Antonio Amendola antonioamendolaintlattcom antonioamendola May 2016 DIRECTV now part of the ATampT family Latin America multimedia services landscape 6 key challenges of regulating QoSQoE for multimedia services in LatAm ID: 800711
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Regulatory challenges of dealing with QoS/QoE for multimedia services in Latin America
Antonio Amendola
antonio.amendola@intl.att.com
@
antonioamendola
May, 2016
Slide2DIRECTV now part of the AT&T family
Latin America multimedia services landscape
6 key challenges of regulating QoS/QoE for multimedia services in LatAmFinal considerations
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Slide3DIRECTV now part of the AT&T family
DIRECTV, a subsidiary of AT&T since July/2014, is a leading satellite pay-TV provider
Presence in Latin America.Over 19 million subs in 10 LatAm countries16.5% CAGR in number of subscribersDIRECTV Play, online platform for sub in LatAmAT&T to launch 3 new ways to access and stream DIRECTV content in the U.S. this year:Over a wired or wireless Internet connection,From any provider, and From any device (smartphone, tablet, Smart TV, streaming media hardware or PC) 3
~2,2M
~5.7M
~3M
~190K
~250K
~1.3M
~660K
~570K
Subs. as of Nov., 2015
Mexico, Puerto Rico and Caribbean not included
Over 19M Pay-TV Subs in LatAm
Slide4DIRECTV now part of the AT&T family
4
Slide5DIRECTV now part of the AT&T family
Latin America multimedia services landscape
6 key challenges of regulating QoS/QoE for multimedia services in LatAmFinal considerations
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Slide6Latam fierce appetite for online content
U
sers in Brazil and Uruguay spend more time connected to the Internet than European users and world average.The number of LatAm social network users as a % of Internet users is the highest in the world.84.5% of LatAm HHs with fixed broadband access films/series online (Business Bureau 2015)At least 10% of LatAm HHs have cut the cord with Pay-TV services (Business Bureau, 2015)6 Data as of 2013Source: El Ecosistema y la Economía Digital en América Latina. Fundación Telefónica. 2015
LatAm Social Network
Users as % of Internet Users
Slide7Unprecedented growth of OTT platforms
7
Netflix’s steep growth in LatAm LatAm Pay-TV curve begins to stagnateMain OTTs with presence in LatAm
Source
:
El Ecosistema y
l
a Economía Digital en América Latina. Fundación Telefónica. 2015
Source: Business Bureau and ABTA, NETFLIX, Digital TV Research. 2015
Slide8DIRECTV now part of the AT&T family
Latin America multimedia services landscape
6 key challenges of regulating QoS/QoE for multimedia services in LatAmFinal considerations
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1. Structural competition barriers thwart the effectiveness of QoS/QoE regulation
QoS/QoE regulation is unlikely to increase consumers’ welfare where dominant providers are shielded from competitionSome pay-TV markets in LatAm have barriers that impede healthy competition and reduce consumer choices:Regulatory restrains for pay-TV providers to provide telecom services
Regulatory asymmetries between platforms used to provide multimedia services
Anticompetitive use of
e
xclusive “must-have” programming (e.g. sports, local content)
Anticompetitive bundled services
Protection of local operators or state-owned providers
Anticompetitive vertical integrations
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1. Structural competition barriers thwart the effectiveness of QoS/QoE regulation
(Cont.)ARGENTINA: DTH providers banned from providing telecom servicesTelephony providers banned from entering into the Pay-TV market until 2018 COLOMBIA: Pay-TV providers subject to higher regulatory fees than telecom providersRisk of potential anticompetitive bundling and cross-subsidization highlighted by OECD
Source: Subscriber figures as of September, 2015. Business Bureau
PERU:
Market challengers with small shares
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2.
Some well-intentioned QoS/QoE regulations stifle investment and harm consumersUnreasonable QoS/QoE regulation reduce operating margins required to invest in innovative services and deployment of networks Some unreasonable QoS/QoE requirements imposed on pay-TV providers in LatAm are:
Prohibition on advanced billing
Prohibition to have separate online interfaces for subscribers and potential
clients
Impediment to offer subscribers a retention offer before they decide to cancel the service subscription
Obligation to continue providing the service to delinquent subs for a certain period of time (1-2 months)
Prior cost-benefit assessments are necessary to assure that
benefits outweigh regulatory costs
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3
. Rigid QoS/QoE regulation hinders the innovative pace of IP-based services Skyrocketing consumption of mobile broadband services, applications, and content impose network management challenges to service providersSince 2007, the traffic of mobile data in AT&T’s network has increased 100.000%Flexible regulation is key for network providers to provide high-quality service to
customers
Net Neutrality regulation should not impair providers ability to manage network traffic
Regulation
should not
impede subs from getting
the type of
services and quality that meets their needsPrior approval for the development of new solutions or service offerings stifles innovation and investment
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4. Regulatory asymmetries between traditional services and video apps
A fair balance is required between allowing the free development of new multimedia services and assuring a leveled playing field to compete
DIRECTV pay-TV bill
(With all information required by regulation)
NETFLIX bill
(Unregulated)
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. Duplication of requirements in the presence of multiple regulators and control agenciesComplex regulatory structures give rise to duplication and inconsistencies in the definition of QoS/QoE standards applicable to each serviceLatAm pay-TV service providers are subject to the monitoring and control powers of at least 4 different authorities
Some
countries like Colombia, for example, maintain
3 different regulators (CRC, ANTV, ANE) which
regulatory and control competencies have not yet been clearly
defined
In 2014, the OECD recommended Colombia to merge CRC and ANTV into one convergent regulator
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6
. Pay-TV pirate services elude all forms of regulation and provide low quality services29% of pay-TV HHs in LatAm are being served by pirate providers
In
addition,
110 million unique users
of the ~222
million Internet
users in
LatAm, use pirate sites to access IP infringing contentSource: Business Bureau and ALIANZA, 2015.Source: NetNames, 2015.
Slide16DIRECTV now part of the AT&T family
Latin America multimedia services landscape
5 key challenges of regulating QoS/QoE for multimedia services in LatAmFinal considerations
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