MEMO #13

(International Internet Issues)

Today, there are neither established nor uniform rules which decide how the costs of providing Internet access and Internet content services are allocated among the Internet service providers (ISPs) of the world. This situation stimulates unfair charges for international Internet interconnection issue.

For example, most of the non-American ISPs, such as the Asia-Pacific ISPs, pay the full cost of the leased lines connecting their counties to a U.S. international gateway, together with port charges to connect to a U.S. Internet backbone because the Internet started in the US [1]. This means non-U.S. ISPs have to invest more in order to receive the same benefit of global Internet connectivity as U.S. ISPs. Under this situation, unavoidably, inequitable cost allocation occurs. Asia-Pacific ISPs pay for and receive the benefit of connectivity to the U.S., while U.S. ISPs receive the benefit of connectivity to the Asia-Pacific region without paying for it [2]. In addition, this inequitable cost allocation is applied to most international destinations. Now, most of non-American ISPs complain that U.S. ISPs use the investment of ISPs in other countries, and the U.S. gets a net financial benefit that is not equivalent to the amount of service it provides in return [3].

Of course, U.S. ISPs argue that due to the nature of the technology, it is hard or even impossible to determine the direction and the volume of the traffic [4]. In addition, U.S. ISPs also argue that due to this uncertainty and to the fact that so many parties benefit from Internet traffic, it is very difficult to ascertain the cost that traffic would incur given that the determination of price for Internet traffic is so different from that of voice telephony [5].

In summary, although non-American ISPs partially agree with the U.S. ISPs’ view, they think that the direction and quantum of traffic flow are not necessarily the direction and quantum of commercial benefit. The main reason why the non-American ISPs’s view differs from the U.S. is that non-American ISPs have a pressing commercial incentive to address this issue [6]. This issue can be considered an International trade issue, so I think that the World Trade Organization should consider it.

Reference

[1] e-OTI. “The International Internet Interconnection Issue” by Jane Van Beelen and John Rolland. [Last checked April. 21, 2007] http://www.isoc.org/oti/articles/1000/vanbeelen.html

[2] e-OTI. “The International Internet Interconnection Issue” by Jane Van Beelen and John Rolland. [Last checked April. 21, 2007] http://www.isoc.org/oti/articles/1000/vanbeelen.html

[3] e-OTI. “The International Internet Interconnection Issue” by Jane Van Beelen and John Rolland. [Last checked April. 21, 2007] http://www.isoc.org/oti/articles/1000/vanbeelen.html

[4] e-OTI. “The International Internet Interconnection Issue” by Jane Van Beelen and John Rolland. [Last checked April. 21, 2007] http://www.isoc.org/oti/articles/1000/vanbeelen.html

[5] e-OTI. “The International Internet Interconnection Issue” by Jane Van Beelen and John Rolland. [Last checked April. 21, 2007] http://www.isoc.org/oti/articles/1000/vanbeelen.html

[6] e-OTI. “The International Internet Interconnection Issue” by Jane Van Beelen and John Rolland. [Last checked April. 21, 2007] http://www.isoc.org/oti/articles/1000/vanbeelen.html