My comments to U.S. State Department ITAC group. One of the issues at the ITU is whether the cost of peering/transit should be part of the discussion on affordability of access. Africans tell me this is perhaps the largest single impediment to bringing down the cost of the Internet in Africa. Backhaul is 10x the cost in Europe or the U.S., only a small part of which is due to the cost of undersea cables. I infer a (weak) cartel and strongly urge the ITU to produce the data to convince anyone objective something should be done.

Some people are trying to exclude this from the development agenda. They come from countries with companies that benefit from high transit prices. (Surprise.) By accident, I'm on the U.S. State Department International Telecommunications Advisory Committee and wrote this. By my choice, I do not report what anyone else says at that committee. This is my opinion.  

On Peering

Carlos Slim at the Broadband Commission told me $50 mobile phone prices will allow two billion more people to connect, a goal i know we all share. Since then, I've looked closely at the actual cost factors delivering Internet to the poor in emerging nations. I also discussed it with numerous people at ITU Busan. (Article below) Peering/transit costs appear the largest single international issue in affordability in Africa especially, as I report below. According to an African at the Busan Plenipot, the saving from reducing peering/transit costs is 5-10x anything likely from IXPs. Several Africans saw peering/transit costs as a key issue and welcome ITU involvement.  

It is extremely disrespectful for the U.S. to oppose the Africans getting the actual data on peering/transit, especially since U.S. companies are profiting. 

 

That peering/transit costs are a crucial factor in access costs is confirmed by my research, which found costs of backhaul in Africa 10x higher than Europe or the U.S.. Only a small part of that is related to the actual costs of the necessary undersea fiber. Pricing has gone down as Africa has been connected by fiber, but remains so high I infer a (weak) cartel. 

 

I've removed all comments except my own from this reply so I can cc this to Michael Kende and Kathy Brown, Jane Coffin's colleagues at the Internet Society. Michael, a good economist, is one of the world's experts on IXCs and is close to the data sources here. He can probably run approximate numbers on an envelope. Kathy - it would be enormously useful if Michael did a thorough study here. The U.S./EU poloicy people seem not to have the data. 

 

Until we've reviewed the data, I strongly urge the U.S. not to object to including peering/transit costs in the work.

 

Dave Burstein

 

 

Fairness for Africa: Cheaper Transit, Reasonable Royalties, Fair Taxes (10/30/2014)

"Affordability is the single most important lever to bring the Internet to everyone," Hamadoun Touré tells us in Busan. Here are some things the richer countries can solve to help bring affordable broadband to the poor. I'm focused on correcting flaws in the system that suck 

 

1) High backhaul/transit costs double or triple the cost of providing broadband in most of Africa. A megabit costs $0.50-$3 in most of the U.S. and much of Europe. The same megabit in Lagos costs $170, 100x as much. 50-90% of the difference is cartel pricing, based on undersea costs where there is more competition.

 

2) High royalties may soon double or triple the cost of a low end smartphone.  Hundreds of millions fewer people will connect. Carlos Slim of Telmex told me at the Broadband Commission the $50 smartphone will connect two billion more people. On a mass product like a smartphone, a "reasonable" royalty would be something like 5-10%. Intel calculates royalties may soon be $140 on a mid-priced phone. Every international agreement calls for "reasonable" royalties and it's time to reduce the Qualcomm tax.

 

3) Multinational giants should pay reasonable taxes. France and England can't get Google or Apple to pay taxes. What chance does Cameroon or Thailand have without strong support from International groups like ITU and the giant's home countries. Collecting through a "sender pays" is a terrible system which clearly is anti-consumer in the developed world. But changes in telecom pricing have sucked hundreds of millions in taxes/fees and probably more from some of the the poorest countries. Most of the benefit goes to carriers and consumers in richer countries, starting with carriers like AT&T that now aren't pay the old termination charges. 

 

i've been asking those from the emerging world what countries like the U.S. can and should we do to support affordable broadband development. I've spoken in the last few days to people from Sudan, South Africa, Malawi, Niger, Zimbabwe, Guyana, Bangladesh, Saudi Arabia, Costa Rica, Egypt, Nigeria, China, Mali and others.

 

    One question I asked is "What should richer countries and International organizations do to help those in need?" The answers were surprisingly consistent, focusing on a few situations where richer countries/their companies are extracting capital from poorer countries. 

 

    Most of the work climbing out of poverty and building networks will need to be done in-country. Fortunately, the domestic private companies are finding the finance they need to build mobile networks for the cities of the world. Econet Wireless in Zimbabwe is completely privately funded and has reached nine million subscribers in one of the poorest countries in the world. Zimbabwe has more mobile subscriptions than people, and Econet is expanding across Africa.

 

 

 Peering
 
Carlos Slim at the Broadband Commission told me $50 mobile phone prices will allow two billion more people to connect, a goal i know we all share. Since then, I've looked closely a the actual cost factors delivering Internet to the poor in emerging nations. I also discussed it with numerous people at ITU Busan. (Article below) 
 
Peering/transit costs appear the largest single international issue in affordability in Africa especially, as I report below. According to an African at the Busan Plenipot, the saving from reducing peering/transit costs is 5-10x anything likely from IXPs. Several Africans saw peering/transit costs as a key issue and welcome ITU involvement.  
 
It is extremely disrespectful for the U.S. to oppose the Africans getting the actual data on peering/transit, especially since U.S. companies are profiting. 
 
That peering/transit costs are a crucial factor in access costs is confirmed by my research, which found costs of backhaul in Africa 10x higher than Europe or the U.S.. Only a small part of that is related to the actual costs of the necessary undersea fiber. Pricing has gone down as Africa has been connected by fiber, but remains so high I infer a (weak) cartel. 
 
I've removed all comments except my own from this reply so I can cc this to Michael Kende and Kathy Brown, Jane Coffin's colleagues at the Internet Society. Michael, a good economist, is one of the world's experts on IXCs and is close to the data sources here. He can probably run approximate numbers on an envelope. Kathy - it would be enormously useful if Michael did a thorough study here. The U.S./EU poloicy people seem not to have the data. 
 
Until we've reviewed the data, I strongly urge the U.S. not to object to including peering/transit costs in the work.
 
Dave Burstein
 
 

Fairness for Africa: Cheaper Transit, Reasonable Royalties, Fair Taxes (10/30/2014)

"Affordability is the single most important lever to bring the Internet to everyone," Hamadoun Touré tells us in Busan. Here are some things the richer countries can solve to help bring affordable broadband to the poor. I'm focused on correcting flaws in the system that suck 

1) High backhaul/transit costs double or triple the cost of providing broadband in most of Africa. A megabit costs $0.50-$3 in most of the U.S. and much of Europe. The same megabit in Lagos costs $170, 100x as much. 50-90% of the difference is cartel pricing, based on undersea costs where there is more competition.

2) High royalties may soon double or triple the cost of a low end smartphone.  Hundreds of millions fewer people will connect. Carlos Slim of Telmex told me at the Broadband Commission the $50 smartphone will connect two billion more people. On a mass product like a smartphone, a "reasonable" royalty would be something like 5-10%. Intel calculates royalties may soon be $140 on a mid-priced phone. Every international agreement calls for "reasonable" royalties and it's time to reduce the Qualcomm tax.

3) Multinational giants should pay reasonable taxes. France and England can't get Google or Apple to pay taxes. What chance does Cameroon or Thailand have without strong support from International groups like ITU and the giant's home countries. Collecting through a "sender pays" is a terrible system which clearly is anti-consumer in the developed world. But changes in telecom pricing have sucked hundreds of millions in taxes/fees and probably more from some of the the poorest countries. Most of the benefit goes to carriers and consumers in richer countries, starting with carriers like AT&T that now aren't pay the old termination charges. 

i've been asking those from the emerging world what countries like the U.S. can and should we do to support affordable broadband development. I've spoken in the last few days to people from Sudan, South Africa, Malawi, Niger, Zimbabwe, Guyana, Bangladesh, Saudi Arabia, Costa Rica, Egypt, Nigeria, China, Mali and others.

    One question I asked is "What should richer countries and International organizations do to help those in need?" The answers were surprisingly consistent, focusing on a few situations where richer countries/their companies are extracting capital from poorer countries. 

    Most of the work climbing out of poverty and building networks will need to be done in-country. Fortunately, the domestic private companies are finding the finance they need to build mobile networks for the cities of the world. Econet Wireless in Zimbabwe is completely privately funded and has reached nine million subscribers in one of the poorest countries in the world. Zimbabwe has more mobile subscriptions than people, and Econet is expanding across Africa.

 Peering
 
Carlos Slim at the Broadband Commission told me $50 mobile phone prices will allow two billion more people to connect, a goal i know we all share. Since then, I've looked closely a the actual cost factors delivering Internet to the poor in emerging nations. I also discussed it with numerous people at ITU Busan. (Article below) 
 
Peering/transit costs appear the largest single international issue in affordability in Africa especially, as I report below. According to an African at the Busan Plenipot, the saving from reducing peering/transit costs is 5-10x anything likely from IXPs. Several Africans saw peering/transit costs as a key issue and welcome ITU involvement.  
 
It is extremely disrespectful for the U.S. to oppose the Africans getting the actual data on peering/transit, especially since U.S. companies are profiting. 
 
That peering/transit costs are a crucial factor in access costs is confirmed by my research, which found costs of backhaul in Africa 10x higher than Europe or the U.S.. Only a small part of that is related to the actual costs of the necessary undersea fiber. Pricing has gone down as Africa has been connected by fiber, but remains so high I infer a (weak) cartel. 
 
I've removed all comments except my own from this reply so I can cc this to Michael Kende and Kathy Brown, Jane Coffin's colleagues at the Internet Society. Michael, a good economist, is one of the world's experts on IXCs and is close to the data sources here. He can probably run approximate numbers on an envelope. Kathy - it would be enormously useful if Michael did a thorough study here. The U.S./EU poloicy people seem not to have the data. 
 
Until we've reviewed the data, I strongly urge the U.S. not to object to including peering/transit costs in the work.
 
Dave Burstein
 
 

Fairness for Africa: Cheaper Transit, Reasonable Royalties, Fair Taxes (10/30/2014)

"Affordability is the single most important lever to bring the Internet to everyone," Hamadoun Touré tells us in Busan. Here are some things the richer countries can solve to help bring affordable broadband to the poor. I'm focused on correcting flaws in the system that suck 

1) High backhaul/transit costs double or triple the cost of providing broadband in most of Africa. A megabit costs $0.50-$3 in most of the U.S. and much of Europe. The same megabit in Lagos costs $170, 100x as much. 50-90% of the difference is cartel pricing, based on undersea costs where there is more competition.

2) High royalties may soon double or triple the cost of a low end smartphone.  Hundreds of millions fewer people will connect. Carlos Slim of Telmex told me at the Broadband Commission the $50 smartphone will connect two billion more people. On a mass product like a smartphone, a "reasonable" royalty would be something like 5-10%. Intel calculates royalties may soon be $140 on a mid-priced phone. Every international agreement calls for "reasonable" royalties and it's time to reduce the Qualcomm tax.

3) Multinational giants should pay reasonable taxes. France and England can't get Google or Apple to pay taxes. What chance does Cameroon or Thailand have without strong support from International groups like ITU and the giant's home countries. Collecting through a "sender pays" is a terrible system which clearly is anti-consumer in the developed world. But changes in telecom pricing have sucked hundreds of millions in taxes/fees and probably more from some of the the poorest countries. Most of the benefit goes to carriers and consumers in richer countries, starting with carriers like AT&T that now aren't pay the old termination charges. 

i've been asking those from the emerging world what countries like the U.S. can and should we do to support affordable broadband development. I've spoken in the last few days to people from Sudan, South Africa, Malawi, Niger, Zimbabwe, Guyana, Bangladesh, Saudi Arabia, Costa Rica, Egypt, Nigeria, China, Mali and others.

    One question I asked is "What should richer countries and International organizations do to help those in need?" The answers were surprisingly consistent, focusing on a few situations where richer countries/their companies are extracting capital from poorer countries. 

    Most of the work climbing out of poverty and building networks will need to be done in-country. Fortunately, the domestic private companies are finding the finance they need to build mobile networks for the cities of the world. Econet Wireless in Zimbabwe is completely privately funded and has reached nine million subscribers in one of the poorest countries in the world. Zimbabwe has more mobile subscriptions than people, and Econet is expanding across Africa.

 

The world needs a good news source on Internet and telecom policy. I hope to create one. Catch a mistake? Email me please.  Dave Burstein

Latest

Professor Noam's "Many Internets" http://bit.ly/ManyNets

Until about 2010, everyone agreed the Net was a "network of networks," not a monolithic entity. There was a central authority, ICANN, keeping track of domain names, but that was a minor administrative function.
Columbia Professor Noam suggests we might be better off accepting that some nations or groups might want to organize their networks differently. It's easy to see demand for an Internet with much more effective filters against material some think harmful to children. (Any 10 year old can easily find porn today. Many do.)
Internet translation is getting better very quickly. You might want an "Internet" that translates everything into your language. Google Chrome translation isn't perfect but I was able to research most of this story on Russian language sites. With a few more years progress, I might welcome an alternate that brings me everything in English, including caching for better performance.
De facto, Internet news is already split, as hundreds of millions only get their news from Facebook. Google AMP pages, including for news, also favor selected parts of the net
Centralizing the DNS doesn't prevent censorship, as the Chinese have demonstrated. There are many Jewish and Muslim fundamentalists who want to block what they consider blasphemy and limit free speech. See http://www.nytimes.com/2012/05/21/nyregion/ultra-orthodox-jews-hold-rally-on-internet-at-citi-field.html . More from Noam http://bit.ly/ManyNets

Russia Orders Alternate Root Internet System http://bit.ly/RussiaDNS
It's actually practical and not necessarily a problem.The Security Council of the Russian Federation, headed by Vladimir Putin, has ordered the "government to develop an independent internet infrastructure for BRICS nations, which would continue to work in the event of global internet malfunctions ... This system would be used by countries of the BRICS bloc – Brazil, Russia, India, China and South Africa." RT
Columbia University Professor Eli Noam and then ICANN CEO Fadi Chehadé have both said such a system is perfectly practical as long as there is robust interconnection.
Actually, the battle over ICANN and domain names is essentially symbolic. Managing the DNS is a relatively insignificant task, more clerical than governing. ICANN Chair Steve Crocker pointed out they had very little to do with policy.
Some will claim this is about blocking free speech but that's rhetoric. Russia doesn't need to fiddle with the DNS for censorship, as the Chinese have demonstrated. The wonders of the Internet will continue so long as the resulting nets" are robustly connected. The ICANN and U.S. policy goal should be to help create that system for interconnection.
I expect contentions that “The Russians are taking over our Internet” and “They are splitting the Internet.” The Internet is a “Network of Networks.” It is not a monolith so what would “splitting” it mean or do?
After the WCIT, China realized that ICANN and the DNS are side issues not worth bothering about. They have been building alternate institutions including the World Internet Summit in Wuzhan and the BRICs conferences.  The Chinese have put their main work where decisions that matter are made. Wireless standards are set by 3GPP, where nothing can be approved without China's consent.
The American battle at ITU is proving to be a historic mistake.
Why does Russia want an independent Internet?
They fear that Western sanctions on Russia could cripple the Russian Net. Communications minister, Nikolay Nikiforov, worries about, "a scenario where our esteemed partners would suddenly decide to disconnect us from the internet." I think that's highly unlikely but Nikiforov points out, “Recently, Russia is being addressed in a language of unilateral sanctions: first, our credit cards are being cut off; then the European Parliament says that they’ll disconnect us from SWIFT."
It makes sense for the Russians to be prepared for such a contingency as the Cold War has been warming up on both sides. "Britain's top military chief Air Chief Marshal Sir Stuart Peach just made headlines warning Russian subs "could CRIPPLE Britain by cutting undefended undersea internet cables." Much more http://bit.ly/RussiaDNS

ICANN Continues Excluding Russia & China From the Board http://bit.ly/CEOPromises
No wonder Russia wants an alternate root. Three years ago, ICANN CEO Fadi Chehadé promised "a seat at the table" to Chinese Premier Li. ICANN welched and this year added two more Americans.
Almost all the ICANN board is from the U.S. and close allies; only about 4 of the 18 board members are from countries on the other side of the North/South divide in Internet policy.  Claiming ICANN represents the Global Internet is inappropriate. China is 1/3rd of the Internet but has no representation on the board.
I know many of the board members. They are all basically honorable but generally share a strong opinion on North-South issues.
Larry Strickling of the U.S. government knew just what he was doing with the IANA transition. He handed over to a board with similar positions as the U.S. government.
"The system is unsustainable while it excludes half the world," I have been saying since 2012. More, including the transcript of Fadi's statements,http://bit.ly/CEOPromises

Sorry, Ajit Pai: Smaller Telcos Did Not Reduce Investment After NN Ruling http://bit.ly/SorryPai
Pai justifies his NN choice with the claim, "The impact has been particularly serious for smaller Internet service providers." #wrong (Actually, NN has minimal effects on investment, up or down, I’m convinced. Competition, new technology, customer demand and similar are far more important.)
The two largest suppliers to “smaller ISPs” saw sales go up. Adtran's sales the most recent nine months were $540M, up from $473M the year before. 2016 was $636M, 2015 $600M. Calix the last nine months sold $372M, up from $327M. The full year 2016 was $459M, up from $407M in 2015. Clearfield, a supplier of fiber optic gear, was up 8% in sales in the smaller ISPs.
There is nothing in the data from others that suggests an alternate trend. Anyone could have found this data in a few minutes from the company quarterly reports.
The results in larger companies are ambiguous. I can "prove" capex went up or went down by selecting the right data. The four largest companies' capex - two/thirds of the total - went up from $52.7B in 2015 to $55.7B in 2016. The result remains positive after making sensible adjustments for mergers and acquisitions. That's as close to "proving" that NN led to increased spending as the facts chosen to prove the opposite.
Actually, whether capex went up or down in 2016 tells us almost nothing about the choice on neutrality. Everyone knows a single datapoint could be random or due to other causes. Much more, including the source of the errors http://bit.ly/SorryPai

Elders Bearing Witness: Vint, Timbl, & Many More http://bit.ly/VintTim
Vint Cerf, Tim Berners-Lee, Steve Wozniak and more than a dozen true Internet pioneers wrote Congress to protect Neutrality. The best Congress money can buy didn't listen but I wanted to reproduce their letter.
I hope they are wrong believing "is an imminent threat to the Internet we worked so hard to create." My take is the impact will be moderate in the short run.
From the letter:
We are the pioneers and technologists who created and now operate the Internet, and some of the innovators and business people who, like many others, depend on it for our livelihood. ... The FCC’s proposed Order is based on a flawed and factually inaccurate understanding of Internet technology. These flaws and inaccuracies were documented in detail in a 43-page-long joint comment signed by over 200 of the most prominent Internet pioneers and engineers and submitted to the FCC on July 17, 2017.
Despite this comment, the FCC did not correct its misunderstandings, but instead premised the proposed Order on the very technical flaws the comment explained. The technically-incorrect proposed Order ... More, including the full list, http://bit.ly/VintTim