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Policy

At Dubai Conference, Future of Web at Stake

Internet Tax, Inspection Could Be on Table 12/02/2012 7:00 PM Eastern

WASHINGTON — “The Gathering Storm” is how the Information Technology & Innovation Foundation described it in a report last week.

The gathering is the International Telecommunications Union’s treaty conference in Dubai, United Arab Emirates, that begins today (Dec. 3). The storm: A collection of proposals that could give such countries as China, Russia and some Arab states the power to tax Internet traffic or inspect the contents of communications, both of which the United States sees as deal-breakers.

So what does that mean for cable operators and content providers on this side of the pond?

Cable operators have positioned themselves as leading Internet-service providers, so anything that adds cost to using bandwidth — particularly for video — affects the value of the TV Everywhere platforms on which they’re positioned to capitalize.

DISRUPTIVE UNCERTAINTY

“At a minimum, the uncertainty created by the talk of adding an international layer of regulations onto the ’Net disrupts business and engineering decisions,” Federal Communications Commission member Robert McDowell, who will accompany the U.S. delegation to Dubai, said. “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,” the commissioner added. “Uncertainty never decreases costs.”

The proposals being offered up in advance of the conference include a mandatory “sender pays” model of Internet traffic that could become a tax 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,” ITIF senior research fellow Richard Bennett said.

The 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. (NCTA senior vice president of science and technology William Check is a member of the delegation.)

“[It] sends a strong and clear message that the United Nations and International Telecommunications Union should cease its efforts to assert and impose unprecedented governmental regulation over the Internet,” the NCTA said at the time.

The good news, according to a variety of sources, is that some European countries have backed off their proposal of a sender-pays mandate, which would charge such companies as Google for sending traffic, and content, over the Internet.

CYBERSECURITY HOOK

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 Internet in the name of security.

The ITU’s inspector general said recently that the conference is not about taking over the Internet, but the U.S. will be taking a trust but verify approach to those assertions.

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

September