To understand what is really happening at the International Telecommunication Union’s WCIT, one must return to an old question: is the Internet “telecommunications” or is it something else? That seemingly obscure definitional question has been at the center of communication and information policy since the mid-1960s and it – not a “UN takeover of the Internet” – should be the point of departure for understanding WCIT.
More than 50 years ago, the U.S. Federal Communications Commission decided that basic telecommunications (which in the 1960s-70s was dominated by the AT&T monopoly) needed to be strictly regulated, while “enhanced” services (i.e., the emerging networked computer services industry that relied on the public telephone network) needed to be opened up and deregulated. To facilitate this policy goal, the FCC created a regulatory distinction between “basic” and “enhanced” services. Telecommunication was straight transmission of signals while “enhanced service” added some “information processing” to telecommunications transmission.
At that time traditional telecommunication (layers 1 physical and 2 data link of the OSI model of data communications), was provided by highly restrictive, protected and usually state-owned monopolies known as PTTs (postal, telephone and telegraph monopolies). By placing information services in a separate regulatory/legal category, information service providers could (when other countries agreed) ride unmolested on that telecommunications infrastructure, without being subject to all the entry restrictions and gatekeeping regulations of the telephone companies and/or their governments. During the 1980s and 1990s, many countries were more than happy to open up that tiny “information services” market a bit in exchange for continued protection of their gigantic voice telephony markets from foreign competition.
The separation of “telecommunications” and “information services” paved the way for an open, economically and politically free Internet. Internet protocol was basically software, and thus could be considered an “information processing” or “enhanced” service. And so when the Internet went viral in the early 1990s, it spread like rhizomes into the global path cleared for it by the international deregulation of information services.
From the 1980s on, layer 1-2 telecommunications services were liberalized as well. New competitors were allowed to enter the market worldwide. The public infrastructure became more diverse. State-owned PTTs were privatized. Many prices and features were deregulated. Mobile networks became substitutes for fixed networks. As the industry became more diverse and competitive, maintaining a clear, simple distinction between telecommunications and information services became complicated. The combination of Moore’s law and expanding bandwidth allowed the application layer to provide services “over the top” that were substitutes for the offerings of traditional telecommunications and broadcasting networks, such as Internet telephony (VoIP), video streaming, or instant messaging. Instead of a single monopoly platform hosting thousands of services, we got multiple telecom platforms with multiple services. It was difficult if not impossible to keep the service providers out of telecom platforms – and vice-versa.
The ensuing debate between those favoring a free market, contractually-based, deregulated Internet model and those who wanted regulators to preserve the Internet of the 1990s by treating ISPs as regulated common carriers turned – once again – on the telecommunications-information distinction. The distinction was reaffirmed in 2005, when the U.S. Supreme Court upheld the Powell FCC’s classification of cable modem Internet as an “information service.” Net neutrality advocates in the U.S. hated that decision, because classifying ISPs as “information services” instead of “telecommunications” released them from common carrier-style regulation. But it did keep network operators exempt from many potentially debilitating forms of political and regulatory intervention, especially around interconnection arrangements.
So what does all this have to do with the WCIT and the ITRs? It is this: the ITU’s attempt to update the International Telecommunication Regulations (ITRs) is a new attempt to negotiate the boundaries between telecommunications and information services. Just as in the Brand X case, if certain things are defined as telecommunication they can be subject to certain (in this case, weak) forms of control under international regulations designed to support traditional telecommunications. The targets of most ITR amendments are the interconnection arrangements among ISPs. Because it comes from the ITU, this effort is driven in large part by the interests of foreign telecommunication incumbents and by developing country administrations who feel bypassed or marginalized by the burgeoning Internet economy at layer 4 and above. In that respect, it is somewhat reactionary and threatening.
But it would be wrong, and a bit silly, to talk about the ITU “taking over” the Internet. It is, rather, the Internet that is taking over the world of telecommunications, setting more and more of the terms and conditions under which the ITU and its operating entities function. The Internet-based services’ growth in revenue has far outstripped that of the telecommunication operators. A fabulous new economy has emerged on top of the telecommunications platform.
The issue is primarily the economics of interconnection; i.e., the revenue sharing (or lack thereof) involved in taking and sending traffic. It is not in the slightest about taking over the IETF, ICANN or IP address registration. WCIT is also a clash between a transnational regime based largely on privately negotiated contracts and the permissionless service provision created by a globally interoperable, distance-insensitive Internet protocol, and the nation-state system of hierarchical regulation and bordered gatekeeping which was built up around telephone companies. The most important battleground in the WCIT is not censorship or security, but interconnection and the flows of funds among carriers attendant upon interconnection agreements. If you want national regulatory authorities to have more collective control over ISPs generally, and American ISPs and Internet services specifically, you should support the WCIT effort.
The ITU and its members are, as usual, in reaction mode, a step behind. The current ITRs were defined in 1988, before the public internet as we know it even existed. They have numerous archaic references. They still talk about telex, for example. If you think there should be ITRs at all, it is absurd not to update them. But that raises an interesting question that no one else seems to be asking: should there be ITRs at all? Why do we need them?
The existence of treaty-based telecommunication regulations administered by an intergovernmental organization made sense in a world where telecommunications were provided by state-owned monopolies. Negotiating telecommunication interconnection across national authorities was very much like negotiating a mutual passport/visa recognition agreement. Also, many governments had their own incompatible technical standards and a single, national telecommunication standards body as well, so having an intergovernmental organization around to negotiate international compatibility made sense.
The world of the Internet is very different. It is a world of liberalized trade in services, of transnational services and corporation, of dozens if not hundreds of private-sector voluntary technical standards forums, a world of multiple, competing private network operating entities, most of them no longer state-owned, and millions of Internet-based services riding on and crossing over those multiple platforms. So why are we treating governance of this sector as something that should be happening through treaty negotiations among governments?
Why do we need a special set of international telecom regulations at all? Every country has its own national regulations regarding interconnection, privacy, antitrust, consumer protection, and so on; compatibility across platforms and services is much easier technically than it was in 1930 and tends to get worked out in the market. International telecommunications is a form of trade in services, and the WTO agreements already provide a sufficient regulatory basis for foreign or multinational providers to enter national markets with different regulatory regimes, and to offer transnational services.
Another missing fact from the debate is exactly how weak the ITRs and the ITU are. If you don’t follow a duly passed FCC regulation, you can get fined or you can get your license pulled and put out of business. The ITU doesn’t have any police. The ITRs are just a bunch of verbal commitments from “member states” that they will agree to do something. If the member state doesn’t agree, or chooses not to enforce what it agreed to, the words are meaningless.
I hope this re-framing of the WCIT helps observers to understand better what the general context is. In the next post, we look at the specific language of proposed ITR revisions and explain the degree to which they do or do not create a threat to Internet freedom.