Transcript Slide 1
International Internet Connectivity Internet Governance Forum Athens, Oct. 30 ~ Nov. 2, 2006 Kishik PARK / ETRI, Rep. of Korea Chairman, ITU-T Study Group 3 Agenda Current trends The International Accounting Rate System International Internet Connectivity (IIC) Impact on Developing Countries The Role of ITU 2/21 Number of Telephone Users has more than quadrupled since 1990! Fixed-line networks have more than doubled 2'500 in size Mobile phone networks have grown from 11 million users in 1990 to 2.2 billion in 2005 Telephone and Internet Users Telephone and Internet Users World, Millions World, Millions 2'000 Mobile 1'500 Fixed line Mobile phones overtook 1'000 fixed lines during 2002 Internet Users 500 Only 27 countries had a direct Internet connection in 1990; now all have one 0 1991 3/21 1995 1997 1999 2001 2003 2005 Internet Penetration Trails in the Developing World 32.6 Internet penetration, 2005 (Internet users per 100 inhabitants) 30.2 10.5 7.2 2.5 Americas Europe Asia-Pacific Arab States Source: ITU World Telecommunication Indicators and World Telecommunication Regulatory Databases. 4/21 Africa Mbps International Internet Bandwidth (1000 Mbps, end of 2004) 2.929 1.268 0.474 Europe Americas Asia 0.026 0.005 Oceania Africa Source: ITU World Telecommunication Indicators and World Telecommunication Regulatory Databases. 5/21 What are accounting and settlement rates? Collection charge The amount charged to the customer by the Public Telecommunication Operator (PTO) Accounting rate Internal price between PTOs for A jointly-provided service Settlement rate Payment from one PTO to another. Normally, half the accounting rate 6/21 What the accounting rate covers Country International Transmission Facility X International Switching Facility (Gateway) Call Termination 7/21 Traditional regime: Joint provision of service X X 8/21 Trade-based regime: Market entry and interconnection X X X 9/21 Accounting rates and international interconnection rates: What Differences? Accounting rates International interconnection rates Normally symmetric (accounting rate split 50/50) Asymmetric (charges may vary between countries) Bilaterally negotiated Set unilaterally, but subject to trade discipline Non-discriminatory (same Discriminatory (different rates reference interconnect offer with different correspondents) offered to all carriers) Half-circuit regime (not normally unbundled) Full-circuit regime (can be unbundled) Status of Accounting Rate System (ARS) Today: Alive, but not very well Only 20% of international traffic today still uses the accounting rate system Developing Country Developing Country Developing Country Developed Country No traffic between developed countries uses the ARS 11/21 What’s Wrong with this Picture? Developing Countries Now Pay $3 billion to Developed Countries Developing countries used to receive $5 billion in settlement payments 12/21 What happened? Accounting rates became more cost-oriented as international traffic was opened to competition Internet traffic from many developing countries to internet backbone providers not “eligible” for peering Instead developing countries pay internet backbone providers full circuit VoIP only last nail in the coffin 13/21 International internet connectivity completely different from ARS Where traffic between ISPs is more or less balanced, “peering”, or sender keeps all is applied. Either no payments made or arrangements negotiated Tier 1 ISPs in developed countries peer to exchange traffic Where traffic between ISPs is unequal, initiating provider pays for the whole connection with the other country (full-circuit cost) Many developing countries pay for the whole connection 14/21 ITU Efforts to Balance the Payments ITU-T Study Group 3 Recommendation D. 50 calls for arrangements to be negotiated and agreed upon on a commercial basis when direct Internet links are established internationally. It requires only that the two providers involved reach a mutual agreement. It does not prescribe any particular formula or system, thus leaving to providers the freedom to determine the forms or methodologies to be used in implementing the principle. http://www.itu.int/rec/recommendation.asp?type=folders&lang=e&parent=T-REC-D.50 15/21 Not everyone agreed Recommendation D.50 is voluntary, and suggests that parties involved take into account the possible need for compensation for elements such as traffic flow, number of routes, geographical coverage and the cost of international transmission among others when negotiating such commercial arrangements. In addition, the WTSA agreed that while international Internet connections remain subject to commercial agreements between operating agencies, there is a need for on-going studies in this area. 16/21 Not everyone agreed(Cont’d) The Chairman recalled that the decision made in Montreal provided a framework for future discussions and was therefore only the beginning of a process where issues would be further analyzed. Two countries - the US and Greece - made reservations and stated that they would not apply it in their international charging arrangements. 17/21 Current System Hard on Many Developing Countries ITU-T Study Group 3 has agreed that the high costs of the international circuit for Internet connectivity between least developed countries and the Internet backbone networks remains a serious problem for these countries. Solutions include efforts to facilitate the creation of traffic aggregation within localities, countries or within regions in developing countries in order to avoid sending this traffic over satellite or cable links used for intercontinental traffic, for example between Africa and Europe or North America. This effort would aim to maximize the retention of local and national traffic within these regions and thus reduce the dependence on international communications links. 18/21 Solutions to IIC Problem for Developing Countries Self-provide – a few countries have succeeded here, most developing countries can’t afford Increase internet volume: – – – Promote competition Drive demand through local content and low-cost internet access devices Promote migration to all IP networks and NGN Aggregate traffic through IXPs Explore new avenues of negotiation 19/21 ITU Development Bureau (BDT) Issued a report on IXPs in 2004 Increasingly African countries are creating IXPs to keep local traffic local. In the absence of IXPs emails between African users often transit through Europe or North America, adding to costs http://www.itu.int/ITU-D/treg/publications/index.html 20/21 Thank you! 21/21 Average settlement rate is only 1/15th of what it was in 1998! It’s dropped by nearly 50% since 2001 Average settlement rates in Special Drawing Rights (SDRs): 1 SDR = $1.48 (September 2006) 1998 2001 2002 2003 1.06 0.258 0.229 0.195 2004 2005 2006 0.125 0.088 0.071 Sources of telecom revenue Worldwide, in US$ billions 1'200 1'000 Data and other 800 600 Source: ITU World Telecom Indicators Database. Mobile 400 International fixed telephone 200 Domestic fixed telephone 0 1993 95 97 99 01 2003 Growth of Competition, selected services Local International Countries Long distance 2G 160 140 120 100 80 Number of countries that permit competition in international services is twice as many as in 1997 Source: ITU 60 Telecom 40 Regulatory 20 Database. 0 1995 1997 2000 2001 2002 2003 2004 2005 Level of Competition in Selected Services and Networks, World Monopoly 100% Competition 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Basic services Leased lines Mobile cellular (2G) Internet services Wireless local loop VSAT Source: ITU World Telecommunication Regulatory Database. Cable TV DSL 3G Fixed Wireless Broadband