Radical Proposal Now on the Table at the ITU

Internet users in less developed countries could find their access to the global Internet more limited or more costly if proposed changes to the International Telecommunication Union’s treaty are adopted.

ITU Member States are meeting this December at the World Conference on International Telecommunications (WCIT) to decide whether and how to extend ITU regulations to the Internet. A group of European telecommunications companies (the European Telecommunications Network Operators or “ETNO”) is proposing radical changes to the ITU’s underlying treaty in an attempt to wrest more revenue from providers of Internet content and applications. Internet users should urge their governments to oppose the ETNO proposal and any similar proposals that may be considered by ITU Member States.

While the ITU plays an important role in promoting interoperability of traditional telecommunications systems, CDT is highly skeptical of expanding the ITU’s mandate to include Internet governance and regulation. The ETNO proposal illustrates why we are concerned, as we explain in a paper we are issuing today.

ETNO’s proposal is ambiguous in some respects, but it seems to urge radical changes. In particular, the proposal asks the ITU to adopt through treaty an approach to Internet interoperability that would completely upend what has been widely adopted today – a system of voluntary agreements that has successfully enabled anyone (once connected to the Internet) to speak to anyone else in the world, or launch a new website or application, without having to negotiate with entrenched private (and even state-owned) telecom interests in the middle.  The ETNO proposal would introduce new friction by requiring sending networks to navigate a new system of fees to deliver content to end users.

While the ETNO proposal might benefit large, incumbent telecommunications operators, it will not likely expand Internet access in countries that need it most. And the ETNO proposal could negatively impact Internet users, with citizens in less developed countries shouldering the burden of the changes in several concrete ways. The proposal could:

  • Increase the cost of Internet access for everyone by replacing the existing, highly functional Internet interconnection system with something significantly more complex and costly.
  • Cause online service and content providers to abandon smaller and less developed countries, depriving citizens in those countries of access to information, knowledge, and empowering communications technologies. The proposal would require online content and application providers (potentially broadly defined) to pay to reach specific users. If large companies decide that reaching users in some countries is not important enough to their business strategy to justify the cost, companies may decide to simply not provide their services or content to those countries.
  • Increase costs for individuals and businesses located in less developed countries who want to reach users and audiences outside their country because they, too, may be required to pay to do so. Higher costs would create yet more barriers for those entrepreneurs already located far from traditional tech industry power centers. This result would make it more difficult for local innovators to use the Internet to reach global markets, build sustainable scale, and compete with established companies in the Internet ecosystem, limiting the Internet’s potential to facilitate economic development.
  • Disproportionately impact not-for-profit entities, individual speakers, and new forms of non-commercial and collaborative endeavors, all of which may have little ability to pay new and unpredictable fees to reach global user bases.
  • Fundamentally undermine principles of Internet neutrality, owing to the “quality of service” requirement (explained further below), by encouraging telecom operators to decide what kinds of traffic and communications deserve priority treatment and what kinds of traffic might be left to lag behind.

Our analysis of the proposal examines several key changes that ETNO wants ITU Member States to adopt through global treaty:

  • “Peering” is a common mechanism that allows global Internet communications to traverse seamlessly over the various networks that make up the Internet, allowing information to reach users from one part of the world to another. Currently, money rarely changes hands between peer networks for information to flow online – over 99% of peering happens without involving a settlement fee (2011 OECD survey). ETNO wants peering relationships to involve payment, and particularly endorses a “sending party network pays” concept, where those providing content and applications that users want to access must potentially pay to reach those users.
  • Currently, ISPs and large content providers are addressing the challenge of delivering new, high-volume content (especially video) by using caching to store content locally in the network, a major trend in the architecture of content delivery.  ETNO’s proposal would strongly discourage this entire approach, by making it lucrative for ISPs to force “sending” networks to re-send the same content again and again.
  • ETNO proposes addressing network performance and congestion issues by implementing “end-to-end quality of service” (QoS) – an idea that has been around a long time but has failed to get any traction in current practice.  QoS means that carriers would prioritize certain traffic (based on what network operators believe has “value” – which may depend on who pays them the most) to guarantee a level of end-to-end speed.

The ETNO approach is in key ways the exact opposite of the solution that has been widely embraced on today’s Internet as the best approach for delivery growing volumes of content to users. The current approach is to store content locally to minimize the amount of traffic that needs to be sent long distances at peak times, and not to bother hassling with the technical complications and higher costs of trying to manage inter-carrier QoS. ETNO proposes to turn this on its head by making it lucrative to receive lots of traffic from other networks (which strongly discourages local caching), and dealing with congestion through prioritization of certain traffic. Since the current approach to Internet interconnection has successfully supported the globally interoperable Internet, it is unclear what benefits would flow from ETNO’s approach that would outweigh the costs of fundamentally upending current arrangements, costs that will surely be passed on to individual Internet users.

Countries around the world have legitimate concerns about Internet governance, including the uneven pace of the development of the information society, which has left many unable to participate fully in the digital economy. The ETNO proposal, however, would not promote access to the Internet or benefit users. Indeed, it might well have the opposite effect, raising costs for access and impairing the ability of citizens and entrepreneurs in less developed countries to tap in to the full range of information and tools available on the global Internet.

The ITU works through negotiation among national governments, currently happening behind closed doors. Anyone concerned about promoting the full realization of the information society should work with his or her national government’s ITU delegation to oppose the ETNO proposal and any similar proposals that may be put forward in advance of the meeting later this year.

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