EU Telcos To UN Regulators: Divert More Money Our Way And No One's Internet Gets Hurt

from the unfortunate dept

Back in June, we wrote about the European Telecommunications Network Operators Association (ETNO) and its "proposal" to basically tax the internet, which they're hoping the ITU will adopt later this year. The thinking here is not hard to figure out. These are old school (either state run or formerly state run) telco monopolies not used to having to compete or innovate. They look at the success of various internet companies, and get jealous and -- like the big entertainment legacy players -- start thinking "hey, some of that should be my money -- this is unfair!" And, so they come up with schemes and proposals like this -- trying to effectively get regulators to force a revenue shift from those companies that innovated and found business models that work, over to the lazy telcos who sat back, fat and happy with their monopoly, refusing to innovate. It reminds me of Andy Kessler's description of companies that create value vs. those that lock up value. One goes out and builds something new that the market wants... and the other runs to the government and asks them to put in place policies that divert revenue to them.

With that in mind, check out ETNO's latest proposal from ETNO for the ITU to consider (pdf) later this year. And you notice all sorts of questionable claims, all designed to basically say: we haven't adapted, and so regulators need to force money from actual innovators into our bank accounts:

The telecommunications market and the telecoms industry as a whole is undergoing a fundamental shift. Catalysed by the availability of higher bandwidth connectivity, new applications and services are being enabled that go far beyond the traditional services of voice calling. In both the consumer and enterprise segments, services such as Voice over IP (VoIP), social networking, instant messaging and the rise of ‘apps’ have changed the way customers use their mobile and fixed connections. This development is significant and telecoms operators need to adapt and rebalance their tariff structure between voice and data services.

While broadband definitely is a key "catalyst" note how they set this up so that they can claim that it's really all about them... and then how the "tariff structure" needs to be "rebalanced." It's not about how they need to rethink their own business models or innovate or anything along those lines. It's about asking regulators to divert money that others are making to them.

The aim of the ETNO proposal is to contribute to the achievement of a more sustainable model for the Internet. ETNO is not asking for increased regulatory intervention but aims to establish a reference for commercial negotiations. The current interconnection model has some shortcomings that need to be addressed. Today there is a huge disproportion amongst revenues and a clear shift of value towards players (Over the Top players -- OTT) who are not contributing to network investment. Traffic and revenue flows need to be realigned in order to assure the economic viability of infrastructure investment and the sustainability of the whole ecosystem. The revision of the ITRs offers a unique opportunity to propose high‐level principles for IP interconnection.

Yup. "More sustainable" means "more money to the telcos." "Disproportion amongst revenues and a clear shift" towards online service providers is basically "the folks providing the services that make our connections valuable are making more money than we'd like, and we deserve some of that." And the idea that they're "not contributing to network investment" is a red herring. The big internet companies pay a ton for the bandwidth they use. And that money goes to the telcos. If they're not investing it in their networks, then perhaps they should explore why. Any time you hear a company say that "traffic and revenue flows need to be realigned in order to assure the economic viability," you know you're dealing with a company (or industry) that has failed to adapt and is asking the government to bail them out by taking money from those who did adapt. To claim that this isn't asking for regulatory intervention is laughable, since the whole process is one giant regulatory intervention. If this was just about commercial negotiations, this wouldn't be an issue. They'd just go out and negotiate.

ETNO believes that the revised ITRs should acknowledge the challenges of the new Internet economy and the principles that fair compensation is received for carried traffic and operators’ revenues should not be disconnected from the investment needs caused by rapid Internet traffic growth. The ITRs should be flexible enough so as to further encourage future growth and the sustainable development of telecoms markets, while respecting the guiding principles that led to the successful development of the Internet: private sector leadership, independent multi‐stakeholder governance and commercial agreements. ETNO is certainly not asking for any change to the current Internet Governance model which is based on private sector leadership and multi‐stakeholder dialogue.

Whenever a company is asking regulators for "fair compensation," it's basically them saying "our business model is flopping due to changes in the market, and we need you to prop us up." If ETNO really isn't asking for a change in the current internet governance model, then, um, why is it asking regulators to "rebalance" things and change who gets what cut of the revenue?

ETNO wants to avoid decisions that would prevent new business models from emerging or that would hamper differentiated offers, hence limiting consumer choice. The risk of undesirable economic and technical regulation of operator rates, terms and conditions will be much higher if the development of the Internet continues to be jeopardized by the lack of sustainability and/or by the lack of end‐customer satisfaction.

ETNO members have reiterated on many occasions their commitment to an open Internet and to continue enabling consumers to access services and applications of their choice as well as being completely transparent about terms, conditions and limitations. As recognized by the European Commission, operators should not be prevented from developing differentiated offers based on customer needs, in addition to the best effort Internet. It is important to note that nobody will be cut off from the Internet as the best effort Internet will continue to exist and to evolve. New business models based on differentiated offers will ultimately create more choice for consumers.

This is very close to "nice internet system you got there... you wouldn't want anything to, you know, happen, to it, now would you?" Basically, if regulators don't divert more money from successful internet companies to lazy telco monopolists, well, then we might just have to "jeopardize" the network.

There's a lot more like that in there. They're trying very, very carefully to use the language of "internet freedom" and innovation, in order to then explain why the ITU should put in place a proposal that effective forces local regulators to divert money from the companies who innovate, to the lazy monopolists. This is one of the reasons why so many folks interested in keeping the internet truly free and open are quite concerned about ETNO's proposal. It's not designed to benefit the internet or to encourage innovation. It's just designed to divert money from those who innovate to the telcos who haven't had to innovate.

Filed Under: etno, europe, innovation, internet, internet governance, itu, money, regulators, telcos

The Battle For Net Neutrality Flares Up Again: But Which Countries Still Have It?

from the time-to-check dept

Net Neutrality has suddenly become a hot topic again. Partly, that's thanks to some awful ideas about regulating the Internet coming from the International Telecommunication Union, notably those proposed by the ETNO -- the European Telecommunications Network Operators Association -- discussed recently on Techdirt. New information from WCITLeaks Wikileaks (found via the Net neutrality in Europe site) provides us with the following details (pdf):

To ensure more efficient use of networks and to allow for new business models better reflecting future demand, Member States should support a new IP interconnection ecosystem that provides both, best effort delivery and end-to-end Quality of Service delivery. Delivery based on QoS allows for management of the IP traffic according to its characteristics (i.e. delivery requirements and acknowledged value) thus supporting innovation to provide a value-added service, making better use of the assets of telecommunications operators.

That may sound innocuous enough, but "supporting innovation to provide a value-added service" is a coded way of saying that the telcos should be allowed to abandon net neutrality, something confirmed in one of the accompanying proposals, which reads:

Art. 4
International Telecommunication Services
4.4 Operating Agencies shall cooperate in the development of international IP interconnections providing both, best effort delivery and end to end quality of service delivery. Best effort delivery should continue to form the basis of international IP traffic exchange. Nothing shall preclude commercial agreements with differentiated quality of service delivery to develop.

The key sentence is the last one: "differentiated quality of service delivery" means ignoring net neutrality.

That proposal to move away from net neutrality contrasts with the Netherlands' decision to enshrine it in law:

The net neutrality law prohibits internet providers from interfering with the traffic of their users. The law allows for traffic management in case of congestion and for network security, as long as these measures serve the interests of the internet user. A technical error in the law might still be corrected in a vote on 15 May. [It was.]

In addition, the law includes an anti-wiretapping provision, restricting internetproviders from using invasive wiretapping technologies, such as deep packet inspection (DPI). They may only do so under limited circumstances, or with explicit consent of the user, which the user may withdraw at any time. The use of DPI gained much attention when KPN admitted that it analysed the traffic of its users to gather information on the use of certain apps. The law allows for wiretapping with a warrant.

DPI is one of the most intrusive ways of undermining net neutrality, since it involves looking inside the data part of an IP packet, not just the header, which contains basic information such as source and destination IP addresses. A recent study from a team at the Syracuse University School of Information Studies has explored the use of DPI to throttle BitTorrent connections:

In order to better understand DPI use and the scope of its deployment, the project makes use of crowdsourced data from a network monitoring test known as Glasnost. An Internet user who runs the Glasnost test can see whether BitTorrent is completely blocked by their ISP, slowed down (throttled), or running normally.

The results for various countries are available as graphs of ISP throttling against time, and show the wide variation in BitTorrent throttling -- and hence the extent to which net neutrality is preserved around the world and by different Internet service providers.

The good news:

BitTorrent throttling by most US ISPs ceased after an FCC ruling in August 2008 that declared Comcast’s actions to be against its 2005 Internet Policy Statement. Only wireless ISPs Clearwire and Hughes showed high levels of BitTorrent manipulation after August 2008, but Clearwire substantially reduced it in 2009. But the Comcast Order was reversed by the courts in April 2010. This data shows that no US ISPs have increased their use of DPI-based throttling since April 2010, despite the absence of any network neutrality regulation in the US.

And the bad news:

The UK is one of the few countries where BitTorrent manipulation appears to be on the rise. DPI measurements for the BT Group in particular increased progressively throughout the 3-year period. Talk Talk’s use of it seems to have declined, but it is still consistently above the threshold indicating some form of manipulation. Test results for O2 UK move erratically slightly above and below the error threshold, making any conclusion difficult. Virgin Media, on the other hand, seems to have altered its policy and increased DPI-based intervention in the 4th quarter of 2010.

At a time when much of the debate about net neutrality is driven by dogma, it's particularly valuable to have some objective data on what's really happening. It's worrying that it turns out that net neutrality has been under assault in some countries for a while -- and disturbing that ETNO wants to intensify that attack still further.

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Filed Under: deep packet inspection, etno, europe, itu, net neutrality, united nations