Future of the 'Net at Stake

What does it portend when the Information Technology & Innovation Foundation (ITIF) refers to an upcoming meeting as "The Gathering Storm"? It potentially means strong winds (of change) out of the East that could do more than shake trees in the U.S.

The International Telecommunications Union's treaty conference in Dubai that begins Dec. 3 includes a collection of proposals that could give such countries as China, Russia and some Arab states the power to impose Internet traffic taxes or inspect the contents of communications, both of which the U.S. sees as treaty dealbreakers. U.S. cable operators and content providers have much riding on it.

Cable operators have positioned themselves as leading Internet Service Providers. Anything that adds cost to using bandwidth- as the new platform for delivering not only data and Internet content but, increasingly, TV everywhere-affects the value of the platform they are positioned to capitalize on.

"At a minimum, the uncertainty created by the talk of adding an international layer of regulations onto the Internet disrupts business and engineering decisions," says FCC commissioner Robert McDowell, who is a member of the U.S. delegation to Dubai. "It's difficult to plan investments and innovation if you think you'll have to ask international bureaucrats for permission first. Also, if these pro-regulation ideas gain steam, look for the economics of the Internet business environment to produce higher prices for ISPs, content and application providers alike. Uncertainty never decreases costs."

Among the proposals being offered up in advance of the conference: a mandatory "sender pays" model that could create a tax on Internet traffic used to replace dwindling revenues from payments for the exchange of traditional telephone traffic.

"We're still at a very early stage in the Internet's development, and it would be an enormous shame if it were prevented from reaching its potential by the imposition of unneeded regulations spurred on by nations with narrow, self-interested agendas," says ITIF senior research fellow Richard Bennett. (The ITIF board is made up of academics, computer companies and analysts.)

The National Cable & Telecommunications Association had no comment on the recent proposals, but it is solidly behind the Congress' resolution, passed last summer, opposing a more ITU-centric model of Internet governance. The resolution, the NCTA said, "sends a strong and clear message that the United Nations and International Telecommunications Union should cease efforts to assert and impose unprecedented governmental regulation over the Internet."

The good news, according to a variety of sources, is that some European countries have backed off their proposal of a senderpays mandate, which would charge companies like Google for sending traffic, and content, over the Internet. The bad news is that some other countries-India, for instance-have picked up on the idea. Then there is the cybersecurity issue, which has emboldened Russia, China and others to push for greater government control over the Web in the name of security.

The ITU's inspector general has said recently that the conference is not about taking over the Internet. But the U.S. is expected to take a trust-but-verify approach to those assertions.

Last week, the U.S. and Canada proposed that the conference first deal with the threshold questions relating to broadband before getting into any of the nuts and bolts of the treaties.

E-mail comments to jeggerton@nbmedia.com and follow him on Twitter: @eggerton

John Eggerton

Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.