Policies for Enabling Broadband: Focus on OTTs and Level Playing Fields

4 September 2014 - A Workshop on Other in Istanbul, Turkey

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Full Session Transcript

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This is the output of the real‑time captioning taken during the IGF 2014 Istanbul, Turkey, meetings.  Although it is largely accurate, in some cases it may be incomplete or inaccurate due to inaudible passages or transcription errors.  It is posted as an aid to understanding the proceedings at the session, but should not be treated as an authoritative record.

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>> PROF. DR. KEMAL C.:  I would like to welcome you all to the Host Country Session.  The name of the session is Policies for Enabling Broadband, and a special focus on OTTs and level playing fields.  This is, I think, one of the important sessions in this forum.

The title of the forum ‑‑ the session, as it indicates, it's about the broadband services, but, more importantly, as we all know, these over‑the‑top services and then fair rules for competition is very critical in the past few years of Internet.

And this is actually ‑‑ I was told a few days ago by the organizers that this Host Country Session will be a feeder session.  Some, actually, feedback will be generated here, hopefully, so it will be a feedback session for the Network Neutrality Session, which is one of the main sessions of this IGF Internet Governance Forum.

Today I have a very distinguished speakers with me, panelists.  One gentleman from UK just sent me an Email last night.  He had some health issues with his family.  Mr. Prodromos (Indiscernable) will not be here today.  We will have seven from abroad, some local speakers from industry IGOs, private speakers, and hopefully discuss all the issues regarding broadband, over‑the‑top services, fair competition, and leading these discussions tonight for neutrality.

Now I would like to open the floor with a representative from Yandex.  And, as we all know, Yandex is a new portal.  And before introducing her, the rules of the panel will be seven to eight minutes, and I think we have a panel here indicating the time, and once the speaker panelists are finished with their discussions, then we will open the floor.

I was told there would be some contributions from social media.  I don't know how I will get that, but if there are other contributions from social media, I don't know how I will get it, but we will try to address those questions, as well.

Milana Duritch ‑‑ did I say that right?

>> MILANA DURITCH:  Duritch.  It's okay.

>> PROF. DR. KEMAL C.:  ‑‑ Just joined Yandex from Google, where she worked for eight years.  She left Google as regional director for Double Click.  Prior to Google she had her own IT company.  She is an entrepreneur, obviously based in Belgrade, Libya, lived in Athens, and for the past four years she lives in Istanbul.

Thank you.  You have seven minutes.  Thank you.

>> MILANA DURITCH:  Thank you very much for the nice introduction.  I'm very happy to be here.  As you just heard, I just recently joined Yandex.  I started on Monday morning and started talking at 9:00 A.M. in the morning, and I didn't stop since, so if my voice stops working in the middle of the presentation, I apologize in advance.

So, as I said, I'm very happy to be here.  I'm going to give maybe a different spin on the discussion.  It is not going to be that controversial and somebody would like to in order to steer the discussion.  Basically all technology companies are there to somehow in the middle of the supply and demand, right.  So our mission is to provide easy and rapid access to the wealth of information and give the answer to every possible question.

If you look at the Yandex that was established in 1997 broadband for sure influenced a lot the way this content is organized then via Internet content change.  The way how people consume content is also changed.  There for we are also changing the way we are providing our services to our users.  And as broadband is providing this augmentation of the services, we are very happy that this is a challenge for us in order to service our customers in the better way.  So basically in the recent years do it yourself concept is becoming something as a standard, right.  People want to choose where they watch, choose what they listen, where to watch it and where to listen; therefore, there are not any more favorite portals, or there are less of them, and the people are searching ‑‑ people are browsing and using isolated islands of the content.  And this content varies from text to video; therefore, the broadband is the driver that provided this change in the way how the content is consumed.

One of the biggest changing content is online video.  And I'm sure we are going to talk more about video as the most important oddity service.  Majority of traffic is now video, and the traffic is increasing the way how video is consumed and how video search has changed.  And we, as technology company, are also challenged how to present this video in the proper and searchable way, in a different way than the traditionally text websites where index is done and searched.

So we are happy to announce that we are working on a very new future of the Yandex video search which represents videos in a different way, and organize it in a different way, because the consumed content is changed.  This is when we are talking about level playing fields, and the whole fairness, this is where I said we are somewhere in the middle, and we believe that we are providing the fairgrounds for everyone, because broadband is now providing people with the opportunity to browse more, to search more, to explore more, and to find the applications and content of their choice.

We, as a technology company who has to provide them the access to the information, we are trying to be as neutral as possible.  Algorithms are there in order to understand what is the most valuable content to the user and, therefore, the level entry is much lower and people can search for the niche content and access it.  This is when we are talking about ‑‑ we are talking about the supply side.

When we are talking to demand side, this is something that, maybe, I will say, more, is my personal opinion, is that this is somewhere where we have to be very careful.  On one side, supply is changing, so all content that we are seeing, or majority of the new content, and what the startups are investigating, are rich in content.  Rich video, rich images, rich media, in general.  People that don't have relevant cannot access this content.

So the question here that I have, if we can maybe discuss later, is how we plan ‑‑ with using the proper policies, we are planning not to make the digital divide even bigger than it used to be because, you know, the more content is created it is reached, that means that people that don't have the proper services, they cannot really use it.

What we are doing, we are, again, as a technology company, trying to provide ways how we can still deliver this content.  I think, probably, people in the audience know our feature in our browser are enabling people that don't have broadnet Internet still to access rich content, so we are trying to do that.  And, of course, we know that all this new content and new features that are coming are extremely important for the economy and opening the new jobs, et cetera, but this is not something that I'm going to talk about.  I think that my colleagues will have much more to say about that, so I think I am pretty well on time and pretty well with my voice, as well.

Thank you very much.

>> PROF. DR. KEMAL C.:  Okay.  Very good.  We saved two minutes.  And now we heard the voice of private sector.

Now I would like to give the floor to one of the very important NGOs of Turkey, then we will switch between private sector NGOs and Government.

Mr. Yusuf Atariak is a good friend and good colleague.  Very short introduction.  He graduated from Middle University with B.S./MS in electrical engineering.  Right after his graduation he started looking at the electric steel authority of Turkey.  Afterwards Atariak participated in network development.  He was also active in politics.  He worked as a Deputy Mayor and Secretary General at ONCAL Municipality after 1977 elections.  He was the first secretary general working at Turkish metropolitan municipalities.  He had some Government related work, as well.

After 1980 he worked as a board member.  He switched to private sector, and later at ACOM, where he still works, but more important he is one of the founders of Telco Air.  It is a Turkish competitor association.  He has been the chairman of Telco Air for 12 years.  Telco Air is the main non‑Governmental organisation and ISPs in Turkey.  He is also the president of telecommunications of TUB.  That is the union chambers and commodity exchange of Turkey, an important NGO.  He still serves as the chairman at ACOM.

The floor is yours.  You have seven minutes.

>> YUSUF ATARIAK:  Thank you very much.  I would like to make a short speech about the topic today we have from the point of view of alternative telecom operators we are all are aware of the fact that everything is going to Internet.  Radio, direct mail, print, TV cable, everything goes to Internet and Internet goes to everybody.

As far as the telecommunication operator ship and the content is concerned, in the last maybe ten, 15 years the atmosphere is fully audio visual world.  So I can give you some figures to make you maybe more familiar with what is going on.

In Europe in the green paper prepared, we can see that the videos data, video on demand services paid TV services are increasing enormously.  And for example in Europe there are 306 video on demand services.  This means the infrastructure to carry this traffic has to be improved very rapidly, and in that point we should be quite careful.

Again, all this content is created by OTTs.  Just a second.  There is a mistake here.  Yeah.  So on this sketch you can see that IPT, and paid TV is growing enormously especially in North America, West Europe, East Europe, in all countries content generation is enormously increasing and as a result of this, authorities are becoming more and more important, generating more money and operators, telephone operators have to invest more and more.

In this context, OTTs have some relations and very important topics with electronic communication site and broadcasting site.  I am mostly talking about the communication side because for the broadcasting side there is nothing much to say.

As a result of this relation between OTTs and electronic communication side, there is very important thing we should be aware of.  The revenues of electronic communication companies all over the world is not increasing in the last several years.

In Europe, for example, 2010, 11, and 12, in this chart you can see that the revenue of operators is almost stable.  There is no increase.  And also, when you look at the revenues in Turkey of the total operators revenues, starting from 2010 until now in a dollars term, the revenues are not increasing.  It is about around 16 billion dollars and as far as 2014 first six months, the figure is again the same.  About $16 billion.

So OTTs are getting bigger, more stronger, they are using the infrastructure operators, but operators are not making big revenues or they are not able to increase their revenues and, of course, this should have something very much related to OTTs and the operators ‑‑ and both sides position against taxes, against Government authorities.

And there is a ‑‑ if OTTs are getting stronger and operators are staying still, we can say that possibly there is a big contradiction here and OTTs without paying any taxes, without being subject to any end rules, they are doing their business, but operators are subject to very high measures taxation, et cetera.

We see unfair competition here.

>> PROF. DR. KEMAL C.:  You have 30 seconds.

>> YUSUF ATARIAK:  30 seconds.  Legal interception, sanctions.  OTTs no taxes, no regulations, no legal interception, no section.  So you can see here there is taxes that operators have to pay and I think this is a very important subject we are going to be talking about a lot in the coming years.  Thank you very much.

>> PROF. DR. KEMAL C.:  Okay.  Thank you for the good introduction.  I think you have a very good slide.  The slide just before your last slide using important distinction between OTTs and operators.  And on one side there are no taxes, sanctions leaving implications; on the other side, the operators had to endure serious taxes, infrastructure requirements.  And having said so, I'm going to give the floor to one of the international operators sitting on the very left hand of this table.  Sorry for actually keeping you apart from the table.  He is Luigi Gambardella.  He represents ETNA Chamber Telecommunications Authority.  At the same time, he is the Vice President of Telecom Natalia, one of the largest operators in Europe.  So I would like to give the floor to Mr. Gambardella and try to get his views on how for an operator for mobile and fixed services from both a private sector perspective that he represents and also I think he works in an NGO at AETNA, so he is very valuable for us.  How he is actually approaching this problem.  We know that U.S. has different tariffs, regulations, maybe a good comparison with Europe, and U.S. could be, as well.

The floor is yours.  You have seven minutes.

>> LUIGI GAMBARDELLA:  Thank you.  First of all, thank you very much for the invitation.  Thank you very much for the invitation.  Okay.

First of all, thank you very much for your kind invitation and I'm most happy to see that there is a big delegation here in Istanbul of many European operators.  And this is very important because it shows our commitment to work together with the Internet community and many, many people that are involved in the discussion of Internet.  And I accepted to speak, but I'm very happy here also listen to others because I think that this is more for us on occasion to listen wrath every than speak.

Let me say a few things.  One correction to previous speaker I don't know where you get your data but I can tell you that the revenue of European operator went down in a very significant way and we're not stable after all.  But maybe we can discuss this later.

>> YUSUF ATARIAK:  Basically going down, not up.

>> LUIGI GAMBARDELLA:  Down.  And everybody knows that.  I can give you all the numbers, and unfortunately for us, in the last five years, the revenue with operators went down significantly.

Now let me ‑‑ I have just a few points.  The first one is because ‑‑ about this story of telecom operators over the top before Biran.  So I think it's not totally about that.  Personally I realized that I have many friends in the Internet ‑‑ among Internet players, and even in the telecom.  So, to be friends.  To be enemies not is the issue.

Here there are some commercial company.  The Internet company are not for profit company.  On the contrary they are a natural company like we have.  And sometimes you can have co‑national discussion.  It is quite nice that this happen.

What is important to find?  I think that one of the main messages that I'm getting and got here in the meetings, the meeting I had, is I feel there is a completely different atmosphere and there is first of all is much more relaxed maybe because Istanbul is so beautiful, everyone is so happy to be here and this is an inference in a very positive way in the way we're discussing.  I see there is a very positive atmosphere and what we want is to find a win‑win solution.  So what we need is we are not against ‑‑ the problem is that we have to realize and recognize that there will be some changes.  There are some problems and we have to solve this problem.

But I think that in doing this we should not always refer to us so mean because I don't see how many people they care about telecom operators or Internet players, but let's put customers, our customers, cities and people at the centre of the voice.

And we have to start from them what they want and we have to address their requests.

Now what I think is clear from our point of view, what we would like to see, obviously open Internet, but we want to see more choice, more freedom, more services and this is what we should try to give to a customer.

So also, I think in doing that, we have two objectives.  We should take care of two also I shall use.  The first is that how we can grow.  How this echo system can grow.  And second, how we can sustain the growth of infrastructure.  Because if there are no infrastructure there is no possibility to have such kind of services.

Now, let's meet now, introduce the argument of level playing field which I will not say that we have invented but we many years ago started inure up to discuss this and something that is also our fault if we are using this.

What we are intending for this, first of all let me clarify.  We are not asking for more regulation.  The last people who that are asking for more regulation are the moderators.  We would like to see a reasonable regulation, but we don't want to see an excessive regulation.

So we are the last people who are asking for that, but obviously what is happening that due to the changes, the changes of the market or the technology or the services, things are different today than they were a few years ago.  And everyone recognized that

Now, what is happening?  The customers, the citizen, they have access sometimes to the same services that are offered by over the top or tell co but the same services are regulated in a different way.  What we say here is when we are confronting with the same service, we should have the same rules.

Maybe, maybe we could find a way to reduce a little bit the regulation for the telecom and to give some rules to over the top.  Because at the end of the story what is important, the production of the consumer, the production of the rise of the citizen, and enough to be sure that when they use a service on the net, whatever is provided by a telecom operator, an Internet players, whatever is in the world as a certain kind, a certain level of a protection.

And I think that in this respect we have to continue to work together and try to find the solution.  What we don't accept that we keep our symmetries and we keep such kind of situation as I said not only asked but also consumer can be damaged.  And maybe them in a second round we can address other issue or other issue that you would like to discuss farther.  Thank you very much again.

>> PROF. DR. KEMAL C.:  Thank you very much, Mr. Gambardella.  We heard the voice of a telecom operator.  What he was proposing as I understand is more like a soft hybrid solution, not very strict and he is saying you're not enemies with regard to authorities, but at the same time there are regulatory issues in OTT issues.

As you may be well aware in the U.S., United States, FCC has actually ‑‑ had a legislation treating all traffic equal but then the federal appeals court I think a few months ago struck down this rule saying that he has no business in actually treating traffic equally, so in the U.S. there has been, you know, many discussions in the European side apart of the ocean there are also discussions, so now I would like to give the floor to someone from the regulatory authority of Turkey and let's hear what he would say.  Mr. BeytullahKuscu.  He is the head of research and strategy development at information now communications technology authority of Turkey.  In Turkey we call them BTK.  BTK chairman was sitting in front.  I think he left for a few minutes, but he'll be back because he will be back because I will have questions for him once the session is finished.

So Mr. Kuscu holds a B.S. degree in electrical engineering.  He also has a Masters in the University of London.  He started his professional life in 1998 as an engineer.  Worked as an ICT expert since 2004.  Sorry.  He has been serving as the acting head of sectorial research and development.  He is experienced in regulatory activities so I believe he will have more to say on how a regulatory authority sees this problem for Turkey and also for global operators.  You have seven minutes.

>> BEYTULLAK KUSCU:  Thank you.

I would like to talk about regulatory OTTs but before that I would like to say a few words about OTT and broadband.  Let me share three studies from broadband market.  The total broadband penetration was less than one person in 2004 but it reached to 50 person in ten years.  The traffic increased ten times in three years from the second quarter of 2011 to the same quarter of this year.  And the data revenue increased 15 times in five years from 2008 to 2013.

We see developments in other countries with broadband.  We see the developments in other countries related to the number of broadband subscribers and increasing the data traffic.  And parallel to this development OTTs and OTT service are also growing explosively.

I will not talk much more but it's clear that OTT service continues to penetrate to all of the citizens which have smart devices and which have access to broadband.  So with the introduction of more broadband technology LT or LT advanced, it is expected that OTT applications much more easily will be delivered to the consumers by this high skilled technologies.

There is also in some research OTT has contribute to the revenues of operators.  By 2019 research shows by 2019 40% of the revenues of operators will come from the data services and most of this revenue will be generated by the OTT applications.

Seeing the developments of OTT services, operators and regulators are trying to handle the problem and I will share with you statistics which was conducted by mobile scarce in 2013.  It shows that 32 persons of operators work with OTT in 2012 but this number increased to 36% in a year.  So more operators are partnering for OTT and the survey also shows that the number of mobile operators blocking the OTT services was no person in 2012 and has dropped to 6%.  So blockage is not seen as a solution.

Regulatory approach is also different and some phase that is a product first approach to OTT services is a kind of electronic communication service and the OTTs and the network operators fight in the same market.  It is also stressed that as the OTTs do not have any obligation they can act freely and have advantages or network operators in competition.  So they should have the same rights and obligation as the corporators.  There is one consideration.

Another way that Internet is an open platform and the user should access whichever content they run and should have application, too.  This group gives the priority to the net neutrality and the Turkey is about leading to the market finance N this case it is expected that the operators and the OTT players will it's around the table and determine the special of services between them.

At this point I want to say what is going around the world and I want to start with the surveys which was conducted by Europe in February of this year.  It shows that 25% of European citizens are experiencing blocking of the Internet content.  And the commission finds it unacceptable and it is studying to determine the boarders of the net neutrality.  And we know that Country which is the Netherlands to determine Internet rules, but hindering or slowing down the Internet traffic are the subject to some regulations which is if the network, if the network is ‑‑ if the network has a congestion or if there is a need to apply the court decisions, then the services of OTT may be restricted or slowed down.

In other countries, for example, in Korea, in the USA as Mr. Chairman men many of other countries are under the discussion that we have the same discussions actually in Turkey and although we do not have yet determined an official position we are discussing it with the stakeholders and we are trying to find a solution.  But for now we do not yet determined an official position.

Thank you very much.

>> PROF. DR. KEMAL C.:  Okay.  Thank you very much.

So obviously we don't have an official position, that is what we understand but we'll come back to that when we start discussing when the speakers finish with their presentations.

Now I would like to turn to my right and give the floor to another very important OTT operator that we all know.  Consult from Google, Aparna Sridhar.  She is actually working on Internet policy on governance issues.  She previously served in a similar role at free press, which is on U.S. NGO, so she has some media experience as well.  She is a graduate of Harvard college and Stanford University.  Is floor is yours and I would like to actually hear Google's or your personal view on how do you see OTTs one of the largest OTT operators like Google and, two, identify this distinction between net neutrality or is Google in favor of these services being taxed and have some levies on fast services.

And maybe you have more knowledge on how this is handled in U.S., because as I mentioned before, there are some issues with FCC and some federal appeals court.  We would be happy if you can give us some thoughts on that.  Thank you.

>> APARNA SRIDHAR:  I might give a brief overview of the relationship as I perceive first and then turn to your specific questions.

I think the first key point I would want to make is content providers on the Internet like Google and broadband network operators are complementary.  We can reach our end users without being able to put our content across broad band operators networks.  On the other hand, people want access to broadband network operator servers because they want to access content.  They are not looking for a fat, empty bit of transmission.

So I think we really need each other and what we have seen in the tremendous growth of the Internet is that there is a virtuous cycle between the demand for content and growth in networks.  And bigger networks allow more innovative content to be created there by furthering the demand.

So I think the first message would be we're all in this together.

The second message is, I think there are a number of opportunities for us to work together on lowering the barriers to entry in the telecommunications market.  So, for example, if there are particular bureaucratic obstacles that make it difficult to deploy infrastructure that is something that we obviously want to minimize because we have an interest in making infrastructure deployment as easy as possible.

Similarly, I think we, as many of the mobile operators do, support increasing access to spectrum for mobile operations.  Spectrum is really the life blood of wireless communications and more and more communications are going over wireless networks.  So this is definitely an area where I think we are aligned in terms of the need to improve and/or reduce regulation in that space.

The third point I would make, again in the vein of we have the same goals and we're in this together, is that the challenge of connecting Internet users who are not yet connected to the Internet is a tremendous challenge.  Two‑thirds of the world are still not yet connected.  And that's a problem that needs a lot of investment and a lot of creative minds to solve.  It's an area that we have focused a lot on and I'll just highlight a couple different examples.

One is we're working on technologies to get broadband to the hardest to reach most remote areas.  So for example we have a project called Project Lun that uses high altitude balloons to try to deliver Internet at roughly 3G speeds.

By the same token, we have also invested in wholesale infrastructure so we have a project in Uganda called project link that is an attempt to deliver broadband more effectively in that city.

We're obviously, some of you may be aware of our Google fiber project which is a project based in the U.S. and that is where a retail broadband provider in the U.S. and we've really focused on improving speeds.  So I think, you know, we have to work together to solve this problem of the two‑thirds of the world not being connected.

Finally, you know, I would like to make the point that Internet content providers invest heavily, heavily in infrastructure.  So we try to bring our content 99% of the way to the end user.  Often it is just carried over the last mile by the broadband network operator.  Tense of billions of dollars are spent by our industry on exactly this goal.  So I think that for us we would like to bring our contents as close to the end user as possible.  In general globally different circumstances may differ from Country to Country, but that is certainly an overall goal.

You asked about net neutrality in the United States and, so, on that question, you know, I think the question of how to approach network neutrality rules is it's going to be a kind of Country specific determination, so deaf markets may call for different rules and some markets may be ‑‑ there may be so much competition in the market that maybe it makes sense to take a wait and see approach and some markets may be heavily concentrated and maybe some intervention is warranted.  In the U.S. we have supported open enter knelt rules for the very last mile in which paid prioritization is not permitted.

That debate is currently underway at the federal communications commission.  It has been you know back and forth between the commissions and the court and now it is back at the commission so no one has perfect knowledge of how that might transpire.

I just want to make one final point in response to a couple of the other speakers, which is I think it's a fallacy to say that, you know content providers are over the top providers operate in a wild west such, Wild West being an American term, but for an environment where there is absolutely no rules.  I think that is simply not the case.  I mean, we have to comply with the laws of the countries in which we operate just like everyone else does.  There are plenty of regulations that apply to us and, so, I think that is probably not a helpful way to talk about the issues.  So with that, I'll probably turn it back to you.

>> PROF. DR. KEMAL C.:  Very good.  We saved eight seconds, but there are some questions, and I think somebody wants to address a question to Google.

>> LUIGI GAMBARDELLA:  I think I was lucky because I, before my holiday went to the Silicon Valley and visited Google.  Had a chance to have a meeting with all of the stuff of the project of Luna and I think that it is very interesting the project idea that Google wants to cover the whole world and to give access to everybody to the Internet.  In this particular case, very interesting.  As you are aware of that this should be done with the telecom operators.  Could be one of the first example, big example, a corporation together of Google with some telecom operators and we're having some discussion to do something together.

You know, whether we can do help to develop this project, it can be very, very interesting.  So I appreciate a lot what you said.

>> PROF. DR. KEMAL C.:  Okay.  Just to actually make a few comments on Aparna's views, basically what she is saying is we are in this boat together.  So without content the empty big spectrum doesn't mean anything, but at the same time I have some views on my own.  As large majority operators, there are tax issues, for example in countries like Turkey and some other countries, there is some heavy traffic coming in and out and these Governments I know there has been issues with, you know, operators like Google or content providers, tax issues.  Who is taxing Google on these OTT services that they're pushing globally?  And that is something else, but that is also related to the infrastructure investment that is you're making.  I think what you're doing is nice, you're reaching, trying to actually push Internet to remote areas, but that is like a social responsibility of the project.  But at the same time, you should be also responsible for the infrastructure investments is all the other Internet providers, but that's something that we're going to discuss, maybe there will be more questions coming.  We'll discuss it.

>> APARNA SRIDHAR:  I confess I'm not a tax expert, so I won't go down a tax road.  That is not my area of expertise.  My area of expertise is in these issues, but I do think, you know, when I say we invest in infrastructure, I'm talking, we are truly trying to bring content as close to the end user as possible, at least globally.  You know, I'm obviously not a Turkey expert either, so I usually take my words as general, but I think it is a fallacy to say oh, we're only interested in the pie in the sky kind of next wave of things.  We're investing all the time in getting content to the user day to day.

>> PROF. DR. KEMAL C.:  Okay.  Thank you.  At least we all agree that we are in the same boat and if there should absolution, the solution should be actually in a table where everybody sits together like Mr. Gambardella coming from the OTT providers and tell law comb operators.

Now we have two more speakers, and then we will open the floor for discussion.

Now I'm going to go back to a Government representative replacing Mr. Shang from Militime Coordinations of Turkey.  He started to work as an engineer in Turkish telecom.  Subsequently he has been assigned to a group chief engineering planning so he has obviously technical background.  Since 2012 he has been working for the Ministry of Transport and Maritime Affairs and Communication.  He is the Theodore Electronics Department.

Ken, if you could give us your view on the Ministry, how the Ministry sees this issues OTT issues and maybe some tax issues and network neutrality issues and who should be responsible for regulating the traffic.  Thank you.

>> KEN:  Thank you, Mr. Chairman.  First of all, I would like to express my great pleasure for being in such a distinguished comprehensive event.

I am trying to express our position today the importance of broadband and high speed Internet is important for all specters.  Also the broadband triggering economical development and social development of course.

I would like to explain some of our items about broadband, first of all.  We have extensive studies about that subject which all shareholders, all the ICT sectors in Turkey.

I would like to share some of our items.  First, extending of ICT infrastructures and in a short competitive competition, extending of broadband infrastructure, promote and finance of ICT are on the projects.  Increasing the number of services covered.  And reasonable tariffs for end users.

In the context defined by Ministry, we also define our target into the period of 2023 which is the rest of our study.  In the study we focused especially to private infrastructure and mobile broad bands.

That study, I want to give some broadband related targets.  One of them is create infrastructure and installation fiberoptic networks and to ban exchange point in the region.  100% with penetration with vibrant broadband multi infrastructure all over the Country.

We also are ‑‑ we have studied with our national institution on the subject.  Now we are studying define our points and targets are about broadband infrastructure.

In order to achieve all 2023 calls we anticipate an investment.  And it is neither to remove barriers in front of operators.  At this point fiber investment is very important for fixed and mobile networks.  Then fiber infrastructure migration very important.  I want to give some of them.  First of all, I want to divide into two sections the infrastructure.  One of them is the active part, which consists of multiplex system cables, et cetera, and the other part, the part is just consists of pipe, pipes, et cetera.  Recognition for active part our cable sharing and on the other hand regulations for the right of the very important and sharing.

According to our regulatory regime, Government relationship between piloters are information and communication technology or authority ICTA, but right of failure also consists of relationship between piloters and Governmental institutions municipalities.  For that reason, by the law the regulation of right of addressed for the Ministry.

Broadband and infrastructure investment are very important for the future.  For realizing our cause we believe that 10% audit knees need each other and have to be studied closely.  Because infrastructure developed by offering global services.  On the other hand, Teko needs to develop all entities and Internet and broadband services.  But we have to consider also the user's perspective.

Information Society meets both of them.  In other words, user perspective has to be taken into account and we have to very careful on that issue.  Because on the national level actors and responsible for telecom regulations the telecom communication and also for all sectors affects all human life sick else and infrastructures have financial and responsibilities.  On the other hand, OTTs are international and global and have no national regulative responsibilities, but have some responsibilities as a global learning.  The service ‑‑ but we see that they also have some invest in fiber infrastructure.

Issues between Teko and oddities have to be considered in a global and international level.  Regulation or punishes in our Country with the national level are absorption to create fears problems, because Teko's oddities are not at the same range and same platform.

We have staples of sectors, regulation authorities, they should find it reasonable, so find a solution which meets regulatory requirements.  And we are studying on that issue inside the Ministry and information and communication technologies authority.  On the other hand we follow the debates, discussions about the subject very closely.

Thank you.

>> PROF. DR. KEMAL C.:  Okay.  Thank you very much.

Obviously, as I understand the Ministry's view on regulation, is they have the regulatory authority, as most countries do and, so, that regulation issue falls in the hands of regulatory bodies.

And finally we have one more speaker.  He represents one of the largest Telco operators, mobile operators in Turkey.  So we would like to hear their view on network neutrality, broadband regulation on broadband, because I know that there are some issues in Turkey regarding broadband infrastructure, and Mr. Tsiavos, he took office in the state planning organisation and BTK.  So he has some regulatory office experience as well, and now he represents the private sector.  He holds a degree in electronics energy, and then he did his Master's degree in science and technology policy and communications technology AT University of Westminster.  I think this is in UK, right, London.

The floor is yours.  We have seven minutes now, we're going to open up the floor for discussions, and we will have 20 minutes for discussions.

Thank you.

>> PRODROMOS TSIAVOS:  Might be a good idea to talk as the last speakers, but I will go back to 80's and 90's first to show what you are discussing today is not new for the operators we have seen a similar experience in the past and then try to come back to today in a few minutes.

So in 80's and 90's we had as in the telecommunications market we had police and nothing else.  Then the technology brought some opportunities so that some guys were able to carry international traffic through other ways and then this business got bigger and bigger so that when the structure collapsed and there was a near business structure, a new pricing model, which was symbolized by termination rates regulate bide the regulator authorities established at those states.  Then we had an imbalance between the earnings and spendings, which is very similar to today.  So the operators had to find a way for this which is first at the time called tear I have balancing, saying that they had to introduce monster fees to their customers just to balance their earnings from the business they have been doing.

So at the time there was a remedy for this frictional transaction and all the operators made their rays.

So today, yeah, this was licensed telecom operators.  Today we have neat players in the market which are not licensed yet.  And there is a new interconnection regime today.  I mean, I see some guys call the partnership between the operators or net and the operator as interconnection.  People today call it partnership, but some old guys, including myself call it interconnection agreement to actually it is really an interconnection agreement in any way.

So the history repeats itself.  Today we have new players and again we have the same problem that the revenues earned from this business and the investment, the expenditure to be done do not match and, so, the sustainability of the business comes under threat because what I mean by this, for instance for mobile site the cost of network operating the network all over the world is around $150 billions in these days, and this will double in the next decade.  It will go up to 300 billion by 2022.  So in this Country for instance the amount of the investment done by four big operators is around $1.7 billion and this is not one of actually, if you combine the last five years it is more than $10 billion and it is not decreasing.  It has to increase.  It has to be sustainable.

So history repeats.  A new business model and a new price and structure to go with this one.  This comes to the discussion on net neutrality actually, because if you see that this week we have seen here everyone has their own definition of net neutrality depending on their own priorities.  And we have mostly heard the catch term about while talking about specialized services that we can offer to OTTs Society seems there is a reaction to this rassling.  We are used to making analogies from transportation.  It's almost a tradition to everyone in this industry but this time it is not only us, everyone mentions about fast lanes and if you go back to transportation, this fast lanes, the paid service actually prevents congestion and it creates resources for further investment for further upgrade of the network.  So it is having paid fast lanes simply it helps, actually is sustainability of the system.

So on telecom industry on our side, trying to find out new ways, new pricing models, new business models is not to demolish the system it is for healthy growing up in the systems.  Following the discussion here this week if we know everyone can have a word on Internet and everyone can have access to the words or other people, then we have to have a strong network.  Not a fat one, but a strong one.

Again, this was concerning in the 80's and 90's when this transition happens the investment will go to the dense corporated areas to corporate business because the profit is only there and there will be huge access deficit for the rest of the customers, rest of the students, but this did not happen as I mentioned thanks to the introduction of tariff balancing and the way to collect money from the customers.

So if we are to sustain an open Internet, open net again, we will do the same.  We have to find the resource for a strong network and when I say a strong network, it's a large ubiquitous which is not a network which is selectively deployed to certain locations with attractive titles like ultra, ultra super fast something.  For instance in this Country the mobile operators have a coverage of 99% in terms of population and in upcoming years in a couple of years we will have the same level.

And also this networks guarantee a certain level of quality service to each and every customer with GPIs.  So this is the type of network we should pursue, otherwise the network itself can be a premium commodity in the near future not a public commodity one.

So in order to achieve this, we have to create a marketplace which brings together the earnings and expenditures, all the players in the same place.  So yes, I agree that we are all in it together.  We should be all in it together.  Thanks.

>> PROF. DR. KEMAL C.:  Very good.  Thank you very much Mr. Tsiavos.  We are finished with speakers.  Let me summarize the views that I'm going to open up the floor.

Like Prodromos Tsiavos, there is an interesting technology of what is happening in today's Internet world in what happened 20, 25 years in the telecom industry.  Also the speeds have grown tremendously and as a personal anecdote from myself I'm actually a commission at the University I also shared the industrial association IT and telecom association of Turkey.  I was personally involved in Internet connection project in 19 ‑‑ in the middle of 1990's in Turkey.  That was the first Internet maybe the second Internet connection in Turkey.  The first one was in Ankara.  This was back in 1996 or '97.  It is about 14 or 15 years ago.

The first connection we established in Istanbul was 60 kilo bits.  In the past 15 years we have seen an enormous growth in the speeds, but more importantly, the technology was moving so we had to megabit speeds first and then we had gigabit speeds and then the price for megabit dropped significantly

Way I was also involved and I remember clearly selling 1 megabits of satellite capacity for $13,000.  In Turkey now it's a few dollars.  So the technology grew, but back then there was no content.  So Turkey had to wait maybe seven, eight years for content to be developed within Turkey and globally.  So like most panelists today mentioned, so technology, the infrastructure is growing, but at the same time content was growing as well.  So what I understand from all the panelists, so there is no clear solution and neither in this table nor in other discussion platforms in Europe and U.S., network neutrality still something to be discussed before starting the session I mentioned that I received an Email yesterday saying that this conference session is a feeder session to the network neutrality, main neutrality session.

There was also a comment that in NETmundial there were many discussions in network neutrality and at the end of that forum they referred to IGF in Istanbul that the discussions on network neutrality should be continued in Istanbul and as I understand, these three, four days would be a good platform to discuss these issues, but what came out of this at least from the panelist I see there is no clear judgment on network neutrality.  There are different sides.  We've listened to Government NGOs, private operators, telecom operators, content providers.  So as I understand there are still issues to be discussed and platforms like this is a good actually a portion to have views of everyone and now I open the floor for questions, discussions we have 15 minutes.  Okay.  There is one question back there.  If you also present yourself very briefly.

>> AUDIENCE:  Marc Summit was a stand up with broadband.  We helped service providers mostly in immerging markets to provide affordable broadband solutions to their subscribers, specifically focusing on unlicensed technologies.

A few comments maybe as fruitful to get the discussion started here, one thing I noticed in the OTT discussion is a lot that we hear service providers complain about the cost of operating the networks and the revenues they can bring in.  Especially when we look at mobile networks.  The operators are actually in the position to determine a lot of those cuts by themselves when they auction or participate in the auctions for spectrum.  They bid on the spectrum and are in a unique position to actually identify how much they want to pay for spectrum by themselves.  So I think there is a little bit of looking at the industry themselves to write as much as they do for spectrum to get it and now having the problem of revenues not being in shape with what the cost of the underlying spectrum sometimes is.

I think spectrum needs to be more freely available to operators.  Often spectrum which is purchased isn't available to competitors but not used by the owner of the spectrum in certain areas and there could be a lot of things done to alleviate that.

The other part is, when I look at Telcos, I find it unfortunate when we see OTTs like Google and FACEBOOK looking at alternative transmission ways using drones and balloons, I think that innovation needs to come from the tell co‑operators.  If it is coming from the OTT it is demonstrating there is a problem right now with the tell co‑s and whoa like to see that innovation from a consumer perspective coming from the tell co‑to think about all the kinds of ways they can reduce cost of operation for those things and don't leave it up to their competitors to their rivals so to speak.

Last part.  The problem I see with that analogy is we don't charge the stores for the fast lanes, we charge the actual user of the fast lanes to choose if they want to pay more to get faster into the business centre or back home but we don't charge the stores and you would find that probably pretty unfair because the small business who is a baker or a butcher would not be able to compete with the large department store who can pay for that, like Wal‑Mart.  And I think that is the exact problem we see was fast lanes where companies like Google and FACEBOOK can pay for those, but the startups cannot pay for those.  That is very big imbalance we're all worried about in the net neutrality.

>> PROF. DR. KEMAL C.:  Thank you very much.  Anybody would like to add?

>> LUIGI GAMBARDELLA:  Yes.  Thank you very much.

>> PROF. DR. KEMAL C.:  It is not working, I think.

>> LUIGI GAMBARDELLA:  It's working now.  It's working.

Thank you very much for your question.  But I think that when you discuss about ‑‑ we discuss about innovation.  The problem is not only the problem of telecom operators, maybe it is a problem of, for example you see the difference that is between Europe and U.S. and in particular if you visit Silicon Valley you understand why there it is much easier to promote innovation.  Now innovation should not be exquisitive of any valley, but if someone has a good idea and is capable to innovate that, we should use this innovation.

As far as I knee Luna doesn't work without the cooperation of the telecom operator.  So in this case could be really a win‑win solution.  Then I agree with you would be good also to have maybe from our side also, from European innovations.  But the problem of innovation is not only a problem of the telecom operator such is a problem for some of our region that Europe is behind and are not capable to innovate as we should but let be pragmatic.  If there are good idea, are innovations, let's see how we can use and benefit from them.  Okay.  Thank you.

>> PROF. DR. KEMAL C.:  Any more questions from the floor?  Okay.  Two more over there.

>> AUDIENCE:  Thank you.  I listened carefully and enjoyed the contributions from everyone on the panel.

>> PROF. DR. KEMAL C.:  Can you present yourself.

>> AUDIENCE:  I work with the Egyptian Regulatory Authority.  One thing I expected from this session which I hope I didn't miss, when we talk about oddities we often just look at that in contrast with the issues of net neutrality.  And here I want to bring my question which might be a little bit different than the approach.  What is exactly the framework that governs OTTs in terms of those services that is offered to the customer?  I wish to see the matter of OTTs presented from the perspective of Consumer Protection.  Most of the services of companies like Google, FACEBOOK are free, but even free services they don't come without responsibilities.  I mean, some of them are regarding privacy ask and probing tech shun of data and other services that are commercial.  Google they have some paid services so does FACEBOOK.  So where does the customer go when they have a problem with one of these services from the perspective Consumer Protection?

>> PROF. DR. KEMAL C.:  I think that is an interesting issue, but I don't know if that has anything to do with network neutrality, Consumer Protection.  I don't know if you have anything, maybe representative from Google say a few words.

>> APARNA SRIDHAR:  I think Consumer Protection comes from a lot of different sources.  One is the law, and other is public norms about what we expect from corporations, et cetera.

I think there is an important consumer angle to the network neutrality debate and it is why so many consumer groups have been active in the network neutrality debate, which is that, you know the fundamental goal is to make sure that individual users of both generators of content on the Internet as well as consumers of content and with the Internet many people can be both a consumer and again rater of content, that people have the right to reach content of their choice and to create content of their choice to be delivered to other end users.  So I think that the relationship between network neutrality and Consumer Protection is strong.

>> PROF. DR. KEMAL C.:  Thank you.  I think there, as I understand, end of these discussions it turns out that there are many angles to this issue and, like our friend suggested, there are issues with the Consumer Protection and there were suggestions in the past having these fast lanes like economics class.  If you like to play premium then you fly business class.  If you pay less you fly economy but then there are actually some issues in that model as well because in the plane you have a certain area restricted with business class and economy so you're not using the whole spectrum.  It's like this demand and supply issue and the economy should be there.  So we cannot avoid the economics someone is actually investing.  There is no free lunch, so as I understand there are many issues here.  Economics, Consumer Protection, fair competition and I think there will be more discussions on this issue and we have, I think, time for one last question.

Okay.  I have to pick.  Let's get the lady.  Sorry.  I will get you, as well.

>> AUDIENCE:  Rosalind Latin, Augsburg University.

>> PROF. DR. KEMAL C.:  Can't hear you.

>> AUDIENCE:  Rosalind.

I work with our engineering department, and I would like to make a point from our engineering perspective which I think is important for this discussion.  This whole debate we have about fast lanes and slow lanes, I think, is rather misplaced.  It's important to remember that the original TCPIP protocols had differentiation of service built in priority, urgent bid quality type of services.  All kinds of OTTs today are availing themselves to a variety of technologies that help them speed their data to end users.  At my university we have a start up called media at hand which specializes in video compression and this can help the delivery of data to take half as much bandwidth and so most of the world's con ten is poorly encoded.  This is another challenge for operators that they have to deliver lots of data that the poorly encoded.  You can improve your user experience by improving the coding of data.

So I think this idea of fast lanes is kind of a way to scare people and it is not exactly true, but today media companies and content companies all over the world is using priority systems to ensure that their video gets delivered well, Ecommerce companies want to make sure that their credit card transactions get through, and there is all kinds of technologies that are being deployed to do this in a huge innovation ecosystem of startups assisting in this area.  So I would just say that, you know, an idea that a small start up has to have an access to a fast lane.  First of all, I would love to see that actually happen because the out range would be intermediate and there is no operator I know would be so stupid to try to block a company that would do that.  And immediately we have all kinds of areas through competition law, at least in the west, where we could stop it.  I think it is important we bring in these engineering perspectives and also look at the start up community that is facilitating speeding of content through innovative solutions.

>> PROF. DR. KEMAL C.:  That brings a very interesting angle as we sit here today discuss these issues network neutrality fast lane, slow lanes.  As I know myself as well there are actually technical solutions, differential TRIRP.  As far as I know like this lady suggested as well a lot of companies are using such services.

>> AUDIENCE:  I would like to briefly respond.  I think we should be careful about what we're talking about, right.  So video compression is something that is a very useful technology.  It's used by the content provider to make their content more accessible.  That's very different than an operator making choices about which content is delivered more slowly.

I also think when we're talking about prioritization, the key sort of issue with prioritization is that it's most useful when there is congestion.  So, you would only pay for a fast lane if your bits weren't going at the rate of speed of everyone else.  If there were a cue so to speak then a fast lane is important.  If there is no cue ask there is available bandwidth for everyone, then there is no incentive to use a fast lane.  So I think there is a bit of a problem with monetizing scarcity associated with these fast lanes.

On the other hand, it would be very great for all of us if we could focus rather than focusing on fast lanes and slow lanes, if we could focus on bigger lanes for everyone so that everyone's content can get to the end user as quickly as possible.

>> PROF. DR. KEMAL C.:  Thank you.  I think there is one more comment here, but I think what she was suggesting or referring to is not only video compression but there are differentiation and prioritization techniques at the very low level.  So some companies are trying to use them as we speak.

>> AUDIENCE:  That was my point.  This is not about the compressional video by the OTT players.  The operators and vendors always try to develop new protocols to manage the traffic carefully to manage the traffic effectively and today many people are working on this these issues and this is on the operator's side and the OTT players do not care about it.

>> PROF. DR. KEMAL C.:  Exactly.  Right.

>> AUDIENCE:  It seems this is a field to be regulated in the near future.

>> PROF. DR. KEMAL C.:  So operators try to save themselves or try to actually prioritize the traffic.  One last question.  There was a gentleman there, then we close the floor.

>> AUDIENCE:  Thank you.  I'm from India, an association called ACTO.  It was more a comment than any question.

I think the ecosystem today, between the operators and the win technology, where the operators are coming in and falling in the zone of, you know, data centre or cloud and end to end.  Similarly, companies like Google and Microsoft are getting into the space of the operators, as such, and that is where the regulation was unregulated can come and say the rules of the regulation are not same for similar kind of a service so when you're offering a service like SMS or things, the rules are much different for an operator verses the rules and condition for an operator like an ODT.  Like things like security or things like encryption, the monitoring requirement as such.  So that is where the challenge lies from an operator's perspective, not just to comply with his conditions, and also to comply with the services that are being offered or the network as such.

Thank you.

>> PROF. DR. KEMAL C.:  Okay.  Thank you for your comments.  I think our time is up.

I would like to thank you all for coming.  That was a fruitful session.  I hope we achieved our goals, and I hope that the network neutrality session, the main session, will certainly get some positive feedback from this session.

Thank you all.