Net Neutrality Undermining Spreads to Developing Countries

By Paul Budde
Paul Budde

After the USA set the bad example of allowing telcos to start charging different rates for content delivery services, other incumbent telcos elsewhere are only too happy to jump on the bandwagon and use the American example as a reason and an excuse to end net neutrality (NN) in their countries also. As did their American counterparts they too see this as another way to grab some extra monopolistic income.

There is absolutely no reason for that. The only country with a real NN problem is the USA — for two reasons:

The first reason is that there is very little fixed infrastructure competition, which allows companies to extort monopolistic rents.

But, even more importantly, the second reason is that in their infinite wisdom the American government and its regulator the FCC (thanks to incredible lobbying from the incumbent telcos) have classified broadband as a content service, thereby placing it basically outside the telecoms regulatory environment.

In all other countries broadband is classified as a telecoms access service and can be regulated through the normal telecoms rules. In most of the developed countries wholesale regulations have created a better competitive market, and so NN is not a major issue, as content providers have myriad options to deliver their services and are not held to ransom as is the case in the USA, where in most situations there is one telecoms infrastructure operator in any geographic region.

What is beginning to happen now is that incumbents in other countries (especially in the developing economies, but elsewhere also) are now using the US example to obtain similar monopolistic favours from their legislators and regulators.

Similar to the USA, and again, unfortunately, especially relevant to developing economies, the telcos in those countries also wield enormous political and financial power and influence and often have little trouble in getting inexperienced governments to believe their stories — perhaps with a certain amount of financial encouragement/inducement — and to allow them to start creating a two-tiered internet, one for the rich and one for the poor. In particular this will become a serious problem when more and more government services, such as healthcare and education, begin to be delivered electronically.

By Paul Budde, Managing Director of Paul Budde Communication. Paul is also a contributor of the Paul Budde Communication blog located here.

Related topics: Access Providers, Net Neutrality, Policy & Regulation, Telecom


Open access and balanced settlements Michael Elling  –  Aug 26, 2014 12:22 PM PDT

The IP stack lacks price signals and incentives. 

We are confusing regulated and arbitrary originating and terminating (reciprocal compensation) with necessary balanced settlements to clear marginal supply and demand both north-south and east-west in the informational stack.

That said, we also need open and equal access in layers 1-2 as far out to the edge as possible.  With today's hetnets, the CO, head-end, pedestal, pole and conduit suffice.

Good additional points Michael Paul Budde  –  Aug 26, 2014 7:35 PM PDT

Good additional points Michael