Peng Hwa Ang <firstname.lastname@example.org>
Nanyang Technological University
Berlinda Nadarajan <email@example.com>
National Computer Board
The rapid growth of the Internet has spurred many questions about its development and future operations. Internet access provision, once under the administration of the research and education networks, is increasingly being undertaken by commercial providers.
This paper takes the position that because of the unplanned way in which the Internet started, coordination will be needed to enhance its development, usage and sustainability. Quality of service (QoS) will be a key issue in Internet regulation. The paper considers quality of service issues from a policy angle, focusing on regulation of Internet quality of service and QoS standards. In particular, the paper looks at Singapore's attempts to develop QoS standards.
The paper begins by noting that regulation of a product or service usually covers three grounds: price, access and quality. It also notes that regulation of Internet QoS has its closest reference point in the telecommunications model, which has historically been tightly regulated in terms of universal access, price and quality.
Various surveys in Singapore have shown that Internet users rank reliability, access speed, access charges and customer service in order of importance. This suggests that there is a role for the QoS regulator.
The paper then examines how the regulator, the Telecommunication Authority of Singapore (TAS), attempts to regulate quality of service in Singapore. TAS requires Internet access providers to report quarterly on three key indicators--currently defined as network availability, service accessibility and service activation time.
Some problems are highlighted, including the reliance on technical measures, the issue of independent and transparent auditing, the need for incentives to complement penalties, and the difficulty of distinguishing between service levels and their perceived values.
Regulators often view QoS and access provision policies as measures to promote the growth of Internet services. However, the regulation of Internet access provision, as well as other regulations, can sometimes create barriers for quality of service. This contention is explored through larger quality of service issues such as limited infrastructure, resale of leased lines, value-added services, and mediated access.
The paper then discusses Internet QoS regulation issues in the context of changing technology and liberalization. The push for liberalization of the telecommunications industry around the world suggests that QoS regulation on a national level may become difficult, if not unfeasible. However, liberalization of the industry has been applied more in terms of price than access or quality, and regulation of QoS may still be needed to ensure that service providers give consumers a fair deal in a "de-regulated" environment.
This raises the question of who should regulate and set standards, and how. Should there be universal, national or local standards? Should there be government regulation, industry self-regulation, or simply, the regulatory force of the market mechanism? Various options are explored, including the roles of the telecoms or other regulatory agencies, Internet service provider associations and consumer groups.
The paper concludes that the argument is not so much for the need for regulation but the nature of the regulation. As the Internet world is diverse enough to accommodate different service levels and different regulations for access provision, industry players are likely to continue to work on different business and regulatory models within and across diverse markets.
The Internet, which had its origins in the military and academia, is being overtaken by business and commercial concerns. The United States National Science Foundation, for example, has gradually reduced its role in direct service provision since 1995 . Internet access provision, once under the administration of the research and education networks, is increasingly being undertaken by commercial providers.
The rise of the Internet service industry suggests that service quality is likely to be a key aspect of performance measures. This paper looks at quality of service issues from a policy angle, focusing on regulation of Internet quality of service and QoS standards. In particular, the paper looks at Singapore's attempts to develop and regulate QoS standards, while pointing out some problems and emerging issues.
The regulation of a product or service usually covers three grounds: price, access and quality . Regulation of Internet QoS has its closest reference point in the telecommunications model, which has historically been tightly regulated in terms of universal access, price and quality . This is understandable because access to the Internet is usually through communication links, whether phone lines, cables or the wireless spectrum. And countries that regulate Internet access provision usually do so through their telecommunication authorities. The International Telecommunication Union's Telecommunication Standardization Sector, ITU-T, in fact has a study group that looks into quality of service, though not specifically for the Internet.
In Singapore, Internet access provision is regulated by the Telecommunication Authority of Singapore (TAS). Potential Internet access providers (IAPs) have to bid for licenses based on an initial one-time fee, and an annual recurrent fee of 1 percent of annual gross turnover, subject to a minimum of S$10,000 (US$7,140) per year. The license is valid for the first five years and renewable every three years thereafter, subject to a review of existing terms and conditions. Local equity must be at least 51 percent of total shareholding. Selection criteria is also based on the company's financial strength and commitment to investment in infrastructure, as well as proposed plans to promote greater public use of Internet services.
TAS also sets other licensing requirements such as price controls and provision of information. It requires IAPs to seek approval on any changes in pricing or service schemes. This is to ensure that such changes do not adversely affect service quality. While price cuts and service promotions are generally allowed, TAS requires IAPs to expand their network capacity in anticipation of the increase in demand. Surveys are also conducted to monitor customer satisfaction and get customer feedback on how services can be improved.
In Singapore, various surveys have shown that Internet users rank reliability, access speed, access charges and customer service in order of importance [4, 5]. This suggests that there is a role for the QoS regulator. The regulator, TAS, conducted its first Internet users survey in May 1995 and found that the most widely used services were electronic mail (90 percent) and the World Wide Web (75 percent). The survey also revealed that while 84 percent of users were satisfied with the ease of gaining access to Internet, they had to try 5 to 6 times, against an expected 2 to 3 tries. Table 1 below shows the satisfaction with IAPs as follows:
|Factor||Percentage expressing satisfaction|
|Uploading of information||92|
|Helpfulness of customer support||91|
|Speed of response at helpdesk||88|
|Downloading of information||88|
|Ease of gaining access||84|
|Ease of access via service hotline||77|
|Service charges for fault repair||75|
|Speed of transmission||68|
Source: Telecommunication Authority of Singapore, in Vistas, 1995 .
TAS regulates Internet quality of service in Singapore by requiring IAPs to submit quarterly reports on QoS indicators. The indicators were developed based on the findings of the survey mentioned above. There are four indicators of service, which are in turn operationalized in several ways as shown in Table 2 below:
Table 2: QoS indicators to be submitted quarterly by IAPs
|1.||Network availability (Primary indicator)|
|(As a percentage of total operating hours over one month,
including log-in server, e-mail facilities and connection to Internet
Total outage time (hours/minutes) over one month
Details of incidents of outages
|2.||Service accessibility (Primary indicator)|
Leased line access
|3.||Service activation time|
|(From date of receipt of application or on date specified
Leased line access
(Excluding installation time for leased line)
Enquiries via Internet e-mail
Number of customer complaints per 1,000 subscribers
Source: Telecommunication Authority of Singapore, Vistas, 1996 .
Of the four indicators, the three key ones are network availability, service accessibility and service activation time. Each is defined as follows:
The indicators are classed as two types: primary and secondary indicators. Primary indicators are those that tend to have a wider public impact over longer periods of time, and that can cause major public inconveniences when standards are not met. Network availability and service accessibility are regarded as primary indicators.
To ensure that IAPs comply with the QoS standards, TAS has set up a penalty system whereby it fines an IAP S$5,000 for non-compliance with a primary standard, and S$1,000 for non-compliance with a secondary standard. The amount of the fine is not meant to be high, as TAS believes that the adverse publicity that comes with being fined and the potential loss of market share are sufficient deterrents. There is an anomaly in that the penalty system does not apply where access providers have their own service guarantee schemes to compensate individual customers directly for any failure to meet the service guarantee standards. However, service guarantee standards offered by access providers must be no less than those set by TAS.
In sum, TAS has adopted a minimalist approach to QoS standards. Defining too many indicators would be cumbersome for both regulators and access providers. The measurement process can be very costly--business costs would escalate if IAPs had to log every dial-up and every phone inquiry. A key consideration is the general expectation of what constitutes reasonable and acceptable standards for delivery of Internet services. Setting unrealistic standards would create a disservice if access providers passed on these costs to consumers.
There are, however, problems in QoS regulation. First, QoS standards have tended to focus on technical, network measures rather than other qualitative variables. Relying on technical measures for QoS standards obscures the nature of service. This begs the question: what kind of service is the Internet? Is it a service that sells "bits per second"? In this case, even bandwidth is not a service guarantee; it is only an estimate of the speed that packets will go on the network. In reality, capacities have to factor in the amount of congestion on the bandwidth. Bandwidth and other network statistics are estimates rather than accurate measures of service quality.
The reliance on network statistics aside, it is difficult to measure QoS standards because of the Internet's technical setup--in particular, the concepts of packet switching and dynamic routing. The idea behind the Internet was to find a way to move packets without the need for reliability, i.e. the network is assumed to be unreliable [8, 9]. The Internet routes traffic around faults, so there is no specific route that the traffic will take. Data are broken down into packets, and each finds its own way, before combining at the end point. In a sense, the Internet cannot guarantee that traffic will go from one point to another; it simply guarantees that it will try its best to do so . In terms of current technology, to set QoS standards for the Internet is to demand quality from a network that is essentially imperfect and designed to allow imperfection.
Second, there are the problems associated with data collection. Singapore's current system of regulating QoS standards raises the issue of auditing and accountability, and the need for a trusted, independent party. Even with uniform parameters and indicators, IAPs may vary in the way they collect and collate the data. The QoS monitoring system relies on self-reporting by access providers. To an extent, this problem is inherent in data collection because the IAPs would have easiest access to such data, and such measurements cannot be easily duplicated by the regulatory body. TAS has the authority to conduct field audits and to inspect the logbooks and records kept by access providers, although its inspections have thus far been ad hoc and precipitated by user complaints. TAS plans to tender the auditing job to research consultancies, and the details are being worked out .
Third, the QoS regulations have been geared more heavily toward penalties rather than incentives. While regulators set access providers minimum targets, they do not give them incentives to exceed those targets. This could lead to a tendency to cater for average rather than peak performance. The philosophy goes like this: If IAPs provide maximum bandwidth, all of it will be used, perhaps rather inefficiently. But if IAPs provide just the capacity they think customers will need, resource allocation will adjust from there. This means that access providers could hypothetically offer a level of service within the minimum standards, but actually below their optimum capacity.
One way of promoting higher service quality is to create incentives for access providers to go beyond the minimum standards, for instance, encouraging the use of backup equipment. Having backup services for all critical computer systems and network hardware helps prevent single points of failure. Such "over-engineering" attempts to avoid congestion problems and to ensure minimum downtime. This aspect of service quality becomes pertinent in light of the various outages that have crippled Internet services at one point or other. For example, in August 1996, about 6.2 million America Online users were cut off from Internet access and other services for 19 hours, in what was described as the biggest and longest blackout ever of online services. Ironically, the crash happened during routine maintenance. One company dealing with investor information services reported losses in five figures as a result of the outage . (As of April 1997, AOL faces lawsuits filed by several users who had not been able to access the service--following congestion as a result of its flat-rate, unlimited-use pricing plan. AOL has agreed to give refunds or credits to customers who were unable to use its service during the months of February and March.) Most efforts to regulate QoS standards have been from the point of view of access. Little has been done to carry those standards through delivery, e.g. having backup servers and contingency plans in a world which increasingly relies on the robustness of its communications links. Adding an incentive-based component to the current penalty-based system could be one means of shifting the focus on quality to the user end.
Fourth, there is the difficulty of distinguishing between service levels and their perceived values. QoS regulation would be more meaningful if it were possible to differentiate the various uses and users of Internet services. In the Singapore context, a key agenda is to make the local Internet backbone robust enough for electronic commerce. This entails certain criteria such as monitoring mechanisms for traffic; a trusted, independent party to serve as the validation and certification point; a standard format to deal with electronic transfers; and service standards that guarantee security and privacy. While it is obvious that different groups of users have different needs requiring different service levels, there is hardly any separation of users on the Internet today [13, 14]. There is nothing to distinguish a business user from a home user, a big user from a small user, or local from overseas Internet traffic. [Several protocols planned for Internet 2 (e.g. the Resource Reservation Protocol, RSVP, and the Real-Time Transport Protocol, RTP) actually allow for measurable QoS in terms of latency, bandwidth reservation and delivery guarantees. Internet 2, and the "Next Generation Internet" (NGI) initiative announced by the Clinton administration in February 1997, is expected to be completed in the year 2002.]
Ideally, there should be ways to distinguish different service levels, and the different values that users place on these levels. Not everyone will necessarily want high bandwidth at all times and to be connected to everything out there. Business users, for one, are likely to be more responsive and sensitive to service quality levels. As it is, QoS standards are applied across the board, with little means of analyzing the costs and benefits of doing so. It boils down to a question of how to raise QoS standards for services that are more valued, and more importantly, whether lower-valued aspects can be traded off for higher-valued aspects. This option would entail determining weights for different indicators--a process that is difficult and subjective, especially when definitions of QoS standards are still tentative.
Since the implementation of the QoS regulations, performance by the three Singapore IAPs (Singnet, Pacific Internet and Cyberway) has been uneven. When the first QoS report covering the period October to December 1995 was released, Singnet achieved high levels while Pacific Internet fell short in areas like service activation time and service accessibility . (There were just two IAPs then, before Cyberway started operations in March 1996.) For the period April to June 1996, Pacific Internet and Cyberway performed satisfactorily, while Singnet was fined S$5,000 for failing to keep its network running for more than 98 percent of the time . In the fourth and most recent report covering July to September 1996, all three IAPs achieved higher QoS standards than those set by TAS . A key point to note is that the QoS measurements are based on past performance, and may not be an accurate reflection of service quality as network traffic changes. As the local Internet access industry is still in its early stages, it will take time before trends in service quality levels can be identified and made meaningful.
Regulators often view QoS and access provision policies as measures to promote the growth of Internet services. However, the regulation of Internet access provision, as well as other regulations, can sometimes create barriers for quality of service.
First, the infrastructure for Internet services in Singapore and the Asia-Pacific is limited. This has to do with the origins of the Internet. The United States has traditionally been seen as "the backbone" of the Internet, both in terms of infrastructure and content, and access providers in other countries would first connect to the Internet by leasing circuits to the US. This has led to a situation where Internet access and service is often defined in terms of overseas rather than local linkages. For example, it was not too long ago that traffic within Singapore had to be routed to the US before reaching its local destination (which might have been just a door away in physical terms).
The situation is set to improve with efforts like the Singapore Internet Backbone (SIB) and the Internetwork Hub (I-Hub). Under the SIB collaboration, the three local IAPs commit S$10,000 annually to the backbone to help speed up access for local users . The I-Hub, launched by the National Computer Board (NCB) in October 1996, builds on the SIB and aims to link the network centers of all the IAPs, private networks, government networks and other access networks like wireless data, cable TV and public kiosks. When implemented, the I-Hub will have price differentiation between local and international access, a high uptime for the network backbone, a guaranteed performance expectation in terms of latency time, and a security framework for electronic commerce and other traffic . Plans are also under way to enhance links to the US by bringing in a T3 line in April 1997. In addition, NCB has launched a Content Hosting Programme to promote the housing, mirroring, repackaging and customizing of Internet content in Singapore .
Beyond these efforts, a limiting factor may be the narrow subscriber base. In terms of home usage, about 24 percent (71,210 households) of Singapore households with personal computers have Internet access. This is about 8.6 percent of all households in Singapore . The tight market for Internet services has seen access providers engaging in price cuts and competitive packaging. Local access providers have turned to regional growth by building various versions of an Asian Internet backbone, such as the Singapore Telecom Internet Exchange (STIX)  and the Abone , instead of just hedging their bets on the local market.
Besides these barriers to quality of service, there are other regulatory issues with regards to resale of leased lines, value-added services, and mediated access.
Policies on the sale and use of leased circuits have direct implications for quality of service. In January 1997, TAS announced that it will allow resale of leased circuit services from February. This means that companies who subscribe to leased circuit services from the local provider, Singapore Telecoms (SingTel), can now resell these to their customers for intra-corporate communications where they previously could not. One implication is that local IAPs will have more choices of leased circuit providers instead of having to buy circuits directly from SingTel, which currently has exclusive rights to provide leased circuit services until its monopoly ends in April 2000. However, companies seeking to resell leased circuit services must be licensed by TAS and must get their circuits from SingTel. Also, the leased circuits are not allowed to be connected to any public switched networks at either end, and not allowed to be used for public switched telecommunication services such as local and international calls and faxes . For local IAPs, leased circuits are the largest cost item, costing about 40 percent more from SingTel than what overseas providers would charge .
Here, the concern is that access providers may not be getting the best deal for the circuits they have to lease (whether directly or indirectly) from the sole telecoms provider. Non-competitive prices for leased circuits could lead IAPs to pass on the costs to users. In this case, current business regulations limit other avenues to infrastructure, possibly undermining the quality of service.
Value-added services also pose problems for the issue of quality of service. One strategy local IAPs have taken is to offer contents exclusive to their own subscribers. There are at present no regulations to stop IAPs from blocking non-subscribers from contents offered on a particular service. Pacific Internet's classifieds service, for example, is restricted to its subscribers. TAS has thus far kept out of the issue by taking the stand that it will not regulate the "innovative packaging and marketing of such value-added services" . While these restricted services "add value" for subscribers to a particular IAP, they detract from the overall value of the network and from service quality.
In the Singapore context, an issue relevant to quality of service is mediated access. The Singapore Broadcasting Authority (SBA), which undertakes content regulation, has mandated local IAPs to use proxy servers as filters to block out objectionable materials. Corporate leased line users do not have to go through proxy servers, as their communications are considered "private" and therefore not subject to these regulations. While proxy servers speed up access by caching frequently-accessed materials, they affect other aspects of service quality. Home users have complained that proxy servers are dishing outdated Web pages, that access speed has actually slowed, and that they have to pay for longer access time just so that such filtering can take place [27, 28]. Thus, the use of proxy servers is double-edged: while they free bandwidth for other purposes, the trade-off is that users only get mediated access, perhaps deflating the essence of the Internet--its connectivity.
Changing technology poses challenges for regulating the Internet as a service and for regulating the types of services that will ride on the Internet. Debates between telecoms providers and Internet access providers over Internet telephony reflect uncertainty as to how to define the Internet as a service. Telecoms providers argue that it is a basic service and call for stricter regulation; Internet access providers argue that it is an enhanced service and clamor for further relaxation of telecoms regulation. The problem is that the Internet may be seen as an enhanced service which, because of converging technology, also offers elements of what has traditionally been seen as a basic service. In Singapore, TAS has classified Internet access as an enhanced service and separated it from "basic" telecoms service. While it is technically possible for IAPs to offer phone services, they are not allowed to use the leased circuit for telephony as this would constitute "shared use of leased lines."
There is also the complication of other converging services. Applications on the Internet are moving towards even greater diversity and interactivity. Some new applications such as videoconferencing and broadcasting may require new QoS standards to ensure real-time performance. Unlike e-mail, where packets can be delayed and then reassembled, real-time video will not tolerate such delays and breakdowns in packet switching. New service quality considerations may have to be factored into the evolving Internet environment.
QoS issues should also be seen in the light of telecommunication liberalization. TAS has brought forward its plans to liberalize the local market for basic telecoms services from the year 2007 to 2000  and will award up to two licenses for basic telecoms services by mid-1998 . The licenses give rights to offer local and international basic telecoms services, including fixed voice telephony, international direct dialing (IDD), leased circuits, public switched message and data services. The early end of Singapore Telecom's monopoly has several implications. First, other providers will be able to set up their own infrastructure (including leased circuits) and not have to go through Singapore Telecom. Second, Singapore Telecom itself may be allowed to operate as an infrastructure provider. Third, uplink/downlink satellite operations will be allowed to offer ancillary and incidental telecoms services other than their core broadcasting services. Fourth, more Internet access providers may be allowed to enter the market.
These scenarios create many possibilities for quality of service--what will be considered "ancillary and incidental" services, for example. If IAPs can operate their own infrastructure and leased line facilities, this may lead to higher service quality in the form of cheaper ISDN lines, which increase reliability and access speed. However, the high costs of building infrastructure suggest that it is more likely that IAPs will continue to use facilities offered by other infrastructure providers. What liberalization means is that they will have more options and need not be restricted to the services of a single monopoly provider. In January 1997, TAS also announced that companies that win licenses to offer basic telecoms services may also be allowed to provide mobile phone, paging and Internet services, if they can justify that these features will "add value" to their basic telephone services . TAS has yet to finalize detailed policies, but has indicated that the QoS standards will remain as one of the main measurements of performance by access providers, even if more players enter the market .
The push for liberalization of the telecoms industry around the world suggests that QoS regulation on a national level may become difficult, if not unfeasible. However, liberalization of the industry has been applied more in terms of price than access or quality, and regulation of QoS may still be needed to ensure that service providers give consumers a fair deal in a "de-regulated" environment. This raises the question of who should regulate and set standards, and how.
Various countries have approached this question differently. Japan's Ministry of Posts and Telecommunications (MPT) is drafting guidelines for Internet QoS, using the model of national regulation by a telecoms agency. The US Federal Communications Commission (FCC) has set up the Network Reliability and Interoperability Council (NRIC), which has a charter to provide recommendations on reliability and connectivity of public telecommunications networks. However, the NRIC does not act as a QoS regulator. One of its first tasks was to complete an assessment of whether Internet usage was eroding the reliability of the public switched telephone network.
In the United Kingdom and in New Zealand, QoS has been left to industry self-regulation. The UK Internet Service Providers Association intends to address service quality by factoring in a consumer complaints procedure in their Code of Practice, and is considering measuring IAP performance as an independent body . The Internet Society of New Zealand (ISOCNZ) and the Internet Service Providers Association of New Zealand (ISPANZ) have a draft, voluntary Code of Practice that requires members ISPs to make available to each customer:
Yet a third model is to leave QoS regulation to consumer groups, e.g. an independent media consumers association which educates users, highlights breaches and lobbies for change. (As of this writing in April 1997, Asia-Pacific countries such as Malaysia, Korea and China do not specify QoS standards.)
In evaluating the various models, it is unlikely that consumer groups will have much clout in seeking higher Internet service quality levels. At the street level, the Internet is still a little-understood medium. Perhaps a more likely scenario would be a combination of regulation by telecoms authorities and self-regulation by industry associations. The former, while at times cumbersome, will help to keep industry self-interests in check. The industry on its part, will be in a better position to react to changing technology and market factors, in their bid for better service to win user dollars.
The increasing importance of the Internet suggests that some form of coordination and regulation will be needed to enhance its development and usage. One of these elements will be the need to address quality of service issues. If nothing else, quality of service will help differentiate between levels of service and access provision. At the other end, quality of service may be necessary for tariff purposes. Pricing and billing strategies for Internet access may have to partly depend on service quality levels that are requested or provided.
This paper concludes that the argument is not so much for the need for regulation but the nature of the regulation. As the Internet world is diverse enough to accommodate different service levels and different regulations for access provision, industry players are likely to continue to work on different business and regulatory models within and across diverse markets.
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