‘Internet is working well. So why change it?’

Thomas K. Thomas Updated - October 11, 2012 at 09:38 PM.

Telephony is different from Internet and the accounting principles cannot be same. - Michael Kende, co-Head of Regulatory Sector, Analysys Mason

Michael Kende

A proposal to change an international treaty on telecom settlement rates has sparked off a global debate.

The International Telecommunications Union (ITU) will hold a conference in December to consider revisions to the International Telecommunications Regulations treaty, last revised in 1988, which led to the development of the current accounting rate regime that establishes how international operators compensate each other for terminating voice calls.

Some countries are seeking to impose this regime on Internet traffic, with the apparent purpose of providing additional revenues to increase the build-out of infrastructure in various types of markets. But those opposing are questioning the real motives.

Business Line spoke to Michael Kende, co-Head of the Regulatory Sector at the UK-based consultancy Analysys Mason, on the dynamics of the proposed change. Kende is an economist by training, with a Ph.D. from the Massachusetts Institute of Technology (MIT).

Why do you think some countries are pushing for this change?

This issue has come up in various forms since late 1990s. The proposals seem to be based on concerns about the digital divide between countries. But these are vague proposals and no one has said how they will do it. What we are saying is that the Internet is working well the way it is, so why change it. Telephony is different from Internet and the accounting principles cannot be same.

Is it an attempt by Governments to indirectly control Internet?

If you look at the totality of the different proposals being made that’s a plausible conclusion to arrive at. One of the proposals, for instance, is to have fewer gateways for routing Internet traffic globally which would make it easier to control it.

Some operators seem to support it as they want to get a share of the revenue so is there a strong lobby at work here?

The European Telecommunications Network Operators Association came up with the proposal that’s clearly aimed at content providers. But several others like Verizon and AT&T are worried about the bigger picture and want the Internet to be preserved in the current form. What we are saying is that commercial negotiations are working and there’s plenty of ways to address the issue. Why should Governments come into it and what would happen if they do?

So is it a case of Europe versus the US as there are also proposals to let ITU control the Internet rather than the US agency Internet Corporation for Assigned Names and Numbers (ICANN)?

The question is how effective can ITU be. There will no guarantee that it will be quick to address issues. You are really ceding the multi-stakeholder approach being followed by ICANN to an approach led by Governments, which may not be in the best interest of the Internet.

So you say that it should be left to the industry?

There are a lot of different issues. For issues such as interconnection, standards, accounting, you need to let it run as it is. But Governments have other concerns like taxation, hate speech, cyber security … these are all sovereignty issues and different governments can address these issues according to their standards. But every Government has to recognise that its decisions will be taken into account by the company when it makes investment decisions in a country. So the rules have to be made clear.

thomas.thomas@thehindu.co.in

Published on October 11, 2012 15:34