NEXT GENERATION NETWORKS AND NET NEUTRALITY

1. NEXT GENERATION NETWORKS AND NET NEUTRALITY Dimitri Ypsilanti Former Head Information, Communications and Consumer Policy Division, OECD

2. Network Neutrality: the origins • PSTN environment: non-discriminatory treatment of traffic = common carrier • Internet – viewed as open, globally distributed network providing non-discriminatory access • Growth of Internet: • 1991 WWW developed • 1995 5 million users • 2005 1 billion users • 2011 2.3 billion users • Growth of traffic • Excess demand: the growth of content on the Internet • Response to limited capacity – discrimination? • Vertical integration of ISPs

3. Capacity has also expanded significantly. Global Internet traffic and capacity Traffic on the Internet has grown from 0.18 petabytes to 27,483 Pb. Every 60 secs. 60 hrs video uploaded on YouTube

4. Defining Network Neutrality • No discrimination: • Network operators should treat all traffic equally • Sites should not be blocked, traffic should not be slowed down, no restriction on modes of communication and on attaching equipment to networks; • No preference for “own” content; • Consumers should be able to access content of their choice; • Freedom of expression;

5. Widening the definition (1) • Government restrictions (obstacles to access; limits on content; restrictions on online activities); • Concern about fundamental principles; • “Arab Spring”; • OECD Principles for Internet Policy-Making - The Internet’s openness to new devices, applications and services has played an important role in its success in fostering innovation, creativity and economic growth. - Maintaining technology neutrality and appropriate quality for all Internet services is also important to ensure an open and dynamic Internet environment. Provision of open Internet access services is critical for the Internet economy.

6. Widening the definition (2) • OECD work on Internet Intermediaries • Importance of Internet intermediary liability limitations; • Problem of trying to impose ex ante procedures on intermediaries and duties of care • Council of Europe - 10 principles on Internet Governance: architectural principles, open network; - Internet-related policies should recognise….the objective of universal access. They should not adversely affect the unimpeded flow of transboundary Internet traffic. - Users should have the greatest possible access to Internet-based content, applications and services of their choice …using suitable devices of their choice

7. IMPLICATION OF DEFINITIONS

8. Non-discrimination • Distinguish between traffic management for reasons of congestion or priority and traffic shaping for discriminatory reasons • Legitimate traffic shaping - need to manage traffic • Quality of service • Is there a distinction between wired and wireless internet networks (access) However, any deviations from non-discrimination should be transparent, relevant and proportionate to technical requirements

9. No restriction on modes of communications • Mobile operators have usually tried to stop use of Skype, Whatsapp,etc. • Mobile operators have often tried to stop subscribers using mobile terminals to tether • Competition important, otherwise regulation • Consumer switching – vote with your feet Consumers should have the freedom to use whatever terminal they wish to access the Internet and content

10. Open Internet Important for economy and freedom of expression • Principles should apply nationally and internationally • Some have questioned initiatives such as SOPA/ACTA: impact on free speech & fundamental rights – does this link to network neutrality? • Issue of ISP liability is important in context of network neutrality • Some (mostly European incumbents) have stated they would like to charge Internet content providers for access to customers in order to expand next generation fixed and wireless network investment. This would restrict access to content.

11. National Initiatives United States: FCC 2005 - Four principles i) Consumers entitled to access lawful Internet content of their choice, ii) to run applications and use services of their choice, iii) to connect their choice of legal devices (no harm to network) and iv) to competition among network providers, application and service providers, and content providers. Dec 2010 –reinterpretation of basic principles after April 2010 Court decision - 3 basic rules; 1.Transparency. Fixed and mobile broadband providers must disclose the network management practices, performance characteristics, and terms and conditions of their broadband services; 2. No blocking. Fixed broadband providers may not block lawful content, applications, services, or non-harmful devices; mobile broadband providers may not block lawful Web sites, or block applications that compete with their voice or video telephony services; and 3. No unreasonable discrimination. Fixed broadband providers may not unreasonably discriminate in transmitting lawful network traffic.

12. US: Private sector initiatives • Dec. 2006 AT&T/BellSouth – pledge to maintain a fair and neutral policy toward Internet packet routing, applying no privileges based on packets' origin, content, or destination; • August 2010 Verizon-Google agreement on network neutrality; • SEC told AT&T and other telecoms that they must include a resolution supporting wireless net neutrality in annual shareholder ballots;

13. European Union: Balanced discussions • Telecom Council (Dec. 2011): Expressed concerns with respect to discriminatory traffic management & treatment of data, including throttling of data and blocking of content, applications and services; • Stressed need to preserve open and neutral character of the Internet and consider net neutrality as a policy objective; • Invites stakeholders to develop behaviours and economic choices that support an open Internet platform enabling access to, or the transmission of, online content, applications and services;

14. Other countries • Chile (May 2011): ISPs to ensure access to all content, services or applications, available networks & offer services that do not distinguish content, applications or services, based on their source • Netherlands (June 2011) –Law requiring ISPs/telcos to ensure access to all types of content, services or applications available on the network & forbidding mobile operators from blocking or charging consumers extra from using Internet-based communication services(e.g. Skype); Use of deep packet inspection also restricted. 

15. France • No law but 10 commandments (Oct. 2010); -Freedom to access all of the internet’s functionalities; -Non discrimination between internet traffic streams; -A framework to govern traffic management practices; -Contractually-based transparency and user information; -Monitoring the quality of the internet access service

16. Issues of concern • Discriminatory traffic prioritisation can severely degrade VoIP traffic • Jitter • Lags • New video streaming services: Hulu, Netflix, Apple TV • Range of new equipment on market providing Internet access • How many ISPs are available – is there consumer choice and are there sufficient safeguards in market? • Use of data caps (and in some cases discrimination – no caps for “own content”)

17. CONCLUSIONS • Regulatory principles (not necessarily a law) important to ensure that stakeholders are aware of rules of the game – ARCEP example; • Strong competition important; • Ability of consumers to change service provider rapidly important (reduce switching costs); • Transparency by network operators/ISPs crucial; • Traffic prioritisation necessary (not all traffic is equal) but needs to take into account principles; • Need for quality of service indicators; • Separate network from services?

18. 감사합니다Thank you dimitri.ypsilanti@gmail.com