ETNO-ITU Workshop New International Rules for Telecoms? Preparation for WCIT April 2012
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1 ETNO-ITU Workshop New International Rules for Telecoms? Preparation for WCIT April 2012 Walter B. McCormick, Jr. President & CEO United States Telecom Association Good morning. It is a pleasure to be here in Brussels to participate in this important discussion. And, I want to begin by thanking ETNO Board Chairman Luigi Gambardella for his kind invitation. For many years ETNO and the United States Telecom Association have enjoyed a very special relationship, one that was formalized in a Memorandum of Understanding between our two organizations in Venice in We value the continuing dialogue we share regarding how we might best work together to advance policies on both sides of the Atlantic that will ensure continued growth in broadband investment and deployment, and bring the full promise of the Internet to all the nations and people of the world. USTelecom represents broadband service providers before the United States Congress, the Federal Communications Commission and other administrative agencies of the United States government, and the United States courts on matters of law, regulation and public policy. We represent more than 100 member companies offering a wide range of advanced telecommunications services including voice, video and Broadband Internet over local exchange, long distance, wireless, Internet and cable platforms. Our members range in size from large multinational companies like AT&T and Verizon, to small rural companies that serve only a few hundred customers in remote areas. As such, we have an appreciation for the unique characteristics of markets large and small, urban and rural, and for the challenges associated with transitioning from a business environment that was long focused on switched-voice service to one focused on IP-based broadband services. In this regard, we look forward to a positive and successful World Conference on Telecommunications in Dubai, United Arab Emirates, this December. The 193 member nations of the International Telecommunications Union are united in their shared appreciation for the value of the Internet, the importance of broadband investment, and the need for expanded broadband deployment particularly to those regions and people that lack high-speed Internet access today. In looking to the future, we have the ability to learn from and build upon the successes of the past. The 1988 revisions to the International Telecommunications Regulations (ITRs), adopted at the World Administrative Telephone and Telegraph Conference in Melbourne, Australia, were th Street NW, Suite 400 Washington, DC T F
2 a success of historic proportions. Although that conference did not focus on the Internet, the policies adopted in Melbourne laid the foundation for the enormous growth and development of the Internet. These carefully constructed high level strategic policies, which did not mandate any specific regulatory treatment of services, facilitated international connectivity among a broad class of information and data services that utilized telecommunications facilities provisioned under the ITRs. The world-changing growth in Internet innovation that resulted is nearly without parallel in communications history. [See Slide 1] And what explosive growth this has been! In 1994, the year that the Internet was privatized in the United States, it carried approximately 200 terabytes of traffic. In 2010, the estimated total traffic on the global Internet was 240 exabytes or 1.2 million times the 1994 total. And, it is estimated that by 2015 this volume will be increased by a factor of four to 970 exabytes. Moreover, with regard to global traffic volumes, the Internet is no longer primarily a United States enterprise. [See Slide 2] In 1994, more than 97 percent of global Internet traffic came from the United States. In 2010, the United States accounted for only 31 percent and that is expected decline to about 25% by Growth in global traffic has been spread across nearly all countries. More and more countries are seeing increased interconnection speeds. Akamai estimates that of over two hundred countries surveyed, more than half have average landline Interconnections speeds of 1 mbps or greater, with only two countries reporting speeds slower than 1mbps. Just as global Internet traffic has soared, so too have the number of providers competing in the global marketplace, working together to move data from networks to customers. [Show Slide 3] One organization, which has developed a composite index to rank global Internet service providers based on connectivity and reach, highlights the increasing presence of providers outside of the United States. Over the last several years, the non-u.s. providers have gained in the rankings while top U.S. providers have receded. For example, at the beginning of 2008, six of the top 10 providers were U.S. based carriers. Four years later, at the end of 2011, five of the top 10 were U.S.-based carriers. Moreover, of the five non-u.s. carriers in the top ten in 2011, all increased in their ranking, while of the six U.S. carriers in the top 10 in 2008, four fell in the rankings while two increased. This just shows that, although we all agree that there is important work we can do together to promote broadband connectivity to more places and people around the world, the trend-line of increasing global benefit and diversity beyond the US is undeniable. Throughout history, momentous changes in the ability of people to communicate have led to dramatic social progress, economic progress, and significant improvements in the standard of living. The printing press opened the door to the Enlightenment, the telegraph and telephone fueled the industrial era, and today, the Internet is the accelerant of the information age. It is leading to explosive growth in equipment sales, it is making possible new forms of commerce, it is creating huge gains in productivity, and it holds promise for extraordinary benefits to education, healthcare, and the environment.
3 In 1988, few could have imagined the technological advancements that today we take for granted using one hand-held device to talk to friends, watch a movie, buy groceries, pay bills and listen to music. But the beauty of the 1988 framework is its flexibility, which allows parties to work together cooperatively and voluntarily in pursuit of their collective self-interest to solve the complex technical and engineering challenges to interconnecting and operating this network of networks. In doing so, it has allowed for rapid response to challenges that arise, it has accommodated frequent technological change, and it has accelerated investment and deployment. In light of this extraordinary success, any proposed change to this regime must be considered with care and in accordance with the first responsibility of government which is to do no harm. In that regard, let me offer the following observations: 1. We believe that any initiative to change the current multi-stakeholder cooperative approach, and voluntarily arrived-at codes of conduct, would be antithetical to the recently adopted OECD principles for Internet policy-making, would be difficult to achieve, and would have the potential to be counter-productive. 2. We believe it would be a mistake of historic proportions if either governments or intergovernmental institutions were to seek to obviate or duplicate the multistakeholder processes in place today, or the work of the other Internet-based organizations, such as the Internet Society and the Internet Engineering Task Force. 3. We agree with the International Chamber of Commerce that any attempt to include in the ITRs new requirements for the payment of communications termination charges by service providers would threaten to increase overall prices, decrease usage, and risk failure in achieving the objective of increased network expansion. 4. We believe that broadband investment, broadband deployment, Internet innovation, and consumer welfare are best achieved through policies that encourage facilitiesbased competition, and a consumer, demand-driven marketplace. 5. And, given the success of the 1988 revisions of the ITRs with regard to data communications, coupled with changes in technology, we believe that it is time to replace the detailed rules regarding international switched voice communications with a general delegation of the details of these arrangements to the parties involved. The Internet is the communications medium of the 21 st century. It is already an unprecedented success for people around the world, and becomes more diverse every day. It still holds unparalleled promise. Working together we believe that WCIT 2012 can result in policies of continued cooperation and advancement that will bring the full benefits of the Internet, to all the people of the world, in the most rapid and efficient ways possible.
4 88 Framework Fostered Exponential Growth of Global Internet Estimated Global Internet Protocol (IP) Traffic, (Petabytes per Year) 300, ,000 ITR revisions adopted, Melbourne, Australia Global traffic is equivalent to 55 billion DVDs 244, ,000 International connectivity for data services and flexible framework pave way for Internet growth 1.2 million times traffic since U.S. privatization began in 1994 Approximately 3% of total Internet traffic voice 176, , , ,000 77,171 50, ,002 2,359 4,858 47,902 29,107 17,722 9, Source: Cisco Visual Networking Index (VNI) and USTelecom Analysis. SLIDE ONE
5 Under 88 Framework Internet No Longer Primarily U.S. Phenomenon Estimated Global Internet Protocol (IP) Traffic and U.S. Share, (Petabytes per Year) % United States Share of Global IP Traffic % 176, ,754 Global IP Traffic (Petabytes per Year) ,002 2,359 4, % 25% 31% 77,171 47,902 29,107 17,722 9, , Source: Cisco Visual Networking Index (VNI) and USTelecom Analysis and later U.S. data were revised. Pre 2005 data were not revised and are estimated by applying pre 2005 growth rates to revised 2005 data. SLIDE TWO
6 Internet Backbone Is Becoming More International Renesys TM Global Internet Provider Rankings, January 2008 Ranking Top Sprint 2. Level 3 3. Verizon 4. NTT 5. Global Crossing 6. Savvis 7. AT&T 8. TeliaSonera 9. Tata 10. Cogent 11. Qwest 12. Tiscali 13. China Telecom Year End 2011 Ranking Top Level 3 2. Global Crossing 3. NTT 4. Sprint 5. TeliaSonera 6. Tinet 7. Tata 8. Cogent 9. Verizon 10. Sparkle (T. Italia) 11. China Telecom 12. AT&T 13. Savvis Source: Renesys TM. Absolute scores are not meaningful; relative shifts are. SLIDE THREE
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