Through a parallel internet, the platforms have caused seismic changes in global data flows.
The global policy movement to improve connectivity and close the digital divide has led to reports on international data markets and related regulatory policies. The papers present sometimes confusing terminology: access, throughput, peering, and interconnection. Each word has a specific meaning and practice. Policy makers can benefit from a summary of policies and proposed instruments, as well as a thorough assessment of their country’s networks and practices. Here are some key findings from the report.
Emergence of a parallel, proprietary and unregulated internet by platforms
Germany’s Federal Network Agency has commissioned an investigation into competition in transit and peer-to-peer markets (141 pages), noting that the issue has not been investigated by European regulators for at least 5 years. The report finds that internet traffic in Europe is growing by 25 percent year-on-year, 80 percent of this traffic is video, social media and games, and only 5-6 players (such as platforms Netflix, Amazon Prime, YouTube, etc. .) ) are responsible for the total traffic. account for more than half of these players have more international backbone capacity than the world’s broadband providers and have cut off third-party transit in exchange for building their own backbones, submarine cables and data centers, resulting in a decline in transit activities. Platforms largely avoid internet exchanges where prices are transparent, instead creating tailor-made networks for their own content and maximizing the efficiency and profitability of their services.
The massive development and expansion of backbone and delivery infrastructure by these players has permanently changed the overall global architecture of the Internet, the structure of interconnections and the relationship between platforms and broadband providers, creating a competitive disadvantage for operators. Is. The continued growth of internet traffic continues to shape the dynamics of internet architecture, with the continued disproportionate growth of video streaming and cloud services exerting the most influence. Despite the many advantages of privately offering networks, conflicts can arise when parties exchange data, given the relative market power between misaligned entities. While the Internet architecture has changed significantly over the past decade, the legal and regulatory framework governing traffic flow has changed little and the largest platforms in these international data markets remain essentially unregulated. South Korea is an exception, with its unique approach to broadband policy and recognized global broadband leadership.
network usage versus expiration
South Korea has had a framework for network usage compensation for nearly a decade. The policy ethos reflects the recognition of the shared responsibility between broadband providers and content/application providers to ensure the quality of data delivery and user experience. In practice, the policy covers the cost of installing and maintaining fiber from the content provider to the core router of the broadband provider. It provides dedicated bandwidth for a particular content and prevents degradation of the network experience for users who cannot access that specific content.
Importantly, this practice has nothing to do with terminating traffic for end users. It seems that Analysis Mason, the Internet Society and others confuse network usage (which describes the relationship between broadband providers and content/application providers) with the termination mechanism of sending party network payments (SPNPs). Hey. In South Korea, SPNP is a historical arrangement that only applies between Tier 1 telecom operators if their exchange rate does not exceed 1:1.8.
Although cost recovery is encouraged in South Korea, it is not mandatory, so the big US players play the board game. For example, Netflix rejected claims for cost recovery and took the broadband provider to court because it was not required to pay for the broadband network upgrade needed to handle Netflix content, which was streamed 26 hours a day. times increased. Netflix lost and the case is on appeal.
Facebook similarly required South Korean broadband providers to install free Facebook servers in their networks. Broadband providers froze; After all, servers have a cost and cannot be reused for other content, and are therefore inefficient and redundant if kept for free. To highlight the problem, Facebook has shut down some of these servers and redirected traffic to other countries and operators. This reduced the end-user experience and the Korean telecommunications regulator fined Facebook for willful damage. Facebook took the case to court and won, but the abuse caught the attention of the Korean legislature.
Going forward, the General Assembly is considering updating the Telecommunications Act to determine whether companies are negotiating in good faith with data and price transparency requirements. There is no task mandate in the bill.
Dataset required for validation
Policymakers have little data on international data markets. While there is useful information available on a global scale from Cisco and Sandvine about international data traffic, it tells us little about the behavior of traffic exchange actors and the microeconomics of individual networks.
Preliminary efforts are underway to provide more data, most notably from Strand Consult, which collects streaming video data over rural broadband networks and documents the pros and cons of different methodological approaches. Importantly, Congress has considered addressing this through the affordable internet with the Trusted Contribution Act or the FAIR Contribution Act. That will allow the FCC to conduct the necessary investigations.
In any case, there is no data to suggest harm from South Korea’s broadband policy. The country, on the other hand, is celebrated for having the highest penetration rates for fiber to the home (86 percent) and 5G (47 percent adoption). The country is considered a pioneer of network innovation and a global force in developing content for local consumption and export. In addition, Google and Netflix have had record profits in the country for a year. Recouping broadband rates seems to go hand in hand with a thriving ecosystem.