Report to NZNOG and ISOCNZ-Members
This is a report back to these lists on the position taken by New Zealand at
the APEC TELMIN conference in Cancun and outcomes from the conference.
But first: as previously noted, the feedback from members of these lists has
been very helpful in informing a NZ Government view. However, as a member
of the NZNOG list has pointed out to me, despite the suitability for this
type of discussion over a beer, the matters are somewhat off-topic for
NZNOG. The Ministry of Economic Development wishes to undertake further
consultation leading up to an ITU-T meeting and the next APEC TEL meeting in
September. I will continue to send consultation material to the
isocnz-members list. Subscribers to the NZNOG list who wish to continue to
be involved should email me direct. I will assume that anyone responding to
the previous round will wish to continue to be involved (unless you tell me
otherwise ;)
There has been some publicity from Australia and the US about the outcome of
this conference which may have created some confusion as they tend to
express alternative views on the outcome achieved. I have appended below a
copy of a media release from the Acting Minister of Communications which
gives the NZ perspective on the outcome. It should be apparent that the
matter is not going to just fade away and we believe that the NZ government
will need to continue to be actively engaged in the debate.
The stance adopted by NZ at Cancun was as follows:
<quote>
(i) in principle, the costs of international circuits should be shared
in proportion to the benefits. We are, however, unsure of the best way of
assessing those benefits, and of whether there is a more efficient way of
developing cost-sharing arrangements than commercial negotiations between
interested parties, ie whether the benefits of government interventions to
mandate particular cost-sharing formulae would exceed transaction and other
costs;
(ii) recommendations on specific international charging arrangements for
Internet services are premature;
(iii) in any case, recommendations in this area are more properly a matter
for the ITU, not APEC. As the World Telecommunications Standardisation
Conference is in October 2000, this would give more time for the
consideration of issues such as the implications of voice over Internet;
(iv) APEC principles could be a useful means of helping to clarify
thinking on the issue, particularly if they emphasise the role of the
private sector. We see the draft recommendations in the report as a useful
basis for consideration;
(v) recommendations for further TEL work are appropriate; and
(vi) New Zealand will be in a better position to have considered the
issue more fully by the time of the ITU World Telecommunications
Standardisation Conference in October.
</quote>
Note that the position reflects economic orthodoxy ("in principle, the costs
of international circuits should be shared in proportion to the benefits")
but recognises the difficulty of achieving this. This is a fair summary of
the feedback received, which covered both points. The recognition of the
ITU's role in the issue was based on further feedback from the industry and
reflects work done by a NZ private sector representative in that forum as
well as recognition that if any regulatory regime were to be formulated
promulgation would have to be through the ITU as APEC does not have this
function and, in any case, it is not just an issue for APEC economies.
The output documents from the Cancun meeting are something of a compromise
reflecting the difficulty in finding positions that the two 'sides' could
agree to. It was agreed that 'equitable cost sharing' did not necessarily
mean 50/50 and it was acknowledged that the benefits arising from Internet
traffic are hard to determine. The outcome from Cancun was as follows:
<quote>
Ministers also adopt the International Charging Arrangements for Internet
Services attached as Annex B. Ministers also reaffirm the importance of
cost-sharing or other mutually-beneficial arrangements for the region as a
whole.
</quote>
In the Annex B, the key paragraph reads as follows:
<quote>
Internet charging arrangements between providers of network services should
be commercially negotiated and, among other issues, reflect:
a) the contribution of each network to the communications;
b) the use by each party of the interconnected network resources; and
c) the end to end costs of international transport link capacity.
</quote>
A longer statement was contained in the Programme of Action agreed by
Ministers for the Telecommunications Working Group for the next 2 year
period. The NZ suggestion that the matter might be more appropriately one
for the ITU was not picked up. The only specific outcome is a direction for
the Telecommunications Working Group to report back to the next ministerial
meeting in China in 2 years time. By that stage, the ITU (which is a
treaty-making body) will also have considered recommendations on the topic
and the Internet itself will no doubt have continued its rapid expansion.
Ministerial Press Statement:
<quote>
The Acting Minister of Communications Trevor Mallard has welcomed the
progress made by APEC Ministers on international internet charging
arrangements. The APEC Ministers met in Cancun, Mexico last week.
Trevor Mallard said a reasonable compromise has been reached between the
strongly held views of the US and Canada on one side, and the other APEC
economies led by Singapore and Australia.
"At the heart of the issue is a claim of unfair international internet
charging," he said.
"Many APEC economies believe those international charging arrangements are
unfair because in relation to traffic exchanged with the US, the non-US
party has to meet the costs of the international link in both directions.
"New Zealand's position at the meeting was that, as a general economic
principle, the costs of international internet circuits should be shared in
proportion to the benefits to the parties.
"Having said that it is difficult to assess the benefits from internet
traffic, and we need to be sure that gains from the benefits of any
government interventions in commercial negotiations would exceed the costs."
"The International Telecommunication Union (a UN body which has
treaty-making powers) is considering recommendations on this matter at its
World Telecommunication Standardisation Assembly in September.
"The Cancun Declaration issued by APEC Ministers at the end of the Mexico
meeting reaffirmed the importance of cost-sharing or other mutually
beneficial arrangements for the APEC region as a whole.
"The principles adopted by Ministers, and the future work programme approved
for the APEC Telecommunications Working Group, emphasise the importance of
commercial negotiation and cost sharing".
"It is too early to tell how the Declaration will impact on commercial
negotiations, as APEC is not a treaty-making body, but this is still a
valuable step in the right direction," Trevor Mallard said.
New Zealand will continue to participate in the APEC Telecommunications
Working Group. The group will continue to discuss international
developments relating to the internet and report back to the next
ministerial meeting in two year's time.
</quote>
Frank March
Specialist Advisor, IT Policy Group
Ministry of Economic Development, PO Box 1473, Wellington, NZ
Ph: (+64 4) 474 2908; Fax: (+64 4) 471 2658
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