ITS Blog

What is the future of the Internet?

How can appropriate network investment and the allocation of spectrum be ensured and the increasingly complex demands for (local) cloud computing and differentiated traffic delivery be met in a future Internet? And how should issues related to privacy and security be addressed? As the Internet ecosystem rapidly evolves and fixed and mobile broadband access technologies are converging, content and application delivery via cloud-based server infrastructures operated by hypergiant firms are shaping how the majority of Internet traffic is delivered and broadening the array of content that is available. In a recently published book – The Future of the Internet: Innovation, Integration and Sustainability – which was edited by Günter Knieps and Volker Stocker, leading international experts in the field, many of them active in the ITS community, have sought to shed light on a number of highly relevant aspects related to the dynamics of the future Internet.

In her chapter, Iris Henseler-Unger discusses emerging challenges associated with the industrial Internet of Things (IoT) and the ‘Industry 4.0’.  In doing so, she explains not only the nature of investments in very-high capacity networks, but also how telecom providers will have to assume a new role. Through its growing pervasiveness and the widening scope of services that it encourages, the IoT is creating a complex set of demands for service delivery. Günter Knieps begins to illustrate the challenges that networks operators face. He explores how virtual networks enable to efficiently meet these demands based on the orchestrated use of traffic differentiation to deliver required Quality of Service (QoS) levels, (local) data processing and cloud computing and geo-positioning. As the IoT, however, gives rise to a broad range of use cases, the assessment of their respective business case viability is important but also not without its difficulties. To do this, Marlies van der Wee and her colleagues propose a conceptual framework that identifies a series of parameters to guide the decision on whether or not an IoT service should be deployed. Business model innovation in the broader context of ‘blue oceans’ in IoT is examined by Bert Sadowski and his co-authors in an empirical patent-based analysis. They examine the relationship between technological diversification and performance.

When it comes to a deeper understanding of the hierarchies and bargaining power within the current ecosystem, interconnection markets, cloud and content delivery platforms, as well as broadband access service providers must be analysed. Falk von Bornstaedt describes the evolution of interconnection and the possibilities for cooperation between different actors (i.e., CDNs and ISPs) that are typically vertically related. The analysis of interaction between Internet layers then continues in Volker Stocker, who describes how cross-layer optimizations and subsequent integration as well as a localization of traffic constitute trends that shape the current interconnection ecosystem. These can – at least in some scenarios such as the delivery of cacheable media content – reduce or eliminate the performance-relevance of interconnections. Such ecosystem evolution emphasizes the role of complementary innovation at different levels.

The many facets and role of complementary innovations are described by Johannes Bauer. Not only does he emphasize the role of institutional diversity and the periodical reassessments of existing regulations but also the need for a nuanced understanding of regulatory differences and path dependencies. He also calls for new methods to analyze the complex interaction between interdependent innovations in the evolving ICT sphere. An emerging technology that stands at the core of a vision that relies on such complementary innovations is 5G. As William Lehr explains, not only spectrum but also the softwarization and virtualization of networks and (local) cloud computing constitute essential components to efficiently meet the complex demands that arise in 5G-based networking.

When it comes to smart networks that are capable of efficiently meeting the complex and dynamically changing demands that arise, flexible and adaptive traffic management is becoming increasingly essential. Christopher Yoo and his co-author examine the tension between network neutrality regulations that constrain the entrepreneurial flexibility of network management practices with the growing need for such practices in 5G-based service provision. They argue in favor of a flexible regulatory framework that provides room for innovative traffic management strategies and thus fosters innovation. Focusing on the current regulatory framework in the EU and its stance on zero-rating and traffic shaping practices, Thomas Fetzer also emphasizes the need for entrepreneurial innovation to be possible.

The contributions in this book provide an appreciation of the complexity and diversity of the current ecosystem and the forces that drive its evolution. They also provide a more nuanced understanding of the nature and role of innovation and its integration in the current ecosystem. From a policy perspective, it becomes clear that regulations that are capable of striking the balance between preventing harmful behaviour while fostering desirable innovation must be based on a deep understanding of the complexity, diversity and evolution of the ecosystem. Path dependent and static regulations that are oriented at legacy telecom regulations need to be made more flexible to enable workable innovation systems and efficient investments in, and allocations of, network resources. This becomes particularly evident in the network neutrality debate. Network neutrality and thus non-discrimination in the Internet is not easy to define, nor for that matter is it static. Instead, it presents a moving target and should be interpreted as a dynamic and adaptive concept. What this book demonstrates is the relevance of multi-disciplinary research to understand the complex and dynamic nature of the Internet.

Dr Volker Stocker
Weizenbaum Institute for Internet Research, Berlin, Germany

Past Posts

International Telecommunications Society (ITS) Workshop: Spectrum Policy and Auctions: Best Practice from Around the World

On November 21, 2019, the International Telecommunications Society (ITS), along with local host TELUS Communications (Canada) and academic host Chalmers University of Technology (Sweden), convened a workshop, in Ottawa, Canada, on spectrum policy and auction best practices from around the world.

The workshop arrives at a critical juncture as regulators the world over are allocating spectrum, and designing associated policies, to enable 5G deployment. The workshop attracted more than 70 participants from Canada and across the world to discuss auction best practices, opportunities and challenges, in the 5G era. Participants included representatives from government, industry and academia.

The ITS—which this year alone has convened events on four different continents—served as an ideal venue for this discussion, because of its ability to bring these diverse stakeholder groups together, on a neutral terrain, where everyone can bring to bear important perspectives on the foremost goal on everyone’s mind:  maximizing the social and economic promise of 5G.

The workshop was opened by Stanford Levin, ITS Board member.   Stephen Schmidt, ITS Chair, welcomed participants to the workshop and framed the workshop in the larger historical context of ITS.  Adam Scott, Director General, Spectrum Licensing Policy at Innovation, Science and Economic Development shared welcome remarks on behalf of the Government of Canada.  See the Welcome video.

The keynote speech of the workshop was given by Professor Martin Cave of the London School of Economics, Prof. Cave offered a candid “love letter to auctions” and explained why he believes they remain the best method of spectrum allocation. Prof. Cave offered some findings on what makes for successful options and what traps can lead regulators down an unsuccessful path. See the video or the slides from this presentation.

Professor Cave was then followed by Oliver Chapman, GSMA Policy Director, who presented research into the effects of certain auction features on network coverage, quality, and retail price. The findings were based a comprehensive econometric model, detailing auction outcomes from more than 60 developing and developed countries and generally stressed the importance of using auctions as an efficient allocation mechanism rather than a tool to raise government revenues.  The research presented by Mr. Chapman emphasized the empirical linkage between high auction prices and lower network coverage and quality.     See the video or the slides from this presentation.

The FCC’s efforts and findings on how to re-purpose spectrum for new uses including novel incentive auction and voucher schemes were then presented by Evan Kwerel, Senior Economic Advisor at the Federal Communications Commission.  Dr. Kwerel elaborated on the design features and detailed considerations to make these schemes work effectively and find more productive use of spectrum. See the video or the slides from this presentation.

The last speaker before lunch was Dan Maldoom, a partner at DotEcon, who focused his presentation on the auction strategies adopted by Ofcom, the U.K. regulator ComReg, the Irish regulator. Dr. Maldoom provided a number of important lessons from effective auction designs and stressed that when auctions run into problems, they frequently arise not as a result of auction design but rather as a result of the misapplication of auction rules. See the video or the slides from this presentation.

Professor Pat Sujarittanonta, Chulalongkorn University, related some of the challenges in past auction implementation in Thailand as an example of how many design features could go wrong. His review of Thai spectrum auctions revealed that flawed policy can lead to inconsistent implementation and very high prices. Dr. Sujarittanonta then explained how the Thai regulator is learning from these experience and is rapidly allocating 5G spectrum using best practice multi-band auction design. See the video or the slides from this presentation.

Drawing on recent experiences from Italy and Germany to support his analysis, Jan-Hendrik Jochum, Senior Expert, Public and Regulatory Affairs, Deutsche Telekom suggested that auctions themselves may not always be the most effective way to allocate spectrum. Both of those countries recently conducted auctions featuring an imposed artificial scarcity of 5G spectrum and resulted in spectrum prices that set international records. Mr. Jochum offered suggestions on alternatives to auctions (for example, assignment in exchange for investment and deployment commitments), as well as suggestions as to when auctions remain an effective method of allocation. See the video or the slides from this presentation.

Nick Bone, Principal Engineer: Auctions, Security and Cryptography, Vodafone, provided suggestions based on his experience in over 60 auctions globally. Dr. Bone cautioned that, while auctions can allocate spectrum efficiently, they can be very sensitive to small deviations from the optimal design, and these small deviations can lead to significant market distortions. To demonstrate his point, Dr. Bone modelled some typical distortions in a set of illustrative counterfactuals, where the cost of stepping away from the preferred auction design was so significant that bidders were incentivized to stay in the auction and pay inefficiently high prices. See the video or the slides from this presentation.

The final speaker of the day was Professor Erik Bohlin, Chalmers University of Technology, who described the use of auctions to allocate spectrum as a fundamental policy innovation. However, Professor Bohlin cautioned that the implementation of auction frameworks has been wrought by a number of weaknesses and idiosyncrasies that have contributed to great variations in outcomes and implementation inconsistencies. Professor Bohlin offered that a more consistently applied auction framework would have benefitted auction results across the globe.  See the video or the slides from this presentation.

The conference concluded with a panel of all speakers, moderated by Janet Yale, previously an executive at TELUS and presently Chair of the Canadian Broadcasting and Telecommunications Legislative Review Panel, which will shortly propose amendments to the Canadian communications statutory framework. Each of the speakers had an opportunity to reflect on comments of the day and provide advice. See the video of the panel discussion.

The workshop provided a wealth of insights into auctions, with three key insights emerging. Firstly, auctions are often (though not necessarily always) an efficient way to allocate spectrum, but small deficiencies in auction design can lead to significant market distortions. Secondly, auctions should be used to allocate spectrum efficiently and not as a tool to maximize government revenues. High auction prices adversely impact on the network quality and the pace and reach of network deployment. Finally, the most important single action that regulators can take to facilitate the deployment of 5G technology is to release as much of the relevant spectrum as possible, as quickly as possible, on an efficient basis.

Ms. Yale additionally invited each speaker to participate in a “lightning round” targeted on providing a single focused recommendation, from each speaker, to advance Canada’s 5G path.  See the video of the 5G recommendations for Canada.

Erik Bohlin
Chalmers University of Technology
Workshop Co-Chair

Stephen Schmidt
ITS Chair

2019 Asia-Pacific Regional ITS Conference

On October 27-29, 2019, the International Telecommunications Society (ITS), along with local host the National Broadcasting and Telecommunications Commission of Thailand (NBTC), convened the 15th Asia-Pacific Regional Conference in Bangkok, Thailand, Digital Transformation: Building a Sustainable Society.

The plenary panel, 5G, IoT and AI for Building a Sustainable Society, took place on October 29th. The panel featured distinguished policy-makers, industry representatives and academics from Canada, Taiwan, Thailand, China, Japan and South Korea, and was moderated by Professor Hitoshi Mitomo of the Graduate School of Asia Pacific Studies at Waseda University.

As 5G advances from aspiration to actuality in many countries across world, the panelists offered their regional and policy perspectives on building and supporting sustainable societies using this multifaceted and potentially transformative technology. Some of the key themes that emerged were (i) the importance of timely and efficient spectrum allocation; (ii) the early and potentially transformative use cases of 5G technology; and (iii) the role of government in promoting deployment and adoption.

The panel began with a Canadian perspective from ITS Chair, Stephen Schmidt of TELUS. Mr. Schmidt explained that Canada has faced some hurdles in its efforts to accelerate 5G deployment as a result of Canada’s low population density, a delay in allocating 5G spectrum, and insufficient support for infrastructure deployment. Mr. Schmidt then highlighted best practices to support 5G deployment, including the need for the recognition of broader socioeconomic benefits of 5G, timely allocation and release of spectrum, efficient auction policy, and infrastructure deployment support. Mr. Schmidt’s presentation can be found here.

Professor Li Tian, from the School of New Media at Peking University in China, stressed the importance of national innovation strategies that work towards a unified infrastructure, integrated industrial ecology, and business drivers for 5G users. As Chinese global leadership in 5G remains a top priority, a mix of top-down and bottom-up strategies to deployment were described, and real use cases across various sectors including education, transportation, the medical industry, public security and banking were discussed. Professor Tian’s presentation can be found here.

Taiwan’s spectrum policies to support 5G, IoT and AI ecosystems were explored next. Professor Yu-li Liu, of the City University of Hong Kong, explained that as Taiwan seeks to accelerate the country’s digital transformation to support ICT leadership, policy makers are moving quickly to auction the relevant spectrum. The panel discussion centered around the introduction, development and cost of dedicated spectrum for private enterprise versus local carriers, as well as the timing of the spectrum auction from the perspective of the five local telecommunication companies and other players. Professor Liu’s presentation can be found here.

Tomoyuki Naito of the Japan International Cooperation Agency discussed Japan’s 5G deployment and the application of 5G technology to developing countries. Rakuten’s large-scale deployment of a Cloud-RAN mobile network in Japan was used as a case study. As its bid to disrupt the existing market has been hampered by slow progress, the question remains as to whether Cloud-RAN technology can be an innovative solution for emerging economies/developing countries to efficiently launch 5G. Mr. Naito’s presentation can be found here.

Provoking lively discussion, Professor Youngsun Kwon, the Dean of KAIST Academy, South Korea, debated the potential for AI to lead the growth of industrial 5G uses. The question of whether more AI necessarily equals a more sustainable society is controversial: the potential outcomes such as greater productivity, decreased use of natural resources and creative solutions for environmental protection were weighed against reduced jobs/increased income inequality, reduced privacy and reduced individual autonomy, and an imbalance in international political economy. Professor Kwon’s presentation can be found here.

Exploring the broad and far-reaching socioeconomic benefits of 5G, Jackkit Sangkittiwan of TIME Digital Co. Ltd., presented potential Thai 5G and IoT real use cases like smart healthcare, farming, environmental-monitoring, and tourism. As Thailand’s 5G ‘bio hub’ in the eastern economic corridor is on track to trial smart precision farming, discussion arose as to how the Thai government and regulator can promote more 5G service adoption aimed at sustainable development. Mr. Sangkittiwan’s presentation can be found here.

The world is on the cusp of a further digital transformation as it harnesses the power of 5G and its corresponding technological innovation. As the panelists aptly illustrated, such revolutionary potential elicits significant enthusiasm (recognizing the seemingly endless possibilities for building sustainable societies) tempered by a pragmatic caution (a digital society necessarily involves compromises and tradeoffs).

The development and implementation of 5G policies is undoubtedly challenging, and as countries around the world find themselves in differing stages of digital transformation, the necessary policy discussions are highly nuanced. Governments, communication companies, industry stakeholders, and policy-makers all come to the table with diverse and important perspectives, and differing roles to play. International collaboration and cooperation is therefore vital to a country’s digital transition and 5G success. The panelists’ presentations and ensuing discussions, all with the unified goal of building sustainable societies, were timely and welcomed.

Stephen Schmidt
Chair, International Telecommunications Society

Tomorrow is now – A workshop on 5G technology, operations and regulation

In late March 2019, the ITS hosted an international workshop on 5G. This workshop, which included regulators, industry representatives and academics from around the globe, explored the multi-faceted nature of the challenges and opportunities of 5G.

Reflecting the scope and potentially impact of 5G, the presentations were wide-ranging in nature, ranging from a detailed discussion of the engineering that needs to be undertaken and finalized to a broad overview of the demand from users to the policies that need to be developed and implemented. The workshop began with Tom Hazlett exploring the spectrum needs of 5G, touching on issues such as liberalization, demand for data and the cost of spectrum. In many ways, this set the scene for the rest of the day. Michael Hong provided a technical overview of 5G centered around three trends: smaller cells, more antennas and more spectrum. This was then followed by Mike Murphy who presented a vendor’s perspective on 5G, providing insights into how the technical characteristics of 5G interact with its regulation and commercial characteristics.

Operators from either side of the Pacific contributed their thoughts on 5G. Yoji Kishi from KDDI in Japan discussed the upcoming launch of 5G services in Japan.  Changsoon Choi from SK Telecom in Korea then detailed the progress of 5G implementation in South Korea.  The American perspective on 5G came from Gordon Mansfield from AT&T. AT&T has undertaken a series of tests and field trials, gaining valuable lessons into how to deploy 5G and what could and does attract users – these tests and trials provide valuable lessons that will shape its future deployment of the technology.

Four regulatory perspectives on 5G were presented. Erik Bohlin vividly illustrated the dynamic interplay between regulation and investment, showing how regulation will shape the investment and innovation that is necessary make 5G a success. The scale of the policy challenge associated with 5G is clearly shown by Hyeon-Woo Lee’s discussion of Korea. Policies that cut across ICT as well as the sectors – vertical industries – that are expected to be heavy users of 5G are needed. Developing and then implementing the wide-ranging and integrated policies that are necessary is not without its challenges. Heidi Himmanen’s presentation of 5G within Finland also highlighted the wide-ranging nature of the challenges, but it also showed the scope and diversity of the 5G ecosystem that is emerging. 5G should not be viewed is isolation but instead as being integral to the wider economy – the 5G trials and projects that are being undertaken in Finland are in areas as diverse as drones, road safety and maritime automation.

The workshop’s speakers came from Asia, Europe and North America. Among them were regulators from Finland, South Korea and the United States and industry participants from South Korea. Japan and United States. When combined with academic contributions, the workshop provided multiple perspectives on a series of on-going 5G debates – while the workshop was held in Canada, the issues raised in the workshop are clearly relevant elsewhere.

The workshop advanced our aspiration of convening timely and thoughtful conversations among academics, industry representatives and policy makers on crucial and contemporary policy issues. The 5G workshop also has the distinction of being the first ITS event to be made substantially available online. The presentations and videos can be found here.

Erik Bohlin
Chalmers University of Technology
Program Coordinator

Stephen Schmidt
Workshop Chair