Y-Comm too conservative on charging

Ovum has kept a watching brief on Y-Comm, an academic research project that contemplates the possible impact of new architectural models for mobile communications networks and devices.
Y-Comm could sometimes be considered as unconventional, proposing mechanisms and principles that cut across existing telecoms frameworks and relationships, including the relationships between identity, address, and subscription.
However, its consideration of possible new commercial arrangements and the charging principles arising out of them is disappointingly conservative.
We can’t help but think that the telecoms industry is quickly moving towards scenarios that seemed fantastic and implausible only a couple of years ago. This is particularly true in the way in which operators’ relationships with their customers is being transformed by the strategies of over-the-top players, software platform providers, and device manufacturers.
Y-Comm continues to explore the architectural and service dimensions of heterogeneous networking
In What Mobile Operators can Learn from Utilities, Ovum reported on the progress of the Y-Comm concept, which focuses on “vertical” (i.e. device-controlled) handover in heterogeneous networks. Since we last covered Y-Comm, the project has expanded to consider some of the implications of this approach, both for service frameworks and accounting and billing models.
The Y-Comm project is very much an exercise in “blue sky” thinking. There is an obvious, yawning gap between the way that mobile communications work today and the kinds of scenarios envisaged by Y-Comm.
However, that is part of the point of university research – to explore the possible as well as the probable, and to think through the implications. Y-Comm incorporates a group of researchers based at Middlesex University, but also involves others across a number of academic institutions including: the Computer Laboratory, University of Cambridge, UK; the Department of Electronic and Electrical Engineering, Loughborough University, UK; the Institute of Sciences, Mathematics and Computing, University of Sao Paulo, Brazil; the Department of Computer Science, Federal University of Sao Carlos, Brazil; the Centre for Information and Communication Technology, University of Trinidad and Tobago.
It is harder to imagine new commercial frameworks than new technical architectures
We were surprised, and even slightly dismayed, to find that Y-Comm’s research into new commercial frameworks is much less radical than its technical explorations.
In particular, the commercial frameworks being proposed for the new world of heterogeneous networking seem to be founded on the conservative assumption that customers will continue to be “owned” and billed by a single network operator.
While this is the most likely scenario, it is a shame that the project’s iconoclastic disposition has not been applied as thoroughly in this domain as it has in the area of technical architectures.
Y-Comm envisages a future in which charging principles will be more flexible and customers will pay for data elements according to their impact on the network. For example, users that can afford to wait for their data or accept a lower quality of service for a specific interaction would pay less, while applications and users requiring services that place a higher level of demand on backhaul would be penalized.
This means that there would be something akin to a charging element for long-distance data sessions. Y-Comm is also exploring the idea of a more sophisticated model of “cloud caching”, where physical networks would create localized versions of cloud-based resources to minimize the impact of services on the backbone network.
There is no future for complex tariffs that leave end users confused and uncertain
We cannot see any aspect of Y-Comm’s suggested long-distance pricing model being acceptable in the short or medium term, either to users or operators. The rebalancing of charging anomalies between local and long-distance calls has been one of the lynchpins of the technological and regulatory transformation of the telecoms industry, and we cannot see any possibility of the reintroduction of distance-based charging.
The general trajectory of charging principles for end users is away from complexity (and “flexibility”) towards flat rates and “unlimited” packages, even though these are usually not actually unlimited.
However, these types of charging principles might be welcome in a business-to-business context. We can imagine a future model in which customers purchase services from service providers, which in turn buy access and services from a second tier of local and national physical network providers.
Under these circumstances, the end users will enjoy simple charging principles while the service providers will be able to optimize their own businesses through complex algorithm-based purchasing. This would be similar to the models that already operate in some deregulated electricity markets. As a result, we believe that Y-Comm’s work on accounting and charging actually makes more sense in a more radical context.
Jeremy Green is a principal analyst for industry, communications and broadband at Ovum. For more information, visit www.ovum.com/