Seismic shifts in international data markets demand an update of broadband Internet policy


The global policy movement to improve connectivity and bridge the digital divide has generated reports on international data markets and associated regulatory policies. The papers sometimes introduce confusing terms: usage, transitivity, gaze, and association. Each term has a specific meaning and practice. Policymakers can benefit from a summary of proposed policies and tools – as well as a comprehensive review of their countries’ networks and practices. Here are some key findings from the reports.

The emergence of a parallel, registered and unregulated internet by platforms

The German Federal Network Agency commissioned a study on competition in transit and analog markets (141 pages), indicating that the problem has not been examined by European regulators for at least 5 years. The report notes that internet traffic in Europe is growing by 25 percent year-on-year, and 80 percent of this is video, social media, gaming, and only 5-6 players (such as Netflix, Amazon Prime, YouTube, etc.) it) accounted for more than half of the total traffic. These players have more international backbone capacity than the world’s broadband providers and have given up on third-party transit instead of building their own backbones, submarine cables and data centers – and the transmission business has plummeted as a result. The platforms largely avoid online exchanges where prices are transparent, instead building networks dedicated to their own content and maximizing the efficiency and profitability of their services.

The massive development and expansion of backbone infrastructure and delivery by these players has permanently changed the overall global structure of the Internet, the interconnection structure, and the relationship between platforms and broadband service providers, creating competitive disadvantages for operators. The continued growth of Internet traffic continues to shape the dynamics of the Internet’s architecture, with the disproportionate growth of streaming video and cloud services continuing to have the greatest impact. Despite the many advantages of providing private networks, conflicts can arise when parties exchange data, given the relative market power between non-identical entities. While the structure of the Internet has changed dramatically in the past decade or so, the legal and regulatory framework for traffic flows has changed little, and the largest platforms are fundamentally unregulated in these international data markets. The exception is South Korea with its unique approach to broadband policy and recognized global leadership in broadband.

Network use versus termination

South Korea has had a framework for network usage compensation for nearly a decade. The spirit of the policy reflects an acknowledgment of the shared responsibility between broadband providers and content/application providers to ensure quality data delivery and user experience. In practice, the policy ensures that the cost of fiber installation and maintenance is recovered from the content provider to the broadband provider’s primary router. This provides bandwidth dedicated to the specific content and protects against degradation of the network experience for users who do not access that specific content.

Importantly, this practice has nothing to do with terminating traffic to end users. It seems that Analysys Mason, Internet Society, And the others Confuse network usage (which describes the relationship between broadband providers and content/application providers) with the Sending Party Paying Network (SPNP) termination scheme. In South Korea, the SPNP is a historical system that only applies between Tier 1 telecom operators if their traffic exchange rate does not exceed 1:1.8.

While cost-recovery is encouraged in South Korea, it is not mandatory, and so the big US players are playing the system. For example, Netflix denied cost recovery claims and took the broadband service provider to court, saying it had no obligation to pay for the broadband network upgrades required to run Netflix content that increased 26-fold overnight. lost netflix, The case is under appeal.

Similarly, Facebook required South Korean broadband service providers to install Facebook servers within their networks for free. broadband providers abstained; After all, servers have a cost and cannot be reused for other content, and thus are inefficient and redundant if provided for free. To force the case, Facebook close Some of these servers redirect traffic to other countries and operators. This deteriorated the end-user experience, and the telecoms regulator in Korea fined Facebook for what it deemed willful damage. Facebook took the case to court and won, but the abuse caught the attention of the Korean Society.

Going forward, consider the association Telecom business law update To stipulate that companies enter into negotiations in good faith with data requirements and pricing transparency. The bill has no authorization fees.

Data sets needed for verification

Policymakers have little data on international data markets. While useful information about international traffic is available on a global macro level from Cisco and Sandvine, it doesn’t tell us much about the behavior of the traffic exchange actors and the microeconomics of individual networks.

Initial efforts are underway to provide more data, particularly from Consult the Strand which collects data on video data streaming on rural broadband networks and documents the pros and cons of different methodological approaches. Most importantly, Congress considered addressing this by funding the Affordable Internet with Trusted Contributions or Act Equitable Contributions Act Which would enable the FCC to conduct the required study.

In any case, there is no data showing the damage caused by broadband policy in South Korea. Conversely, the country is celebrated for the highest penetration rates of fiber to the home (86 percent) and 5G (47 percent adoption). The country is considered the first driver in network innovation and a global power in innovation Content development for local consumption and export. Moreover, Google and Netflix enjoyed a year of record profits in the country. Broadband’s fair cost recovery seems to go with a thriving ecosystem.


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