Countries Look to International Telecom Traffic for Investment Boost
GENEVA -- A proposed voluntary premium on international telecom traffic aims to help bridge the digital divide by extending networks in developing countries. The U.S. and a group of mostly industrialized countries oppose new measures, which were proposed by a group of developing countries.
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The proposal for a premium on the termination charge for traffic from developed countries was included in a resolution proposed at the 2008 World Telecommunication Standardization Assembly. The U.S. and 19 of the 100 countries at the WTSA opposed the resolution on “network externalities.” Eight others expressed concerns. The assembly called for further study in the ITU-T study group on accounting principles and policy issues. A “network externality” relates to the benefits of adding users to a network, the resolution said. “The bigger the network, the more beneficial it is to both existing and potential users,” it said.
An “externalities premium for network expansion may generate expanded network and additional traffic which increase benefits of developing and developed countries’ subscribers and telecommunication operators,” according to the South Korean proposal. A common understanding is now needed to apply the network externalities concept and to deal with concerns, South Korea said. Studies are being done on formulas, models and guidelines for determining the actual value of any premium, how it should be collected, shared, distributed, and used, and its impact on the concerned operators, the resolution said. The proceeds would be “used exclusively for extending networks in developing countries,” including education campaigns, it said.
The compatibility of competition and universal service obligations is boosted “if the cost of the universal service obligation were shared on some equitable basis between the operator discharging it and competitors,” according to a report on regulating telecom services prepared for the group by Martin Cave, director of the Warwick Business School Center for Management under Regulation.
The sharing proposal triggered general discussion on how to estimate and divide the cost, Cave said, citing governments and regulatory agencies that have adopted ways to estimate the cost and in some cases institutional arrangements for sharing them. “A limited amount of revenue raised either in the form … of a percentage of operators’ revenue or of a tax on particular services, such as interconnection, traded at the wholesale level … is then distributed to ensure that the universal service obligation is satisfied,” Cave said.
Australia wants future studies on network externalities to take into account traffic levels, the potential for new business, the number of developing country immigrants in developed countries and languages spoken, according to a proposal from the Australian Department of Broadband, Communications and the Digital Economy.
Reflecting on established best practices may better inform the study group about network externalities and international Internet connectivity, the U.S. Department of State said in a filing. Various mechanisms are used to spur development and investment in communications facilities, the U.S. said, citing favorable regulatory environments, universal access policies, competition, telecom market access, low equipment tariffs, financing tools and other measures. Experts agree on no single approach, the U.S. said.