ITU Treaty Revisions May Take Aim at High Cost of Internet Connectivity in Developing Countries

The question before the conference is how best to revise the ITRs to spur the availability of information and communications technology for everyone on the planet, Toure said. WCIT “will be the catalyst for the free flow of information,” he said. Submissions on possible revisions to the ITRs were aired during eight sessions of the working group over about 30 months, but have not yet been made to the conference. The group tallied the submissions, which ITU’s membership will use as “a basis” for proposals to the conference, said Malcolm Johnson, director of the Telecommunication Standardization Bureau. Regional group meetings are still planned to agree on common proposals, Johnson said.

Many of the recent public concerns were raised when the regulations were last updated in 1988, Toure said. The concerns were “unwarranted,” he said. The framework that emerged from the 1988 conference “enabled the spectacular growth” of telecoms, “including the Internet,” he said. The 1988 conference “set the stage for the information society,” he said. The 2012 conference “will set the stage for the knowledge society,” he said.

The treaty provisions are considered “not quite up to date” and needing modernization, said Richard Hill, ITU counselor to the Council working group. He referred to market liberalization, privatization, the rise of mobile telephony, and the convergence and voice, data and video. The transmission control and Internet protocols are used for everything today, including the transmission of voice traffic, he said. The shift from fixed to mobile, and from voice to data are new drivers of telecom revenue and traffic, he said. “We need to adapt to that,” he said. Telecom accounts for 3 percent of global gross domestic product, Hill said, and a much higher percentage, up to 10 to 15 percent of GDP in some developing countries.

There seems to be “considerable support” among ITU members for including “high level, technology neutral principles” in the ITRs, Toure said. Those principles would also have a “positive impact” on the Internet because it should “favor its further growth,” he said. The new treaty should address “very light touch” regulatory issues to spur competition, liberalization and innovation, and reduce costs and address security issues, he said.

Industry has said data volume is rising “much faster” than networks’ ability to carry it, Toure said. As data volume increases, “unit prices are declining,” he said. Total revenues for telecom operators “are potentially at risk,” he said. An investment shortfall is “a risk,” he said. Some have said there is a need to address the “disconnect between sources of revenue and sources of costs,” he said. The existing international regulatory framework “is simply not equipped to deal with these challenges,” he said.

Some say the conference shouldn’t address costs, Toure said. Everybody knows the cost of Internet connectivity in most developing countries is “too high,” he said. Many consumers think international mobile roaming prices are “too high,” he said. Discussing the matters at the conference “would seem fully appropriate” to bring down costs in developing countries, while ensuring operators have sufficient revenue to build networks, he said. The conference is “an opportunity” to create a regulatory framework “to allow the market to flourish” globally, he said. The issues on the table are “vital” to the creation of a “fully inclusive knowledge society,” he said.

The key proposals during the eight meetings can be summarized in broad categories, Hill said. None of the proposals are agreed, he said. He referred to proposals on international roaming, misuse of numbering resources, consumer fraud, avoiding double taxation and reducing the tax burden for telecom, transparency of routing, some general principles on economic issues, differentiated traffic management, and improving cooperation on cybersecurity and combating spam. His presentation also included “enforcement measures, including possible binding effect of certain ITU recommendations."

Some proposals on mobile roaming call for more price transparency for users, Hill said. The GSM Association just announced an initiative along those lines, he said. A second approach asks “what should the price levels be,” he said. The proposals are to put the matter into a treaty “because it has a somewhat different effect” than just recommendations, he said referring to recommendations in the ITU-T and the Organization for Economic Co-operation and Development.

Other proposals aim to prevent the misuse and hijacking of numbering resources, Hill said. Industry has said numbering misuse is a key factor in fraud against both operators and consumers, he said. Other proposals try to prevent double taxation, he said, or discourage excessive taxation or to encourage lower taxes. Other proposals deal with general principles, not just for roaming, Hill said. He referred to transparency of prices, cost orientation, “presumably” to include a return on investment, taxes, creation of reserves for future, risk premiums, in addition to the normal operating costs.

Other proposals on general principles aim to continue to spur investment in high bandwidth networks, Hill said, referring to a needed adequate return on investment, and, as some have proposed, compensation for traffic carried and traffic terminated. The “rather delicate” proposals have raised “significant discussion,” he said.

There “are no proposals” to give ITU some “overall worldwide regulatory authority,” Hill said. The proposals are for individual countries to take action, he said. Proposals on mobile roaming, for instance, don’t call for someone in Geneva to judge the cost of mobile roaming in a certain county, he said. The suggestion is for national authorities in those countries to look at mobile roaming rates to make sure they're reasonable, he said.

Late submissions to the working group dealt with new issues, Johnson said. He referred to combating climate change, encouraging more energy efficient standards, combating e-waste, and ensuring telecom services are accessible to persons with disabilities.

Toure said he will bring a civil society request for access to the working group’s documents, including access to future draft versions of the future ITRs, to a July meeting of the ITU Council. He will also ask Council to let ITU hold an “open consultation” on the ITRs that would be open to everyone with a stake. Council will make the final decision, he said.