Mike Masnick strongly opposed the ITU working to keep patent costs down. Mike has done standout reporting on the expensive absurdity of the patent system and many other issues. Mike is being consistent with his belief, “It’s often best for innovation if regulators stay the hell away from innovative industries.” On this, I have to disagree with him. I believe monopolies, including those created by standards, need rigorous oversight to prevent abuse. On Mike’s Techdirt, I posted
“sender pays/termination charge/enhanced quality of service… fails.” ETNO – the big European telcos – wants a share of online video revenue. Deutsche Telekom and France Telecom, like most Euro telcos, are struggling because landline voice is disappearing and they still haven’t adjusted to competition. Earnings at both are below the dividends they pay. They are looking for revenue wherever they might find it.
Vint Cerf has been following this issue since Dave Farber and Vint’s partner Bob Kahn created the first Internet peering arrangement. He made some comments on an Internet Society list and I asked if he’d explain his point of view on the record. He responded:
“Sustainability is essential for the Internet’s continued utility. That means that all its costs need to be paid for. This does not necessarily dictate any particular business model and one can find many in the loosely-coupled Internet ecology. ETNO has proposed that application service providers pay ISPs everywhere in the world for ‘better service delivery’ for users of Internet access provision.
It is generally the case, in the Internet, that all users (including application service providers) arrange for access to the Internet. Essentially the users (and I apply this term to application providers also) get access to the Internet under local terms and conditions and then proceed to use the Internet for whatever purpose suits their interests. ETNO seems to want to return to the ‘sender pays/termination charge’ model of the past. Recently, it has introduced a variant in which the “sender” pays for ‘enhanced quality of service.’
This notion fails on two counts. First, it suggests that the income from users paying for local access is insufficient to compensate for the cost of providing access. The obvious solution is NOT to charge every source of traffic on the global Internet. Rather, local costs should be reflected in access prices (possibly modified by local subsidy decisions). Second, it implies that the “ordinary” service isn’t good enough quality and that the traffic sources should pay (every access provider) for “enhanced quality of service.”
The shadow of “monetizing scarcity” looms in such proposals. Taken to an extreme, costs for every user and application provider would rise in such a model. In the Internet, demand is driven by the users on the receiving side. Since the Internet operates in a symmetric way, both sides have an obligation to defray local access costs and the intervening networks need to work out bilateral interconnection agreements.
Old business models and the companies that revolve around them are often challenged by new technology. Darwin was right, there are only two choices: adapt or die.”
Personally, I don’t think Deutsche Telekom or France Telecom is going to die. But the solution isn’t to tax the net. First step is to follow Telefonica and sale off some corporate jets.
The Right Question: What Should We Do, Internationally, for the Billions Not Online
Imagine how much more effective the U.S. lobbying at the ITU would be if we had a concrete plan for connecting the 4 billion people without broadband.
Marc Cooper at the Columbia CITI event confronted the nay-sayers who believe ITU and WCIT essentially shouldn’t do anything. We all know getting governments involved can muck things up, but is doing nothing a viable alternative?
“We hear about this incredibly successful space. Last century, the PSTN was a complete disaster for 80% of the people on this planet. 84% of the people on this planet do not have broadband. They have been left behind. They don’t want to regulate the Internet. They want to participate. The economics won’t get to these people in the timeframe they want. What are we going to do with it in the international space?” Marc, a tireless advocate, startled me with this. It’s so obvious, but hasn’t been part of the discussion.
Should we have a Marshall Plan or Kennedy-style Alliance for Progress? Instead of saying what not to do, can we demonstrate some American ideas that could really make a difference? Can corporations like AT&T and Google taking such strong positions “against” find positive contributions they can make?
Ambassador Terry Kramer currently is Dr. No, shooting down the substance of the ITU advances. That puts him in a dark corner of “non-negotiable” demands. NTIA Director Strickling’s comment “We will not accept,” is dangerous. Does the U.S. want to cut itself off from an International consensus on the Internet?
Here’s some ideas:
Five years ago, U.S. asserted ITU is not just telephone. Ambassador David Gross led U.S. information policy in 2006 when he said “One of the great things about the I.T.U. is it has changed over the years, from telegraph to telephone to Internet. We don’t want a major international institution to become obsolete just because it couldn’t change as the world changes,” to the NY Times. Today, he’s a private lawyer leading the charge at WCIT to prevent ITU having any influence over the Internet. He’s funded, I believe, by giant Internet companies and articulates their position very effectively.
“Everyone but the U.S. thinks ICT – Information and communications technology. Only in the U.S. are telecommunications and information kept so separate,” Columbia Professor Eli Noam told me several years ago outside a political context. Noam is the world’s leading public intellectual in the field. . His opinion is widely shared. Both the BBC and China Daily in recent articles describe ITU as the U.N. agency for the Internet. Matthias Kurth, the German regulator who nearly defeated Touré for ITU Secretary General, agreed in his campaign material the ITU mandate covered the Internet.
“ITU is the ideal body to organize a worldwide transfer of knowledge and expertise in advanced information and communication technologies. I would initiate, for example, guidelines and principles to enhance the goal of supporting the most cost-efficient technologies for broadband access, in order to boost their worldwide penetration.”
Change is not good. Terry Kramer is too nice a guy to call “Dr. No,” but that was my earlier headline after listening to his press call and reading his speeches. With the exception of more power to the companies in rate negotiations, the U.S. positions amount to “no substantive change.”
The U.S. is going to WCIT with “non-negotiable demands,” ensuring a difficult negotiation. ITU SG Touré repeated at Columbia September 23 his intent to decide everything by consensus, virtually giving the U.S. a veto. Touré and a large majority of the delegates believe improvements can be made, that we are not “in the best of all possible worlds.” The tension is intense at every meeting.
In his own words, here’s the positions of Ambassador Kramer. He has five key principles:
- Minimal changes to the preamble of the ITRs;
- Alignment of the definitions in the ITRs with those in the ITU Constitution and Convention, including no change to the definitions of telecommunications and international telecommunications service;
- Maintaining the voluntary nature of compliance with ITU-T Recommendations;
- Continuing to apply the ITRs only to recognized operating agencies or RoAs; i.e., the ITRs’ scope should not be expanded to address other operating agencies that are not involved in the provision of authorized or licensed international telecommunications services to the public; and
- Revisions of Article 6 to affirm the role played by market competition and commercially negotiated agreements for exchanging international telecommunication traffic.
and here’s the full speech, as prepared to deliver to the SAMENA event.
Who to ask: Deutsche Telekom, France Telecom, ETNO, ITU and anyone who claims that video requires expensive QOS networks.
Accurate answer: Almost never on major wired networks. Best efforts telco networks are generally designed to rarely go over 80% of capacity, per Bell Canada to CRTC. Cablecos may suffer a little more from congestion, but Jason Livingood of Comcast says that even in the worst congestion, speeds don’t go down more than a third. Bandwidth isn’t free, but it’s cheap enough to have plenty of bandwidth for all but Katrina or 9/11 sized emergencies. The results on wireless is less clear, but generally there is far less congestion than the press reports suggest.
Why it matters: The Euro big telcos are spending millions to lobby for the “Google tax,” a charge on all video going over the net. They claim that’s necessary because they need to spend billions to upgrade their networks. They want Daily Motion, Google, Amazon and Netflix to pay for special “Quality of Service” delivery. That’s b___. Even HD video can look great at 3 megabits and below, with the new H.265/HEVC about to halve that. Video comes across fine on any reasonable “best efforts” network.
The Euro telcos, working through their ETNO trade association, are repeating everywhere the false claim their networks suck and can’t carry video. Video traffic is growing at a rapid rate, but the total cost of bandwidth at major carriers is flat to down. The gear needed – primarily switches and routers – is becoming rapidly cheaper because of Moore’s Law. People who don’t understand networks are often persuaded telcos need more money because traffic is growing, but everyone informed knows that’s not so. Politicians like Neelie Kroes and the folks at ITU make sympathetic noises but I believe actually know the argument is unsupportable.
The big telcos have major profit problems. Telefonica and France Telecom have had to cut dividends and Merrill Lynch has called on Deutsche Telekom to do the same. Telefonica has even cut top executive salaries. Landline voice, once among the most profitable products in the world, is in inexorable decline. For most of the last decade, broadband growth compensated. But broadband is near saturation so has little room for growth. So they want to tax the Internet to keep dividends and the stock price up.
Common sense confirmation: 22M Netflix users can easily watch HD. On Jennie’s 3 megabit Verizon DSL, The Tudors looks great in on a 50″ TV. I wouldn’t have believed it if I hadn’t seen it myself. Buffering artifacts are very rare, and most problems turn out to be the home wireless connection, not the broadband line.
Common sense confirmation #2: Nowhere in the warld has any broadband carrier found it profitable to offer a QOS enabled offering for consumer broadband. No one wants or needs it.
Looking for civil society support at ITU. “The USG did reach out to us and that is good,” Rashmi Rangnath of Public Knowledge emails. “They are certainly interested in hearing what we have to say.” Another key D.C. public interest group confirmed to me State was reaching out to them as well.
AT ITU and WCIT discussions, the U.S. “multi-stakeholder” model is just a veneer on corporate interests. A Verizon lobbyist sits on the board of ISOC, where’s he joined by a Comcast engineer; Comcast went to court to oppose even the very weak U.S. neutrality rules and led a massive lobbying campaign against neutrality. Another Verizon lobbyist is on the official U.S. delegation to WTPF. The U.S. ITAC until recently had dozens of corporate representatives and essentially no one from civil society.
Terry Kramer, the head of the U.S. delegation to WCIT comes from Vodafone/Verizon. The State Department lead, Ambassador Phil Verveer, is a former Verizon/AT&T/USTA lawyer, although Verveer is rumored to be a lame duck these days. His telco ties certainly didn’t hurt his chances for the job. Probably more important was that he and his wife were friends since college with Bill and Secretary of State Hillary Clinton.
Join me and make a difference. 303,000,000 Americans have just been offered access to the notoriously secret ITU WCIT documents. Just join ITAC, the State Department International Telecommunications Advisory Committee, and enjoy access. “It takes a simple email with a request to be placed on the ITAC listserv, based on some material interest in a given topic,” Paul Najarian of State writes. Simply send an email to join [email protected]
Uncle Sam wants you, as Ambassador Terry Kramer makes clear below and confirmed to me in a brief phone call. “We welcome all interested stakeholders to participate in our WCITpreparatory process and help the U.S. Government form positions in advance of the conference. We solicit this input and feedback through the United States International Telecommunications Advisory Committee (ITAC).” His colleague, Ambassador Phil Verveer testified to Congress, that ITAC is “open to all interested parties to review and advise on the regional and national contributions to WCIT as they are submitted.”
To my amazement, the discussions are substantive.
Touré working to allow participation. The October 10th Geneva event on “Innovation-stifling use of intellectual property” is open to “any individual or company from a country which is a member of ITU who wishes to contribute to the work,” spokesperson Sarah Parkes writes me. Dr. Touré’s initiative to open all the WCIT proceedings was defeated, although some key documents are being made public. “Participation is open to ITU Member States, ITU Sector Members, Associates and Academic Institutions and to any individual or company from a country which is a member of ITU who wishes to contribute to the work. The event is free of charge but no fellowships will be granted. Follow-up enquiries should apparently be addressed to [email protected]” I asked about the role of civil society because the press release (below) spoke only of “a high-level roundtable discussion between standards organizations, key industry players and government officials.” Geneva hotels are expensive, so those without corporate sponsors might consider the hostels, which are remarkably clean. An advantage to the city is that chocolate is considered a food group and occupies a whole isle in the last store I visited. Glad to see more evidence the ITU is opening up. This is an important issue.
Here’s the original release.
Despite government doubts, Touré looking to open. Credible rumors are that several countries will release all the WCIT documents even if the ITU Council refused to do so. This is a smart move to defang opposition to the WCIT treaty, coming in force from both right and left in the United States. Opposing a powerful treaty being conceived behind closed doors is easy for anyone. It will be far harder to rally support against the actual provisions, nearly all of which are cloaked in obscure diplomatic language. Most will be so abstract no one can be sure what they mean or why to oppose them. Few will read all the documents because they are incredibly boring.
Sarah Parkes of ITU emailed me “all Member States are free to publish any documents they see fit as part of their national consultation process.” Emphasis in the original. She added “all ITU members have always been free to share any of the WCIT docs as part of their own consultation process, entirely as they see fit.” more, including the ITU release