Original URL: http://www.theregister.co.uk/2012/06/08/internet_tax/
Americans stand against UN internet-tax plan
Can't find any reds, so socialists will have to do
Comment The idea of taxing internet traffic has got the twitterverse into a tizzy. Apparently socialists monsters want pay for their carriage, and the UN has cooked up a secret plan to get the money.
Having failed to find evidence that blue-helmeted geeks are poised to invade cyberspace, the US internet community is now up in arms about ITU plans for a mandated tax on web traffic, backed up by evidence laid out by CNET – and ignoring the fact that the evidence doesn't in any way support the claims.
"The European proposal ... would amend an existing telecommunications treaty by imposing heavy costs on popular Web sites and their network providers for the privilege of serving non-U.S. users, according to newly leaked documents", huffs CNET, under a threateningly black version of the UN logo.
But the documents linked to only permit companies operating networks to negotiate with content providers for a contribution to the cost of carriage, with nothing mandated and no governments involved at all.
This is the old debate about net neutrality, with ideological proponents arguing that all content should be delivered equally, while sceptics point out that YouTube (being carried over Google's private 'net) already arrives faster any other video service, making a mockery of the idea that all packets are treated equally.
The UK has a particularly useful example in the form of the BBC's iPlayer video-on-demand service. iPlayer provides TV free to anyone in the UK, the cost being covered by the licence fee Brits pay annually for the right to own a TV set.
But the licence not only covers the creation of content, but also its delivery, and while that is normally in the form of radio transmissions it can now equally be over ADSL wires, and the UK ISPs want to know why they shouldn't get some licence-fee cash.
He who does not pay the piper
That's an extreme example, but the question of whether those who profit from the content should contribute to the cost of delivering it is one of business, not ideology or politics, and the proposal before the ITU simply permits that possibility. The idea that allowing carriers to negotiate deals with content providers will cut developing countries off the internet is fanciful, to say the least.
The first document presented by CNET – a proposal for debate leaked to Wcitleaks – does indeed talk of "respecting the principle of sending party network pays". The second document contains nothing so interesting, but is so long and dull that few people will notice. The principle is mentioned in the context of commercial negotiations between companies, and there's no mention of any mandated payments, but the idea is mooted.
The principle of caller-party-pays is common in telecommunications outside the USA; in Europe we don't pay to receive phone calls and the principle has served developing nations well over the last hundred years or so.
Ergo: a poor country builds a phone network, and collects the termination fees from incoming calls to pay back the investment. CNET points out these fees cost the US $5.4bn in 1996, without mentioning that American almost certainly made more than that on the same basis. But with the internet things are different: a poor country building internet infrastructure must pay foreign peers to carry its traffic.
The meter is running
CNET's assertion that the proposal "would spell an end to the Internet's long-standing, successful design based on unmetered 'peered' traffic" would only be true if peering was indeed unmetered. But when the peers are unbalanced - as foreign surfers consume US content - then money changes hands, and almost all of it flows towards the USA.
So bad is that problem that the ITU's General Secretary has stated that countries which don't speak English will do better in the internet economy as they don't consume so much US content.
ETNO, the body behind the leaked proposals, says it was referring to potential deals on quality of service. Such deals would allow an ISP to negotiate a deal with, say, NetFlix, to provide guaranteed bandwidth to its customers in exchange for a cut of the subscription fee.
Such deals are anathema to the ideologically dogmatic, who feel it necessary to talk of Balkanisation and "a radical re-engineering of the Internet ecosystem and allow[ing] governments to monitor or restrict their citizens' online activities" whenever the UN's telecommunications arm is mentioned.
Quite why the US and the Obama administration feel it necessary to repeatedly attack the ITU in this way is a mystery. Perhaps they really believe the internet is under threat from the UN, or perhaps it's just an election year – and as the internet is still something about which Americans can feel justifiably proud, there's no harm in being cast as its protector. ®