Presentation from
Philippe Quéau
The global market is not concerned by global social redistribution.
Important social issues are thus left to the global political sphere. But
the global market market needs peace and also an educated population to
function smoothly. Peace and education must be taken care of and also paid
for, at the global level. By whom?
Deregulation and globalisation go hand in hand with free market. But we
need a re-regulation at a higher level. We need a global governance, i.e. a
global government with a global currency and a global fiscality (such as
the famous Tobin Tax on all financial transactions proposed by Nobel Prize
Laureate James Tobin, or the "Bit Tax" proposed by UNDP). Why not imagine a
global "telecommunications tax" or a global "energy tax" to help reducing
information access imbalances and fighting global ecological concerns?
Market is based on competition: hence the strongest emerge, with a
non-linear effect: the fall of weaker competitors (provoked by the free
market) creates monopolies or oligopolies. This is why the regulators have
still a role to play. They are supposed to incarnate the " general interest
". For instance they are supposed to define the need for " universal access
" at the information age.
What should be the new "universal access" paradigm? Should it be only based
on physical access? Should it include fair telecommunications tariff
policies, including adequate cross-subsidization of certain classes of
users ? Or should it also include free access to certain "contents", for
instance access to all public domain data and governmental information
relevant to citizens imbued with their duty of being well informed on all
affairs of state and eager to enforce democracy? What should be the minimum
level of service for users? Is it possible to cost obligations to the
public service mission in a meaningful way? What should be the "consumer's
rights"? Are these rights interfering with the "citizen's rights", if they
are limited by the interest of the "market" ?
Problems of interconnection, interoperability of networks and services are
also to be regulated as well as fair allocation of resources (access to
numbers, availability of radio-frequency spectrum, pricing the spectrum,
frequency auctioning).
Regulators have also to consider that deregulation does not necessarily
mean more competition. Private telecom operators overwhelm the regulators
and frequently prevent them from applying effective standards of consumer
protection or economic efficiency.
Sharing the costs of international calls. The case of Internet.
Accounting rates in the international telecommunications traffic have a
major impact on the revenues and on the growth of telecommunications in
developing countries. The full liberalisation of telecommunications along
with other factors (advent of callback, internet telephony) raises serious
concern regarding the old way of sharing the cost of an international call
between countries. The conventional Accounting Rate System which has been
in place for many years, is a revenue sharing system established on the
basis of bilateral negotiations. International telecom carriers negociate
between themselves the price for handling one minute of international
telephone service. The rate is usually divided 50/50 between the
originating and terminating carriers on a direct route between them. For
indirect routes, there is also a fixed transit fee.
Since there is usually an imbalance, the operator with the higher volume of
minutes pays a net settlement to the operator with fewer minutes. As
traffic volumes have increased over the years, strong pressure has been
exerted by outpaying administrations to reduce the settlement rate to the
level of actual costs for terminating calls. Most Asia and Pacific
countries are developing countries and are net receivers. Generally the
cost of telecom infrastructure in developing countries is higher because
economies of scale do not compare with advanced countries which have the
advantage of local manufacturing and high economies of scale. These
countries may be tempted to resist the efforts of traffic originating
countries to exert a downward pressure on the rates. Practices like
callback can put further pressures on the system. The callback operator
attracts high value customers from operators with higher collection rates.
This often means loss of business to operators in developing countries. The
recent United States' FCC Order aims at a huge reductions in Settlement
Rates. This has been opposed by many countries, who feel that the sole
purpose of the FCC Order is to benefit US carriers at the expense of
developing countries. Cost-based charging is not easy to implement, and
implies, in particular, re-balancing tariffs between local, domestic long
distance and international calls. In effect, an international settlement
reduction would ultimately lead to a lowering of developing countries'
revenues and telecommunications viability, already threatened by the steady
fall in their call collection revenue due to the proliferation of call back
services.
Moreover, conventional telecom arrangements will be bypassed with the
carriage of voice over Internet or Virtual Private Networks.
It is a global problem, but addressed at mainly from the vantage point of
the US and call generating countries. FCC has already taken unilateral
actions in July 1997, effective since January 1998.
But the growth of international network will be inefficient if facilities
are not evenly distributed in relation to usage patterns.
The principle of termination charge is being explored. Telecom operators
might set up a standard and transparent charge for incoming traffic based
on cost and other factors (such as interest charges on development loans,
and even cross-subsidy elements...). It would be applicable irrespective of
the source of the calls and would therefore eliminate the need to workout
bilateral settlements.
The case of Internet is very illustrative of strong imbalances. Internet
serves as an information bank where non-US based users access web-sites in
the US and download information. Traffic is almost all one-way or
asymmetrically emanating from the US. Hence, US carriers insisted that
non-US based carriers pay for the full circuit link to US instead of the
traditional arrangements whereby each carrier would pay for its own half
circuit.
The power of American telecommunication operators is such that the United
States have become the telecommunications and Internet " hub " of the
world. At a moment when voice telephony has just been surpassed by Internet
traffic (in 1998) and when it is foreseen that in 2002 the telephone
traffic will only be 1% of the Internet traffic, the first thirteen
Internet providers in the world are all American. British
Telecommunications (BT), the first European is the fourteenth. Worldcom,
owner of the first world provider, UUNet, is well placed to dominate the
world market after having bought the second world provider, MCI
Communications. Let's not forget at this point the iron law of growing
returns in the economy of networking. If UUNet attracts so many users on
its federative network, it's because its geographic span is bigger and
because it has many more associative partnerships with other networks, thus
guaranteeing a better access and a better reliability in a constantly
improved positive feed-back loop.
The invisible hands of the networks change the geography of the world. An
Internet link between Paris and Frankfurt or Paris and London is more
expensive than the same link between Paris and New York or London and New
York. The average cost of the European " information highways " is
seventeen to twenty times more expensive than the equivalent in the United
States. This explains why Virginia has become the hub of intra-European
networks ! European Internet providers are literally obliged to connect
themselves in priority to the world hub, thus reinforcing the predominance
of the U.S. and again augmenting their strategic superiority. In Asia, more
than 93% of the Internet infrastructure is oriented towards the U.S.
Intra-regional networks are much less effective, ans since providers are
competing, they prefer to link themselves to California, where the
intra-Asian commuting is done! This world imbalance has three effects :
firstly, the subvention by world Internet providers to American providers
is about 5 billion US $ per year, secondly, new high capacity fibre optic
links (at 80 Gbits/sec) are being built between Asia and the US multiplying
the available bandwidth at an ever lower cost, thus reinforcing the
compelling attraction of the US hub, and thirdly, the American providers,
and Internet users, obtain free access to the Internet of the rest of the
world, since all Internet links, paid for by foreign operators, are
inherently two-way links. Thus some of the poorest countries in the world,
in Africa or in Latin America, entirely subsidize e-mails, e-commerce or
Internet telephony emanating from American users...
Does such a system, which results from the " invisible hands " of the
market, really correspond to the greater common good, to fair global
justice ?
The continuation of the existing asymmetrical payment arrangement can no
longer be justified. It is unfair to non-US based carriers and especially
users because US-based users are not paying for their international
Internet access. The revenue benefits of Internet services around the globe
are in fact directed toward US operators. The more the situation evolves,
the more US operators, content and database business owners are getting
full advantage of this imbalanced traffic flow. Where in fact are the
global regulators able to think of another global telecommunications policy
? The reality speaks for itself : the FCC is able to take unilateral
actions with almost no counter initiatives from any other countries.
We have to bear in mind that the practical problems of estimating the
relevant costs for a complex telecommunication network system are very
difficult.
As one commissioner of the USA's FCC once stated: " Cost allocation will
become increasingly difficult and meaningless in the future... Once the
local exchange carriers are transporting broadband and video along their
present voice services, and wireless is used extensively for local access,
the allocation of costs will become a nightmare with little meaning... To
take a simple example, consider how the cost of a local loop will be
allocated if that loop was used to carry voice, broadband and video
simultaneously." In fact, there is no universally "correct" set of tariff
setting principles. In other words there is no scientifically assertive way
to decide what is a " good " telecommunications tariff policy. Pricing
policy is only a means of achieving desired objectives. But who should
decide these objectives: the market, or the regulator - supposed to
guarantee the "general interest"? And who decides to give the regulator the
essentially political ends to pursue and achieve? It is a matter of
fundamental policy, which should be democratically discussed, not only at
the national level but at the global level, where the most unfair
imbalances exist. All too often, however, this type of debate is not openly
discussed by national assemblies, and never discussed at the world level,
since there is no such a thing as a world parliamentary assembly.
Public and Private. The crucial importance of public domain
The primary concern of privately owned media is to make a profit. The
primary task of public-interest oriented media is to foster political and
cultural development, at national and international levels. Open ended
goals such as "public interest" or "cultural development" are very
difficult to measure. Public interest is a much more difficult issue to
grasp than private interest. It is more abstract, and in essence more
conflictual to define. It is scattered among all the people, and thus
nobody in particular seems directly and personally concerned, and eager to
tackle this vague and global type of problem, left often to anonymous
bureaucracies or rhetorical politicians. This problem is another aspect of
the "tragedy of the commons". When everybody is supposed to take care of
the "commons", nobody in particular feels urgently and primarily concerned
to do so. Somebody else will care... And vested interests take advantage of
this public disinterest for public good to lobby decision-makers for their
own specific needs. The more the problems grow global and abstract, the
more public good seems to be left unattended and the more private interests
become efficient and active at taking their own profit share out of the
public cake.
This universal mechanism will not be stopped by the Information revolution.
On the contrary, it will be aggravated.
We need a deep understanding of what actually is the "common good" at the
Information age? Is it "universal access", for instance? Or something more
abstract like equal oportunities for all in the Information society?
A good start is to think concretely about "public domain".
At the height of the "economic bubble" in Japan, there was a
tongue-in-cheek proposition to give all land back to the Emperor. This idea
was not new. In Europe the concept of "commons" existed a long time ago in
feudal times, and even earlier was conceptualized under the political
category of "res publica". Now the Japanese bubble has been somewhat
deflated. But the very concept of "public domain" remains valid. The
international sea zone, the outer space or the human genome belong to the
"public domain", or the inalienable human heritage.
In our globalized era, it is of vital and strategic importance to
recognize, promote and strengthen the global public domain, be it physical
(such as radio spectrum) or cultural and informational (such as
masterpieces of the past or information produced on public funds).
The hertzian spectrum belongs to the public domain. Thus the public should
benefit from their use. The recent digital spectrum give-away to
broadcasters underscores the inefficient and biased misuse of public
resources. The citizenry should benefit and profit from the use of public
frequencies, and should retain a portion of the spectrum for educational,
cultural, and public access uses. Public interest should demand more money
for private use of public property.
Same problem with public domain data. Masterpieces of the glorious past,
stored in public libraries and museums do not belong to curators. They
belong to the public of a particular nation, and also to human kind. If
every nation decided to give back to its own people free access to its own
memory, then not only everyone would have access to its own cultural
treasures, but also to all other nations' cultural heritage.
The question of intellectual property rights seen from the global good viewpoint
Water, space, human genome, public domain cultural heritage, past
inventions, ideas belong to the world public domain, the " res publica " of
the world. It is a very sensitive and deeply political subject that is
directly linked to the essence of what constitutes and founds the global
good. In this context the question of the evolution of intellectual
property should not be treated only from the merely juridical or commercial
viewpoints, but also from an ethical, philosophical and ultimately
fundamentally political slant. It is necessary to understand the lobbies at
work and their motivations and to determine from an enlightened vision and
for the global good, the ethical assumptions that should guide the
evolution of the law.
What is the founding principle of intellectual property laws ? To protect
general interest in ensuring universal dissemination of knowledge,
creations and inventions, while guaranteeing authors a protection of their
rights for a limited period of time, after which their intellectual
production " falls " into the public domain. The goal is clearly to benefit
humankind in the long-term by giving access to everyone to the fruits of
the tree of knowledge and invention. During the French revolution, Le
Chapelier established the principle of freedom of copy, to encourage the
freedom of commerce and industry and to avoid the bottlenecks, monopolies
and inefficiencies of an " exclusive " right to intellectual property. The
general idea was to avoid the feudal " privileges " exclusively obtained
from royalty until the Revolution. In the United States, at about the same
period, Thomas Jefferson, promoter of the first public libraries, wrote : "
He who receives an idea from me, receives instruction himself without
lessening mine ; as he who lights his taper at mine, receives light without
darkening me (...) Inventions then cannot, in nature, be a subject of
property. " He was clearly in favor of " fair use " in matter of
intellectual property, looking for the general interest rather than just
the protection of vested interests.
But since the beginning of the century, American Congress regularly
augments the length of copyrights without any compensation for the public
domain. In 1998, Congress voted a new law that prolongs the length of
copyrights from seventy-five to ninety-five years after author's death.
Thanks to the Sonny Bono Copyright Term Extension Act, signed into law 27
October, publishing rare books online could result in a jail sentence of up
to six years. This evolution, obviously desired by the lobbies of
information and communication industries, and obtained without real
democratic debate, supported by some House representatives more for local
political reasons than for general principles, is not compatible with the
development of a really universal access to information. One could also
cite the lobbying organised by giant biotechnology companies tending to "
protect " engineered seeds and preventing farmers to re-use the seeds that
they themselves crop - which is in direct conflict with millenaries of
peasant practice... This kind of enforcement of intellectual property laws
should really be poised in consideration of the needs of developing
countries, and not just from the viewpoint of private companies.
The European Directive of 11 March 1996 on databases created a new
intellectual property right, the " sui generis " right, enabling one to
claim intellectual property rights on all kinds of databases. The goal was
to encourage investment in the compilation of commercial databases. However
critics and NGOs like the International Council for Science (ICSU) quickly
pointed out that the European directive has many troublesome features :