Network Evolution: Challenges and Solutions 

Exploring the future of European connectivity: Challenges and solutions in network evolution

During Workshop 3 at EuroDIG, moderated by Karen Mulberry from the IEEE Standards Association, a panel of experts engaged in a detailed discussion on “Network Evolution, Challenges, and Solutions,” with a focus on the European Union’s initiatives to implement widespread gigabit access. The session aimed to explore the challenges and potential solutions within the context of the EU’s White Paper, the Gigabit Act, and other digital market initiatives.

Paolo Grassia from ETNO provided an overview of the technological and market evolution of the European telecommunications sector, emphasizing the transition towards networks that are increasingly dependent on cloud technologies and virtualization. He highlighted the impressive coverage of FTTH and 5G networks but also pointed out the significant investment required to meet the EU’s 2030 targets. Grassia discussed the financial pressures on the sector, including declining retail prices and competition, which have led to a decrease in return on investment. He supported the European Commission’s efforts to balance the need for high investment with the sector’s profitability challenges.

Constantinos Balictsis from the Greek Commission discussed the transition from copper to fibre networks, emphasizing the importance of a single, future-proof network. He raised concerns about the impact of retiring legacy networks on competition and alternative operators. Balictsis cited target dates from the EU White Paper, such as retiring 80% of the legacy network by 2028 and a complete switch-off by 2030, highlighting the urgency of the issue. He also stressed the need for innovation within the EU to keep pace with global tech giants and to foster the development of AI and other emerging technologies.

Miguel González-Sancho from the European Commission provided insights into the EU White Paper, which outlines the challenges faced by the electronic communications sector amidst rapid transformation. He identified three pillars of the White Paper: funding, regulation, and security. González-Sancho detailed the European funding programmes supporting connectivity systems and research and noted upcoming legislative proposals aimed at addressing the inequitable treatment of different players in the telecom space. He also discussed the importance of cybersecurity and the Commission’s focus on submarine cables.

An audience member representing the Youth IGF EU called for the alignment of AI development with human interests and for the engagement of diverse communities in the development of AI systems. This intervention emphasized the dual nature of AI as both a friend and a challenge and the need for EU leaders to ensure that AI systems benefit everyone.

Peter Koch from DENIC provided a technical community perspective, discussing the internet as a network of networks and the importance of interoperability. He mentioned the trend towards virtualisation and the movement of network intelligence into the cloud, noting that while this increases efficiency, it does not change the fundamental architecture of the internet.

The workshop concluded with an acknowledgment that while there is a clear vision for a technologically advanced and secure network infrastructure in Europe, there are complex challenges related to investment, technology, market dynamics, and regulation that need to be addressed. The discussion recognized the need for ongoing dialogue and careful consideration of the diverse aspects involved in network evolution. Key observations included the need for a common understanding of terms used in the discussion, the importance of considering consumer demand and service uptake, and the potential impact of network changes on national security and resilience. The session underscored the importance of continued discussions on these critical issues, suggesting that a follow-up at the next EuroDIG could provide an opportunity to review progress and further address the evolving challenges.

Karen Mulberry:
Well, I can’t find the document to share, so I will get started while I’m working on it. Anyway, I’d like to welcome everyone to Workshop 3. I’m Karen Mulberry from IEEE, the Standards Association, and I’ll be the moderator of the session today. It’s entitled Network Evolution, Challenges, and Solutions. What I’d like to do is kind of provide a little bit of framework. We looked at a variety of activities within the EU and kind of determined that looking at the White Paper and the Gigabit Act and some of the other digital market initiatives that have occurred would be useful to kind of look at what are the challenges and what are various stakeholders within the European Union facing in trying to implement access for all, especially gigabit access, and, you know, what are the challenges for operators? And I’ve heard in the last two days, there are all kinds of interesting challenges for users who may or may not want gigabit speeds, but that’s the minimum that they’re going to be, you know, provided, and what’s the issues associated with that? So we’re going to address all of this, or at least put some thoughts on the table for you to consider as we move through this evolution to everything that’s online and everything that can be accessible. So to get started… Kind of go through our agenda, we’ve got Miguel Gonzalez Sancho from the European Commission, who will talk a little bit about the white paper itself and some of the thoughts of the commission when they were drafting that. We have Paolo here to kind of give the ethno perspective from his operator members. Peter Koch from DNIC will give some perspective from the internet operators side. And then Costas, who is from the Greek Commission, will provide a little bit of where do we stand on all of this from a state perspective and from a personal perspective on the work that he is doing in Greece. Then we’ll move into a panel discussion. So we opportunity to ask the panelists questions and to have an open dialogue on this topic. And then we’ll conclude, I will try and summarize some of the key points. And then hopefully we can continue this dialogue offline. So I’m going to turn this over to Miguel, who is joining us online. And hopefully Miguel is here. He’s not here. Okay. Well, Paolo, why don’t we move over to you and then we can go to Miguel when he joins us.

Paolo Grassia:
Yeah, definitely. Thanks a lot, Karen. And I think, indeed, we assume that there is a kind of broad understanding knowledge of the content of white paper that the commission published some months ago now is quite a hefty document. So very long and complex to read, but it lays out like a vision for the future of electronic communication, and especially digital infrastructure in the EU. And I don’t want to prejudge any of Miguel’s explanation and details about that. So we just maybe make some commentary based on the white paper. And I would say that the white paper basically describes the technological and market evolution of the European telecommunication sector for the years to come by 2030, which is actually fairly representative of where the sector stands. Basically, the main, I would say, cornerstone of the vision is that telecom networks are going to be increasingly can you clarify the cloud dependent visualize the answer they do require not only basic rollout of the Asian and five g but also constant upgrade to be up to the task to face with the technological evolution i would say that we broadly subscribe with that we do see that’s the trend in the market where indeed networks are becoming highly programmable highly automated and also dependent on cloud native architecture of course we are still not there because when we see for example investment infrastructure according to the latest data from last year i think ftth is available to sixty two percent of the houses and 5g to eighty percent but then so numbers on 5g are impressive now but then we have to consider that in many instances we don’t have like 5g core and full 5g so it still can rely on 4g core infrastructure so in a way there is still a lot of work to do in a way materialize the 2030 targets of the european commission but in a way that’s where the market is going technology is going and that opens up opportunities to telecoms one of the concepts that we have really kind of vulgarized in our discussions and our publications and also the commission in a way is elaborating on is this concept of the network as a service where the networks because of this in a way higher reliance on virtual architecture and software cloud becomes also more interactive so allows telcos to provide their customers with basically network functions as as a service as on-demand service so this is quite of an exciting opportunity going forward so of course i say to materialize this vision not only kind of basic rollout of fiber and 5G is required but also constant investment in technology is necessary we have identified a number of key technologies that are required that match very much with also the European Commission understanding edge cloud, open run, network virtualization, these are all network technologies that need to be invested on to kind of go along with this technological trend the investment requirements are quite high so they match quite realistically the forecast of the European Commission that estimates that there is an investment need to materialize this kind of network evolution up to 200 billions by 2030 that means to bring FTTH and also to reach 5G, full 5G in the EU and a lot of these investment requirements are interdependent so when we say investment in full 5G means also investing in network virtualization, investing in edge cloud because all these technology trends will mutually contribute to kind of the evolution of the networks so in terms of technological trends that’s where we see the path forward and it’s quite in line with where the European Commission see the sector evolving in the coming years when we look at the market evolution, these high investment requirements actually are met with some financial pressure on the sector I mean this is not news I would say but the sector has been facing for a number of years with declining return on investment because of the declining retail prices as well and growing competition which is good for the end user but actually puts the investment capacity at a strength so the sector has reacted to that also with some in a way market adaptation, we have seen some different organizational model, investment decisions some operators embracing the delayering model like spinning the infrastructure out from the service company and create it to separate companies and all this is to kind of bring back profitability and investment capacity to the sector but in fact what we do see is that sometimes this response to kind of short midterm in a way profitability and revenue demand to sustain investment but in the long run the sector is getting weaker because the attractiveness for capitals for the sector is actually lowering so there is need actually and the white paper is quite wise in doing that, there is need to reconcile the higher investment demands and the ever declining return on investment of the sector so there is a need to rebalance these two competing trends in a way. So I’m happy to then discuss a bit more about the solutions in the panel discussion.

Karen Mulberry:
Thank you. See you next, Peter.

Peter Koch:
Yeah, thanks, Karen. How’s the mic doing? Okay, thank you. Yeah, so my name is Peter Koch. I work for DINIC, the German top-level domain registry. And obviously, we are not a network operator, not classic or otherwise. However, we do operate our own, what we call, Anycast network. And we might even be affected by some of these regulatory suggestions that are in there. But I think I’m here more to put a technical community perspective on parts of the paper. First of all, for those of you who’ve read it, well, I’ve noticed that it’s kind of a hodgepodge. And I mean that in a nice sense of various aspects of technology. So there’s a whole section about post-quantum and so on and so forth. While that’s very interesting from a technical perspective, I don’t think we make this a topic. Today, we’re talking about the economics, but also about the underlying assumptions, maybe, that are made. So I’d like to put this a bit into context. So what the Internet, some of the invariants of the Internet are. So first of all, and we can all say this together, the Internet is a network of networks, which means that there is not a central steering mechanism for all of this network. So it’s a lot of independent networks that connect as they wish and maybe pay or otherwise agree. And they apply their own connectivity, sorry, connection policies to their networks and then negotiate this. So it’s based on cooperation and interoperability. And interoperability, for those of you who were in the session yesterday, always has two aspects. The one is the technical underpinnings that enable interoperability and then the economical or operational will to actually really connect. And then the second one, of course, is based on policies and lots of economics, which we’ll be talking about later. The internet is based on reusable building blocks. And that is certain functions that make the internet run, so we had routers and so on and so forth. And I can say, we also, of course, see that there is a softwareization in a way, or let’s say virtualization. Any one of us puts lots of services, quote unquote, into the cloud, which actually means on some other service that you pay for. But other than that, it’s just happening elsewhere. It’s not necessarily a magic technology. Definitely not something that would change the architecture of the internet. Because it’s not an invariant, you replace things that you had on your premises, by things that were elsewhere in the world. And there are some technological challenges like latency between these and so on and so forth. And, of course, if you don’t run these systems yourself, but you rent or buy them, there are certain challenges. But anyway, that’s things we actually can deal with. Now, the interesting part is, when people say that the network is moving into the cloud, I’m not sure that everybody understands what that means, because the network is to connect to endpoints. And if you move everything to the cloud, you have nothing next to you, that wouldn’t make sense. So the way that we go to the cloud is the steering and the controlling functions. In quote-unquote, ancient days, we had large cabinets full of routers and switches and everything where the cables end. Now, we have still these cabinets where the cables end, but the logic and the intelligence and the decision-making of where the packets go, and packets, that’s an important unit in the internet, right? We push packets from here and there. So the packet-pushing decisions are, to a certain extent, not made in specialized hardware, but in the cloud. So the benefit is that much of this can, first of all, can scale very well and can also be done on off-the-shelf devices. systems, and off the shelf means either by them, or you use a, sorry, virtual server in a cloud. So we do that as well as DNS operators, for example, many of our name servers are in virtual cloud instances. And so are some of these routing functions, virtualized and run in software, and we don’t have any dedicated routers anymore. But that’s a natural thing to happen for a lot of economic reasons, but also because it increases efficiency so much, and it allows everybody scalability. So when there is more demand for some functions, you just scale up instead of what we had to do in earlier days, buy new hardware, set it up, and that took a lot of time. And now we can all automate this, that also makes things or helps make things more secure, because everything is automated, software updates, upgrades, and so on and so forth. That’s a trend that we see, and that is, of course, there. Yeah, so that’s that part, and we, I guess, can discuss later what the conclusions of this are and what needs to happen. One thing maybe to say, also as an input to that next round discussion, the connection, when I said it’s a network of networks, much of this is still happening, and that the regulator might be scared about that, but most of them learned and learned to adapt, it’s still based on handshakes in a way, right? Different networks decide that they exchange much traffic, because maybe it’s a user network and a content provider network, or certain other networks that for some reason, exchange a lot of traffic. And if they haven’t done so already, they will agree that it is better for them economically more feasible to directly exchange their data and not go through some other providers, which is what we call interconnection or peering, if it happens in. specialized what we call internet exchange points, for example. But this is all usually the decision of the parties. And we’ve seen recent moves in the United States to regulate this. And I recognize some of it in the paper as well. And that would be a topic for that further discussion. And this has been working, this interconnection based on handshakes. But there are contracts involved as well. But it’s a very flexible mechanism to deal with new demands of traffic flows. And that has been working like the last 40, 45 years, for as long as the internet has been in existence. Maybe I’ll stop here and move forward.

Karen Mulberry:
Okay. Let me turn it over to our next speaker, Costas. If you can introduce yourself and and provide some context, please.

Constantinos Balictsis:
Thank you, Karen. Thank you for inviting us in this very interesting topic. It deals with something that is extremely dynamic, and it’s quite vast, I would say. For those of us who are involved in regulation, since the offing, we used to think about one customer being serviced by a single pipe, which would be twisted barrel coaxial cable, and then be offered an outbound service was telephony. And on the backbone, we used to have SDH and broadband ATM, transport technologies in order to transport it 155 megabits or 622 megabits, which are ancient times. Fast forward nowadays, you have the European Commission or Europe intervening and introducing and promoting a competition, sustainable competition. Therefore, you have the same consumer, be it residential or business user, and being serviced by the same pipe, which is now upgraded by a backbone network, which is to the most part, fully opticalized, and being offered the multitude of services, most of them through the TCP IP protocol stack. And these services, more or less, in a nutshell, they create this global trend for digital transition, which affects our personal lives and social interactions to the economy in general. Therefore, you have nowadays, I mean, more than 67% of the global population are internet users in Europe. That’s, well, that translates into about 5.4 billion people and more than 91% of you is also using the internet. Having said that, you can see that the whole framework has changed and now we have a very complex and very quickly evolving internet value chain, where there is a study by Kearney that was conducted for Aetna, which is that we have roughly five segments and we have the content rights, which is about 3% of the total revenues of 6.7 trillion US dollars. So 3% is content rights, the premium contents, and then they’re made for the internet, the influencers and things like that. Then you have the big chunk, which is the online services, the e-retail, the e-travel, you have the social media, you have all kinds of services. And it’s very dynamic and it has multiple sources of revenue. And then you have the enabling technologies and services, which may be advertising or it can be online payments, which is roughly about 12%. And as Paolo said previously, the internet access connectivity is just 15% of this internet value chain. And there in this segment, you can find the mobile network operators, the MNOs, you can find the fixed operators, you can find the satellite operators, and they are having a very tough time because they’re, I suppose, the main source of revenue. If not, perhaps the only one is access connectivity, subscription from the subscribers at the retail level. And then you have also the user interfaces where you have the operating systems and the tablets and the smart TVs, all of which is about 30% of this value chain. And you have a growth of internet traffic by a calculate of 34%. And the share of the EU in this global revenues or the ICT market has been halved in the last five years or until 2020 to about 11%. So the European Commission has undertaken quite a few steps, interventions in order to try to lead the way, to make some changes. And therefore, you can see that one of the priorities that have been embarked upon is the digital transition, which along with the green transition, the so-called twin transition, they try to change this whole picture. The digital policy program that has been mentioned by the previous panelists, more or less has collectively the European, the 27 member states want to address or by 2030 to achieve certain targets. One of them, and these targets can be seen both on the demand side and on the supply side. On the supply side, you can see that there is a target, an overarching target to have a secure and stable infrastructure. And the premise is that we want to have gigabit for everybody and 5G everywhere, which is a very interesting task, a very interesting target. The question is how feasible that is given the state of the European Union right now and what are the prospects in the next few years. Paolo also, and I thank him for that, he mentioned a few numbers. I mean, you can see the numbers, they are all over in the commission’s studies. You can see that indeed, 81% 5G, a basic 5G stands at 81%, but this is basic 5G. It’s just an increment on the transceiver side of 5G. If we are talking about standalone 5G, which is far below that, we have about 20% of populated areas right now. So in order to cover this, government have 100% deployment of 5G standalone. Now we have all these benefits of 5G like spectrum slicing and sharing, and this all innovative services with AI. You can understand what kind of innovations and investments need to be made and what kind of demand. it should be available there in order to attract or, you know, to consume this capacity. We have indeed the opticalization, the deployment of fiber is about 56%, which is more or less at par with what happens in other countries, except perhaps for Japan and South Korea, which are very far ahead. But nevertheless, the uptake by the consumer is very low. It’s about, I think, 14%. That means that the one who invests, the carriers think, okay, does this make economic sense for me to invest all that money because I have to either have them available, these funds, or to borrow them. And in order to borrow them, I have to pay, you know, a certain cost of capital, which I need to recoup from the investments that I make. Therefore, and of course, they need to consider the investments, they need to consider the future proof of their investment as far as regulation is concerned, and of course, how the different climate changes. If you see the internet value chain, then indeed, you can see that the 57%, which is the online services, are the ones that they have, the Google’s and Metas and the Alphabets and all these companies have sources of revenue that come both from subscription, perhaps from advertising, they may not have as much debt on their back as operators have. And of course, if you see the dynamics, they migrate and they consolidate with other stakeholders in different segments, like in the end user segment, or in the content, they buy content rights, and they offer services to their end user, which is their audiences is more or less global. So having said that, the goal is again, according to Digital Education Policy Program is to offer all end users at a fixed location, gigabit connectivity at their premises, and then all populated areas will be covered by 5G. How feasible this is? Well, it remains to be seen. Certainly, the European Commission follows that very closely and in a coordinated level in order to achieve this target. Now, there were at least, you can read or you can study if you want, it’s all available on the web. The first review of the Digital Decade Policy Program that was published in 2022, and for 2023. And then you can see that in certain areas, Europe is doing okay, or exceptionally well, but others are lagging behind. Certainly, there were two public consultations. One was an introductory one, which happened last year, in the beginning of last year. It touched upon the different subjects. It touched upon market development or technology developments, and then the consumer, fairness to the consumer, and then the internal market, the integration of the single market. Then, of course, it touched about the fair contribution, who’s contributing for the so-called investments that need to be made. There was a very big participation because there’s a high interest in these topics. And these topics came, again, in the public consultation, the white paper that the previous speakers already mentioned, and I’m sure the commission will analyze it a little bit more. But again, the driving force are the technological developments. We have virtualization. We have cloudification. You have disaggregation of hardware and software, which means functionality both in the cloud and also on the edge. And the more data you create on the edge, the less you want to, even though you can’t transport them, store them, and process them anywhere on the web, you want to keep them close to your source in order to support services that are time-critical or real-time. Therefore, you need to somehow, and you have the capability, technological capability, to install this functionality everywhere on the web. Please mind you that the stakeholders that are operating on the online services sector, the Alphabets and Metas, and all these big operators, they already have submarine cables, they carry their traffic all over between their data centers, and they can infuse them even in the access network of a particular member state if the prices, Peter said before, is right. They have peering or transit. If it makes more sense to transport and connect, they can transit them. But if it makes more sense to peer them, then they will see among themselves. This is the interconnection market, which has its own specificities, and one needs to address that. One thing that I really kept from the white paper is the worry or the concern of the European Commission regarding scale. scales is, you know, the carriers, they, most of the participants in the two public consultations say that, okay, we have, we do not have an integrated internal market, we have 27 national markets, and most of them, we have about 50 MNOs and 100 fixed operators, and only a few of them operate across member states. That means that when they buy equipment, or they have facilities, or they have to abide by the regulatory system, they have to abide by different jurisdictions, that creates costs, it creates delays, all these things need to be taken into account. Therefore, if we want to, and then you have, and I will finish with that, we have at the backbone network, we have optical fibers, rather, we have optical cables that nowadays can transport more than 22.9 million gigabits per second on a single cable, which is the internet traffic many times more, many times. And then you have at the end, in certain member states, still coaxial cables or BDSL technology or vectoring. And the commission says, we need to solve the problem of the access network by opticalizing it as soon as possible. Therefore, very high capacity networks, that is, networks that are, if possible, optical up to the to the multi dwelling building, or up to the base station. Why? Because we need to make the investments and make the network transparent, and as future proof as possible. Perhaps I should stop at that, because then we need to discuss a little bit about perhaps the Gigabit Infrastructure Act, which is one piece in the puzzle of how to encourage and facilitate the deployment of this very high capacity networks in the access.

Karen Mulberry:
Okay, thank you. Well, you say, Miguel from the European Commission has not joined our session yet. So I think we will just move on. of our panel discussion. So if anyone has any questions, now’s a good time to ask them. If not, I have some questions. Paolo why do you think we need to invest in the network? I mean, what is the critical component when you start looking at the white paper and the points that Kostovs made about all the issues coming from the various operators and in different communities? What’s the important part?

Paolo Grassia:
Indeed, no, thanks. This is actually a very valid question because we have say there are high investment demands that are from in a way kind of given from the political direction of the institutions. There is a kind of financial struggle on the sectors to keep up with these investment targets, but are these investment targets actually needed and Kostovs gave a few figures like take up in new networks is actually still quite low. Also 5G, we see many markets operators carriers are offering that at the same price as 4G. So there is no really kind of in a way higher profitability for that. So why bothering? Why do we need that? But it’s in a way as with any infrastructure investment is a bit of a chicken and an egg. Like do you wait for kind of the traffic to go over like a road to transform it into a highway or you just transform it into a highway so that more traffic comes in? So it’s a bit of a chicken and a egg. For the sector is quite clear that the investment is not like a choice in network rollout to kind of complete the fiber to the home and 5G rollout. But also the constant upgrade is not a choice but a necessity because the sector needs to cope with the upcoming trends in especially network traffic growth. And that we see that the network traffic both fixed and mobile is going to dramatically increase in the coming year. So according there are many figures out there according to. our figures in the coming years between twenty twenty to twenty twenty seven traffic on mobile will increase in europe by twenty five percent year on year and twenty percent on on on fix the network so these of course needs to be complete in terms of increasing the bandwidth and continue with this transformation technological transformation that makes the network also more programmable automated and able to cope with traffic in real time in a smart way this traffic is driven mostly in the b2c market by video so increasing requirements of devices from four k to eight k increasing consumption of high-definition live sports events video tiktok and others ai generated content and online gaming these are major trends that will make network traffic heavier and heavier in the coming years but if you look also the business segment iot is definitely going to increase dramatically in the coming years estimates that by twenty thirty it would be eight hundred million iot connections in the EU anything anything from smart manufacturing to automated driving smart cities and others so all these increased video and iot traffic will determine this twenty twenty five percent increase year on year on the networks so to respond to your question the bottom line is yes we need investment want it or not and definitely this is the way to go and we need to find ways to make these investment choices sustainable in the long run

Karen Mulberry:
All right, I’m going to pause our panel discussion because Miguel has joined us. So maybe we can get some insight and perspectives from the European Union on their draft white paper. And then we can move back then into the panel discussion with some additional context. So Miguel, over to you. All right, we don’t seem to hear him. Oh, can you unmute him?

Miguel González-Sancho:
Can you hear me now?

Karen Mulberry:
I know we can hear you, thank you. So please introduce yourself.

Miguel González-Sancho:
Sorry, say that again.

Karen Mulberry:
I was going to say, please introduce yourself.

Miguel González-Sancho:
Okay, I am Miguel Gonzalez-Sancho. I am head of unit at the European Commission in DigiConnect of the European Commission and in a unit that is called Future Connectivity Systems. First of all, I have to start by apologizing for joining you late. Obviously I got, and here I also have, sorry, all the light in my back. I obviously got mixed up the time of the session because of a time difference. So I have to apologize. So I will refer to this, I will briefly present this commission communication. Commission communication in our jargon, it means a policy paper, a paper which is not a legislative proposal, but it’s a document that sets some positions, let’s say from the commission. And this is called EU White Paper, How to Master Europe’s Digital Infrastructure Needs. The background for this, it is a document that was adopted by the Commission back in February and it opened a period for public consultation until the end of the month. So, for those interested, you can submit your comments. Basically, this paper lays out from a policy perspective the challenges of the electronic communications sector, challenges against a background of rapid transformation, where basically there is a context of convergence between communications networks, the cloud, and everything is coming together very rapidly. So that, in particular, the players in traditional, let’s say, telco players in this space have to adapt very rapidly. So, of course, we talk about unprecedented transformation. So, of course, the technology, there’s a need. There’s still a need, of course, for electronic communications, for networks. There’s more and more that happens at the edge, but, of course, there’s not sufficient computing capacity, storage capacity. So, at the edge, you still need to move data around, if you like. So, you need networks. and technology is a fundamental enabler for today’s society. This paper identifies that in order for the sector to adapt to this transformation, electronic communication sector, there is a massive investment that is required. Sorry, excuse me, I see the slide keeps moving. It’s a bit difficult. So this document comes up in three pillars. One of them is about innovation, research and innovation. The other is about the rules, the regulation in electronic communications. And the third is about security. So these three aspects. Basically in terms of the EU intervention, there’s two or three very important ways of intervening. One is funding, European funding for supporting in particular research and innovation and deployment. And the other is legislation. And there is a consistent legislation in this area of electronic communications. And then the other would be policy coordination. So we can move to the next slide. Yeah, so I will work quickly, but this is a bit of a chart of what we have today in terms of the gaps in terms of digital capacities in a typical city today. We can move to the next slide. Yeah, and then this is another one, which is a sort of vision of where we want to go towards, which is basically, you know, much more agile connectivity, capacity, smart buildings, basically much more digital connectivity in computing capacity at the edge and on the cloud. And this is what would require massive, massive upgrades and intervention. And the transformation is happening. So the question from this white paper is how to encourage, how to support the European players in managing this transition. This is an area where traditionally European players, telecoms operators and equipment providers and so are relatively strong. But as we know, and we can be very open about it, Europe is not so strong in areas such as cloud computing, in particular, artificial intelligence and others. So the question is here, how not to lose this transformation. Next slide. As I said, there were three pillars of this white paper. The first one is about funding. And there’s a series of programs that exist to support basically connectivity systems. For those that know, in particular, there’s for research and innovation, the Horizon Europe program, for deployment, the Digital Europe program, for, as well, the Connecting Europe Facility program. And this paper proposes to increase European support in this area. And actually, watch this space. There will be a series of proposals that will be published in the coming months. precisely to support this area. I also draw the attention to specific joint undertaking as a specific group only that exists in this area, which is the SNS, Smart Network Services joint undertaking, which is precisely, the mandate is precisely to support from a research perspective, the deployment of 5G and the arrival of the research of the research and future deployment of 6G. Next slide, please. The second pillar, I mentioned it before, it’s regulation, European legislation, legislation in the area of digital infrastructures, digital communication infrastructures. There’s legislation that exists already for many years, and there’s a number of ideas that are floated in this communication. It’s not gonna be for now, we are about to change to have a new commission. So, but the commission is already starting, the commission services are starting to float these ideas in order to come up with legislative proposals in the next mandate. So, they have to do about several things, but the way a spectrum is managed to switch off copper, and there’s different debates there, like for instance, the bottom line, if I can be very short, because we don’t have a lot of time, it is the fact that many, many operators are in this space now that come from different, let’s say angles, like hyperscalers and so, which are not, but not all of them are subject in fact that they provide services, equivalent services, not all of them are subject to the same requirements and the same conditions, and that might create some tensions and some inequal treatment between the different players. Next slide, please. The other aspect which is increasingly important and it’s becoming a major aspect issue is the aspects around security, cybersecurity, because this could compromise, cybersecurity is a major, the size of the threat for cybersecurity is becoming more and more important by the day. So this is a horizontal, of course, consideration that cuts across many areas of EU policy, certainly in the area of electronic communications, but it really has to be incorporated from the start, security by design, as it is said, as there are also aspects like sustainability, this is also important. The white paper in particular, focusing amongst others in a particular type of infrastructure, which is submarine cables, some cables on which the commission issued a recommendation together with a white paper, because there’s a particular concern around this infrastructure, considering the amount of data that go through submarine cables and the political context. With recent attacks, I guess you’ve heard about those things. And next slide, and then I will be going, soon, I know we don’t have much time. Indeed, precisely, the commission issued a recommendation that for those interested, I can refer to in setting up a framework for collaboration at European level in this area of electronic, sorry, of submarine cables. Next slide. I think that’s a body I might have exhausted my minutes by now. I would like just to recall that in terms of the next steps, well, as I said, we’re about to, you know, a new commission is going to start, but the opportunities for funding, for European funding, that doesn’t, I mean, there’s a cycle, there will be a couple of calls for proposals coming up over the next months under different programs that will be relevant, you know, from what I’ve been presenting in particular, Verizon Europe, a call for proposals about the telco edge cloud convergence and how to support these developments. So those calls will continue this, the follow-up to this recommendation on submarine cables. We will have our first meeting of experts from member states starting next week. And then I mentioned the white paper opened a public consultation until 30th of June. And so still some days to come. Then the next commission, there will be the legislative proposals, proposes, changes that I mentioned before. And that’s it from my side. And yeah, sorry again for joining a bit late this session. Thank you.

Karen Mulberry:
Thank you, Miguel. And you, you provided some very good context related to our discussion. I see we’ve got a hand raised online and they will be unmuted to provide their question, please.

Audience:
Thank you so much. I think I would like to be right on what Miguel said, mainly focusing on things for cybersecurity concerns. I’d like to bring to attention one of the critical challenges that we face. which is opportunities and challenges, of course, for cyber security and AI. Infrastructure is growing, which is great, but also, even as we gather for the EuroDIG, it is also imperative for us to address these issues around AI and cyber security with agents and collaboration. And on behalf of the youth IGF EU, I present to you just one essential action that we must undertake. That’s to align AI with human interest. AI is transforming cyber security, which I think some of the previous panelists have also talked about with regards to cyber security and the technology that through the transformation that is coming through. So for us as the IGF EU, we would like to call on EU leaders to engage diverse communities, not just academics, to develop AI systems that benefit everyone. This perspective is strongly supported by the youth IGF EU, who see AI both as a friend, but also as a challenge. And in conclusion, by implementing… It’s that together we can make this a reality. So I think for me, it’s just a comment from on behalf of the IGF EU, but also to engage leaders, the threats, as well as the opportunities that AI are bringing, but also tackling it with a bit of human interest and incorporated into it. Thank you.

Karen Mulberry:
Thank you, for that statement. And I’m sure that the suggestions from the youth IGF will definitely play a part in how all of this rolls out in terms of access for everyone, at what level, and the types of content and the demands on the network. So thank you for those comments. Now back to our panel, are there any other questions? Yes, sir. We don’t have a mic. Okay. Okay.

Audience:
I would have a question for the European Commission. So the White Paper says that the copper needs to be switched off to analogy. The copper needs to be switched off to increase the fiber and all. My question would be, would you have any impact assessment or how do you think this measure would increase the investment into the fiber networks?

Karen Mulberry:
Miguel, you need to unmute to respond. There we go.

Miguel González-Sancho:
OK. First on this question of the switching of the copper and the impact assessment, yeah. All these ideas, because you can go like that in the White Paper. But actually, some of them, they’re not very new. I mean, actually, things are coming back, like the switching off of the copper. That has been around for a while. About your question about the impact, yes, we are doing that, actually. We’re collecting views, number one, as I said, the public consultation. We have studies that are currently ongoing, precisely collect to supplement the evidence that we already have about the impact, not just about this measure, but about all the different proposals for changes in legislation that I mentioned in the White Paper. And actually, there will be several months period for that. I just wanted to react about what the previous person said about artificial intelligence that indeed quite important point, but I think I missed that in my intervention, the importance of artificial intelligence, of course. So it was referred to in relation to cybersecurity, but artificial intelligence is one of these major changes for everything also in the area of networks. So I mentioned things like going to the cloud and edge computing, but certainly artificial intelligence is something that totally redefines this space. And on that line, it’s on the subject of my intervention, but I would like just to stress that the European Commission has recently taken quite important steps regarding artificial intelligence with legislation, funding, and even including setting up a dedicated office for artificial intelligence. Thank you.

Karen Mulberry:
Thank you. Any of the other panelists want to respond to that question? To which question? The one that the gentleman right there just asked from Lithuania about the sunsetting of copper and the investment in migration into fiber. I mean, I know that Kostas touched a little bit about the overall costs of shifting the infrastructure from the way it was structured previously and the investment in that network to what is required to move into the evolving network that is more fiber-based and has more demand on its capabilities and what it can provide.

Constantinos Balictsis:
Well, as the Commission has stated in the white paper, and as the regulator knows, nobody can support two networks in parallel. I mean, you have the legacy networks, the copper, and then you have the new networks that are coming through. So you need, and there are sustainability issues, there are, however, you need to reconsider also competition. There are in different member states, different jurisdictions, different legislations, that you have providers, especially alternative operators who are dependent upon this network in order to have a wholesale products to offer retail services. So if you retire this infrastructure, therefore you more or less take away the business model. So you need to be very careful. And I suppose that’s what Miguel is suggesting that we need to balance these things. On the one hand, you need indeed to incentivize the transition into new networks because you have a lot of consumer benefits in that respect. On the other hand, you need to understand that you need to safeguard competition in order, which is at different stages in different member states. So you need to be very careful and perhaps see it on a member state by member state level. The studies that Miguel mentioned, I suppose they are going to shed light to all these issues. There are some deadlines that are, some dates that are being mentioned in the white paper, like retired 80% of the legacy network by 2028. I don’t know how feasible that is. And then you have by 2030 to more or less switch off the entire legacy network. I cannot comment how feasible this is, but it gives a signal how urgent this problem is. And so you have to balance these things

Karen Mulberry:
very, very carefully. So David, you had a question. Yes, the microphone is down here.

Audience:
Not really a question, but just a comment that this workshop is not well designed in terms of timing because there’s a lot of things to discuss and we are over time already. I think Peter made two reflections that are very interesting. One is related to how the peering contracts are made. And the other one is how the evolution of, natural evolution to cloud for telecom operators is a trend. What I think is missing here is a discussion of the conclusions of the, or the proposals from the commission in terms of new regulation based on these two facts. The commission is saying that the peering or the IP interconnection markets are functioning well, yet they are proposing regulatory intervention. And this has to be debated because there are many stakeholders that oppose to these kinds of measures. And also the commission also extracts some conclusions out of the natural trend of cloudification. They’re also proposing a new regulatory framework. And we don’t see the point on this. So I think it’s important that these discussions continue because these are very important issues. If the commission has a misguided point of departure, the point of arrival would be misguided as well. So we need to discuss these topics. This panel is very short in time. So I hope next time we can design a panel that is more time lengthy so that we can have a fruitful discussion on these matters.

Karen Mulberry:
Thank you for the comments, David. I know that we, this is just to touch upon the iceberg, not necessarily to address it. We’re acknowledging that we have an iceberg that needs to be managed. There are a lot of dynamics related to what the commission is trying to move forward with. You know, as a premise, it sounds wonderful. From an engineering and practicality aspect, there are numerous issues that still need to be resolved in the process. So I mean, it is a struggle. I can tell you, my background is in telecom IP engineering. I was responsible for a number of large areas and switches. Moved most of my switches to IP. And one switch actually went back to be an analog switch because the area didn’t want any of the capabilities that the switch could provide them. They just wanted basic phone service. Nobody demanded any other content. So, I mean, we realigned our resources to move it to somewhere where the need was there. It was hoped over time that we could move the switch back and give them more capabilities, but they did, all they wanted was basic phone service. Yeah, Stokely.

Peter Koch:
Can I maybe add one more thing? Because I think we, and David is right, and I think everybody would love that there’s a large or broad use of terms here. And when we talk about networks, we have at least three different things that we mean. We’ve been talking about the last mile and from the like internet architecture perspective, first of all, the last mile doesn’t exist because it’s another term that comes out of the telecoms actually. And the last mile or the wire there can even be wireless because then it’s 5G or 4G or 6G or you name it. And that’s an economically interesting thing, especially when you ask about, yeah, replacing copper by fiber and need to switch off the copper network. That’s maybe an economic need or a competition thing. But of course, nobody needs to be afraid that their copper won’t work in the next five years. So, completely different topic. And also the road system, I think was a great example. When we were talking about the smart networks. So one of the internet invariants is smart edge dumb core, which means that the intelligence is in the end system and the network pushes packets. Now we see these visions that things happen in the network. on some other level of logic that might be true, but going back to the road system, you have refueling stations or recharging actually, and you have your burger stores at the street, but you would not consider the refueling station and the burger store part of the street system, right? It’s part of the overall infrastructure. And you would not want to regulate the street the same way as you regulate the burger store or vice versa. And kind of that is what I see happening here, that we mix things and because we use the term network in such a broad spectrum of meanings, we need to shape that and focus that a bit more. That would be my plan. Thanks for listening.

Karen Mulberry:
Yeah, and thank you. And you did raise a great point that one of the most important things, I think, to start this conversation in a meaningful way is to come to terms with the terms we use. Do we have common agreement as to what network are you referring to? And what do you mean by the capabilities of copper or the value of fiber and the types of fiber actually that are out there? I mean, so all of that needs to be qualified because they all have different applications and can provide different levels of service to meet whatever the objective is. Yes, Costas.

Constantinos Balictsis:
Can I just state a few thoughts? The network, as soon as it’s optical, then it’s agnostic. It’s transparent. You can transport anything you want, anywhere you want. So you put processing power either in the cloud or in the access and it depends on the service. If we have a time critical service, like Miguel showed in his presentation, like a smart city, you want to have processing on the city because you have automatic driving, you have all this autonomous driving, you have all this time critical application. So you may have e-health or anything else that needs whenever the doctor gives an order, it has to be performed right away. Other applications or other services are not as time critical. Therefore, you need to have high bandwidth end-to-end networks. So the last mile is important and then it becomes agnostic. In order to have the last mile, you need to invest. And the money are not cheap, especially right now. You have to have a business model. And the, I mean, Paolo is more, he’s an expert perhaps than I am. But in order to borrow that money, you have to show a business model that’s sustainable and can generate profits, and it can generate revenues and enough margins. And that is more difficult than it sounds, especially when you have competitors other countries, or from different segments of the IBC chain, which do not have debts, or they have large revenues from different revenue streams. Therefore, you need to invest in order to have these access networks. As soon as you have these access networks, there are a lot of issues that arise. Some of them have been touched here. How do you regulate that? You have end-to-end networks. You can provide centrally access networks. You can have scale, then you can buy cheaper the products and deploy them in the network and have economies of scale. And then you have a pan-European network, which is not the case right now in Europe. And then you have to think about the consumer. You have to protect the consumer. At the end of the day, the consumer receives services and they have to be protected. Not all of the consumers are very sophisticated, and some of them are not very sophisticated at all. If they are not protected adequately, they will not use the internet, they will not generate revenues, there will not be high investments. So the commission is doing a lot of things, I think, with the DMA and the DSA and a host of other acts. You have to have very high-capacity networks in order to have AI. Without very high-capacity networks in the access, you cannot have AI, both fixed or mobile. And that means that you cannot have all this influx of innovation. And we can see, indeed, we have the AI Act, but on the other hand, we also have the AI Innovation Package because the European Commission is very adamantly focused, and I think, in my opinion, very justifiably so, in spurring innovation activity in Europe. Otherwise, I mean, 57%, if I’m not wrong, of the traffic is being created nowadays by the alphabet. Meta, the Netflix, Amazon, Microsoft, and Google. And the rest is everybody else globally. That means I don’t see any European companies there. And the same may happen in the AI value chain. So one needs to be very careful, I think Gil touched upon, not to lose another thing. What you have to have innovation system that will create unicorns and then big companies that will create innovative products that will help the economy, will help employment and all these things. All these things are interrelated. You need to give the right incentives, the right signals, and then you have to have tangible results in a timely manner in order to have tangible results to the end user. So that we can talk about AI that is human centric, that respects human rights, and it evolves in a proper manner. So technical issues is one thing, and then materializing them, it’s a totally different ballgame.

Karen Mulberry:
Yeah. Okay, any more questions? We have time, I think, for one more question. Yes, sir, and then we need to wrap up.

Audience:
So I am still with my question about the copper switch off and don’t see how it could result in the increase of the investments into the fiber. Why? I don’t know the other countries experience, but here in Lithuania, we were quite a front runners of the fiber to the home. And we currently have like 80% of households access to the fiber. So, and in this segment, 80%, 83% have a choice at least of two separate providers of the fiber. So we have actually, in my point of view, we have reached the fiber deployment until the level it’s economically unfeasible. And we still have maybe 20% copper connections, and the prices of fiber and copper are almost the same. So if the end user has the access to the optical fiber, he chooses optical fiber, because the difference is very low. So you’re in the margins of five euro. So in my point of view, if we just cut off the copper, the end user will be worse off, because he will just have mobile connections left over. If we introduce the subsidies, probably the subsidies will be used by the incumbent, and then we recreate the economical problems that we were trying to solve. So there is, I don’t get the mechanics, how the switch off of the copper should motivate companies to invest in those areas where there is no fiber, business case for a fiber. And then if we discuss this white paper, there are, we are kind of, in particular, worried about the network resilience, because it’s a critical infrastructure, so we are dependent on the connectivity. And there are two different, as it was mentioned, pillars, so that one is about the scale, increasing scale and making European companies, and another about the security and resilience of the network, but it speaks about the Europe as a whole, submarine cables and et cetera. But in our case, different trends are going with the resilience. We want everything in the country to, if something happens, a war or something, so we could fix that. So I don’t, I cannot imagine if we would be served as a… the border country by the pan-European company and the network breakage and et cetera. So how they would fix that and all these infrastructures. So it would be very nice discussions. So that were not the questions, but the kind of interventions from the Lithuanian side as well. Thank you.

Karen Mulberry:
Thank you for this comment. Well, I say we’re well over time. So let me wrap up a bit. I mean, we kind of presented the context from the European Commission in terms of the white paper and the things that they were seeking to get information on. You’ve also heard some of the challenges with moving networks, trying to provide things in terms of high capacity access for end users, as well as the opportunities that might be there to provide those high capacity networks for end users to take advantage of. I mean, there are tremendous issues that need to be addressed. I mean, they raised the shift in the business model. The investment demands to move from one type of network to a totally different way of offering service and providing that service to the end user, including does the end user really want it? I mean, so you need to look at all of these aspects. It’s a dialogue that’s starting and maybe next year at EuroDIG, we can come back and we can reflect on a year and see what has been defined better. Are there additional challenges that have been uncovered in terms of trying to move in a direction to be more innovative, to have a network that is a very large pipe that is capable of doing many things, including the security requirements. that have been noted to protect the network. I mean, so there’s, you know, the ideal is wonderful. The issue is how do we get there? And do we really need to get to the ideal to say we’ve accomplished something? So thank you very much. I appreciate everyone attending. And we’ll see what we can do to come back next year and do a recap of this is what we’ve done in the last year. So thank you very much.