1. Net Neutrality Act II:
The Operator Perspective
Dr. Jan Krancke, VP Regulatory Strategy & Economics
IDATE DigiWorld Summit - Trans-Atlantic Telecom Dialog 2011, Montpellier
Dr. Jan Krancke / DTAG / Net Neutrality Act II 16.11.2011 1

2. Traffic Volumes are raising exponentially
Global IP Traffic
Global IP Traffic Cisco Projections
Cisco Projections
Petabyte/Montht
Web, E-mail  Global IP traffic has increased eightfold
63.519
Peer 2 Peer over the past 5 years, and will increase
Gaming
Video Communications
fourfold over the next 5 years.
VoIP  By 2015, annual global IP traffic will
Internet Video zu PC / TV
Business Internet Traffic
+43% reach 966 exabytes - nearly a zettabyte.
39.947
 In 2015, the gigabyte equivalent of all
movies ever made will cross global IP
26.225
networks every 5 minutes. Global IP
17.876 networks will deliver 7.3 petabytes
10.017
13.207
every 5 minutes in 2015.
7.458
 The number of devices connected to IP
networks will be twice as high as the
2008 2009 2010 2011 2012 2013 2014 global population in 2015.
Quelle: Cisco VNI Global IP Traffic Forecast, own calculations
2

3. The current Internet model is no longer sustainable and the future
role of network operators is evolving.
History 1
Telco networks have a long history of securely managing their
networks and differentiating services.
Network congestion is an everyday phenomenon, esp. during peak
2 hours. Over-provisioning of capacity is no longer a sustainable
Today business model.
Service differentiation and guaranteed E2E-QoS is a promising source of
3 further innovation and market growth.
The complexity of the Internet will continue to increase as today’s
4
In the Future separate networks migrate to the Internet.
5 Intelligent traffic management is crucial to guarantee secure,
reliable, robust, efficient, time relevant and privacy-safe services.
Service innovation needs to be supported by high levels of
6 investment and innovation in underlying networks.
All players along the Internet value chain need to contribute to enable
7 future network investment further growth & innovation.
 Network operators will play a key role in the “all IP world”. Enabling Internet players
through commercial offers of standardized network capabilities is the way forward.
Dr. Jan Krancke / DTAG / Net Neutrality Act II 16.11.2011 3

4. Enabling is at the heart of the DT business model
Best Service
New Service Offerings
business
non-access
non-access
business
Connected Life Connected Work
Connected life - communication across all Connected work - from cloud services
screens from digital content right through to the right through to industry solutions for
connected home Enabling energy, healthcare, media distribution
and connected car
SaaS
Quality of service, Authentication, Authorization, Accounting, Payment, Security, Storage, Context Information Software as a service
Best partner to Internet providers
IT Factory
Process modernization for increased flexibility and speed based on consistent standardization
Network Factory
All-IP networks (fixed network & mobile communications) for the Gigabit Society
Dr. Jan Krancke / DTAG / Net Neutrality Act II 16.11.2011 4

5. Innovative services need intelligently managed networks
e-Energy e-Health e-Mobility Media Distribution 2.0
Smart grid solutions There are significant Potential to improve both Digital platforms provide
depend on quality efficencies to be realized the safety as well as the new flexibility to an
assured network in the public health connectivity while on the increasingly challenged
functions: sector: road: distribution model:
 Availability  Digital medical records  Connected Car  PagePlace
 Accuracy  Telemedicine  AutoLinQ  One Music
 Security  Ambient Assisted Living  Next Telematics  Enabling new business
Generation models for Content
Owners
Dr. Jan Krancke / DTAG / Net Neutrality Act II 16.11.2011 5

6. EU Level Developments
The European Commission has reaffirmed the three pillars Competition,
Transparency and Customer Choice to assure the openness of the Internet and the
„net freedoms“ of European citizens
The “wait and see” approach is sensible. New legislation would risk to jeopardize
innovation, investment and total economic welfare (e.g. ESMT study)
This year’s CEO Roundtable has indicated that positions of key actors are starting to
converge :
 Network operators agree that best effort internet needs to be maintained
 Content providers agree that players may enter into commercial partnerships which
involve prioritized traffic management alongside best effort services
 Consensus: Europe should promote open and interoperable standards for IP-based
Interconnection at specified quality of service (e.g. IPX-like)
Dr. Jan Krancke / DTAG / Net Neutrality Act II 16.11.2011 6

7. Summing it up – a forward looking perspective
The goals are undisputed: Digital Agenda, e-Inclusion, Investment & Innovation
The question is: What policies are likely to promote these goals?
Essential building blocks for a forward looking regulatory policy :
 Legal certainty, including QoS-based business models
 Incentives to invest, allowing for reasonable returns & fair distribution of risks
 Incentives to innovate across the entire internet value chain
 Agreement on and standardization of basic QoS classes for IP transport
 The European “Wait and see” approach is clearly superior to any pre-emptive
regulation/legislation. It is up to the industry to innovate and offer QoS based
services.
Dr. Jan Krancke / DTAG / Net Neutrality Act II 16.11.2011 7