sending party network pays


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.
From months back LIRNEasia’s focus was on the economic aspects of the WCIT proposals, specifically the mad proposal floated by ETNO to impose access charges on data flowing into a network, the sending-party-network-pays principle. This is the real debate in Dubai according to even early apologists for the ITU. More energy is expected to be spent on how companies make money off the Internet. In one submission to the conference, the European Telecommunications Network Operators’ Association, a lobbying group based in Brussels that represents companies like France Télécom, Deutsche Telekom and Telecom Italia, proposed that network operators be permitted to assess charges for content providers like Internet video companies that use a lot of bandwidth. Analysts say the proposal is an acknowledgment by European telecommunications companies that they cannot hope to provide digital content.
The Center for Democracy and Technology has been in the trenches of Internet policy from the 1990s. They played a leading role in expanding the debate over the various proposals to extend the ITU’s scope to include the Internet at the upcoming World Conference on International Telecommunication (WCIT) in December 2012. Here in their latest paper, they draw on work including mine, to argue that many of the proposed revisions to the International Telecom Regulations are likely to do more harm than good.
ETNO has earned notoriety for its ill-considered proposal to impose the old sending-party-network-pays principle on networks that house servers carrying attractive content. It is clear that ETNO and its allies in Egypt and elsewhere are is looking beyond the “sending party” networks at the OTT players such as Google and Facebook, who they perceive as those with the real money. Greed loves company. The old style telcos who make up the membership of ETNO are not alone. The old-style media firms of Europe would also like to get their hands on the earnings of Google et al.
The termination of voice calls is a form of trade in services which is in many countries, including Pakistan, governed by the General Agreement on Trade in Services (GATS). The buyer of the service is the company abroad that wishes to terminate voice calls in Pakistan. The seller is the international long distance operator in Pakistan who receives the calls and terminated them on various Pakistan telephone numbers. Under GATS, the sellers in Pakistan are free to enter into any kind of commercial arrangement with foreign operators. What cannot be done is for the government to get involved.
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.
For two days, I’ve been immersed in debates around WCIT, here in Accra at the African preparatory meeting. The delegate from Egypt, who had control of the text, was the most committed advocate of imposing a form of accounting-rate regime on data flows. According to him, the data are a burden on the network, they cause harm to the network, and the access network operators are subsidizing them. His views extend to content: he believes that the content is in some cases inappropriate. I could understand this attitude from an executive of an old style unreformed voice telephony company, longing for the good old monopoly days when the network was operated for the benefit of the managers and employees and the customers were an annoyance to be tolerated.