The following are the outputs of the captioning taken during an IGF intervention. 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, but should not be treated as an authoritative record.
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>> FABRO STEIBEL: Hello, everyone. Welcome to the panel Global Perspectives on “Network Fees” and Net Neutrality.
I really enjoy this panel because we have been talking about these for years now.
I will make a short introduction. We have five speakers. Each one will have one minute to introduce themselves, 12 minutes to present topic, and then we will answer questions online and on‑site.
If you're unaware what network fees are, some will call them "fair share." Some will call them "Internet tools." Some will support and some will not support.
Things can vary according to telco decision and the service provider.
This has been a topic of conversation in Brazil, South Korea, in the U.S., and other place.
In some places, they have experienced the network fees impact like South Korea.
We did a campaign that we call it "The Internet Tool." And we gave 10 reasons why we believe it's the best for the Internet. You will have issues of consumer rights and data costs and others.
The report ‑‑ the cost for data has been decreasing the past years, which does not justify the introductions of a new fee system.
That said, telcos will support that they need more proportional contribution to the networks. Government will say that they need more investments for connecting the unconnected, and it's a topic of different sides and contributions.
So I will give here the floor, one minute to introduce.
Kyung Sin Park is a professor of law and director of Open Net.
Welcome.
>> KYUNG SIN PARK: Yes. At IGF, especially the IGF, we should not be afraid of talking about not just the economy, the significance of net neutrality or other norms and practices by which we have financed the data delivery around our work to make the Internet possible.
I will get into that, and I will talk about how even a small departure from that Golden Rule, the golden practice, will cause the adjusters on the Internet ecosystem, as in South Korea.
>> FABRO STEIBEL: Thank you. We move to Konstantinos Komaitis, Civil Society, WEOG.
>> KONSTANTINOS KOMAITIS: Hello. Good morning. So glad to see so many of you here and interested in this topic. As Fabro said, I'm Konstantinos Komaitis. I'm a residency fellow at the Atlantic Council. I've spent 20 years discussing this issue. I can't believe we're still discussing this issue. I was in Dubai when this was a thing in 2012. Then I was part of the conversations in Brussels when the regulation was being discussed in 2015.
Then, since 2021, if I remember correctly, we have been discussing it again in Europe, and I have been engaging in those conversations as well and also in some conversations that are happening in Brazil.
So very much looking forward to this.
>> FABRO STEIBEL: Thank you, Konstantinos. We move online to Claudia Ximena Bustamante, the director, commissioner of the regulatory Commission, CRC, of the government of Colombia.
Welcome, Claudia.
>> CLAUDIA XIMENA BUSTAMANTE: Hello, everyone. Thank you for having me in this space. I'm Claudia Ximena Bustamante, Executive Director and Commissioner of the Communications Regulatory Commission of Colombia.
We have been studying this topic since last year and working on net neutrality more than a decade. It will be a pleasure to discuss this with the panel today.
>> FABRO STEIBEL: And now we move to ‑‑ Tatiana ‑‑
>> TATIANA: I will speak about how this debate has shifted and taken different angles but how ultimately there is no indication that there is in problem that actually needs to be solved.
In fact, all these proposals on network fees are more solutions in search for a problem and how they can ultimately fragment the Internet, disadvantage consumers, and have quite a detrimental impact on net neutrality.
Thank you.
>> FABRO STEIBEL: Thank you. Now we move to Thomas Volmer.
>> THOMAS VOLMER: Hi, everyone. It's great to have such a nice attendance early in the day. Hopefully, if we put on a good show, more people will also walk into the room.
So thank you for making it. I'm Thomas Volmer. I represent Netflix today in the private sector, but it's been 20 years in this great community of IGF. We're all part of this multistakeholder process.
From event to event, sometimes we represent different organisations. So I think I will bring that perspective, also as a practitioner. I've been doing this on the telecommunications scale and others.
I'm a little bit intimidated because I see a slide deck.
>> FABRO STEIBEL: We should all be intimidated.
I think there is a higher issue here.
So we have been discussing network fees for a few years, but directly related to that is how do we govern? How do we regulate the Internet?
So looking at how we use the Internet and regulate ‑‑ it's two sides.
In Brazil, the infrastructures of the Internet are ruled but not the application layers. In the countries, this happens as well, in the EU and others.
This has been questioned, and it's directly related to network fees. So it's very good to discuss this because beyond the idea of network fees, per se, there's a discussion here in how we regulate the Internet and how many people, how many agencies we have involved in that.
So, Kyung, would you like to start?
>> KYUNG SIN PARK: That's my contact information. I'm the professor at the school and also directing with the digital rights organisation that I've been fighting for various norms, including net neutrality.
Now, you all know that the rule that was proposed by teleco at ITU, 2012, was rejected by stakeholders. You know already why they were rejected because there's this canonical relationship.
There's discussion on whether the traffic was paid for. Under that regime, everyone has the chance to spread their message to everybody else without having to worry about the cost of data delivery. You can put on one video revealing police brutality, and 1 billion people can watch it but no cost to you.
So the photo that you see is the status of democracy fighters for work around the time around the massacre of 1980, which was an important event in the history of Korea ‑‑ the modern history of Korea. They are risking their lives in printing leaflets and asking people to come in for a demonstration. In passing those leaflets out, they're risking their lives, risk of being caught by the police and being tortured.
In these days, the protest organisers, they don't have to go through this risk. They can just put on one video, one message, and people will come out. That's how you see the massive demonstrations in South Korea these past few decades.
So the fight for net neutrality is not to continue but not to regress back to the world of telephony or postage or the sender, whoever is speaking, has to pay for the cost of delivering their messages.
It undercuts this pro‑democratic effect of the Internet by taxing people for speaking online.
So the Internet was built on this idea that we can all crowdsource our connections with one another for free, just like people lined up to ‑‑ in a fire in the village, the routers, as long as they stick the rule of taking from their neighbour and giving to the other neighbour without any condition and without any payment, everyone can use the communication system without having to pay for delivery.
As long as everyone pays for connection. As long as everyone pace for local connection, no one has to pay for the global delivery of data no matter where you are.
And the rule undercuts that.
So we have had this system where everybody is paying for local connection but really don't have to pay anything for the actual delivery of data.
Now, network fee proposal that was revived a few years ago is something different. It seems to apply only to the data traffic. It has a characteristic to it. By spending money to maintain the domestic network ‑‑ whoever is sending the data needs to pay the teleco while maintaining it.
But what telecos are forgetting is that the traffic route of any Internet communication has the overseas segment and the domestic segment. Who is paying for the overseas segment? Big Techs are investing in cables and networks. Telecos can charge their customers the monthly fees exactly because their customers can receive the data from overseas Big Techs, delivered through these CDNs.
So telecos are benefitting from the Big Techs overseas infrastructure as much as is Big Techs are benefitting.
It's a mutually beneficial relationship.
So that's why the only framers of the Internet decided not to charge one another, and that decision really made the information revolution possible. Actually, telecos already know this because, telcos, when they receive the traffic through the hierarchical ‑‑ the normal hierarchy, before the Big Techs began delivering the traffic at their doorstep through cables, they actually paid money to the higher telecos.
But now, by receiving traffic directly from the Big Techs, they're actually saving money. Right? Again, a mutually beneficial relationship.
Now, you know when there's a mutual benefit ‑‑ peering can be paid for, and net neutrality does allow that. But the problem with the network fee law, the Fair Share Deal or Network Fee Law in other countries, it mandates a pay period. If one party is to be paid and the other party is to be paid, what do you think will have in that relationship? There will be abuse.
The party entitled to payment will abuse the relationship to charge as much as possible, and the other side will have to succumb to whatever the demand is because why? Because they have a legal obligation to make the payment.
Now, how do I know this? You don't need a thought experiment to do this because the real experiment happened in South Korea in 2016.
You will see a small departure from this principle causes a huge problem. So, in South Korea, in 2016, the government instituted a partial sender pay rule. Only among the telecos, the ISPs, the sender had to pay. What happened?
You can see the image, the picture above. The teleco hosting popular content like Neighbour, Korea's number‑one platform, et cetera, by definition, because they were popular to all the users of the Internet, they became the net sender of the traffic, and they had to pay other telecos, which means hosting popular content became a burden for the telecos. So the competition among the ISPs to host popular content disappeared.
Because the competition disappeared, Korea became the only country that the transit prices, which is really the Internet access fees on the supply side ‑‑ data supply side ‑‑ did not fall, unlike all other countries where the transit prices fell by there's five to 10% each year.
2017, you can see the Korea's transit prices is 8.3 times Paris, 6.2 times London, 4.5 times New York and L.A. And this trend continues to 2021 when the Korea prices became 8 times London and 10 times Frankfurt.
This, of course, makes things toxic for the Korea providers.
That's why you don't see successful start‑ups from Korea. Public interest apps like COVID‑19 contract‑tracing apps, it was complained to the network that there were failures due to the network.
Many of these left Korea to avoid the fees. This affects the foreign providers as well. It has exerted upward pressure on paid fees that was charged on foreign content providers. So Twitch, the premier game video platform, pulled out of Korea in 2022, citing, quote/unquote, network fees 10 times more expensive than other countries. Ten times Frankfurt, you see it?
Then, oh, okay, the Neighbour has a platform, and they should welcome this. One competitor is eliminated. No. Neighbour actually opposes this law because they know that if this law is accepted, it will consolidate the system where there's payments for sending traffic.
Korea was the market with the most latency amongst all the countries.
Now, probably there is a nagging argument that, still, we should do something about Big Techs because their traffic accounts for like 40% of all traffic volume, but the argument is really unfounded and almost childish.
If Nvidia chips cover 90% of AI chips market, does Nvidia have to pay something back to the customers? Right? We have to think about the cost, right, whether the traffic actually increases the cost of network maintenance.
Now, okay, does traffic really cause congestion? No. I mean, you see on the left side, if ISP provider 50 Mbps, then it can be distributed to five houses, but if it's 30 Mbps, it will cause problems for all the households.
Now, what's going to happen?
This means that no matter how much each household ‑‑ no matter how much a single household tries to use data, it cannot use more because the pipeline is already fixed for each household. The real responsibility for removing congestion comes from ISP who are laying the regional line, whether it would be 50 Mbps or 30 Mbps or whether it's enough to supply all the households.
>> I like that even the dog is upset on the right‑hand side.
>> KYUNG SIN PARK: Yes. (Chuckling). I'm almost done.
This is the graph showing how over the four years of the pandemic, the traffic increased five times, and, yet, the green bars representing not just network maintenance costs but also capital costs has remained the same over the years.
So I will stop there, and then I will answer any question you may have.
>> FABRO STEIBEL: Thank you, Kyung.
I welcome you to see the ISOC report or Kyung's publications.
The first days of the network fees in Korea, you see a spike of Internet flowing outside of Korea to come back to Korea.
In the current state where we need AI fabrics, data centres, we must remember that this kind of dataflow is the basis of how we fund data centers. If we make data be processed elsewhere, our data centres will become less cheap to process our own data.
So I move now to Konstantinos.
>> KONSTANTINOS KOMAITIS: Thank you, Fabro. It's a very hard task to follow Kyung because he's been doing this for such a long time, and he has the data.
I'm going to give a little bit of the European perspective here, which is actually, in some ways, the reason why we are still having this conversation globally because European telecos ‑‑ and a small number of them ‑‑ really started this conversation.
I will focus on predominantly four points.
So one of the key arguments that we have been hearing in Europe the fact that this idea of network phase is necessary because it is required to finance the increasing demands of infrastructure in Europe.
And, of course, we all know that the data inference structure is not just limited because the Internet is not a monolith, and it consists of many different players that are invested heavily in order to make sure that this infrastructure expands and is able to meet the demands of users.
As I said in the beginning, this is really not new. We have been having this conversation for 15 years at least. And for 15 years, we have been having reports suggesting that, actually, the model of traffic exchange is responsible for producing lower prices, promoting efficiency and innovation, and attracting investment that's needed to keep in pace with the demand.
So, over the years, of course, and because the Internet has changed and because the demands of users have also changed, we have seen this increasing number of new players entering the infrastructure to facilitate the higher demands of traffic.
You have satellite centers and data centers and nodes, et cetera, and it's just a few of the infrastructures that have developed to support Internet communications.
So the reality is there's not just one way to finance infrastructure. I think it would be really naive to believe that. However, you know, telecos are fixated in just one way, direct payouts. Give us money, and we promise we're going to address your infrastructure's needs.
The second point I want to raise is really about what Kyung was talking about, this idea of net neutrality and what a system could do with the basic, yet fundamental principle that exists on the Internet.
We all note the Internet is interconnected networks. When data moves from point A to point B, it is routed through these networks, and different companies own and manage different parts of the network. So the fact of the matter is the ISPs are really the gatekeepers to the content user space, to access. And ISPs have a lot of power, if you think about it, at their disposal. They can mess with traffic and degrade your traffic and change your quality. They can do a bunch of different things.
The idea about net neutrality is they're not allowed to do that. We need to make sure this continues to happen because if we give them any indication that the rules are flexible, they will be able to mess up with the way that traffic is delivered and the experience that users end up having.
So imagine an environment where telecom operators are able to ‑‑
We cannot expect things to be handed out from Google or any other big company. So the possibility is that a teleco may end up prioritising traffic or allowing content from certain companies.
And that is a real issue.
The other thing that needs to be pointed out, especially in the context of Europe, is nobody can ever prove there was a market failure. Literally. There have been studies after studies after studies that say there's no market failure in Europe.
And when we have been asking for evidence that ‑‑ you know, why do we need this change to be able to support a market, we have not been getting that evidence.
So this now is on top of a global pandemic where we saw a massive increase in traffic. Right?
If there was ever a period in time where we could have had market failure, that would be during that one year in Europe when we were all locked up in our houses, and the only thing we were doing was accessing the Internet.
So another point, moving money from one private point to another actor is a pretty lazy idea, if you think about it.
So the Internet is made up of independent networks, and each network joining the Internet is response affordable their own policies, their maintenance, and upgrades.
Any proposal now that suggests a full subsidy from one part of the Internet's value change to another through ‑‑ regulatory intervention risks competition and a change to the way the Internet works.
The European Commission, who is really fixated on this, should focus on investment and innovation instead of trying to transform the way those connect.
The last point I will make and then wrap up is that I find it very ironic that, in Europe, we are talking a lot about market and fear of concentration. Here, we should be asking how sustainable is a model where big technology companies will be paying off telecos? I've been asking this question. How long do we think this is going to be happening if it goes through? Five years, 10 years, when is going to be the point before the big teleco companies are going to say, do you know what? I don't want to pay anymore. I'm going to start providing my own. I'm going to become an ISP and start providing my own Internet access.
Then you really talk about market consideration.
Before closing, right now in Europe, we're at a place where we sort of phased off discussing network but we're discussing dispute mechanisms. So we're not talking about network fees, but we're talking about how things flow from one actor to another, and we're even discussing perhaps reopening again the conversation around the open Internet regulation, which would affect the net neutrality conversations.
Let me make something very clear, a dispute resolution is a backdoor. It's exactly the same. The idea is not new. It's been borrowed from the publishers, and we saw it happening in the context of in Australia and in France where some deals have been made between big technology companies and publishers. The things that, unfortunately, we don't have a lot of visibility in how that works simply because those agreements are covered by NDAs, and they're not transparent.
The only thing we know, however, is they don't cover the small accomplishers. These are deals between huge publishers and big technology companies.
So we have to think about what we want to create, if it's literally about innovation and investment and ensuring that infrastructure develops, this is really not the way to do it.
And happy to discuss further. Thanks.
>> FABRO STEIBEL: Thank you, Konstantinos. There's gaps in the network fees mechanism.
The first is if you transfer funds from one private sector to another private sector, you cannot make sure those funds will be used for connectivity or innovation. Basically, you're just transferring from the same sector to another.
And the second one is transparency. If you increase the need, you can have private contract needs, and you can discuss how it impacts the Internet.
Claudia, we go to you. Welcome.
>> CLAUDIA XIMENA BUSTAMANTE: Okay. Regarding this discussion, I want to address first the net neutrality as a principle. In Latin America, many countries have adopted net neutrality in their laws. For instance, in Colombia, since 12 years ago, net neutrality is applied in Colombia. For the reason, we need to have an open Internet without discrimination related to type of traffic or company or any sector.
I think this helps to foster innovation and to continue evolution of the ecosystem.
When we talk about network fees or fair share, it's a discussion that is brought to the table mainly by the telecom operators who control the access networks. They indicate there are huge investments needed in the years forward, and they need that all parts in the ecosystem contribute to the sustainability.
From the regulator perspective, we need to, first, identify if there is a problem, if there is a market failure. For that reason, in Colombia, at the end of the last year, we opened a consultation to all the stakeholders but not focused on fair share, specifically, but in the whole ecosystem to understand better, in Colombia, how is the functioning between access networks, content networks, all of the agents of the value chain of Internet for mobile and for fixed telecommunication networks.
In that context, we ask for information about traffic evolution, infrastructure provided by the different actors, the content access providers and the telecom, and we are gathering this information to have a real diagnosis of what's happening here because, as we heard before, the Europe and South Korea approaches are very different, and we cannot only bring that experience directly to the Latin region. We need to understand what is happening in Latin America, having in mind that we have a multinational companies also working here.
In the first analysis that the CRC has taken, we saw growth of the traffic in 1.7 times in the last few years. We think this is a normal growth. There is no exponential growth of the traffic that sometimes is mentioned by some actors. We think this could be due to two main aspects.
One of them is this devotion that's been made to the content. We have more CDNs and caching installed inside our country, and this helps to have the local or domestic traffic instead of overseas.
And the other is the technical advances made in compression. Some content providers have been working on that. We have news about agreements between Big Tech companies and ISPs in different countries like Mexico, for instance.
This will lower the need for traffic ‑‑ no ‑‑ for networks, lower the pressure for the network that is handling that traffic.
Of course, we understand that there's a great pressure for investment and users. Now we have a lot of users that have not been reached by any network at the moment. We have a connectivity gap in Colombia and in different regions. As a strategy and as a public policy, we need to address that.
In that aspect, different discussions have been taken, for instance, to have more actors, more stakeholders contributing to universal service phones to have more resources to address these connectivity gaps. This is a topic that has been discussed by many policy government agencies around the region, and it's a way to have more services, more reach of the services for the users. But, at this moment, we don't think there's a specific solution for this discussion that's been taken, mainly in the last couple of years in the Latin region.
We know, as Konstantinos said before, there's more years in discussing this. We know we have studied their experiences about the conclusions of the functioning of the IP Internet connection and how things are still working for the European context.
We hope to have the results of our analysis related to this open consultation of the Internet ecosystem in Colombia in the next month.
Also, we have a new legal aspect to review because our constitution court recently took the decision about our net neutrality law and, maybe, as a regulator, we need to make a review of the current regulatory framework related to net neutrality because the constitutional court considers that offers different plans to users with specific applications or content shown by the ISP, not by the user directory. It's against the net neutrality principles. We will have to study that decision when it's published in the coming month, and maybe we have, in the next year, an updated regulatory framework for the neutrality and for this discussion.
>> FABRO STEIBEL: Thank you very much, Claudia. It's very interesting that the results of the consultations are coming in in the next month. Brazil has done this twice. There's support and rejection of network fees. There's an Internet Society report from two years ago called Teleco Versus ‑‑
>> TATIANA: There are things developing and shifts. As Konstantinos said, there's no way to finance the development. And there are very creative ways on how big telecos push this idea of network fees through. So what initially started as the underinvestment debate, we see it moving into different aspects, such as network sustainability or what Konstantinos mentioned already in the EU. There is currently a discussion about the dispute mechanism for the interconnection market, which is basically a back door.
In Latin America, we witness debates and discussions about regulating platforms through quality standards, which, again, is a backdoor to network fees.
What does it show? To us, it shows that it's not just about these initial concerns about the lack of infrastructure investments. So far, we don't see any indication that there is a problem that needs to be solved with the network fees, fair share.
In fact, it's like a solution. Various solutions have been presented in search of a problem. Of course, we look forward to see the outcomes of the consultation in Colombia, but various debates in Latin America found no market failure.
The consultations in Europe failed to provide any evidence that there's any interventions needed. Even more, the European body of regulators for electronic communications, as mentioned here, has concluded that the ecosystem is a well‑functioning market. It has very good dynamics with various bargaining powers.
And it was said the introduction of these mechanisms would, in fact, have very negative consequences on the ecosystem, but it's basically all about the telecom operators ‑‑
Following these developments in the EU and also South Korea, basically ‑‑ they're basically saying it's time to review the net neutrality.
There's a fundamental flaw in the ‑‑ it's the traffic that these users pay for in the Internet subscription and just as online service pays for their own Internet access to send it. To put it simple, there's no service free ride on the Internet because data access and fees have already been paid. They've already been factors.
Content generators have their own investments. I'm pretty sure Netflix can tell us how much they invest in this content creation. It's millions.
So from our perspective, any solutions that would introduce network fees would, first of all, disadvantage the smaller players by creating much higher entry barriers.
They will risk fragmenting the Internet by conditioning these connectivity in the user network, and these costs are going to be passed to the end users, which contradicts the fairness that these proposals seem to be motivated by.
This affects the globally connected Internet because the global connectivity is based on voluntary network agreements that allow network ‑‑ to optimise to meet their customer needs.
This is basically a cornerstone for the Internet to be an efficient network, resilient network that's able to host new applications, deploy these services, and this happens without prior contracting with everyone in the system.
And these arrangements foster innovation. They foster this.
They turn the idea of the Internet into a telephone system, the same regulation. And talking about what Fabro mentioned, in Brazil, there's a distinction that allowed Brazil to go with a competitive system. A recently published open letter for Brazil ‑‑ disrupt current governance model that's based on multistakeholder input.
To sum up, if we stop treating the Internet as technology neutral general purpose network, we will just lose it.
We witnessed the evidence. Like, for example, when KS spoke about South Korea and anecdotally also, particularly for users and services, when you look at Korean markets, you see that teams playing esports in Korea do not play from South Korea anymore. They moved to other countries to avoid playing because of disadvantage in network latencies. They're basically unbearable for the activity.
I know that for some reasons, it might be irrelevant, but in South Korea, it's a very big issue.
As I said before, the consultations in Latin America and the EU didn't find any market failures to justify such interventions in the traffic.
And just to wrap up, if we continue these debates that continue the issue of investment to telecom infrastructure, to this flawed premise of traffic generators, we'll always get nowhere. We'll get stuck, at best. At the worst, we'll have fragmented Internet because the initial premise in this discussion is absolutely flawed.
In this context, any solution ‑‑ if we're saying that, okay, maybe the investment in the infrastructure is a problem, but any solution that connects network investment to traffic generator is not a proper solution because it does not solve the root of the problem.
Thank you.
>> FABRO STEIBEL: Thank you, Tatiana.
I can bring freedom of expression. We need things to enforce, and then we need sheriffs.
Let's say I have a documentary for myself and against myself, if I can make distinction in how they each impact the audience, there's ‑‑
>> THOMAS VOLMER: I have not seen the documentary yet.
I will try not to repeat what many of you have said. Maybe just to start looking at the evidence, a good policy is always grounded on evidence.
The discussion, of course, has been rebooted in the past years. It's not been years. It's been decades. We have decades of perspective on Internet traffic growth. And, in the past, what, let's say 25 years, since the Internet has gone universal and mainstream, traffic has grown 500 or 1,000 times. Is the Internet breaking? No. It's doing great because the growth is absolutely sustainable. And the reason for that is it's managed really well in a collaborative manner by the stakeholders, many of which are in the room today.
In that connection space, content providers such as Netflix and ISPs, large or small, work together to make the traffic flow in an efficient manner. It's in a joint interest. Our customers, consumers want access to great content and are willing to pay for good broadband. Netflix has invested over a billion dollars in OpenConnect. We have over 6,000 server locations around the world.
When you press play on Netflix, you're actually streaming from right around the corner. It means no terabytes of streaming over a long‑distance network, no congestion and unhappy dogs in the Korean household, thanks to that.
And, to be clear, it's not Netflix doing it on our own. It's working with ISPs. It's engineers sitting in the room and drinking coffee or a beer and figuring it out together.
I think this was mentioned so many times, but the quote is so good I couldn't have written it myself.
‑‑ marginal network costs have declined to any ‑‑
Traffic is going up, up, up all the time. Costs, flat, flat, flat all the time.
The Internet has managed to cope with traffic growth and more traffic peaks, all of which reflect changes in usage patterns as well as increased infusion to Internet access to societies.
Due to competition as well as technological progress, there's no indication that this is likely to change in the future.
Okay. I think it's pretty self‑explanatory.
Network fees directly turn this principle upside down because if there's a toll at the entrance of your ISP network, when you don't have a choice in the content. You can only access the continue that has an agreement with the ISP.
The gatekeeper is in control. That's the fundamental contradiction.
By the way, in the entertainment world, we know when there's no net neutrality. It's called cable. It sucks. Oh, if they don't get along, you don't get channels.
You pay for broadband and Disney or anything else, and you have a choice. I think it's a much better system.
In our engineering discussions between ISPs and content to figure out the servers and the Internet connection, yes, there's one moment at the end of the meeting where you figure the plan out, you drank all the coffee. Oh, by the way, my boss says you need to pay for this Internet connection.
And maybe the other side will be, Well, we think maybe you should pay the Internet connection to access the content.
It's not a good model.
That's the way the business is done now.
Claudia mentioned an interesting point. I don't mean to say everything is fine on the Internet and there's no issue to resolve. We're gathering at IGF every year. There's still interesting questions to resolve.
I want to mention a few of them. Right? Websites are still being throttled today. There's a net neutrality case in Germany happening at the moment. We still have unconnected people, billions of people around the world that are still not connected to the Internet, and geopolitical risks are creating the splinternet.
There are good solutions for many of those problems. I will mention some of them. The first someone the most obvious. First, do no harm. Right? I'm often asked, yeah, well, isn't there a compromise to be found in this fair share deal? Let me be crystal clear, if you're looking to solve a problem that does not exist, there's no compromise to be made. That's a fake ‑‑ that's a solution in search of a problem. Right?
Now, on the supply side, for connectivity, competition has been proven over and over and over again to be a great way to stimulate investment and stimulate affordability. Competitive policies should be considered when they are helpful, of course.
And then there's potentially a coverage gap to be addressed through subsidies. I think even bigger is a demand gap. We were talking about Latin America. I'm always fascinated for the figures released for Latin America. I may be misquoting the numbers, but directionally, I think there's 90% of people covered by 5G networks and only 60% adoption. That means people are covered by the network, however, either they choose or cannot afford to actually subscribe.
That's the gap. A demand gap. Streaming services like Netflix contribute to the demand, to the Internet. There's a causal link between the availability of video on demand and then broadband adoption and adoption at faster speed and willingness to pay and consumer surplus.
So that's a way to address the demand gap. It's not the only way because, as you all know, it's not just about entertainment on the Internet but access and so forth.
In terms of policies, if I want to quickly recap, and I know we need time for the questions as well.
Discard the false ideas, do no harm, move from the past, stimulate the supply side and potentially target subsidies and also pro demand policies, and the demand is generated by the content, by the availability of the online services.
Nobody buys a broadband connection to see the blinking lights on the router.
Well, actually, I do. I like to have the super‑fast connection in Paris and see the lights blinking fast.
But there's people that want to tax the online companies to fund the infrastructure. That's looking at the problem exactly backwards because you're going to suppress the demand by taxing the demand for the thing that you actually want to stimulate adoption of in the first place. That's not going to work.
Thank you.
>> FABRO STEIBEL: Thank you, Thomas.
Now we have 13 minutes. They will cut my mic. We need 10 minutes for the table to reply to the question. So we have three minutes for collecting questions.
We can start here. Please be aware of the person next to you.
>> FLOOR: Thank you very much. Much appreciated for facilitating this very important discussion.
I am from the South African Internet Governance Forum programme, and I run an Internet Service Provider in South Africa.
Given the need to expand affordable Internet access to over 1 billion unconnected people, how do we then ensure that the global network fee models do not create new financial barriers for African‑owned networks, content creators, and also users trying to participate meaningfully in the digital.
Traditionally, the undersea cables are owned by the consortiums of telecommunication companies, and most of those cables are now reaching end‑of‑life.
And it's the same content creators ‑‑ the telecos want to introduce network fees for them. So if the fees are increased, aren't we worried that the international transit will increase, and, therefore, it's causing problems for us to connect the next billion.
Thank you.
>> FABRO STEIBEL: Thank you, the next one on‑site.
>> FLOOR: Hello. I'm from the Brazilian Association of Internet Service Providers. We've been an active voice and represent small and medium operators in Brazil. Brazil has over 20,000 small and medium companies holding over 60% of broadband market share. Unfortunately, it's been shown by the panel that the regulator continues to ‑‑ even though there's no evidence that there's a problem to be solved.
There's a lot of proposals from parliament and we would urge others to follow suit.
What else is to be done to overcome this debate so we can focus on actual solutions for connectivity?
>> FABRO STEIBEL: Thank you very much. We'll go for the last question.
>> FLOOR: I'm from a teleco, 200 million customers in nation Nordic. I'm surprised with the panel. Just one side presented here, one view. Next time, I suggest to get some ‑‑ we'll talk about that. The telecos and ISP.
There was an equal share of traffic. I send as much traffic as I receive from you. And there was a the principle.
Today, it's about maybe 70 or 80% of traffic that I've seen in some operations that comes from a handful ‑‑ Netflix, Google, and some others. So it's very ambianced.
So the (?) For telecos is syncing. The revenues created on the content providers like Netflix, it's gone straight up. But the infrastructure needs to be paid for. And there are three ways to do this. You can have network fees or we can break the net neutrality to get some ‑‑ in revenues.
And move the costs to the customers.
So what I have for you, you want the customers to take all the costs. Yes. Thank you.
>> FABRO STEIBEL: Sorry. We have nine minutes, so no time for new questions. Let? Okay. Please go.
>> FLOOR: Thank you. My name is Pablo ‑‑ from Telica.
I think it would be good to have a ‑‑ when talking about network fees. Sometimes the multistakeholder model is not so multi, I see. We agree that there is a problem. There is a problem. And the problem is the substitute of the model. Of course, it is always interesting to talk to try to find solutions to the problems we have. But, sincerely, I'm not sure that what has happened today can be considered a dialogue.
Thank you very much.
>> FABRO STEIBEL: Thank you.
KS, do you want to go for concluding remarks?
>> KYUNG SIN PARK: I will answer one question. I've read a lot on the principles of the Internet, but I've never heard of ‑‑ traffic. There's no cost differential whether traffic is going one way or the other. I mean, there is no increase in cost. So I don't know why that you think there has to be ‑‑ on any road, why should the data travel ‑‑ an equal amount of travel to go both ways.
>> THOMAS VOLMER: I think it's important to be addressed because it's transit and ‑‑ I think, historically, Internet traffic has been routed on a hot‑potato basis. If you have a French network and American networks connecting on both sides of the Atlantic. Say the French is the net sender. You're dropping to the American network in Paris, and they have to carry it long distance and vice versa. So there used to be hot‑potato routing, a benefit to be a net sender and ‑‑ to being a receiver.
So you have agreements, and I think that's fine. It's okay to have those agreements. That's why it's a well‑functioning market because you have deals that reflect the underlying economics
However. The modern Internet does not function like that, certainly not for content delivery. What we do with OpenConnect is the opposite of hot‑potato routing. It's the cold‑potato routing, meaning we bring the traffic all the way next to the user, to those 6,000 OpenConnect locations around the world.
When you're on the cold‑potato routing, whether the traffic flows in and out locally to Oslo does not make a difference. That's why for some agreement, agreements between CDNs and operators, there's no ratio concerns.
To your point, long distance, backbone networks, they wouldn't ‑‑ agreements, but if it comes from a terminating ISP wanting to charge CDNs on the basis of ratio, then you almost always know that this is a fake argument and more like a network fee type of, yeah, I want to explore my termination monopoly and violate net neutrality doing it.
>> KONSTANTINOS KOMAITIS: One of the things that surprises me in the conversation, especially when I hear about traffic, yes, we're talking about a change in traffic, but then no one continues to say, oh, but some companies have actually built data centers and content networks to ensure that this traffic does not become burdensome for ISPs.
And the other point, we're literally both in Europe and in Brazil, hearing small ISPs telling large teleco operators that they don't want this, that this system is going to disadvantage them. And we continue to beat the same drum. There are five companies in Europe that continue to beat the same drum, saying, oh, my god, but, yes, we used to be so big, and right now, we're not as big as other companies.
Well, I'm sorry. They had 20 years to invest. They had 20 years to innovate, and we have not seen that. Literally, we have not seen that. And I still cannot understand why we need to be excusing the lack of innovation and start moving money around just because we have telecos being extremely unhappy with not being as big as they used to be.
>> FABRO STEIBEL: Thank you, Konstantinos.
Claudia, online?
>> CLAUDIA XIMENA BUSTAMANTE: Yes. Regarding the questions, I want to address first, the sustainability issues that the teleco operator has can be addressed in different ways. In the different spaces that we share with them, they indicate there are different ways that can help them to grow the networks and to have better solutions for the users, for instance, reducing spectrum licensing fees, reducing the taxes that they are being charged by different laws, and reducing or adjusting the obligation for a specific coverage in far and difficult‑to‑access regions. Those are measurements the government could take to help them grow, to have more focused services and investments in the region. For the reason that there is no one specific answer to the discussion that we are having with them.
Another thing that I would like to mention is that the regulatory framework needs to be more flexible, more innovation driven.
We've been working on things like the regulatory sandboxes, and we are opening to receive proposals from the teleco operators and TV providers with new projects they could develop in an experimental way that need some specific regulations in place.
In that context, we could help them to develop new services, new process, to have better quality of service and adjust and change our regulatory framework.
I think, as a government institution, we need to have these kind of spaces and explore different approaches to help the ecosystem growth.
And I think the discussion is not for only one specific solution but have different ways. Of course, multinational and multilateral, regulators could help us find these different approaches.
>> FABRO STEIBEL: We have five seconds.
Thank you very much for your participation.
Sorry, Tatiana.
(Applause)