The Internet is the world’s biggest economic and social success story of the past three decades. Citizens, NGOs, engineers and governments have all have joined together to write an amazing narrative.
That success story now is under threat. In Dubai this December a group of governments will conclude a treaty and some countries such as Russia and China are proposing changes that would give international legal backing to measures that would facilitate state censorship of online content. These tyrants have found an unlikely ally – some of Europe’s telephone incumbents. These companies’ so called “sender pays” proposals were debated at the Financial Times’ European Telecommunications Network Operators Association (ETNO) sponsored conference Tuesday in Brussels.
Proposals put forth by ETNO would harm Internet users in less developed countries, depriving them of a full range of online tools and knowledge because large companies may be reluctant to pay for them to receive access.
Here’s how. Traffic over the Internet flows today through unregulated commercial agreements. ETNO proposes to replace this successful system with formal interconnection agreements, requiring the sender to pay the receiver for the traffic sent. This “sending party network pays” would complicate interconnection. Its added costs would be passed on to Internet users who receive information. In short, Internet access would begin to resemble international telephone access with its high rates.
This development would be detrimental, in particular for the developing world. Many Internet service providers would attempt to limit connections with destinations deemed not worth the cost of termination fees. Although local network operators could keep termination fees low, governments would be tempted in the short term goal of collecting revenues from high termination rates than on preserving the citizens’ ability to access foreign Internet content, according to the Center for Democracy and Technology. Instead of closing the digital divide by generating funds in developing countries as ETNO argues, the proposals would widen it, raising prices and depressing Internet use.
The negative fallout would be felt in Europe as well. The ETNO proposal would mean that European leaders’ ambition to create a vibrant Digital Single Market would be never come to fruition. A sending party might decide that certain markets were so attractive they would pay. It might also look at poorer, normally Eastern European markets, and decide that the prices demanded are not worth it. This would cement Europe’s east / west divide and even damage attempts to render the European Union more democratic by preventing information flowing through new media to citizens.
Upstart entrepreneurs and innovators everywhere would be harmed. The current Internet makes it possible for anyone, anywhere to reach the entire world. The smallest business in the furthest flung location suddenly finds itself at the center of the global marketplace. The ETNO model for the Internet would jeopardize this essential freedom. If networks serving local startups need to pay interconnect fees, they will have to charge substantially more for serving any business that generates a large and growing volume of requests for its content. Considerable rigidities would be injected into the flexible Internet system thus making innovation much harder both now and over the long term.
ETNO attempts to frame its proposal as innocuous, designed only to allow new deals with content makers – but nothing needs to change to allow those deals to be made. And there’s no sign that the interconnection market is failing or needs reform. Much more likely, is that the incumbent telcos want to use the authority of the ITU to force content providers to pay, so the telcos will increase their bargaining power at the expense of everyone else. ETNO claims that investment needs require this, but the cost of transmitting a gigabyte of traffic is one fiftieth what it was in 1997. The upshot? Established players will have their leadership cemented resulting in reinforced oligopolies.
Providers of popular online content and services already invest huge amounts of money to keep the networks running. Services such as YouTube and Facebook are provided free of charge. If they had to pay for access to the Net, consumers would suffer, but so would the next generation of Internet companies that do not have such deep pockets.
Even worse are the potential threats to Internet freedom. Some countries are seeking to include cybersecurity and cybercrime provisions into this treaty allowing the ITU to establish itself as the organizational home for international cybersecurity policymaking. Included within this could be broad new data privacy, spam, and child protection regulations that could be leveraged to quell free speech.
Other countries have proposed to move oversight or “control” of aspects of the Internet and Internet development from the non-governmental, multi-stakeholder mechanisms such as ICANN and replace them with the ITU. There is already a robust, multistakeholder system that does this work. Involving the ITU would create confusion and inefficiencies – and give some of the world’s most undemocratic regimes more control over the lives of everyone.
That of course is the most dangerous of all the risks, that countries can hide behind the cover of an ITU treaty obligation to justify censorship. If certain proposals for security and censorship are enshrined in a treaty, it makes it more difficult to attack those prohibitions through other international foras, like the World Trade Organization or through the Convention on Human Rights. We must fight ETNO’s proposals – and fight to keep the Internet free and open.
The above piece is co-authored by James Waterworth, CCIA VP and director of CCIA’s Brussel’s bureau.