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Sunday, June 03, 2018

Telecom regulation and blockchain - is #RegTech the killer application?


One of the most interesting developments in telecoms technology for a while occurred this week – India’s telecom regulator TRAI issued a set of draft regulations aimed at combating spam and nuisance calls. (link)

At first glance, you could be forgiven for asking why anti-spam rules could possibly be more important than all the hoopla about 5G, market consolidation, network-slicing and, especially, “digital transformation” or RCS messaging (I jest).

The reason is in the details: TRAI has stipulated that telcos should use blockchain-based technologies to enforce its proposed rules, creating a tamper-proof and encrypted ledger of consent records, given by users for opt-in telemarketing. If the rules translate to reality, this is a major step forward in commercialisation of digital ledger technology, and at scale.

"Access  Providers  shall  adopt  Distributed  Ledger  Technology  (DLT)  with
permissioned and private DLT  networks for  implementation of  system, functions and processes as prescribed in Code(s) of Practice: -
(1) to  ensure  that  all  necessary  regulatory  pre-checks  are  carried  out  for  sending
Commercial Communication;
(2) to operate smart contracts among entities for effectively controlling the flow of Commercial Communication;
Access Providers may authorise one or more DLT network operators, as deemed fit, to provide technology solution(s) to all entities to carry out the functions as provided for in these regulations."


But in my view, this could be just the tip of a quite large iceberg. I'm starting to think that regulatory uses for blockchain (especially private/permissioned versions) could be central to the technology's success in telecoms.

Innovation in Regulation Technology, or RegTech, is already a huge domain, especially in sectors like financial services and healthcare. Historic methods for regulatory enforcement, from money-laundering rules, to certification of professionals, have often used reams of paperwork and had cumbersome processes. There is a huge need for automation, better provision of security and authentication, and simpler online access to regulatory resources and approval.

Obviously, telecoms has itself long had technical means for creating and enforcing rules, from spectrum-monitoring and radio-coverage tools, through automated platforms for telecoms licensing, to software aimed at checking broadband QoS and spotting net-neutrality violations.

But given that a lot of telecoms rules tend to involve multiple parties (eg user, telco, advertiser as here, or multiple telcos doing interconnect or wholesale agreements), requirements for "credentials", and there are often registries and other databases involved, the whole sphere looks like an archetypal match for the types of capability normally found in blockchains.

In particular, I think there are many potential use-cases for regulators to assist - or keep tabs on - telco activities that relate to regulatory policy. Adding unarguable timestamps to tamper-proof data storage has huge potential, in particular. Ones that immediately leap out to me include:
  • Number portability databases and porting requests
  • Storage of call detail records, that may be subject to lawful request at a later date
  • Spectrum allocations and permissions, especially for shared, local and dynamic spectrum models.
One other that I think has longer-term potential, but which nobody has talked about yet, is in secure and encrypted storage of network configuration and log files. One of the problems with regulating wholesale interconnect, peering, net neutrality and other rules, is that it is exceptionally hard to prove what happened retrospectively, if someone makes a complaint. This issue will be exacerbated with NFV/SDN, and the move to network slicing, when network configurations will be temporary and highly dynamic.

Given that law-enforcement insists that ISPs retain theur users' data records, it doesn't seem unreasonable to retain the ISPs' own information as well - obviously in a form that's secure and encrypted unless needed for evidence in the case of a legal intervention. It could also make a clear distinction between a problem of network failure (or happenstance in the way the maths of contention works), and deliberate actions.

The Net Neutrality angle here is particularly potent - it would allow any egregious behaviour to be dealt with post-hoc. Most anti-neutrality lobbyists dislike ex-ante regulation, but few could argue against allowing competition authorities or others from investigating alleged infringements that occurred deep inside the network's configurations and policies.

I'm just musing here, but I definitely feel that there's a lot more to telecom #RegTech using #blockchain than just tracking spam calls and SMS. 

This is one of the topics that will get discussed at my upcoming workshop on telecoms blockchain, on July 3 in London. Full details are here (link) or email information AT disruptive-analysis dot COM