I wrote this on the flight back from the Baku Internet Governance Forum of 2012, where we did serious damage to the ETNO campaign to introduce the “sending party network pays” principle into an international treaty document governing relations between telcos and companies such as Google (so-called OTTs). I make it a habit to try to understand the opposition. This was the result. Once upon a time, there was a sleepy old railway company, serving a sleepy old town. The tracks were old, the rolling stock had been paid for, and the customers were regular.
It appears that ETNO, which tried unsuccessfully to extend the “sending party network pays” (SPNP) principle to data through the International Telecom Regulations, suffered another big defeat in its own house, the European Parliament. But the game is not over and should not be: we too believe the Internet companies must make reasonable contributions to upgrading the networks; unnecessarily restrictive net neutrality rules may not be the most helpful is prodding the different parties toward the right compromise. Any future horse trading, particularly over how telecom giants charge Internet companies for access to their data networks, may lead to changes in the final rules after domestic politicians and regulators provide feedback for the Pan-European proposals. Despite the uncertainty, Internet companies and consumer advocacy groups voiced support on Thursday for the new rules, while telecom companies said the changes would potentially curtail investment in the Continent’s mobile and fixed-line Internet infrastructure. European politicians inserted last-minute amendments intended to provide a strict definition of so-called net neutrality, which means that telecom companies and other Internet service providers cannot discriminate between different services that run on their data networks.
Facebook is about to announce the results of a major initiative to make its services accessible to those at the bottom of the pyramid who do not yet use smartphones. More than 100 million people, or roughly one out of eight of its mobile users worldwide, now regularly access the social network from more than 3,000 different models of feature phones, some costing as little as $20. Many of those users, who rank among the world’s poorest people, pay little or nothing to download their Facebook news feeds and photos, with the data usage subsidized by phone carriers and manufacturers. We saw this phenomenon back in 2011 when our researchers were in the field in Indonesia and heard them say they use Facebook, but not the Internet. I have also discussed the possible rationale for serving low-income users who may not be generating revenue at this time.
Few days back I was asked to speak on the above subject at a workshop held at the Center for European Political Studies in Brussels. I discussed what effects the continuing efforts by ETNO and likeminded groups to introduce some form of government mandated rent extraction from Over the Top players such as Google and Facebook are likely to have on small alternative media using the Internet as a workaround or simply as a low-entry-cost publishing opportunity. The slideset that I used is Samarajiva_CEPS_Mar13.
We just beat back a misguided attempt to break the Internet on the basis of some retrograde conception that equated the Internet with circuit switched telephony. But there is no debate that the Internet is under strain. We’ve been working with UN ESCAP, among others to address some of the problems. But the more fundamental questions of moving massive amounts of data from multiple devices are being addressed in the universities that begat the Internet. These are the solutions, not ETNO’s proposals, now seeping into European policy, to tax OTT players.
Ian Scales of Telecom TV has dubbed the WTO rules as the final nail in the coffin of ITU occupying Internet and ETNO’s demand of SPNP. Praising Rohan Samarajiva and Hosuk Lee-Makiyama for detonating “The well-timed blast” with their joint publication – Whither global rules for the Internet? The implications of the World Conference on International Telecommunication (WCIT) for international trade – Ian said: It points out that as part of the WTO agreement 82 countries unilaterally agreed to “open up and refrain from discriminatory measures in a so-called reference paper on basic telecommunications.” Most countries also agreed not to restrict the most common forms of Internet services and signed up to a moratorium on tariffs and fees on data transmissions (known as the WTO e-commerce moratorium). Those undertakings therefore run smack-bang into proposals such as ETNO’s, as well as Arab and African states’ proposals for re-establishing a version of the old accounting rate regime (designed for telephone call revenue sharing) for Internet applications.
The ITU hobnobbing with ETNO in a joint Twitter-storm during early October had been a mystery until the WCITLeaks’ recent disclosure of a “confidential” document. It reveals that ITU’s senior management went for a two-day “retreat” at the pristine Domaine du Château de Penthes in Geneva during early September. That was exactly one month before staging the Twitter-storm. Besides assembling its entire hierarchy from worldwide, the jumpy ITU also invited (of course on hefty payments) professional public relations heavyweights to strategize its counteroffensive against the defenders of Internet. The leaked document, with typographic error in the second question bellow, nicely captures ITU’s high-speed of heartbeat: On the basis of the outputs of the preparatory process, which includes preliminary inputs from the regions, we can address the following questions: Where do we stand regarding the substance?
The Body of European Regulators for Electronic Communications (BEREC) has condemned ETNO’s proposal to implement a mechanism for online content providers paying the cost of carrying their traffic over telecom networks. Based on its own market analysis in terms of net neutrality, BEREC said it would be inappropriate to include such rules in the ITR. Strictly speaking ETNO is advocating an “interconnection philosophy” based on transmission services being provided across the Internet all along a defined path between endpoints, much like the connection-oriented circuit switched “old generation” PSTN networks and voice services on which ETNO members built their businesses. This is fundamentally at odds with the principles of connection-less packet switched networks underlying the success of the Internet to date, based on decentralisation and simplicity. BEREC believes that the benefits of a connection-less network risk being unravelled by the widespread adoption of connection-based practices on the global Internet.
The Mo Ibrahim Foundation has published its 2012 facts and figures on African youth titled, “African Youth: Fulfilling the Potential”. It reveals: Africa is the only continent with a significantly growing youth population. In less than three generations, 41% of the world’s youth will be African. By 2035, Africa’s labor force will be larger than China’s. Africa is keen to reap the benefits from this imminent demographic dividend.
John Kay cites interesting Q&A with a Russian planner who visited the United States after the collapse of the Soviet Union: A perhaps apocryphal story tells of a Russian visitor, impressed by the laden shelves in US supermarkets. He asked: “So who is in charge of the supply of bread to New York?” The market economy’s answer – that not only is no one in charge, but it is a criminal offence for anyone to seek that position – is surprising. The essential things like milk, bread and eggs get supplied through obliquity rather than direct central planning. And so has been the Internet, worldwide.
Analysys Mason has published a report for the Internet Society on what a good thing the Internet is, as it is, not as it might be if undermined by the imposition of telco business models, according to Telecom TV. This report is a sober reminder that the Internet continues to work remarkably well and that its heartbeat is sustained by the very things – openness underpinned by settlement-free peering – that some want to get rid of. The report tackles all of the technical and structural objections to the way the Internet is governed and shows how the technology and the evolving business models have always solved looming crises. For instance, despite fears to the contrary the history of the Internet so far has involved sustainable development as bandwidth demands rise. Telecom TV has further said that this report, commission by the Internet Society and entitled ‘How the Internet continues to sustain growth and innovation’, is a direct and pointed rebuttal to all the talk of data tsunami, unsustainable business models, scissor effects and so on that we’ve had for the last year or two and which have culminated (in a way) in the effort to establish ‘sending network pays’ […]
The South Asia Democratic Forum conference held on October 11, 2012 featured a talk (delivered in the form of a video) on the pernicious effects of the certain proposals before WCIT 2012. The talk is here.
Something to think about. Earlier this month, Facebook announced that it had 1 billion active users. Of that, 81 percent were said to be outside the US and Canada. The top-five countries in ranked order at this time are US; Brazil, India, Indonesia, Mexico. Last year, there were lots of reports about Facebook building a server farm in Northern Sweden.
If the ETNO and related African group proposals to charge the networks sending information to Africa go through, those who will suffer will be users in Africa, particularly those with limited budgets and no internationally accepted credit cards. The European Telecommunications Network Operators’ Association (ETNO), representing European telecommunication companies, is proposing that the “sending party network pays” principle be written into an international treaty. This proposal would force content providers to pay local telecom operators for the delivery of user-requested data. Users from countries not seen as having large revenue potential could even find themselves cut off from some content. Alternatively, attractive content may have to be moved behind paywalls, making them inaccessible for those without credit cards.
Mr Luigi Gambardella of ETNO responded to one of my tweets and asked me to relook at their proposal. I did (CWG-WCIT12/C-109 of 6 June 2012). On the face, it appears that they are concerned about broadband quality of service, a real problem that we have been working on since 2007. But then they go off the rails. The solution to QoS is supposedly treaty-level language mandating that “Member States shall facilitate the development of international IP interconnections providing both best effort delivery and end to end quality of service delivery,” and that “Operating Agencies shall endeavour to provide sufficient telecommunications facilities to meet requirements of and demand for international telecommunication services.
There are many arguments that can be made against the ETNO proposal to import the international accounting-rate regime from voice telephony to the Internet. Here as a PDF is an argument about its impracticality from ISOC. ISOC also agrees with my main point that the ETNO proposals will result in the marginalization and exclusion of the developing countries, especially their poor who are just beginning to join the Internet economy: Because the bilateral model of sending-party-network-pays or “sender pays” that is common in traditional telephony or mobile-settlement systems does not readily accommodate the Internet’s multi-party transit network system, it cannot be mapped to the Internet as we know it. Simply said, retro-fitting a “sender pays” settlement regime to the Internet is not possible without extensive changes to the infrastructure of the global Internet. In addition, the “sender pays” model could adversely impact the technical and commercial environment in developing economies that need to grow their networks.
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