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Regulation & the Internet Michael.Minges@itu.int


Internet regulatory issues • • • • • • •

Market structure Spectrum Voice over Internet Protocol (VoIP) Domain names Content Cyber laws Universal access


Can I use Wi-Fi? Can I choose my ISP?

I don’t want my kids to access pornography!

Can I safely use my credit card over the Internet?

Can I stop all this SPAM?

Can I make a phone call over the Internet?


Market structure

Internet

Mobile

International

Monopoly Competition

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Local

• License • International gateway • Interconnection


What can an ISP do? Cable TV

?

? Wireless Access

Dial-up

ADSL?

?

T E L E P H O N E

International connectivity

?

E X C H A N G E

? ISP ?

Leased line

?

ISP POP


Market structure: Theory versus reality Country

Competition?

Licenses issued

ISPs in operation

Fiji

2002

8

1

Incumbent claims monopoly

Maldives

2003

2

1

New ISP in process of building network

Mauritius

2002

12

2

Competition stalled over interconnection

St. Lucia

2002

3

1

Competition stalled over interconnection

January 2004

Note


International gateway What the Internet is all about • In some countries ISPs are allowed but cannot operate own gateway to Internet • Incumbent telecom operators typically own landing station of international undersea fibre cable. Should they be forced to unbundle submarine cable access?

Southern Cross


Internet access prices Average world Internet access price Dial-up, 20 hours per month 2003 Total=US$ 36.91

Telephone usage 45%

ISP 55%


Interconnection in Mauritius: US 0.8 ¢ is a lot of money Dial-up subscribers

50’000

Dial-up traffic per subscriber per month

4 hours (240 minutes)

Interconnect charge Per subscriber per year 144 million minutes

Before

After

1.1 US ¢

0.3 US ¢

US$32

US$9.6

US$1.6 million

US$ 480’000


Does effective competition make a difference? • Government wants Swisscom to open up local loop • Swisscom argues not necessary as there is effective competition – Note: I could choose several DSL suppliers all charging same price & all leasing capacity from Swisscom. I cannot get cable modem service

• Switzerland has some of the highest broadband prices in the world

Swiss Broadband Market, 6/03 WholeSwiss- sale com 22%

Cable TV 50%

Retail 28%

60

Price per Mbps

40 20 0

$78

$85

USA

France

$101

$4 Japan

Switz

Price per month of ADSL US$


International communication interconnection USA 28.1 million minutes US$ 5.9 million

Telephone

4.2 million minutes US$393’847

St. Lucia

Calls

USA Gets to surf to St. Lucia for free!!!

Internet

US$ 4 million

St. Lucia

Connection

Source: FCC


Internet exchange • Without an Internet exchange, if I have one ISP and you have another and you live down the street and I send you an email it will go out of the country first before getting to you • This adds to higher costs since more international bandwidth is needed • Chile passed a law mandating ISPs to interconnect


Spectrum • Wireless technologies growing in popularity (e.g. Wi-Fi) • They require frequency • Wi-Fi uses 2.4 GHz which is recognized by ITU as unlicensed Industrial, Scientific and Medical (ISM) band • Yet many developing countries impose restrictions

% with license exempt wireless spectrum 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

96%

41%

Developed countries

Developing countries

Source: “The Wireless Internet Opportunity for Developing Countries”


Voice over Internet Protocol (VoIP) • • •

• •

Internet is a packet-switched network. All information is sent over data packets. Is a telephone call over the Internet voice or data? Many developing countries have opted for the first definition and ban VoIP unless offered by licensed operator. Hard to enforce unless monopoly over Internet gateway. As more users switch to broadband, VoIP could supplant traditional telephone calls raising new regulatory issues. See FCC: http://www.fcc.gov/voip/

Can I use Voice over IP from my ADSL connection? Voice over IP will also not be allowed or tolerated. —Cable & Wireless St. Lucia, FAQs on ADSL service. 23 February 2004


Domain names

Country Code Top Level Domain (ccTLD)

13. Functions of the Internet Management Committee (1) The functions of the Internet Management Committee shall be – (c) to administer domain names in the context of the development of the information and communication industry; and (d) to make recommendations to the Board on any matter relating to internet including the administration and management of domain names. 18. Functions of the Authority (1) The Authority shall (y) authorise or regulate the registration, administration and management of domain names for Mauritius —The Information Communication Technology Act 2000 (Mauritius)


Content Porn, Politics, SPAM, VoIP, Music, etc. Political / pornographic / VoIP / SPAM – “… as we open up Internet access, we need to allay the concerns of parents on children gaining easy access to websites containing pornographic and other potentially harmful content. Users in Singapore continue to have access to all material available on the Internet, with the exception of a few high impact illegal websites.” http://app9.internet.gov.sg/scripts/MDA/f aq/faq.asp?category=Internet

Controlling the Assault of Non-Solicited Pornography and Marketing (CAN-SPAN) Act 2003 – “The pornographers, the herbal Viagra merchants, the relatives of dead Nigerian dictators -- it may get rid of them…But the legitimate marketers now have a federally mandated stamp of approval. They can send each of us as much e-mail as they want until they're asked to stop.”http://www.wired.com/news/politics/0,12 83,61928,00.html?tw=wn_story_top5

Number of SPAMs per user per day 45 40 35 30 25 20 15 10 5 0 2003 2004 2005 2006 2007 2008

Source: Ferris Research.


Cyber Laws • Are transactions over the Internet legal? • Lack of law inhibits development of ecommerce, e-government and other applications • Can telemedicine be used in Mauritius to consult a doctor in Canada if the Canadian doctor is not licensed to practice in Mauritius? • Computer crime


Universal service and access •

Information society and Digital Divide –

Policies to promote widespread access to Internet –

“Connectivity is a central enabling agent in building the Information Society. Universal, ubiquitous, equitable and affordable access to ICT infrastructure and services, constitutes one of the challenges of the Information Society and should be an objective of all stakeholders involved in building it.” --WSIS Declaration of Principles

“… a provision of the Telecommunications Act of 1996 … directly addresses schools' and libraries' access to communications services. This provision specifies that, upon request, individual telecommunications carriers must provide service to schools and libraries at "affordable" rates.” http://www.fcc.gov/learnnet/

Impact of Internet on traditional regulatory processes (VoIP) –

Traditional telecom operators contributed to Universal Service Fund

Khin Ya Min May Winner - Primary School, Asia, Myanmar, 8 years old WSIS Poster Competition


References • ITU Internet Case Studies – http://www.itu.int/ITU-D/ict/cs/

• ITU Regulating the Internet: – www.itu.int/ITU-D/ict/papers/1999/LM-CyprusNov99.ppt

• CAN-SPAM Act of 2003 – http://www.spamlaws.com/federal/108s877.html

• “Internet Regulation” on Google: – 3’560’000 hits [23 February 2004]


Regulation & the Internet