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Policy Control & Policy Makers: New Settlement Needed?

Graham Finnie, Chief Analyst

Money is piling into the policy management sector, which is seeing a boom in business, vendors, and technology development. Policy engines are getting far more sophisticated and powerful, taking advantage of advances in computing, servers, and software to increase performance on metrics such as transactions per second by an order of magnitude or more. Still relatively small, it's a sector that could get a lot bigger very quickly.

Innovations in technology don't always determine market outcomes. Some technologies fail to catch fire. But with policy vendors reporting high double-digit or even triple-digit growth, no one can doubt the current enthusiasm among network operators. As one big telco put it to me: "Policy is going to be really big for us. We have to get beyond gigabyte pricing, and in the next 12 to 18 months, we will make much greater use of policy to differentiate ourselves."

And that means there's a good chance that more policies will be applied (or offered) by network operators to more end users than anything we've seen hitherto. In a recent survey, we found that the average telco with a policy architecture in place anticipates over the next three years adding a new policy every six to eight weeks. Policies on how services are delivered will be shaped by a growing list of triggers, including a subscriber's tier, location, device, network type, and stated preferences, real-time congestion information right down to cell level, time of day, type of application, URL, and so on (and on).

From the point of view of operators, the name of the game is competitive differentiation, not end-user control. And increasingly, the policy levers will be placed in the hands of end users themselves.

All of this raises a big policy issue for regulators: What should they allow network operators that enjoy significant market power to do with these powerful new platforms? If policy platforms enable new policies to be written and deployed within days, and dozens of policies are routinely deployed in the average network, how are regulators to maintain effective control?

This debate has to date been largely framed in terms of net neutrality, and the Federal Communications Commission (FCC) 's proposed rulemaking on the topic. Yet in some ways, net neutrality feels something of a creation myth that is getting in the way of a more nuanced debate. What seems to be missing from public discussion is any sense that the current and emerging generation of tools might actually benefit end users as much as network operators especially if those tools allow users to control the way that policies are applied in order to save money or improve the performance of services they especially value.

As I've argued previously, the key requirements for regulators in this area are to ensure that there is effective competition, as well as transparency in the way that policies are applied, so that end users know what policies are being applied to their connection. Beyond that, the rule should be to let the market determine what policies work best for both network operators and their customers.

Graham Finnie, Chief Analyst, Heavy Reading

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