Governing the Internet

It's running on time, but is it running IPv6?
It’s running on time, but is it running IPv6? Source: Iljitsch van Beijnum

Today’s post is by Rudolf van der Berg of the OECD Science, Technology and Industry Directorate

“Internet”, it’s a word we use daily. “Look it up on the Internet”, “I have no Internet”, “Read it on the Internet”, “Connect it to the Internet”, “Meet him/her on the Internet”, “because of the Internet”. There are so many ways the Internet has changed our lives that many of us would be hard pressed to remember daily routines without it. Perhaps, there has never been a technology capable of pervading our activities so much, so quickly and on such a global scale.

A tram (like the one in Iljitsch van Beijnum’s photo above), a train or a bus may already be connected to the Internet with few of us being aware. The number of connected devices in our homes is increasing as are the range of connected devices that we wear or are all around us, from fitness trackers to light bulbs.   A new idea for a device or service developed in Shanghai, in Silicon Valley or in Stockholm can overnight be taken up by people around the world. Think of the games “Flappy Bird”, developed in Vietnam, or “Angry Birds”, from Finland, and extend that phenomenon to everyday activities across the world.

This has had an unprecedented effect on global governance. It is no longer enough to have your national governance of a sector. Unless you cut the cord, the governance of others is directly influencing yours. Whether it is access to undersea cables, satellites, harmful and illegal content, cybersecurity, health or trade, a country’s rules affect those of others.

And it is for this reason that each year the Internet Governance Forum (IGF2014) comes together. This week, 3000 representatives of business, civil society, the Internet technical community, Inter-governmental Organisations and governments come together in Istanbul to discuss the width and breadth of Internet governance. They’re primarily discussing the role of regulators, the deployment of local infrastructure, the creation of local content, the triangle of privacy-security-trust, the governance institutions, and what it all means for the Internet and future developments, such as the Internet of Things. Moreover, the topics are expanding, in parallel with the Internet’s influence, to encompass what it all means for areas such as employment, health, energy and transport.

The OECD is present at the IGF2014 since the Organisation is one of the principal forums where its 34 member countries and partners discuss issues relevant to Internet governance. The OECD publishes each year a number of reports on policies and good practices on how to preserve the open Internet, how it influences economic and social development and how to take advantage of opportunities and address challenges.

This year we are participating in a number of sessions and presenting our most recent work on the Internet economy. We will in particular have an Open Forum on Thursday at 14:30 in Workshop Room 03. The focus of this year’s forum is on the many economic layers and dimensions that make up the open Internet, in a holistic manner. The OECD will engage with policy experts, economists, the technical community and civil society to discuss the different possible approaches to assessing the economics of the open Internet. This session will provide an opportunity to update the IGF on OECD’s ongoing work in this area and to present the OECD Ministerial on the Digital Economy to be held in Mexico in 2016.

Useful links

OECD work on the Internet

The connected television debate in OECD countries

A stakeholder interacting with her radio-TV set
A stakeholder interacting with her radio-TV

Today’s post is from Rudolf Van der Berg of the OECD’s Science, Technology and Industry Directorate.

Thirty years ago last week, a US Supreme Court decision in the “Betamax case” clarified that even though a video cassette recorder (VCR) could be used for copyright infringement, the manufacturer was not liable for infringement by the purchasers. The decision was by the narrowest of margins – 5-4 – but it stands to this day. Nonetheless, despite widespread take-up of VCR’s in all OECD countries, their legal status often remained unclear. The copyright law of Australia, for example, deemed recordings of broadcasted content for personal use to be illegal until 2006, when the law was amended to reflect common use over many years.

Today, many similar cases are making their way through courts in OECD economies. A new report “Connected televisions: convergence and emerging business models” describes some of the debates taking place regarding new equipment and services that change how television is delivered. The report describes the influence of connected television on the telecommunication market and the interaction between various stakeholders, including actions taken by governments.

Today, anything connected to a screen can serve as a television and it is a network connection that makes it connected.  The report looks into the impact these new devices and services have on telecommunications networks. For example, some have expressed the opinion that online television and video-on-demand (VOD) services are either challenging for network management or that telecommunications networks are not fairly compensated for carrying this traffic.

Digital Video Recorders

Digital Video Recorders (DVRs), sometimes integrated in digital television set-top boxes have added the ability to pause content while watching and fast-forwarding later on through parts of the broadcast. The DVR is currently facing challenges in and outside courts across the OECD.

In Belgium, public and commercial broadcasters requested compensation from cable and IPTV companies for the use of DVRs. The reasons given were that the new technologies enabled users to skip commercials and that pay-per-view catch-up television services saw less than expected take-up from consumers.

In the United States, Dish Networks, introduced two features that are currently being challenged in courts. PrimeTime Anytime would automatically record the four major broadcast channels during primetime hours, store eight days of recordings, and hop over advertising in content recorded on previous days. The other feature was to enable its DVR users access via the Internet to content received over their home satellite dish and on their DVR.

Also in the United States, Cablevision introduced a cloud DVR for its customers. Instead of requiring a DVR in the home, the recording was done in a datacentre. This was challenged in the courts, but after an initial defeat, was upheld to be legal, because it was under the control of the user.

In Australia, in a similar case, a cloud DVR service offered by Optus was ruled against by the court. The outcome also led to the closure of similar over-the-top cloud services in Australia, such as MyTVR and

French television service providers cannot introduce a cloud DVR service, unless with prior authorisation of the copyright holders.

There are also less contentious services, such as the ability to Tweet screenshots of viewed content via Numericable’s DVR in France, access to catch-up television such as BBC iPlayer, and the ability to download apps and games to the set-top box.

Live television online

A number of services have sprung up that allow consumers to access live television via the Internet. One of the best known examples is Aereo in the United States. It gives each individual user an antenna and then streams the content via the Internet. It has been challenged in court, by broadcasters and cable companies, such as Cablevision. However the earlier Cablevision cloud DVR ruling was significant for Aero, with two courts ruling it was not in violation of the law. FilmOn offers a similar service to Aereo from Switzerland for European channels. They take the position that under Swiss law reception and distribution of any receivable free-to-air signal is allowed. Magine, a Swedish company, offers licensed live online television and cloud DVR services in Sweden, Germany and Spain. It therefore resembles more traditional cable television. One of its distinguishing features is that it allows users to go to the start a programme when they switch channels and a programme has already started.

Implications for telecommunication networks.

Catch-up television, such as BBC iPlayer has proven to be very popular with viewers. Viewing is happening increasingly through non-traditional devices, such as mobile phones and tablets.

The report finds that all broadband networks in principle support connected television and online television services. The effect of increasing video traffic over networks has been described by the terms “data tsunami” and “exaflood”. The terms suggest that networks will succumb in a dramatic manner to the amount of data sent. There are, however, few independent sources for data on traffic growth over networks. Those sources that are available show robust growth but offer data that enable a more considered view of network capabilities and traffic growth. Data from European Internet exchanges and Cisco’s  Visual Networking Index show a year on year reduction in the pace of growth for Internet traffic. For example where Cisco saw an eight fold growth in traffic from 2007-2012, it only expects a threefold growth between 2012 and 2017 (see also the OECD Communications Outlook 2013).

ISP’s have different views on connected television and the potential effects on their networks and business models. Some networks such as Swisscom openly welcome online television services and increased use of video services. It has stated that it will stimulate consumers to use the higher-speed access services that the company sells. Many ISPs, however, have flagged and adopted a range of different strategies to deal with traffic increases in an endeavour to strengthen revenue:

Differentiating on quality of service: Some ISPs have proposed to differentiate between classes of Internet traffic (gold, silver bronze) or by dedicating broadband for certain applications. So far networks appear to have been mostly unsuccessful in selling such services. Some reasons put forward by content providers for not purchasing these services is, that their impact is mostly unknown as the ISP controls only part of the network. Furthermore in a competitive market content providers may judge that ISPs will upgrade their networks when quality degrades to remain competitive with other ISPs.

Internet traffic exchange: In Korea, Samsung introduced a VOD-service integrated into its television sets, that made use of the consumer’s broadband connection. For a short period access to this service was blocked by Korea Telecom in a dispute over interconnection. In Norway, Nextgentel, the largest ISP, decided to significantly reduce capacity to the national public broadcaster NRK. The broadcaster had reportedly declined to pay for the additional capacity needed. Capacity was later reinstated. The report contains submissions from both countries on the background of these cases and how it was dealt with. It further explains how Internet traffic exchange, also known as peering and transit, functions and how large content providers such as Netflix implement peering. In addition it describes some notable peering disputes in Australia, France and New Zealand. (See also this OECD report on Internet traffic exchange)

The use of CDN’s and caches. Content Delivery Networks (CDN) and caches reduce the costs of traffic for both content providers as well as ISPs, while at the same time increasing quality. Though Akamai is perhaps the best known, serving up to 9 Terabit/s in 2011, there are a great number of competing services, including those offered by ISPs. This has created a very dynamic market. Content providers may use multiple CDNs at the same time, choosing the best one for a customer based on costs and performance. Some large content providers such as Google and Netflix however have opted to deploy their own CDNs also known as caches instead of purchasing from ISPs or third-party CDN providers, because for them this is the most cost effective and efficient solution.

Download limits: Until recently, the use of download limits (data caps) on fixed networks was decreasing in the OECD area due to competitive pressure. There has been a slight uptake, however, in some countries, whereas other countries have witnessed an increase in caps. Some state that caps allow the network to be shared more equally amongst users. Others, such as the president of the United States National Cable and Telecommunication Association have stated that limits are not about network capacity but that discriminatory rates provide a way of meeting costs of broadband roll-out. Critics of limits note that at peak times, those that go over caps, are not using the network significantly more than other users in a way that incurs costs to the network. Those that exceed their cap use the network more during off-peak hours. Content providers have reacted by offering customers to choose lower quality video streams that use less of the available download limit.

Useful links

OECD Policy Roundtable: Competition Issues in Television and Broadcasting 2013