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WCIT Proposals Threaten Internet’s Disruptive Potential and Violate International Trade Commitments to Boot

· November 28, 2012

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As delegates from more than 190 countries converge on Dubai next week for the United Nations-sponsored World Conference on International Telecommunications (WCIT), the corps of representatives participating alongside them from both the telecommunications and Internet industries is a sign of just how central a role the dynamic between these two sectors will play at the proceedings.

The UN’s International Telecommunications Union (ITU) organized the meeting to significantly update its binding rules for the first time since 1988—a full seven years before the Internet was transferred to the commercial sector and before the WTO existed.  As those who follow disruptive competition know, a lot has happened since then and it is understandable the ITU would revisit rules designed for voice communications in a pre-Internet era.  Some see a raft of proposals on the table in Dubai as a way for telecommunications companies to more fully benefit from today’s data-driven economy; at the expense, critics say, of Internet companies and consumers in the form of increased regulation and access charges.

The debate over whether and how to regulate the Internet is not new, and WCIT is just the latest forum for long-running commercial and ideological disputes, including attempts to use regulation of commerce in favour of limiting speech that governments find uncomfortable.  There is a more straightforward and practical concern about the Dubai conference: Several proposals, if approved, would likely put member countries in violation of their existing international trade commitments.

As the role of the Internet has expanded, so have the agreements at the World Trade Organization and elsewhere that (however imperfectly) help protect it as a global driver of commerce and innovation despite its disruptive potential for established industries.  Yet some of the WCIT proposals would take the Internet in a very different direction, according to a study by two internationally respected experts on global telecommunications and trade policy. Released today, the report found that proposals designed to give the UN agency more control over the Internet would conflict with member countries’ current WTO trade obligations.

Study authors Rohan Samarajiva and Hosuk Lee-Makiyama show how attempts to foist access charges and other fees on the Internet would violate a binding WTO e-commerce agreement that forbids all member countries from imposing duties or equivalent fees on electronic transmissions. The report also found efforts to apply telecommunications sector accounting strategies and service definitions to the Internet industry would violate additional WTO member commitments—on top of slowing down the dynamism that has characterized the Internet ecosystem over the last two decades.

It is clear that, in drafting their proposals, many WCIT negotiators failed to adequately consider their trade commitments. They have taken an idea of telecommunications regulation and associated business models from the last century and attempted to apply them to the Internet. Those incumbents (like the members of ETNO) whose commercial models have been transformed – or, in some cases, made redundant – have a natural tendency to ask the rest of us to let them create rules that can bring their old models back into currency.

That’s not in our interest: as every revolution in technology has shown, you cannot go backwards, only forwards.  The steam engine created the Industrial Revolution and every aspect of society and the economy was transformed. It wasn’t always easy for society to deal with it, but it was worth the result. The Internet is our era’s steam engine. We must grab with both hands the opportunity it provides, accepting that the opportunity comes with a price – commercial and social change – and that everyone needs to learn to make the most of the opportunity, while accepting that some companies won’t.

The Internet has grown from a new, disruptive technology into a vital engine for global commerce that now underpins the entire economy.  Approval of problematic provisions at WCIT would be a recipe for international confusion, litigation and economic torpor with negative impacts far beyond the immediate victims, the technology industry. This is exactly why the ITRs do not need to apply to the Internet – and why any government that wants a piece of the 21st century digital economy should reject efforts to include the Internet in the outcome.

Nick Ashton-Hart is CCIA’s Geneva Representative.

European Union

DisCo is dedicated to examining technology and policy at a global scale.  Developments in the European Union play a considerable role in shaping both European and global technology markets.  EU regulations related to copyright, competition, privacy, innovation, and trade all affect the international development of technology and tech markets.