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UN Internet Meeting About Who Pays, Not Who Rules

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Tuesday November 27, 2012
Should the Internet be treated like traditional phone services when it comes to regulation and pricing? That is the contentious question as the International Telecommunications Union, a United Nations agency with roots dating back to 1865 and the interconnection of telegraph services, meets in Dubai next week for the World Conference on International Telecommunications (WCIT).  The WCIT is a treaty-writing event that has attracted growing attention given fears that the ITU and countries such as Russia plan to use it to press for greater control over the Internet.

My weekly technology column (Toronto Star version, homepage version) notes that there are certainly legitimate reasons for WCIT suspicion since the ITU lacks transparency and largely excludes public participation. For months, the ITU proposals scheduled for debate (known as International Telecommunications Regulations or ITRs) were shrouded in secrecy and the organization itself offered only limited opportunity for public participation. Moreover, some countries view the WCIT as an opportunity to increase their leverage over the Internet by proposing regulations that would increase governmental controls.

While these issues are cause for concern, proposals aimed at seizing control of Internet governance are unlikely to succeed and the reality is that governments already flex their regulatory muscles within the current U.S.-backed Internet governance framework.

The focus on a UN takeover of the Internet has obscured the real concern with the WCIT, namely efforts by telecom companies to find new sources of revenue by changing the way we pay for the Internet.
Before the emergence of the Internet, telecom companies often enjoyed monopolies within their own countries and were able to extract enormous fees for long distance calling and other services. Those revenues have diminished in recent years as the Internet enables consumers to shift from expensive telecom services to cheaper, more flexible, and less regulated Internet-based alternatives such as Internet telephony, instant messaging, and over-the-top video services.

Some telecom companies and developing countries with government-backed monopoly providers now view the WCIT as an opportunity to bring the traditional telecom model to the Internet. For example, the European Telecommunications Network Operators Association (ETNO), a consortium of 41 telecom companies, has proposed a new sender pay model for Internet traffic so that its members receive "fair compensation."

The interconnection of Internet traffic is generally managed through "peering" arrangements in which Internet providers exchange traffic without metering or further charges. The system means that sending Internet traffic to another provider is effectively free with revenues generated through a receiver pay model (ie. consumer and business monthly Internet access subscription fees). Internet providers face costs in building and maintaining their networks, but peering arrangements ensure that there are few additional costs in transmitting the data.

The ETNO has proposed replacing the current peering model with a "sending network party pays" model, which would create enormous new costs for major content providers such as Google or Netflix. The long-term impact would be to either shift significant new costs to consumers or lead to a global digital divide in which the large content companies stop sending traffic to uneconomic countries where the financial return from sending traffic is outweighed by the new transmission costs.

Not only is ETNO seeking a new payment model for Internet traffic, but it also wants new "quality of service" rules for the Internet that are reminiscent of older telecom models and which would threaten net neutrality principles that ensure that all Internet traffic is treated equally.

Many countries, Internet companies, and even North American telecom companies are on record as opposing ETNO's plans. Some have gone further by asking whether Internet services belong in a telecom discussion and expressing doubts about the need for ITRs in a marketplace that is largely deregulated and has relied on private contracts to address network traffic management. As the telecom world gathers in Dubai, it is these issues that bear watching, not over-the-top claims about a United Nations takeover of the Internet.
Comments (10)add comment

Joe living near Afghanistan said:

leaked documents show: ITU is preparing for ACTA-like protest waves
http://translate.google.com/tr...ta&act=url
November 27, 2012

Chris Brand said:

"Sender Pays" feels wrong for the Internet
I haven't checked recently on the relative proportions of different types of traffic, but while "sender pays" might make sense for things like email, it's completely wrong for things like websites and streaming music and video, where it's the receiver of most of the data who initiates the data transfer.
November 27, 2012

Wiebe de Haas said:

How to pay for that internet connection, a proposal
Internet traffic is not a physical commodity.

Here is a link to a proposal I put forward, along with discussion and expansion that may have some value: http://openmedia.ca/forum/cana...t-proposal .
November 27, 2012

David Collier-Brown said:

The telcos would like to increase prifit as well, methinks!
The OECD (Organisation for Economic Co-operation and Development) in it's report "Internet Traffic Exchange, Market Developments and Policy Challenges",
http://www.oecd-ilibrary.org/s...pt130q-en

... eposed the fact that the telcos are overcharging somewhat amazingly.

Rick Falkvinge has been commenting on that yesterday and today:

OECD: Telcos Overcharging By Five Orders Of Magnitude

http://feeds.falkvinge.net/~r/Falkvinge-on-Infopolicy/~3/2Zj_L36836g/

Free Market Failure: Telco Profit Margin On Data Roaming Exceeds One Million Per Cent

http://feeds.falkvinge.net/~r/Falkvinge-on-Infopolicy/~3/d4y5oKWyz0M/

Were I a telco, I would be very much interested in how much one pays, so as to get my profit margins back up where they are with telephony.

--dave
November 27, 2012

Grump said:

...
We used to pay for time connected (minutes/month, or simply months)... Now we pay for lop-sided rates and throughput limits that neuter uploaders (would-be service providers). Next we'll pay for uploading and downloading seperately, with downloading likely cheaper (this proposal)... Might as well keep the cable when the only ones with transmitters are the big media conglomerates.

No deal.

Oh, and "quality of service" (QoS) is just a way censor the poor independent thinkers and keep tomorrow's inventors under the thumbs of today's monopolies.

"On or off" is the only logic fit for Cyberia.
November 30, 2012

Randy Guzman said:

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Thanks for sharing this post.I got a lot from it.
December 02, 2012

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December 03, 2012

PeterA said:

wait... what???
What drugs are you on???

If the telecoms companies wanted to charge differently, why the help do they need the ITU involved??? They own the damned pipes! They can just charge differently! Don't sign the contract that says "peering", sign the one that says "charged by megabyte". What planet are you on that thinks the itu (despite their attempts or rhetoric) it is ultimately meaningless.

If a country wanted to block YouTube? Pass a law that enforces this pricing model on its telcos, seriously why do they need the ITU for this?

Come back to earth guys. It's not a horrible conspiracy to charge you money.
December 04, 2012

David Collier-Brown said:

Re: wait... what??? What drugs are you on???
Well, mostly aspirin (:-))

Seriously, though, in the physical networking world the suppliers have been basing their rates on the level of efficiency of analog telephony, so that 1 48 to 64 KB line can only support a single circuit-switched conversation.

The same line doing packet-switching can deliver a lot more information, and much of that information is encoded a tiny bit more compactly than voice (ie, it's ascii).

Unless they actually want to see their profits fall, they need to raise their rates, but tat the same time not be seen as acting in an uncompetitive way, by all raising them in concert. One wants to get someone else to do the raising, and the ITU looks like a suitable fall-guy.

--dave
December 04, 2012

rickster said:

It's getting near time for an Internet2 ppl.
wait, we don't pay enough for Internet usage to our ISP's, here in Canuckada ?
When the Internet becomes like TV and Radio,(aka big one-way sewer pipes), then we all just unplug and "shutdown -now", and start a brand new world Intenet2, (and WITHOUT these darn Captcha's pleeeeezzzz!)
"... here's your new boss, not the same as the old boss..."
Done.
December 07, 2012

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