Proposed net rules would hit digital economy

A summit hosted by the International Telecommunication Union is proposing regulations that the U.S. opposes, regarding the future of the Internet.

DUBAI - Inter-governmental regulation of the Internet could deter investment, raise costs for consumers and hinder online access, a U.S. diplomat said. The United States has been leading efforts to stop a United Nations body extending its remit to cyberspace.

U.S. Ambassador Terry Kramer reiterated his country's "hands off" message at a summit hosted by the International Telecommunication Union that could decide the future of the Internet, at present largely unregulated at a global level.

"We are concerned some of the proposals could create an investment environment that is very tenuous," Kramer told Reuters on Wednesday. "We need to be very mindful that we are not creating new, much greater problems than we are solving."

About 150 countries are gathered to renegotiate an ITU treaty which was last updated in 1988 before the Internet and mobile phones transformed communications.

The United States wants to restrict the debate to conventional telecoms and two of its three core recommendations have been approved, Kramer said. Member states have agreed the definition of 'telecommunications' should remain unchanged, while the treaty's introductory passages, relating to its scope, will also be unaltered.

The third recommendation, still being debated behind closed doors, is a technical, but important distinction that the treaty should only relate to "recognized operating agencies" - conventional telecom operators - and not "operating agencies".

The latter definition would potentially place the likes of Facebook, Google and government and business networks under the jurisdiction of the ITU.

"These sectors have done incredibly well without almost any regulation at all," said Kramer.

The United States and its allies including Australia, Canada, Europe and Japan want a strict delineation between the two, while other countries say the two are now inseparable and should both be governed by ITU legislation.

The United States says that allowing the internet, and with it content, to come under global regulations would pave the way for online censorship and restrictions on free content.

"There are still a lot of countries seeking to sweep the Internet into this and some of them have got ulterior motives," said Kramer.

Some African and Arab states have adopted proposals from a European telecom association to introduce charges to companies such as Google if they deliver content to networks abroad.

Telecom operators' voice revenue is in decline and they claim the investment needed to keep up with surging demand for data does not justify the returns.

"If there is a charge imposed on developers of content and applications that could significantly curtail traffic," said Kramer. "It would potentially exacerbate the digital divide because a lot of countries would not receive the traffic they need."