Why The ITU's Plans To Divert Money To Lazy Telcos Will Slow Internet Buildout, Not Increase It

from the damn-history dept

We've noted that among the proposals being pushed this week at the ITU's World Conference on International Telecommunications (WCIT) are a few that are solely designed to divert money from innovative internet companies to stodgy old telcos who haven't adapted. The ITU has defended such proposals as being about sharing revenue more fairly, which tends to be a warning sign for most folks that failed organizations are about to take money from successful ones. Indeed, a number of proposals have suggested a form of "sending party pays" infrastructure for peering, claiming that such a system was successful (via the ITU) for telco buildout, and so they could do the same thing for the internet. Of course, this leaves aside the vast differences in how the networks work and where they came from -- and how a "sending party pays" internet system would almost certainly lead to a balkanized and fragmented internet.

But, it's even worse. A new study by Eli Dourado looking at how well "sending party pays" actually worked in the telco system found that it tended to hinder growth, rather than accelerate it:
The possible extension of the telephone system’s “sender-pays” rule to the Internet is a contentious international political issue under consideration at the World Conference on International Telecommunication (WCIT). This paper examines whether higher international telephone rates support or impede telecom sector growth in the receiving country. It uses data on international telephone rates from the US from 1992-2010 to explain growth in foreign telecom sectors during the same period. I find that higher international calling rates are correlated with slower growth in the telecom sector, which suggests that countries are not primarily using higher charges to finance additional expansion. These findings cast doubt on proposals that would extend sender-pays to the Internet sector.
In other words, the key argument the ITU likes to make for this diversion of funds... isn't actually supported by the facts. Instead, it's what we expected: about helping big telcos (often either state-owned, or formerly stated owned with still close connections) get a bunch of money for nothing... which they then won't invest in expanding the network (why should they?). And, oh yes, the implementation of such a system might just also make it easier to limit internet access and/or spy on nearly everything people do (how else do you charge if you're not monitoring activity?).

Filed Under: eli dourado, investment, itu, sender pays, wcit

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  1. identicon
    Anonymous Coward, 4 Dec 2012 @ 3:51pm

    Explain to me like I am five

    Sorry if I am being dumb, but could someone explain to me the following?

    1. If this "sender pays" stuff is per-packet (which is the only way that makes sense, since the Internet Protocol is packet-based), what prevents a protocol from wastefully sending same-sized packets in the opposite direction, netting a total result of almost zero? For instance, if you download a five-megabyte Youtube video, and Google makes your browser send five megabytes of junk data to Youtube, wouldn't that result in a total payment of zero?

    2. Why would charging for bytes sent result in more spying, since it could be implemented on top of the already existing per-interface byte and packet counters on the border routers? The way I understood the idea being proposed, every step of the way would pay based solely on the amount of traffic sent, independent of the destination of the traffic. So Youtube would pay its next hop based on how many bytes or packets it sent, that hop would pay the next one also based on how many bytes or packets it sent, and so on, until the traffic reaches the end user, which for some reason is not paid even tough he/she got traffic sent to him/her. Each step has a simple byte and packet counter, which already exists, and needs to log nothing more.

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