The following 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.
>> MODERATOR: Okay. Good morning. I think we can get started. So welcome to the annual meeting of the Dynamic Coalition on Network Neutrality. My name is Luca Belli, I work for the Council of Europe and also I'm affiliated to Université Paris 2. I will have the honor to moderate the session.
We will discuss the annual report of the Dynamic Coalition. You can find hard copies in the room and it will be online by the end of the day on networkneutrality.info. So let me introduce to you the distinguished panelists that will help us on this travel through Network Neutrality.
First of all, Vint Cerf who is Vice President and Chief Internet Evangelists of Google and also one of the Fathers of the Internet.
And then Chris Riley. He is a senior policy engineer at Mozilla.
Then we had Roslyn Layton who is a researcher at Aalborg University.
Then we have Patricia Vargas-Leon who is a PhD candidate at Syracuse University and information studies.
Ørnulf Storm from the Norwegian telecommunications authority who will be representing Sorenson who offered his contribution for this report.
And last but not least, Alejandro Pisanty, who is the director-general for academic computing services at the National University of Mexico.
So this year's report is dedicated to the various regulatory debates that are going on around the world on net neutrality. Last year we devoted the report to Network Neutrality on Human Rights. The report has been read by quite a few people and has had an inspiring role also for the European Parliament that took inspiration when he adopted the first reading of the Connected Continent regulation.
This is one of many regulatory debates that are going on right now around the world of Network Neutrality. 2014 has been a very intense year for Network Neutrality debates. It started with the invalidation of the Open Internet Report and Order in January. Then the European Parliament adopted its first reading, but that process is not finished at all. And then Marco Civil, is landmark law was adopted by Brazil. And so today we will have the opportunity to explore these aspects and other aspects of all the regulatory debate onto.
Just one second period I also forgot to say we have our remote moderator which is Alexandra Permyakova who will remote moderate. So remote moderation is available at any time. And we will have, if technical issues allow us to have it, we will have remote intervention from Australia which Angela Daly which is professor at Swinburne University.
I'd like to start with Vint Cerf who, being one of the Fathers of the Internet being is in good perspective to provide us some good thoughts on Network Neutrality.
>> VINT CERT: Thank you. Do you mind if I get up and walk around? First of all, I've been asked not to go on longer than 10 minutes, so I will try very hard to keep within that limit.
Let me start out by saying that my view of Network Neutrality begins in the United States, which is where the debate began at least where I live.
The issue really had to do with consumer choice. The question is: Are the consumers in charge of where they go on the Internet and what they do with it? And the issue arose that there was not a great deal of competition for broadband service in the U.S. And, in fact, in many cases, you had, if you were lucky, a choice of two broadband providers, typically one was a cable provider and the other one was a Telco. In some more common cases, you had only one choice one or the other. And in the rural parts of America, you often had no choice because there wasn't any broadband available.
So the debate arose about the provision of broadband competition and user choice. And the question was whether the provider of broadband service to a consumer like you and me could arbitrarily control where I could go on the Internet and what I could do there. And there were arguments made by some of the providers of broadband service that somehow or other, they should be able to charge suppliers of content that the users wanted to go to for the privilege of delivering that content to the users of the broadband service. Notwithstanding the fact that the broadband provider was already charging the user for access to the Internet.
And so the worry arose that the providers of the broadband service would in fact interfere with and potentially limit the ability of a user to go somewhere on the Internet and get something done or obtain some content.
To make matters worse, the problem also came up that the users might not actually be able to take advantage of what was being offered because in the interior of the network, there could very well be congestion.
So you can imagine the following scenario. A provider is told by an Internet service provider: You have to pay us, in addition to getting onto the Internet yourself, you have to pay us at the other end in order to reach your users and oh, by the way, we can't guarantee that will make any difference because there may be congestion in the middle of the net about which we can do nothing. So this was not a very good scenario at all.
I think that the most important outcome of this debate is to try to assure that the users really do have choice. Moreover, when you don't have enough competition so users have the choice of moving from one provider to another, then you have to ask whether there is a regulatory role to be played to assure that the playing field is even and that the users have the ability to do what they want. And if they don't get the service they want, then they can get it from somewhere else or the regulator helps to make sure that they get access to what they are expecting to reach.
So that's basically the picture in the United States. The question of anti‑competitive behavior was a very heavy focus. Here's another example. Suppose that you're in the business of providing broadband services but in addition you are providing, let's say, streaming video services on your network to the users. So you have a vertical service that includes video service, plus broadband Internet access. And on the broadband channel, some competitor in the Internet is also providing services like streaming video and you conclude that you could interfere with that competitor by delivering poorer quality service to the users for anything except your own video services. That's an anti‑competitive example. And that, too, was a worry.
So at this stage of the game, there are debates all over the world about what does Network Neutrality mean. And I want to finish this introduction by saying, first of all, it does not mean that every packet has to be treated exactly the same way. It's understood that there are some services that need low latency. There were other services that need high capacity. The point is that if the service requires one of those features, any service should have equal opportunity to get access to that kind of service as opposed to the provider of broadband services picking and choosing which of the suppliers of service will get that extra capacity or get that low latency.
So, once again, it's very important that we have equal opportunity to get access to these services.
Finally, there was an argument that some people made that Network Neutrality meant that you couldn't charge for more usage. That's also not my position, anyway. If you use more of the capacity, it's understandable that you might actually have to pay more.
The important point here is that the unit of service that is at stake here is bandwidth. How much data are you moving and how quickly? There's a big difference between moving a terabyte of data in a month and moving a terabyte of data in a minute. And the two, moving a terabyte in a minute really consumes a lot of bandwidth. And so you could imagine in a congested system, that the supplier of service, to try to be fair, will offer more capacity to someone who paid more and less capacity to someone who paid less. That's not a violation of Network Neutrality. That's a very reasonable position to take because it's a fair allocation of resource.
So I will stop there. There is more to be said, which we are going to hear from the panelists with different perspectives on how the Network Neutrality debate is showing up in different jurisdictions around the world. So thank you very much for your attention.
>> MODERATOR: Thanks for the varying perspective. And I would like to keep on with the U.S. perspective. So go to Chris. Chris, can you provide because overview of the state of play in the U.S. and also the regulation, what is going on at this moment?
>> CHRIS RILEY: Absolutely. So, first of all, thank you, Vint. That was a terrific overview. Each I'm Chris Riley. I'm a Senior Policy Engineer at mow still Awe worked on that in a number of areas such as Brazil, EU and the United States. Today I'm talking about the U.S. debate both because that's the scope of the article of mine that's included in this report and because that's the one where most of my, Mozilla's attention is focused right now. The open Internet debate, depending on your chosen terminology in the U.S., is at least a decade old. I mark the unofficial start of that around the development of the policy statement of 2005 but you could also argue that it goes back many, many more years to the computer inquiries further back fending upon Hugh you want to look at it. The biggest development as Lucas said was the January decision that overturned the 2010 Open Internet Rules that were adopted by the Federal Communications Commission.
So there's a lot of work now to basically determine what to do to what the role of the regulators should be in this space in the United States. So just the current status as I understand it, I think there's a very general, very wide agreement in the United States on the importance of an open Internet as a normative matter. And I think there's even generally a pretty broad agreement that there should be some rules and some role for the FCC in that.
I would argue there's three key areas of debate in the U.S. regulatory process now, two of which have residence globally and one of which doesn't.
So the first of is prioritisation. What does it look like? What does it mean for other services? How is it engineered? What are the repercussions in which it's engineered in the network? And what is the right role of a regulator in setting limits on that or not? And there's a lot of active discussion of that at the FCC and in these processes right now.
The second is mobile. Mobile networks are different. They have different infrastructure. So the question is: Should the rules be different? And if so, how? And there's a lot of active discussion about this.
We also have a big pretty well‑established part of the American regulatory framework called Reasonable Network Management. It has echo in other environments, as well. And so there's a question of whether the rules or the scope of reasonable management network need to change or be applied differently in mobile networks to allow for things like different management of upload congestion and mobility in bouncing between cell site and cell site and so forth that arise there.
And the third thing that is, in my view, the most active in the U.S. right now is the question of authority. I think it is unique to the United States. Obviously there are authority and jurisdictions issues that are related to Network Neutrality no matter where it occurs but in the United States it's a particularly complicated time because the reason the rules were sent down by the courts was an assertion that the FCC was using the wrong basis of legal authority for rules of the sort that it tried to adopt.
So there are a few different paths forward that the FCC is weighing actively right now. One is to keep the basis of authority largely the same and tweak the rules a bit to try to get something that's legally clear and acceptable that way. Another is to change the basis of authority by means of reversing some fundamental classification decisions that were made in the early 2000s.
Mozilla has offered a third theory, which is the first half of our article on this report, which I won't go into in great detail now. The gist of it is essentially the D.C. Circuit's decision in January said the market for broadband local access services is two‑sided. Whether you like it or not, Verizon is functioning as a carrier to Google and other edge providers. Take this and run with it. Call a separately legally distinct service and then look at the regulatory for that and use that as the basis. Won't go into detail but there's a lot more on that report.
The status of the process of the FCC people are writing their reply comments right now. There are two rounds of legal filings on this. There are a lot of active meetings. There are workshops being held in September and October. I think most likely there will be some new set of rules by the end of this calendar year. I don't know what those rules will look like. That's not just my public messaging. I really don't know what the outcome will be. Which is one of the reasons why this is a real interesting process in the United States right now. Regardless of what the outcomes are in the U.S., it will have echoes in the EU and in other environments where Network Neutrality is an active issue.
>> LUCA BELLI: Thank you. Could you also elaborate a little bit on how paid prioritization and mobile traffic management can ‑‑ what are the entrants that those issues can have out of the U.S. in a global perspective?
>> CHRIS RILEY: Absolutely. I think these are network management practices and challenges and opportunities that are being seen by network operators everywhere. I mean, the mobile infrastructure, it sort of works the same way no matter where you are. You have backhaul connections that are powering cell tours that are driving data and download and upload to and from the cell phone. So the unique management in mobile are unique features in network management everywhere.
So if the United States' rules come out and say: We can have the same Network Neutrality rules for both types of systems but interpret the concept of reasonable network management differently to allow for the things the carriers need to do, that happens to be Mozilla's position in this debate, I think that will set a precedent for the other environments.
On the other hand, if the FCC says we have different rules. Depending upon how they say that and what explanation they use for that, that could also have a precedential effect I believe in other jurisdictions just because the networks are the same everywhere. I'd argue comparable in the prioritization debate.
There's a big engineering background and context here. And the business practices are different, the technologies are different. I don't know exactly how big the effect will be, but I think there's at the very least a potential for impact in a way there's not with the authority question or not to the same degree.
>> LUCA BELLI: Thank you. And before passing to the eyes of other regulatory approaches in Europe and Latin America, it is interesting to make a step back and analyze the theories that underpin Network Neutrality. So ‑‑ authored an interesting paper on an empirical assessment of the variou innovation s theories that underpin Network Neutrality. So why it is important to analyze, to test these theories?
>> ROSLYN LAYTON: So, good morning, everyone. Well, I think one of the themes of this conference is the different approaches of Network Neutrality around the world. And it certainly gives ‑‑ it's a wonderful opportunity for an academic such as myself to provide a test. So those of us who are getting our PhD, like myself and Patricia, we actually have a wonderful ground of where we see situations where Network Neutrality rules have been applied. So we can actually test, are the policy goals delivered through the various legislation?
Now obviously something we'd love to see is that, if in fact the Network Neutrality logic is followed, then we would see the next Google would come from the Netherlands and there would be a boom of investment in Slovenia and the people of Chile would say Human Rights have improved because -- with the imposition of a Network Neutrality rule.
So the paper I have prepared for this conference is looking at what is called the virtuous circle of innovation. It's a theory of innovation suggested by the Federal Communications Commission in their 2010 Network Neutrality rule. And it holds that in the state of Network Neutrality, there will be flourishing of content and applications which are desired by users who purchase Internet subscriptions, the revenue of which goes to operators who then invest in network.
Now, it seems like a very straightforward cycle and it is sort of fulfilling and going around. So that seems on the surface very intuitive and it should be easy enough to prove. So I'm in the process of building this econometric model to look at that. And then the various data that would go into that.
And so what I talk about is some of the challenges that you will need to address when you look at the data. Obviously regulators are interested in these kinds of things before they make a law, they want to see does it deliver on what it said? So just to give you some highlights, things like some of the challenges of this are that Network Neutrality rules differ in all of the countries. It's defined differently, the way that if it's a single law versus part of an omnibus law. We see different market compositions.
Another challenge is that one of the key measures you would look at is capital expenditure. Accounting rules are different for different companies or different countries. So some things could be included like, let's say, subsidy for mobile phone in one country and not in another. That would change the data to some extent.
The other challenge with this theory is that it doesn't take into account the efficiency developments in networks. So, for example, 10 years ago maybe we could buy a router for $100,000. Today may be much less. Today also, for example, network sharing. Two operators could share the same mobile mast. So one of the things you could see is maybe less infrastructure expenditure but more efficient use of the network.
The other challenge with the theory is it's not taking into account the application side. So right now there is an explosion of companies involved in content delivery not just of CDNs and cloud delivery but things like video compression and video encoding. So the vast majority of the world's video content is not encoded very well. So it's kind of very bulky to deliver. If you can improve the encoding of the content, the user can have a better experience. And this takes up less network.
So the same network could deliver more content if you encode the data better. So there is ‑‑ we also saw something with Facebook where they improved their mobile platform where it once took up 15 megabits of your mobile subscription, today just take up two. So the idea of this theory makes a lot of sense, but a linear theory like that is a difficult time to maybe capture these efficiency enhancements which would change the relationship.
So at any rate, what are the results so far? I would say unfortunately like a lot of things in economics, are conflicting and inconclusive. We have on the one side all the around the world that traffic is growing. Everybody wants to get on the Internet, use more services and applications. But the rate of investment is varying quit a lot depending ‑‑ and it's not commensurate with the rate of the traffic growth.
So, for example, in the United States where you've got just 4 percent of the world's population, people, the Americans for a decade have enjoyed over almost a quarter of the broadband investment. So that's quite a large amount. With deep respect to Dr. Cerf, the world owes a debt of gratitude, but I disagree with the characterization of there not being competition in the United States. There's a variety of reports showing national broadband map FCC, White House office of science and technology policy, and so on that actually discussing the competition. And it's also you can see that through the investment.
But at any rate, the other challenge we see, of course, would be in the European Union where a decade ago the EU accounted for a third of the world's broadband investment, the communication networks. Today it's less than 1/5. Now a lot of that is because the world's total pie has grown. But the EU as a whole has not been able to keep up.
But when we look at the country levels in various European countries, we see a different story. The Netherlands which has a Network Neutrality law, very high investment, it has been high historically, but we can look at another country like Denmark which has high investment but no Network Neutrality rule. And it's specifically been the policy there to use a multistakeholder model in lieu of making a law because it was unclear that the law was necessary.
So to me the take‑away: There's really not a strong conclusion here either way. It needs to have more data and study. But it also shows the value of a multistakeholder approach to managing Network Neutrality. And I think the fact that we have such a wonderful attendance at this kind of event gives a lot of credence to this sort of model where you can bring stakeholders together and it could have some impact to influencing firm behavior and perhaps deterring what could be a possible projected abuses.
>> LUCA BELLI: Thanks, Roslyn. I'm sure your representation will trigger some reply.
>> Roslyn Layton: Yes.
>> LUCA BELLI: So before the replies, I will like to keep going with the regulatory approaches that have been adopted so far, particularly Patricia analyzed some approaches adopted in Latin America. But those approaches have been criticized because some of the provisions contain some not clear specific terms, such as arbitrary or nonarbitrary, illicit or legal, specialized services. So could you highlight what are the challenges, the critiques of this lack of clarity? And what are the unintended consequences of this lack of clarity?
>> PATRICIA VARGAS-LEON: Good morning. Good morning, everybody. Thank you for coming. Well, I'll start saying that for those of us who work in law, we know the language is important. For the ones who come from the civil law, we know that the written language is actually extremely important.
So, between 2010 and 2012, three South American countries, Chile, Colombia and Peru enacted Network Neutrality legislations. The three of them in general terms have a provision that says that ISPs are not allowed to interfere in the Internet traffic when ‑‑ cannot arbitrarily interfere with Internet traffic. The reason why this word arbitrary has been criticized is because, one, there is no authoritative source that defines these concepts in these countries. The only one is Chile.
The Chilean jurisprudence mentions that the word arbitrary means something that lacks justification with no motive or cause or when it is just the result of someone's will. This is also a very general definition. But it's been followed by the Chilean regulator. Specifically critical in the sense that although ISPs cannot act arbitrarily, they can act by justified reasons because in that case, they are allowed to interfere in the Internet traffic.
This has not been written in the law, it's not in the initiative regulation but it has arisen as a concern by policymakers and it's also stated by some of the Internet Service Providers. So we do not only have the possibility of having Internet Service Providers defining what is arbitrary or nonarbitrary, but also the possibility of having multiple approaches because each country has more than one Internet service provider.
In the specific case of the Columbia legislation, there's two words called special services. Special services, according to the needs of the market. This is related to the mobile service. The legislations give the possibility to the Internet Service Providers of giving special services mostly connected to chat services or social networks, social platforms in the mobile devices. In this case, this practice has been explicitly forbidden by the Chilean legislation and the Peruvian doesn't mention anything about it.
Regarding the words legal or illicit, the three legislations mention that the Internet access is a right as long as it has licit purposes. And the Internet Service Providers also understand that they are in the capacity of the side when a capacity is legal or not. If it is not legal, for instance somebody that is acting against the intellectual property rights, they will be entitled to act in the Internet traffic. Whether this is legal or not, it will be later undefined a rule by the regulator.
>> LUCA BELLI: So after these initial definitions and the programmes that these definitions can trigger, could you provide us a short overview of what is the traffic management? The general approach to traffic management in the Network Neutrality legislation of Chile, Colombia and Peru?
>> PATRICIA VARGAS-LEON: In the case of the traffic management, it is allowed but it is regulated. So in the [Inaudible] Chile. The ISPs can affect the traffic management on two conditions. As long as it is previously notified and as long as it does not interfere with the free competition. The Colombian and the Peruvian case are actually different. The common legislation put more detail on this. They mention that the traffic shaping is allowed as long as secures the reduction of the network congestion, as long as they secure the integrity of the network and the quality of the services, and as long as it provides service or capabilities according to the yoorp's choice.
In the case of Peru, the traffic shaping is allowed only if there is previously an approval of ‑‑ which is the Peruvian regulator. And there is only two exceptions to this mandate. One is when there is a precedent also by ‑‑ and when there is additional mandate. In the case of the Brazilian legislation, any degradation of the traffic will be regulated by the President. But since the initiative regulation has not been published yet, we don't know.
>> LUCA BELLI: So also the legal powers of telecom regulation derive from one country to another. Do you want to elaborate more on the legal powers of the various regulators? Or maybe we can keep on following on that after. And have the perspective of Ørnulf Storm from the Norwegian Telecom Authority that has adopted a coregulatory approach since 2009. So they have quite a long term, long‑standing experience in regulation and coregulation.
So you are in Norway. You are arguing for a service model for Network Neutrality, distinguishing Internet access service and specialised services. So what is the ‑‑ why is it useful for your purposes to distinguish between Internet access and specialised services?
>> ØRNULF STORM: Yes, thank you. First, yes, I'm Ørnulf Storm from the Norwegian Telecom Regulator. I think also I just want to comment briefly at the start, our goal as the regulator is also very much in correlation with Vint Cerf touched upon that we as regulator want consumer choice availability of broadband services and competition. That's our main goal as a regulator.
And as Luca said, we have had a coregulator model in Norway since 2009 which has been working well, actually. But of course now in the new proposals from the commission, there is a proposal in the single market regulation, there is a proposed Network Neutrality regulation which will of course also be part of the Norwegian regulation if it's passed because with the EA agreement, Norway, even though being outside the EU, we are also still have to implement all the regulations and directives in these fields. And therefore we have been working with that goal to allow for ‑‑ to have Network Neutrality and allow for specialised services.
So the service model mentioned with the two service categories has been developed to provide the balanced approach to Network Neutrality. And the model both protects the Network Neutrality for Internet‑based applications whilst it allows alternative approaches to quality of service and business models for specialised services.
So as specialised services are exempted from Network Neutrality, it is paramount that the specialized services are clearly separated from the Internet access service so to insure that the Internet traffic is not degraded.
So that's the purpose of that model.
>> LUCA BELLI: So the issue that you are stressing is with the clear separation, it can be technical or logical separation, the provision of assured quality of specialised services does not impinge upon the quality of the open access Internet. So how can these specialised services be provided without degrading Internet access services?
>> ØRNULF STORM: Well, the quality of service to these specialised services are not secured by giving these services an explicit higher priority level than the regular Internet access service. But, rather, by having adequate capacity reserved for the specialised services without this being done at the expense of the Internet traffic. So Internet traffic has its own capacity scale according to the contractual agreements access speed. But of course that does not mean that it always will get that speed, of course. But that so it should be separated.
>> LUCA BELLI: And speaking about unexpected consequences, what kind of unexpected, unintended consequences could lead to an unclear definition of specialised services?
>> ØRNULF STORM: Well, since the whole idea underpinning Network Neutrality is to ensure the equal treatment of traffic and specialised services are exempted from the Network Neutrality considerations, it is essential that these services did do not have a negative impact on the Internet traffic otherwise this would effectively undermine the foundation of the Network Neutrality. And because how will mutually ‑‑ neutral handling of traffic help if external conditions degrade the capacity of Internet access service as a whole? So the consequences of the unclear definitions is actug lil regulatory uncertainty. So what we want to achieve is to have a certainty both for the regulator and for the actors, Internet Service Providers and others to know what to do.
>> LUCA BELLI: Excellent for analyzing this perspective. And keeping on regulatory debates, Alejando Pisanty, he is in Mexico, there is a major market reform. And some interesting must carry and must offer have been introduced through this reform. Could you elaborate a little bit on the debate that is taking place in Mexico on these provisions and their effects?
>> ALEJANDO PISANTY: Thank you, Luca. Thanks for the invitation, for the refereeing of the papers and very glad that the meeting has had such a good calling power, convening power.
To your question, there was a major constitutional-level legal reform of telecommunications law in Mexico which is very significant. And now we also have the most of the secondary legislation, the actual rules that will apply in the market.
As the part you mentioned, which is must carry, must offer, was introduced now for the television and cable markets for the broadcast and cable television markets, which is very significant. I don't want to dwell that much on the detail specific case of Mexico except for its general implications. The general implication is major because in my understanding ‑‑ and I hope to be corrected loudly and soon if I'm wrong ‑‑ that must carry and must offer rules have been in place for a long time, especially in the U.S. market. And this goes all the way to the middle ages in history to the history of roads where common carriage was assumed or established as a rule in the Anglo world, whereas in continental Europe, it took a lot longer to be able to drive a road through some private property. And you will have toll roads. The tolls were private. And you would see that even in rivers, like in the Rhine in Germany where it narrows. You have an island, you have a tower and even a chain that would stop shipping traffic unless people paid tolls.
So, the introduction of common carriage street really a revolutionary notion that has not been worked out completely and it doesn't apply only. This is a statement not only for Mexico or Latin America, but I think it's also significant for continental Europe.
Second, there's a very significant consideration here starting from Vint's statements about the U.S. There's an excellent presentation in the paper about five years old by Scott Marcos which tells us why the economics of Network Neutrality is so different between Europe and the U.S. And when we start doing activism for Network Neutrality in places like Brazil, Mexico, et cetera, we should really look at the whole history compared with our own history and see what we actually want to achieve.
I would just like to mention from today, this happened yesterday but it's in the news today, the President of telephonic has come out very strongly against Network Neutrality again with a really broadside, broadband broadside can on ad against Network Neutrality by saying that Google and Facebook and the Internet companies are not neutral but they want the network to be neutral.
So when we are activists or militants or analysts or even academic analysts participating in public policy in countries where there is discussions about Network Neutrality ‑‑ has difficulty in staying close to the principles and to the social aims want to achieve without being taken for one side or the other by a banner that's a principles‑based banner but puts you on the side of Telcos or or ISPs and Telcos or makes it easy for them to accuse the militants and activists to be in Google's pocket, so to speak.
>> LUCA BELLI: Thanks for highlighting this. And also keeping on this, what are the ‑‑ speaking on this, what are the major political ideological and economic forces that are at stake in this moment in Mexico and that can be also found elsewhere and can be used as an inspiration for other markets?
>> ALEJANDO PISANTY: The economic forces are a major attempt by the government to reshuffle the markets. So the explicit of the telecom legislation is to open up for competition. This has meant mostly going after the incumbent Telco ISP, which is called Telmex or American Mobile and it's owned by well-known character named as Carlos Slim, second richest man in the world at this time. The other major economic interest at stake is a company called television which has been almost monopolized broadcaster. The interesting and economic and political dynamic is almost to political economy of the issues is as happens in many other markets the broadcast certain about a tenth of the size of the Telco in money. They are almost exacted lid 10 percent capital or the company value.
But their hold on power is much larger than the Telco because being media, they really hold some government officials by the neck. They can shuffle a couple of seconds more or less of television presence of these guys, show or not show the demonstrations against them in the newscasts. And they can totally shift the political debate or campaigns. So that's a power struggle that we see.
The companies have not been very explicit, either company. They have not been very explicit about Network Neutrality rules. The interesting part there is that the voice of the ‑‑ against let's say mandated Network Neutrality has been taken mostly by Telefonica, which again is pretty universal constant wherever European Telcos are in foreign markets. And I see this happening also in Europe have and there's a couple fallacies in their argument which is very interesting to listen. They are telling us things like we don't have the capacity to provide all the traffic without making investments.
And the users -- this takes to us think to ask about what we're demanding when we demand Network Neutrality? When we demand Network Neutrality, we are asking for some kind of lost paradise, some paradise lost in the past. And, really, Network Neutrality was lost much longer ago than when Telcos ‑‑ I mean, in many technical senses, the networks have been managed, if you run a network, if you have ever had the responsibility to run a network, you know you have to manage it. So what we want is a very much content‑oriented issue. We should see many of the states that we have heard, even in this panel, have two assumptions that I need to challenge. One of them is a very web‑based approach. It's mostly the users want to see the Web pages they want. You know, there is 65,534 other ports in the IP stack which can provide you file transfer protocol, tell net, remote access, they provide you peer to peer things. It is not only the Web. And this is also a very consumer‑oriented statement, even if you take it to the political to the economic side. So you say people should be able to look and communicate politically and not have the Telcos interfere. You're still thinking mostly email and again web access.
What we see and this comes back to finish the reply, Luca, to your question, the other big discussion that's going on around the economics of Network Neutrality is centered on innovation. And we have two sides saying they have to do what they want to do because of innovation. So the Telcos are saying they need freedom. They cannot be constrained by Network Neutrality because Network Neutrality impedes innovation in the Telco market. And to a certain extent, this may be true depending upon how you write the Network Neutrality rules. And on the other hand you have on one side the large companies like Google or Facebook and on the other hand lots of smaller startups or venture capitalists who can tell you about the startup stories which tell you that if the network is managed in a certain way, they won't be able to innovate.
So we should look at this in a more comprehensive way.
>> LUCA BELLI: Excellent. Thanks a lot for your statements. And I'm sure there will be some reaction within the panel. So I will start with the reaction from the panel and then I will open debate to the floor. Oh, sorry. I was for getting for Angela. Do we have the remote? Have we managed to connect with Angela or not? The remote participation. Okay. So can we have Angela, can you hear us?
>> ANGELA DALY: I can hear you.
>> LUCA BELLI: Excellent. So before opening the debate, we have the final, the ‑‑ from our panel. Angela Daly, who will provide us some impact on the Australian debate. We can also see you. Excellent. So please, Angela.
>> ANGELA DALY: Hello. Canadian law [Inaudible] only technical here.
[Poor Audio] happy to consider any context ‑‑ consultations here ‑‑ which is very similar ‑‑ we have very large ‑‑ Telstra which is telecom ‑‑ which is a ‑‑ company ‑‑ content and such as sports and entertainment. And I think concerns Telstra and it's acting in no net neutral way. It's been providing itself on customers with unmetered access to content from the box hell subsidiary and the pirate party here also ‑‑ include here ‑‑ services.
Another argument which is ‑‑ that there is better competition ‑‑ retail Internet market anyway that in U.S. for instance that's the argument, anyway. I am sure the most of the population do have a choice of retail Internet providers. There is argument that [Inaudible] that neglects the fact that various parts of the country particularly the remote and rural areas competition and making very limited choice of Internet service provider. Particularly the choice of Telstra.
Very quickly my analysis of the situation here is that Network Neutrality is not really being debated at the forefront of Internet policy in Australia. And [Inaudible] about network management practices there are in Australia. I think it would be interesting to have a bit more information about this as more information about these practices seem to change the game of it in the European Union and in terms of the report which was released showing that there was [Inaudible] conduct and that seemed to change how policymakers were thinking about Network Neutrality, as well.
Yes, we do have competition in Australia so arguably that can deal with some of the concerns. And areas competition between ISPs very little of it. And there is also problems with contractual for Internet users. So [Inaudible] like the network management practices and it might be difficult for them to do so. And also Internet [Inaudible] which are not prominent not Telstra are more likely to ‑‑ that is probably not going to be dealt with the competition role. [Inaudible] highly framed this competition issue. Very few people [Inaudible] issue and only really [Inaudible] perhaps electronic ‑‑ which is the main civil society from which to write organisation really considering Network Neutrality as an issue of free expression or privacy. Weak culture of rights in general in Australia. There is no Bill of Rights here, for instance.
The national broadband network interesting and political foothold. Not entirely sure but interesting that the original model which seems to have potentially content delivery unnecessary. There has been so much capacity that really there wouldn't have been a great advantage in using them. But uncertain now. There's been a change of government here last year which [Inaudible] backed model which networks and proving problematic net neutrality here, as well.
>> LUCA BELLI: Thank you. That was a little bit disturbed but we managed to get the content. Now it will be a little troubled. Now we can start with the reactions. I think Vint Cerf has immediate reply to Roslyn's statements.
>> VINT CERT: Are we ready for this?
Let me remind you that in the days before broadband Internet, we had to dial up the Internet using modems that sounded like cats being twisted on their tail. There were 8,000 dialup Internet Service Providers in the U.S. in the 1990s.
When the broadband technologies became available, there were three types. There was the digital subscriber loop on copper. There were cable modems on coaxial cable networks. And there was optical fiber. Those are the primarily three technologies that are used for broadband service.
And I would challenge there was anything like the competition before. When it was dialup, if you wanted to change carriers, you just dialed a different number. Now if you want to change carriers in broadband either you don't have any choice or a truck has to come out to your house to install different kinds of equipment. So I'm going to argue that there is not adequate competition to discipline the market.
I would like to tout the fact that Google recognized that and we're starting to put in broadband optical fiber networks that operate at a gigabit per second compared to everything else is at least 10 times faster at what I think are pretty competitive rates. But competition is still an issue.
Mr. Chairman, if I be allowed to make one or two more responses?
One thing I worry greatly about is that the model of the Internet that I grew up with anyway, and I guess I can say that, is that you paid to get access to the network and then you talked to each other and you did whatever it was you were going to do. This notion of two‑sided market I think is actually kind of broken if I've understood what is meant. Let me give you the example. Suppose you are "a" network, just one network, and you have both parties communicating with each other through your network. That is sort of two‑sided because you get to charge each of those parties for access to the net and then they do whatever they do.
But when one party is on one part of the world and another party is someplace else in the Internet world and there are multiple networks in between, which is pretty typical, it's not really a two‑sided market in the classic sense of the word because whatever the party of one end pays for is not necessarily guaranteed through all the intermediate networks. That's why we call it best effort service. And then you get a final party on the other end.
The users of the Internet see the global Internet. They don't see just the people that are on the same network that they are getting service from. And so what they see is not the same as what I would have understood a two‑sided market to be. But maybe I just don't understand that because I am just an engineer and I'm not an economist.
So I'll just stop there. Oh, one other thing. I want to endorse Alejandro's point that this Internet of Things is coming. And they're not people. They are machines. And so they don't need the World Wide Web and they don't need to put up videos of cats or anything else. All they need to do is communicate with each other. And as long as we keep the Internet architecture as open as possible, then new kinds of protocols can be invented to sit on top of the Internet Protocol layer, which is itself extraordinarily neutral. It has no idea how the packets are being carried and it has no idea what the bits mean inside the packets. So we should retain that stupidity because what it allows is new applications to be invented and new transport technologies to be inserted into this expanding and evolving Internet. Thank you, Mr. Chairman.
>> LUCA BELLI: Thanks a lot. And I guess there is immediate reply from Roslyn?
>> ROSLYN LAYTON: So I want to say at the outset, I'm a huge fan of Vint Cerf. I think you're fabulous.
It's not a “but,” but let me put the question this way. So this argument about competition by the number of competitors, if we look at the early days of Google or Facebook, at any one time there were probably 1,000 clones of Facebook, 1,000 versions of a search engine. Just having a lot of them, where are we today? The world uses Google. I'm sure there's some other search engine out there. But Google's a wonderful search engine. It does a lot of other things. So just having many in the marketplace doesn't necessarily mean it's better. Users have migrated to one for a lot of good reasons.
>> VINT CERT: But there's choice. You really have to give credibility to choice and that's important.
>> Roslyn: Let's look at one other layer that I think is important. When we look at the U.S. and EU, I think there's this big debate between the two of is it competition one way or the other? In Europe they have had an approach which I think certainly has defenders that we want low end user prices. So 74 percent of all the connections in broadband in Europe are DSL. Now, I don't think most Americans would be happy with that if we look at the broadband connections of the United States, a third are DSL, a third are cable and a third is other technologies. Fiber is growing, wonderful that Google fiber is making a tremendous amount of competition in the marketplace, it's great but also mobile broadband. We have to name competition not by the number of players but by the technologies.
So I think if many people, if you told them, well you can have 8,000 choices of DSL today. I don't know if so many users would be happy with that. They would like the opportunity to take their broadband in a mobile phone when they go somewhere. Maybe they like to have it in cable. Maybe they like satellite.
So I look at competition as a technology choice, not necessarily number of competitors.
>> VINT CERT: I'm sorry. I must intervene at this point because the difference between us is not that there are different technologies, which I absolutely acknowledge. It's what technologies do you, as a user, have the choice to use? That is the key question.
And that's where I don't think there is adequate competition because as a user, each one of you, at least those of you who live in the U.S. will know that at your residence you don't have as many choices as we used to have. I only have two. And I'm lucky because I live in an urban area. For people who live farther out or who live in the rural parts of the country, they don't have choice, despite the existence of the technology. If they don't have access to it, it's not of any use to them and it isn't competitive.
>> LUCA BELLI: Thanks a lot for this very passionate reactions.
So I think, Chris. No, Alejandro may be first then Chris and Ørnulf.
>> ALEJANDRO PISANTY: I think we need to go to core principles or design principles that merged with the ethos of our age. Particularly in our case, the layered architecture is very important. We are speaking of comparing competition in let's say search engines and other services provided by companies like Google like automatic translation, email and so forth is very different could comparing, from discussing competition in infrastructure in the network provision. It's completely different because you really are e lie on a lot of like rights of way and expensive investments. We have to listen to the Telco even if we don't bow to their antineutrality arguments.
Whereas in the higher layers, we have choice and we have to fight to keep that choice open. In the sense that once you are connected, once you have IP traffic and routing, you can choose the service and use it. We should fight or resist locked in, like you get more service from Google if you are locked in. Or even at some points you only get service from Google, the search, if you are logged in. Mostly on mobile that's awful. But you still have the choice. And certainly you have choice in automatic translation. You can have it translated buy Google translation, by Bing. Or searches by Google or searches by Bing. If you're grandparents are now my age, but if you're a grandmother and not very Internet literate, grandmother in the U.S. looking for hamburger joint, use Bing. For everything else you use Google. But it's open in this sense. The layer, access to innovation in the layer only requires software. And much smaller investments of capital than you need in the infrastructure. And therefore you have to work with them very differently.
>> LUCA BELLI: Yes, thanks for the difference between infrastructure and content applications market and innovation. And I think Chris had some replies and then Ørnulf's.
>> CHRIS RILEY: I mostly really liked what Alejandro started talking with, the principles of this and the spirit and values of this. I think the goal here that everyone shares is that, is preserving the good features of the Internet, the pro‑innovation features of the Internet, the pro‑competition features of the Internet. All other debates is how do you get there? We have very different ‑‑ we all have different unique perspectives on that.
I wrote an article in IEEE censorship and control magazine a year or two ago where I started out with a semi dramatic statement that I'm very fond of. The Internet was built on a social contract and that social contract is now broken. And the question is: How do we preserve the Internet that we know and love in light of the changing world that we live in?
And I think a lot of us have different philosophies about how to do that.
>> LUCA BELLI: Thanks a lot for this. And I think Ørnulf had something to add, also.
>> ØRNULF STORM: Yes, thank you. Just a comment, really. Of course we could go into the sort of traditional telecom regulations of access to infrastructure, which is very important as has Vint Cerf said, to use the infrastructure. That's why we as a telecom regulator have regulations on allowing for the main infrastructure owners to get access to officer competitors on their own infrastructure and that's very important for having broadband competition. The same in the mobile phone area with virtual operators, even though you have just a few physical networks, you have virtual operators and competition.
But just a comment to also what Alejandro mentioned that in some sense the Network Neutrality impedes the innovation in the Telco market. In our view, the service model, as we have mentioned, I think addresses and actually preserves the innovative force that the Internet has and also it ensures the innovation in the specialised services applications, as well. So you need to have that coexistence and allow that without having a degraded Internet access service. Thank you.
>> LUCA BELLI: So, now if there are no more reactions from the panel, I would like to open the discussion to this huge floor. So raise your hands. We have a lot of hands. I would like to start with the gentleman here, you, sir. Oh. Is there someone here with another mic? Because the room is quite big.
>> AUDIENCE MEMBER: Thank you. My name is Michael -- I'm from coordination from ccTLD. The question is I absolutely agree with Alejandro who spoke about the difference and some contradiction in between huge technologies and something that is against this new.
I would like to ask you about CDNs. Content delivery networks. Content delivery network is not about traffic. It is not about bits and bytes. It is about servers. And more ‑‑ 50 percent of Internet traffic is going through CDNs. Or slightly less but it's rising up. So CDNs and network Network Neutrality, is it a contradiction? Or not?
From my point of view, yes. Because services in the citizens are not the traffic, the real traffic. Someone had ability, for example, Google built their own CDN pan provide, which is going to the end user just to the premises of the end user operator. But some new operator has no such possibilities even to buy economized services, for example.
So this is secondary from my point of view and a real contradiction.
>> LUCA BELLI: So who would like to answer?
>> VINT CERT: First observation I would make about CDNs is that they actually reduce the load on the network. If the source of the content is somewhere in a distant part of the Internet and you have to repeatedly carry the same information over the infrastructure of the Internet on a global scale to deliver to a particular user, a CDN can be tremendously helpful in reducing the load on the net and delivering better quality service to the users.
There are lots of different ways to achieve that effect. Some of the network providers build their own CDNs. Some of the network providers arrange for Akamai to put its facilities either in the head end or in the central office. Or the case of Akamai in many cases it is not in either one. They just built the servers to be all around the world, attached to many of the access networks that deliver traffic to the end‑users.
I don't see this as any different than any other investment in physical facilities in order to deliver product to the users. I'm not even sure what outcome you would like other than the current business motivation for making the investment to provide better quality service to users who are subscribing to it.
In the case of Akamai, it's frequently if case that the source of the content is paying Akamai to deliver that content more readily. That's perfectly good business model. It worked very well for them.
In the case of Google and others, they often will build the CDN and make that available to the source of traffic in order to reduce the load on their own network. It's an investment to make the network work better.
>> LUCA BELLI: I think Alejandro also had an answer.
>> Alejandro: Very briefly and building upon Vint's reply, I think that, yes, content distribution networks are among the many things that stand in the way between today and that long gone paradise lost where you would just be a simple computer, simply connected to a simple network talking to another simple network simple computer. Now you have all the complexities of network management across the main routing, CDNs and many other things standing between any two ends. The end‑to‑end principle is actually what is being questioned in a way.
And when I mentioned a fiction, what I mean is that when we sit with authorities trying to make new law or new regulations or with the Telcos in a multistakeholder approach trying to design a Network Neutrality policy in a country, we really have a hard time to define from the militant side, from the activist side, what are we actually asking for? As soon as you want to go into details, you'll begin to see, okay, how do I measure that you are actually throttling traffic when the traffic is so complex that it comes from several networks, it has to go through a CDN, anything can be slow for a moment and how are you going to allocate blame in order to have regulatory teeth? These are very practical questions.
Your question, Michael, is very practical because it means that if we don't have the expertise when we go, let's say, from civil society and the technical community to these discussions with the government and the companies, it's very easy to dismiss us. It's very easy for them to dismiss us by ignoring ‑‑ you don't know what you're talking about. You don't know how complex the job of network management is. And what you're asking from us is very ill defined. We cannot provide it. Give us a good engineering question that we can test and we can let you measure insider network and then we'll give you something.
But it comes back to ‑‑ one of the ways it comes back to is the service level agreement, the SLA, which we only know in detail when you sign it between a big company and the Telco provider. What you don't have a real SLA for the user that's detailed enough that you can test it and that you actually own the tools that access the network to prove that the company's doing something bad.
And also we should be able to separate Network Neutrality from outright censoring blocking and filtering, which is the political side or even the commercial side and call them by their name in that case.
>> LUCA BELLI: I think Ørnulf also had some comment on this.
>> ØRNULF STORM: Yes, just quick comments from the regulatory aspect. I think my comment is very much in line with what Vint Cerf said the CDNs, the content delivery networks, actually improves the over the top services on the Internet, saves network loads, increases ‑‑ improves response times, et cetera. And we had a sort of short analysis regarding the regular telecom regulations, and in that respect, the CDNs are not a problem to our regulation, at least. So I think that's at least our conclusion, that increases and improves and enhances the existing of the top services. Thanks.
>> LUCA BELLI: I think there were many other questions. Just for a matter of proximity.
>> Thanks very much. My name is Sara Ludford until May I was a member of European Parliament and voted on the text in early April. I was very much guided by my friend and colleague -- wrote the preface to your report. I don't think she's here yet. She may be coming. I must confess -- and this is a stupid question because I'm a hack politician and legislator I am now in the upper chamber of the UK parliament. But I mean just coming back to and I think it's a colleague from the Norwegian regulator who said and that is the basically the idea in the article 23.2 of the text that we voted which is to say you allow specialized services as long as they do not ‑‑ should only be offered if the network capacity is sufficient to provide them in addition to network access services and they are not to detriment or availability or quality of Internet access services. And I think you used a phrase you've got to make sure you have adequate capacity to ensure contractual obligations are upheld on the open access Internet.
Well I'm just thinking in very banal thought of the situation in the UK where contractual/contracted Internet speeds are never, almost never delivered. So how long is a piece of string, really is my question? Who decides what is adequate delivery on the open access Internet?
And I must confess even though I believe when I voted this text and I still believe that it's quite good, but I'm not entirely sure what it means in practice and I would really like to search for an answer to that. Clearly It comes back too the regulators. But the regulators certainly in my country are not delivering what the users have paid for at the moment. I don't know if my thought is wrong I'm trying to learn as one here.
>> VINT CERT: I'd be interested to hear what the regulatory response is. But two answers from me. First of all it would be helpful if we can provide tools to users so they could actually find out what kind of service they're getting in bandwidth, average and peak. And there are some groups that try to do this. There's an MLAB, Measurement Lab Activity in the United States, the New America Foundation setup. Google is a participant. Measuring a great deal of what's going on all around at least in the U.S. to see what kind of service levels are actually delivered.
Second, if there were more choices to users, at least they'd have the option of going to somebody else if they didn't like for whatever reason the service they were getting. I think there is, I'm sorry to keep harping on this and I know you and I are having this debate, but if there were more choices for the users to go to then we might be less worried about the quality of service because there is options.
>> If I may interject, would you be less worried but highlighted competition and transparency alone maybe are not able to guarantee Network Neutrality. In Europe, there was a report from Barak in 2012 saying that ‑‑ of the fixed lines are victim of blocked line and yours is a highly competitive market so I'm not sure that competition is alone.
>> VINT CERT: If all of your choices are crappy, none of this works very well.
>> One quick comment. I think the latest FCC report was U.S. consumers were down 101 percent of advertised speed.
>> VINT CERT: That's what the report says but you need to look at some other data.
>> LUCA BELLI: I think Ørnulf had a comment.
>> ØRNULF STORM: Yes. Just a quick response to you were talking about the latest draft that was voted in the European parliament of specialized services. And the Norwegian view is that text is much better than it was in the past. So I don't know the details or by heart in the definitions, but at least that is what ‑‑ at least in our view it's very important to ensure any ambiguity in the definition so that everyone, both the regulators and the Internet service provider, knows what is specialised services so that we don't have situations where there's am buy goo tie in the regulation.
Also one quick on measuring network speed. We have from the regulator side we have established a network measurement tool which we have put on the Internet exchange and the consumers can use our tool to measure their network speed directly just out of their ISP's network and to our measurement tool. So at least we measure what they do get speed from their subscription to that point. But of course you cannot guarantee, as we have been discussing, guaranteed that speed throughout to any service on the Internet, of course. But then we have that measurement tool to measure the actual speed to the closest point outside your ISP's network. And that's a tool that they can use ‑‑ well, it is initiated by the user. It is not something that we do. But it's facility for them to use if we want to measure that speed. And of course it's still a discussion of with the consumer ombudsman and so on if they then charge for a certain speed.
I don't know the details by heart in the definitions, but at least that is in our view it's very important to ensure any ambiguity in the definition so that everyone, both the regulators and the Internet Service Provider, knows what they are paying for. But of course that is a definition thing of how much is enough or not? Should it be 100 percent or should it be 90, 80, whatever? That's a definition that needs to be sorted or agreed on, maybe. Thanks.
>> LUCA BELLI: Excellent. I think Alejandro also had some comment on this.
>> ALEJANDRO PISANTY: Thank you. Alejandro Pisanty speaking. Those rules, Madame, are very well oriented in their intention and also extremely naive in the sense that we are all asking about service level agreements basically asking about service levels, certainly. We want the speeds delivered.
We have to look at what we are actually asking for in a best effort network by definition. By definition, if we insist on getting guaranteed levels of service, we are going back to circuits. We are going back to Telcos. But we of course have gotten used to very high levels of service.
Use net analyzer, Berkeley's net analyzer software to analyze this. It goes through all the ports of the it doesn't just measure speed, bandwidth jitter and delays but it measures the ability of all ports and makes it easier for you to know whether something is being throttled. The most radical definition you can have for Network Neutrality is the 5 Alls. All protocols. All port numbers. All origins. All destinations and all contents must be able to traffic. And of course you would not want that. A consumer that got that from their ISP would not want that. That's why we insist on the fiction. We want the ISP to filter out the spam, to filter out all the port scans, malware, attempts to access your computer, denials of service. Tons of very bad things come through the network and still make us feel that we can access everything that we want when we want. So that's wore the regulation becomes very murky and we have to get multistakeholder processes to define it.
To your point about competition, you may have very strong competition many providers and very strong regulation for network neutrality and you may still have lost the open access to the full Internet one example is port 25 which was blocked as a recommended practice because it was being used as a relay for spam. But unless it's kind of an open agreement like that. You could just have a very ‑‑ among the providers not on pricing it could be very computative. But the serial rating of Facebook. You don't have even if you have value of full competition in the market because nobody tells you you have to provide it.
>> LUCA BELLI: Also and it is words highlighting, there are some nuances between the extreme version of the five Alls and Network Neutrality. It's like freedom of expression. It is not an absolute right. There are some limits to Freedom of Expression.
I think there are some questions. There, the gentleman there and then after you to choose.
>> AUDIENCE MEMBER: Thank you, my name is Kazan for Russian Station for Telecommunications. I want to start with some anecdotal evidence, the place I live, Moscow I have a choice of 8 broadband providers. Two of them are DSL. Two cable. Others are fiber. All of them also provide Internet services and the end result is as far as we know there is no commercial discrimination of Internet services. And 100 megabit compaction costs $25 a month. [Inaudible]
So for me the competition is obviously the way to work with the net neutrality problem. Which brings me to the question: Are the policies that basically treat broadband as a utility or in some way or another like opening the networks to the competition are the way to go with problem with the competition? Title could classifications.
>> LUCA BELLI: Title 2 maybe Chris would like to say something.
>> CHRIS RILEY: We'd need another hour or week to really engage with that question. There are a lot of different layers to it. A lot of people have a lot of different opinions. And even if you are talking about in the United States context title 2, it depends on what you mean by title 2. And even if you take one interpretation of what you mean by title 2, it depends upon your theories of investment and competition around that. So it's a really complicated question. I don't even want to bother to give my opinion. You can probably guess what it is. But it would take forever to engage with that.
>> ROSLYN LAYTON: You bring up a great point. It also has to do with -- I think this came up in the last piece is, you can create the perfect free, open access with the low fee, but that doesn't mean you have the neutrality of content, neutrality of these other things. So that would be my question is: Do the users feel like they're getting ‑‑ is the content authentic, for example?
>> LUCA BELLI: There is a question there. I think the gentleman with the pink shirt.
>> LUCA BELLI: Yes. Let's have three questions.
>> AUDIENCE MEMBER: I'm Christopher from the University of Pennsylvania. I have been lucky enough to be on the thread planning the main session and heard some of the debates there. And people have argued very passionately for a different conception of Network Neutrality. Some say it should not just be how traffic is handled within a last mile network but should extend to interconnection among networks and another have circulated a recent report by French think tank saying it should be platform neutrality including search engines, iPhone, platforms, social networking and all these other things.
And what we've struggled with on that list is to figure out how to get ‑‑ how to appropriately frame the issue. And I would be very interested in the panel's opinion about what the proper scope of the issue we're actually thinking is because otherwise we risk disagreeing on fundamentally what we're talking about and never actually ever engaging in the issues itself.
>> LUCA BELLI: We will take a couple.
>> VINT CERT: Just following up.
>> AUDIENCE MEMBER: Hello? Hello? Hello? Hello? Okay. Perfect. I am from Brazil. I am an activist for Internet freedom. My question is this. Usually we see the legal, technical and the economical approach on the Network Neutrality debate but it's hard to see the humanity approach. Why?
I just ask this based on the importance of the Internet for us, the humans. There was a lot of studies that prove that the intelligence are related to the number and the quality of stimulus. But just imagine the lack of the potential for one Internet that was a place for the cognitive construction of qualitative intelligence and the ‑‑ for the citizen that just see the Internet through the Facebook [Inaudible] mobile companies. That's it.
>> LUCA BELLI: Then we can take another question.
>> RUDOLPH VAN DER BERG: Yes. Rudolph Van der Berg here at the OECT. We've delivered a report on connected television this year which goes into the impact that television, online video services has on the Internet. And it discusses such things as quality of service mechanisms, why they are offered or at least technically possible but why nobody buys them, interconnection mechanisms are being discussed. So how does this model of peering and transit work? And how is it breaking down in some places where some operators just refuse to buy transit and require everybody to pay them for peering and how this is harming the Internet.
When we look at CDNs, we don't see any buyers in the network towards CDNs. CDNs is a valid way of distributing your costs. You could build out a CDN yourself or you could hire somebody. If you like to fly, then build your own CDN. If you like other people to fly for you, then you contract it.
So when we try to discuss this at the OECT, we actually tried to not mention the word Network Neutrality. We tried to discuss these individual elements. And then it becomes a little clearer what is meant. And it becomes a lot easier to discuss this. And particularly what we see is yes, you need competition, but competition in infrastructure is limited in the OECD.
We've heard that the U.S. has more cable than Europe. Yes, that's based on investments of 20, 30 years ago. We don't see any investment of new cable networks. What is there is what was there 20, 30 years ago. You don't see new cable networks being rolled out, at least not the actual physical infrastructure. You see a bit of box exchanging at the end nodes.
But a country like Italy, it didn't do cable networks. And you won't see any new cable networks being built. Hopefully you see a little bit of fiber. But that's the problem that a country like that faces. So making Europe versus U.S. comparisons on that base is flawed because the U.S. had 92 percent penetration of cable. Yes that's true for Belgium 98 percent. I'm rambling on. I'll stop here. But the report sews that when you actually break it down into the individual components, it's easier to make this discussion.
>> LUCA BELLI: Thank you for your perspective. And that was more comment than a question. So I will take one last question because we will have to wrap up. One last question.
>> AUDIENCE MEMBER: Hi, my name is ‑‑ Vana Casery. I am a lawyer and policy adviser to the National Internet Exchange of India and my question is on zero fee services or zero rated services which I think some of lists have already touched upon. And I ask this question for a specific reason. In India, currently Internet users for whom mobile is the only form of access to the Internet are currently in the majority. Broadband users are in fact in a minority. The vast majority of these mobile‑only users access fairly basic services. They don't access very content intensive or data intensive applications and content.
Now, the fact is that many of the issues that we have discussed so far, things like packet shipping, and some of the other methods used by Telcos wouldn't actually have much of an effect on most of these subscribers. What does actually have a huge impact on them is zero‑rated services. And I think that this is the case in a number of other emerging markets, as well, particularly in Africa.
And I think that zero‑rated services also have perhaps in some ways a more profound impact on the way in which people view the Internet because when we're talking about package shaping and other forms of discrimination, if you want to call it that, they can affect the way in which an existing Internet subscriber accesses services and the patterns of use of the Internet, whereas with zero‑rated services it has the ability to affect a person's conception of what the Internet is, because many of these people are first time users.
>> LUCA BELLI: Could you go to the question, please?
>> AUDIENCE MEMBER: Sure. So my question is whether the panelists view zero rated services as a violation of Network Neutrality or what their view is exactly?
>> LUCA BELLI: So we will have some quick replies to the questions and then we will have to wrap up because I promised to end on time.
>> ROSLYN LAYTON: Can I say one thing on India? Just to respond to this in India, I lived for India for two years in Hyderabad. What I had experienced were a lot of elderly seniors, grandparents, because of so many people of India around the world and they love to use WhatsApp and Facebook to connect with their grandchildren. You're absolutely correct that they have a very small view of the Internet.
On the other hand, if there were not these fun, cool services, they wouldn't get on, anyway. They are not going to learn to use the computer. They're not going to learn to programme. And that in many ways these kinds of programmes are helpful for them to keep in touch with their family and they offer them a way to communicate.
So I know this argument both sides but that is a perspective my Indian colleagues have shared with me is they like the ability to have this kind of programme.
>> VINT CERT: Just one kind of observation here. The Internet was designed in a highly diverse environment and it remains so. It's not a uniform and homogeneous systems. So best efforts is still really an important notion. You can't get more bandwidth out of the channel than the channel can deliver. And the channels are pretty broadly distributed in terms of their capacity and latency.
So I think the best we can do in the Network Neutrality world is to try to assure that the users get the best efforts of the network collectively that they could reasonably expect to get. And I know that's not something you can write into the regulations. But that's about all you can truly expect out of this design.
>> CHRIS RILEY: So thanks for the great set of questions and I really wish we had more time to talk about all of them. I will briefly note to the gentleman from Brazil, I like the idea of the human approach. For me, this is cross‑cutting. I think we should be thinking about technical, legal and economics about this from a perspective of the humans, the Internet users and empowering their choices and serving their interests in everything that we do in this.
And thank you, as well, to Professor Ufer's question about scope. It's a big question and there is not universal agreement. Mine and Mozilla's position has been -- we call it Network Neutrality, first of all. And so for me, the focus is on the neutrality of the operation of the network. And we've been trying to focus it and say at least in the United States, let's start with just the local access network and the routing of traffic within that. Obviously there are problems that go beyond that. But let's not conflate them. Let's take a look at them. Let's figure out how to approach each of them. We just want to focus on the local access network and protecting users there. And then look at everything else.
>> LUCA BELLI: Excellent. Alejandro and then I would ask the panelists to give some final remarks to wrap up.
>> ALEJANDRO PISANTY: To João Carlos from Brazil, that sums up the question that we are dealing with. Yes, the human part is what makes Network Neutrality important, otherwise it would just be a technical operation that no one with know about.
But the thing is I think that the big step to take in each country, because this varies very much by country, by legal, tradition and technical infrastructure is set up a multistakeholder model, not multistakeholderism as a religion but the rights of stakeholders. This means bringing the Telcos, the ISPs, the government regulator and so forth. But make sure you have people that understand the technical capacity that lies below the wish of Network Neutrality.
Network Neutrality is an important principle. We have to keep it in mind, fight for it but we cannot do it naively. We have to understand what's going on in the lower layers, the things that, Christopher, you have already mentioned, so forth, CDNs, so that you can ask the right questions to get the right answers and to be able to evolve, not fix rules right now forever but to evolve with the network.
>> LUCA Belli: Just to add a little comment. The first report we issued last year was indeed on Human Rights and Network Neutrality and the value of Network Neutrality for the Internet of tomorrow based on a Human Rights perspective. So that was indeed our starting point. And now we are developing it with the other perspective. So, some other remarks?
Do you have any remarks to wrap up the panels? No, if not, okay. We are finishing right on time. Excellent. So thanks a lot for being here from this excellent discussion. We will have other sessions to discuss Network Neutrality. There will be a workshop tomorrow on Network Neutrality and infrastructure enhancements. You are all invited in the main session Network Neutrality tomorrow in the afternoon.
If you didn't manage to have a hard copy here, you can find it on networkneutrality.info starting from today.
And I'm also pleased to anoint that the Dynamic Coalition has adopted some rules of procedure. So we will have these rules of procedure starting from this week. Thanks. So see you in the next sessions.