1. REGULATORY
IMPLICATIONS
CLOUD

2. CLOUD - REGULATORY IMPACT | Public | © Ericsson AB 2013 | 2013-09-10 | Page 2
Ericsson Cloud System
Overview: Concepts
Ericsson cloud System offering
Ericsson Cloud Execution Environment
Network & Data Center Infrastructure
Ericsson
Cloud
Manager
Virtualized Applications
The Ericsson Cloud System
is made up of three main parts;
Networking and Datacenter
Infrastructure, Cloud Execution
Environment, and Cloud
Manager.
All of these parts are required
to create a cloud platform, but
not all of the parts need to
supplied by Ericsson in order to
deploy any of our virtualized
applications.
This segmentation of the
Ericsson offering follows an
industry benchmarking making
it more generic for policy
implication analysis.

3. CLOUD - REGULATORY IMPACT | Public | © Ericsson AB 2013 | 2013-09-10 | Page 3
Native System
Overview: Concepts
Virtualization I
Application
Hardware
Native
Application
Understanding Virtualization is key to
understanding the Cloud System.
In a native deployment the application
software has direct control over the
hardware on which it is running. This
means that dedicated hardware is
required to run each application.
In a virtualized platform like the Ericsson
Cloud System, each hardware
component is turned into a virtual
resource by a piece of software called
the Hypervisor.
The Virtualized applications now run on
virtual machines rather than on specific
hardware and are given resources as
required by the Hypervisor.
Cloud System
Cloud
Hardware
Virtualized
Application
Virtualization
Software

4. CLOUD - REGULATORY IMPACT | Public | © Ericsson AB 2013 | 2013-09-10 | Page 4
Native System
1
Overview: Concepts
Virtualization II
Application
Hardware
Native
Application 1 With the Hypervisor in-between the
application and the hardware resources
the application software is now said to be
Decoupled from the hardware. This
means, for instance, that multiple
applications can share the same piece of
hardware.
It is up to the Hypervisor and the rest of
the Execution Environment to distribute
the hardware resources as efficiently as
possible to the applications that require
them. This dynamic allocation of
resources by the execution environment
is called Elasticity.
In the Ericsson Cloud System, the
Hypervisor is included in the Ericsson
Cloud Execution Environment.Cloud System
Cloud Hardware
Virtualized
Application
1
Virtualization Software
Virtualized
Application
2
Virtualized
Application
3
Native System
2
Application
Hardware
Native
Application 2
Native System
3
Application
Hardware
Native
Application 3

5. CLOUD - REGULATORY IMPACT | Public | © Ericsson AB 2013 | 2013-09-10 | Page 5
Overview: Virtualization
REGULATORY IMPLICATIONS
Decoupling (D) per see should not
result in any new regulatory
implications or for new policy
interventions.
Decoupling and outsourcing results
in regulatory implications such as
conditions defining possibilities of
transferring statutory liabilities.
Localization, e.g. off-shoring of
outsourcing will result in regulatory
considerations.
LOCALIZATION
OUTSOURCING
D

6. CLOUD - REGULATORY IMPACT | Public | © Ericsson AB 2013 | 2013-09-10 | Page 6
Overview: Outsourcing & Cross-border flows
REGULATORY IMPLICATIONS
Outsourcing:
Statutory Responsibilities
Enforcement
Localization:
Type of data processing:
- Commercial
- Public Institutions
- Law enforcement
National standards of privacy regulation
Extra territorial implications
Data Transfers
Trade barriers / Forced localization

7. CLOUD - REGULATORY IMPACT | Public | © Ericsson AB 2013 | 2013-09-10 | Page 7
Overview: Deployment Scenarios
regulatory implications
Public cloud deployments raise
policy issues regarding intermediary
liability and immunities for
intermediaries which are
conditional for service providers
offering public clouds.
Conditions and immunities
contribute to the cost and risk
associated with such service
provisioning.
Network offerings underpinning
telecom private cloud solutions that
are subsequently a part of a
consumer offering might potentially
face issues regarding traffic
management and traffic
differentiation.

8. CLOUD - REGULATORY IMPACT | Public | © Ericsson AB 2013 | 2013-09-10 | Page 8
Ericsson Cloud System
Overview: Applications & Services
REGULATORY IMPLICATIONS
Ericsson Cloud Execution Environment
Network & Data Center Infrastructure
Ericsson
Cloud
Manager
Virtualized Applications
Different types of user applications,
hosted in a cloud, may be used in a
specific context/sector and hence
this use becomes subjected to sector
specific regulation such as telecom,
media/content, e-commerce, health
etc. above and beyond consumer
protection law.
These “applications” will then add an
additional layer of regulatory
consideration that are not specific to
the implementation architecture e.g.
native or decoupled.
Sector specific regulation might have
additional regulatory implications not
on virtualization per see but indirectly if
virtualization is followed by outsourcing
and/ off-shoring localization.

9. REGULATORY
CONSIDERATIONS
CLOUD

10. CLOUD - REGULATORY IMPACT | Public | © Ericsson AB 2013 | 2013-09-10 | Page 10
WHY, WHAT and HOW to Regulate?
CLOUD REGULATORY Challenges
Global nature of connectivity/processing
Quantum jump in scale/scope of processing
Distributed nature of control SCALE/CONTROL
Law/Hierarchy
Architecture/Code/Design IMPLEMENTATION
How to Enforce
When to Enforce
Convergence / Services & Sectors
ENFORCEMENT
CONGRUENCE
Norms/Values

11. CLOUD - REGULATORY IMPACT | Public | © Ericsson AB 2013 | 2013-09-10 | Page 11
Addressing Scale & Control Issues:
› Commercial Data Processing
› Public Institutions Data Processing
› Law Enforcement Data Processing
› National Security Data Processing
› Cyber Security
Devising Effective Regulatory Frameworks
REGULATORY Targeting

12. CLOUD - REGULATORY IMPACT | Public | © Ericsson AB 2013 | 2013-09-10 | Page 12
Holistic Regulation
REGULATORY Convergence
Wire line
Voice & data
TV & Media Internet
Wireless
Voice & data
Broadcast
Internet Apps
/ASP/ Cloud
Fixed
Mobile
Source: Heavy Reading, Telecom in TV Land, 20070710
APPLICATIONS & SERVICES
PLATFORMS
WHEN NECESSARY REGULATE SERVICES NOT PLATFORMS
PLATFORM & TECHNOLOGY NEUTRAL APPROACH

13. CLOUD - REGULATORY IMPACT | Public | © Ericsson AB 2013 | 2013-09-10 | Page 13
Co-/Self-Regulation
› Privacy by design
› Accountable company
› Self Regulation with
substance
› Cooperation with agencies
and facilitated knowledge-
sharing
Command-Control
› Outcome oriented
› Clear roles and
responsibilities in the value
chain
› Risk-based approach
› Efficient tools managing
Cross-border flows
How to Implement
Implementation Strategy

14. CLOUD - REGULATORY IMPACT | Public | © Ericsson AB 2013 | 2013-09-10 | Page 14
INTENDED
INFORMEDWELL
ILL
ILL
ACCOUNTABLE
COMPANY
EVIL
COMPANY
UNINFORMED
COMPANY
DECEPTIVE
COMPANY PUNITIVE
DETERRENCE
PARTICIPATORY
COMPLIANCE
How to Enforce
Enforcement Strategy

15. CLOUD - REGULATORY IMPACT | Public | © Ericsson AB 2013 | 2013-09-10 | Page 15
When to Enforce
Enforcement Strategy
FOCUS ON
ENFORCEMENT
FOCUS ON
AVERSION
PREVENTIONACTHARM
PERSUASION
WARNING
CIVIL PENALTY/
ADMINISTRATIVE NOTICE
OPERATIONAL
INTERVENTION
CRIMINAL PENALTY
CONTROL OF COMPANY /
LIQUIDATION
DETERRENCE
COMPLIANCE

16. CLOUD - REGULATORY IMPACT | Public | © Ericsson AB 2013 | 2013-09-10 | Page 16
Convergence – Platform Equality
Information Management – Data Protection
Information Management – Cross Border Data Flows
Copyright - Enforcement
Network Regulation – Traffic Management
Related Regulatory Topics
ERICSSON’S POLICY advise
ICT Policy for the Networked Society