Will other solutions for improving QoE like CDNs become more successful rather than traffic classes? ............................................................................... 13



Question 17 (Chapter 4): Which of the factors impacting on the regionalisation of traffic is most important: language, CDNs, direct peering? ............................................................. 13

Question 18 (Chapter 4): Are any further issues missing?................................................. 13

Question 19 (Chapter 4): Given the cost reductions and the economies of scale and scope observable in practice, why do network operators call for compensation? ........................ 13

Question 20 (Chapter 4): Do you subscribe to the view that CDNs lead to improvement of QoS without violating the best effort principle? .................................................................. 14

Question 21 (Chapter 4): Is there a trend for CDNs to provide their own networks (i.e. integrating backwards)? ..................................................................................................... 14

Question 22 (Chapter 4): Is there a general tendency for eyeball (CAU) ISPs to deploy their own transit capacities and long distance networks or even to become Tier-1 backbones? ....................................................................................................................... 14

Question 23 (Chapter 4): If an eyeball ISP becomes Tier-1 provider, does this in-crease the eyeball’s market power on the interconnection market because there are no alternative Tier-1 providers to reach the customers of this eyeball ISP? ............................................. 14

Question 24 (Chapter 5): Will Art. 5 become more relevant as some large Eyeballs have equally qualified as Tier 1 providers not having to rely on transit any more? ..................... 15



Company Overview










Wind welcomes this public consultation in order to forward its view on the BEREC’s assessment of IP-interconnection in the context of Net Neutrality, considering the BEREC as a crucial institution to improve harmonisation and consistency in the application and enforcement of the Regulatory Framework in EU countries.

Wind is of the opinion that currently it is not possible to make a clear distinction between CAPs and CAUs, due to the fact that there is no necessarily a relative clear distinction about the network layers.

Moreover for what concern the definitions of CAPs’ revenues and costs, Wind strongly believes that several important relations are missed, namely those at the core of the problem of the internet value chain imbalance between ISPs and CAPs, in favor of the latters.

In fact it should be considered that all retail services sold by operators to end users generate a certain typology and amount of traffic, which in turn impose a certain expected amount of budgeted costs in order to make all the related investments to develop and maintain the network as efficient as possible, capable to face, inter alia, saturation of network capacity. To date what happened is that in addition to the ISP-related services, individuals and companies generate more and more incremental traffic due to more and more contents and applications that are in the most cases no longer “integrated” with networks (like for example voice or SMS services). It cannot be ignored the fact that these services require incremental investments and entail incremental costs, which are not balanced by any revenues both at retail and wholesale level, revenues that on the contrary are drained by content and application providers.

This scenario is the consequence of an overall wrong approach on the net neutrality issues, which aim is not the development of the market itself to the benefit of CAUs, on the contrary it is forcing a de facto state which entails the current EU situation of stalemate related to the network infrastructure investments to the detriment of the end users and the overall welfare.

The fundamental mistake of this model lies in the incorrect allocation of content/application costs within the overall business model. As a matter of fact today the model is still focused only on the relationship between ISPs and end users, but today contents/applications are in the most cases no longer integrated within the network. Wind strongly believes that the current scenario, IP-based, is a two sided market scenario, where ISPs give their services on one side to



CAPs and on the other side to CAUs, so it is necessary that both sides of the market (CAPs and CAUs) will contribute for the costs underlying the usage of the network that they made.

Wind believes that only a system that allows such modeling can bring to the correct balance and the proper allocation of costs, distributing to the related subjects the right amount of:

costs and revenues ascribable to service/content/application

investments necessary to develop and distribute service/content/application

risk related to these investments

On the contrary, today CAPs maintain their best position, safeguarded by net neutrality principles, completely free from regulatory obligations, leaving all of the above mentioned costs and risks upon ISPs whilst gaining revenues from end users.

It should not be neither allowed nor maintained anymore the CAPs’ current and “distorted” business model, which continue to burden ISPs with incremental costs, without contributing adequately for these additional costs or network investments, to the detriment of current and future possibility for end users to experience a better quality of service in the next future.

Moreover for what concern the classifications of CAPs outlined it the report, it is remarkable the fact that the bigger players, like incumbent companies, can also include in their business model the ownership of a CDN. In this view it can be useful to identify also a list of more detailed classification (a sort of sub definition) which can take into account those situation in which companies can act as integrated “players” of the different layers outlined in the report by the BEREC. However as correctly reported by the BEREC in its report, because of the great variety of the possible examples related to CDNs, it is not possible to define unambiguously the CDNs.

Furthermore, the report rise the issue of the comparison between the transit price and peering cost, in this respect Wind believes that it is necessary to take into account that:

Peering does not provide universal connectivity.

Not all relations are equal, because some relation are more important than others (e.g. other local operators, own subsidiaries, local broadcasters) and therefore require an higher reliability. A multiple peering on IXPs usually provide a higher reliability towards the counterparts preferred the operator.

With the broadly adoption of real-time and/or high-bandwidth contents (VoIP and video), it is reasonable to consider that their demand will progressively continue to grow for regional interconnections between ISPs.

Considering all the above reasons, It could be considered the need to move on peering agreements even in the case of peering cost higher than the transit price



Wind’s answers:

Question 1 (Chapter 2): Are any other important players and/or relationships missing?

Wind agrees with the BEREC definition of internet value chain players but there are some concern about the layers and the distribution of the players. In this view, since the CDNs are strictly interconnected and integrated with operator’s network, Wind proposes to move the CDNs on the Network Layer. This can contribute to improve the CDNs performances and the QoS offered to end users due to synergies that may rise from the direct interaction and integration between CDNs, OTTs and ISPs.

Question 2 (Chapter 2): Do you agree with the classifications of CAPs as outlined above?

Wind is of the opinion that currently it is not possible to make a clear distinction between CAPs and CAUs, due to the fact that there is no necessarily a relative clear distinction about the network layers.

To make the concept more clear, there are some example that can be made: a simple 8Mbps ADSL connection can be used by a large enterprise or a 128kbps frame-relay link can be used by a Stock Exchange operator, moreover a 30-access VPN can be used either by a consumers association or multi-dwelling premises. Furthermore it should be considered that the same internet connection can be shared between a freelance programmer of iPhone’s Apps and his/her children’s game console, that is for business or for leisure purposes.

For what concern the definitions of CAPs’ revenues and costs, Wind strongly believes that several important sources of revenues and costs are missed, namely those at the core of the problem of the internet value chain imbalance between ISPs and CAPs, in favor of the latters.

Currently CAPs are able to make their own business with very low investments, mainly due to the fact that they are able to exploit the investment made by ISPs. At the same time it should be considered that CAPs’ products are pushing CAUs to ask more and more bandwidth to ISPs and that this lastly turns to be a non-avoidable increase in ISPs’ investments to enhance their networks in order to face this demand increasing and which are too huge to be comparable to the CAPs’ ones and that represent a de facto situation no more sustainable by ISPs.

This scenario is the consequence of an overall wrong approach on the net neutrality issues, which aim is not the development of the market to the benefit of CAUs but on the contrary it is forcing a de facto state, which consequence is the current EU situation of stalemate related



to the network infrastructure investments to the detriment of the end users and the overall welfare.

The fundamental mistake of this model lies in the incorrect allocation of content/application costs within the overall business model. As a matter of fact today the model is still focused only on the relationship between ISPs and end users, but contents/applications are no longer integrated within the network. Wind strongly believes that the current scenario, IP-based, is a two sided market scenario, where ISPs give their services on one side to CAPs and on the other side to CAUs, so it is necessary that both sides of the market (CAPs and CAUs) will contribute for the costs underlying the usage of the network that they made.

Wind believes that only a system that allows such modeling can bring to the correct balance and the proper allocation of costs, distributing to the related subjects the right amount of:

costs and revenues ascribable to service/content/application

investments necessary to develop and distribute service/content/application

risk related to these investments

On the contrary, today the CAPs maintain the best position, safeguarded by net neutrality principles, completely free from regulatory obligations, leaving all of the above costs and risks upon ISPs whilst gaining revenues from end users.

As a matter of fact it cannot be ignored the principle of causality, which specifies those services that caused certain investments or costs: in this view, it is clear that all retail services sold by operators to their end users generate a certain typology and amount of traffic, which in turn impose a certain amount of budgeted costs in order to make all the related investments to develop and maintain the network as efficient as possible.

In this view it is easy to understand that when end users generate incremental traffic on ISPs network due to CAPs products, this leads to:

1. saturation of network capacity, which cannot be estimated, resulting in a downsizing of (or even a disruption) of the service;

2. incremental investment and costs for the network operator which are not balanced by any revenues both at retail and wholesale level

Considering all of the above reasons it should not be neither allowed nor maintained anymore the CAPs’ current and “distorted” business model, which continue to burden ISPs with incremental costs, without contributing adequately for these additional costs or network investments, to the detriment of current and future possibility for end users to experience a better quality of service in the next future.



Question 3 (Chapter 2): Do you agree with the classifications of CAUs as outlined above?

See answer on Question 2.

Question 4 (Chapter 2): Do you agree with the classifications of ISPs as outlined above?

See answer on Question 2.

Moreover it is remarkable the fact that the bigger players, like incumbent companies, can also include in their business model the ownership of a CDN. In this view it can be useful to identify also a list of more detailed classification (a sort of sub definition) which can take into account those situation in which companies can act as integrated “players” of the different layers outlined in the report by the BEREC.

In this view Wind remarks that is a very short-sighted approach to analyze only the ISPs model as the core of the net neutrality issue, considering the more and more influence of the CAPs as players in the value chain of the internet.

Question 5 (Chapter 2): Do you agree with the classifications of CDNs as outlined above?

As correctly reported by the BEREC in its report (see point f), page 17), because of the great variety of the possible examples related to CDNs, it is not possible to define unambiguously the CDNs.

As a matter of fact, to make some example it is sufficient to think that a cache system can be seen as a peering point (in fact there is no difference if “behind” the peering there is a backbone or a simple rack of caches), at the same time a CDN can play a role in inter-ISP routing (with BGP) therefore it does really interfere with ISP routing; moreover the impact of a transparent cache on a DNS system is so relevant that it cannot say it is so “transparent”.

Finally it should be considered that although the reference to the peak bandwidth parameter (i.e., Mbps) is the most common parameter to consider the revenues and costs related to internet, currently the parameters related to volumes is more and more commonly used (i.e., MB/month).



Question 6 (Chapter 3): To what extent are requirements regarding traffic ratios still important in free peering arrangements?

To Wind’s knowledge, usually they are not.

Question 7 (Chapter 3): To what extent does the functioning of the peering market hinge on the competitiveness of the transit market?

Although the comparison between the transit price and peering cost is the main issue, it is necessary to take into account that:

Peering does not provide universal connectivity, that is transit ISPs can recover a faulty peering whilst a peering cannot recover a faulty transit, so it is risky to have more than 50% of peering bandwidth on operator connectivity landscape.

Not all relations are equal, because some relation are more important than others (e.g. other local operators, own subsidiaries, local broadcasters) and therefore require an higher reliability. A multiple peering on IXPs usually provide a higher reliability towards the counterparts preferred the operator.

With the broadly adoption of real-time and/or high-bandwidth contents (VoIP and video), it is reasonable to consider that their demand will progressively continue to grow for regional interconnections between ISPs. In this context two ISPs may need to be interconnected (peered) in multiple sites in order to avoid long distance transport of time-sensitive traffic.

Considering all the above reasons, It could be considered the need to move on peering agreements even in the case of peering cost higher than the transit price.

Question 8 (Chapter 3): Does an imbalance of traffic flows justify paid peering?

The imbalance of traffic flows does not imply which one of the party involved in the peering has the highest interest into the peering itself. On the contrary it could be influenced by the “nature” of contents but not by the direction of the mainstream.

Question 9 (Chapter 3): Does paid peering increase (number of contracts and volume handled under such contracts)?



Private Paid peering is not relevant, considering also that its volume increase in Europe is low

Question 10 (Chapter 3): To what extent does regional peering increase in relevance and affect transit services?

It is reasonable to increase the peering component up to a certain percentage (40% to 60% of external bandwidth, depending on granularity) in order to guarantee that transit component can support a fault on a peering path.

Question 11(Chapter 3): Are any important services missing from the list of services provided by IXPs?

Considering that many IXPs allow the participation of other entities in the IXP, such as for example CAPs, broadcasters or CDNs, Wind underlines that it is possible to define these entities more generally like the so called AS (Autonomous System), instead of the adopted definition of ISP.

Moreover an IXP may provide additional services, usually (but not always) free of charge, for example:

- Route server

- DNS and Root Name Servers

- Routing Tools (e.g. iBGPlay)

- Multicast routing

- QoS

- L3 IXP (AS in the middle, e.g. qxn-scpa.it)

- Multisite IXP (e.g. LINX, AMS-IX)

- Interconnection to other IXP (e.g. TOPIX to LIONIX, or NAMEX to AM-SIX)

Question 12 (Chapter 3): Are there any further developments regarding IXPs to be considered?

Wind considers that it is possible to list the following additional cases:



Two or more IXPs can join themselves together and interconnect each other, realizing a kind of backbone.

IP Multicast development has been an issue for years, now it seems to be abandoned

QoS is an issue that can be considered

Question 13 (Chapter 3): Should in future Europe evolve to have more decentralised IXPs closer to CAUs?

Wind believes that it is reasonable to foresee that most of the future traffic will be video-related, but it does not means necessarily that it will become the core business for operators.

Video over IP could generate a need of more decentralized peering between ISPs, but in Europe there are already available many IXPs. Moreover BGP is not designed for managing a number of peering points between the same couple of AS. Probably the number of European IXPs will not be much greater than now (e.g., there are 63 members of Euro-IX association).

Question 14 (Chapter 3): Will traffic classes ever become available in practice on a wide scale?

The lack for a worldwide standardization on a QoS model (e.g. on the meaning of the classes, on their relative treatment, on the protocol to be used and so on) is a great barrier to its application. Some not relevant cases like single IXPs or the Italian QXN have applied a local classification of the services. Wind is the opinion that a strong positioning of IETF could push such a further step.

Question 15 (Chapter 3): Will interconnection for specialised services be provided across networks?

Large networks use differentiated interfaces to provide specialized services. They can be “logic” interfaces (i.e. different VLAN, different VPN, different lambda) or “hardware” interfaces. In any case this kind of differentiation applies only to a very limited quantity of specialized services (typically voice and video), and could not be managed if this quantity increases.



Question 16 (Chapter 3): Will other solutions for improving QoE like CDNs become more successful rather than traffic classes?

A CDN can be considered as the solution of a bandwidth bottleneck at transit level on repetitive traffic; whenever the traffic is not repetitive, generally speaking CDNs are not efficient. If latency is the issue, prioritization of the traffic can be the solution. Another kind of solution is the “codec optimization”, usually applied to video and images in order to adapt the content to the terminal, improving the customer QoE.

Question 17 (Chapter 4): Which of the factors impacting on the regionalisation of traffic is most important: language, CDNs, direct peering?

The language has been the most important factor impacting the regionalization of the traffic in the past and this was particularly true for video-related traffic. Recently the diffusion of cloud based systems and the increasing accessibility of e-payments systems, made easier to diffuse country specific contents abroad. Currently those factors which are able to determine the distribution on a worldwide basis:

- bandwidth (closer does not necessarily mean quicker) – CDNs may provide an added value in this case;

- level of pricing

- local/country specific laws with limitations and/or prohibitions

Finally it can be considered that in the past P2P user-to-user (e.g. emule, torrent) pushed a “regionalization” of traffic, but its following modification to P2P on a shared location (e.g. megavideo, megaupload and similar) changed it again to international traffic.

Question 18 (Chapter 4): Are any further issues missing?

The IP Multicast, which failed on inter-ISP transport, can be considered as the missed solution for all linear streaming applications. It could have been the key for real-time audio/video content distribution but this never happened.

Question 19 (Chapter 4): Given the cost reductions and the economies of scale and scope observable in practice, why do network operators call for compensation?



Wind believes that the answer relies on the fact that Network Operators faced huge costs related for example with energy but also to manage the complexity of the new high speed needs and demand.

Question 20 (Chapter 4): Do you subscribe to the view that CDNs lead to improvement of QoS without violating the best effort principle?

A CDN can be viewed as a closed peering point to the same content provider. It doesn’t change if “behind” the interface there is, for example, a peering with a data center or a rack of caches.

Question 21 (Chapter 4): Is there a trend for CDNs to provide their own networks (i.e. integrating backwards)?

A worldwide CDN (e.g. Akamai) is de-facto an “overlay” network, with logical connections all over their systems. At the same time there is a trend for large ISPs to provide their own CDNs.

Question 22 (Chapter 4): Is there a general tendency for eyeball (CAU) ISPs to deploy their own transit capacities and long distance networks or even to become Tier-1 backbones?

Wind believes that the answer is no simply because the business case should take into account to high costs, that currently could not be balanced by sufficient revenues streams.

Question 23 (Chapter 4): If an eyeball ISP becomes Tier-1 provider, does this in-crease the eyeball’s market power on the interconnection market because there are no alternative Tier-1 providers to reach the customers of this eyeball ISP?

Wind considers that Tier 1 is not enough relevant, especially in the past, due to the fact that internet in not backbone-centric but rather it should be considered related to the relevance of the area to be covered.



Question 24 (Chapter 5): Will Art. 5 become more relevant as some large Eyeballs have equally qualified as Tier 1 providers not having to rely on transit any more?

Wind believes that Transit is indeed necessary to reach the “whole internet”, but at the same time considers that the Tier1 is not a big part of it.

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