Cooperation Working Group Minutes RIPE 84

Thursday, 19 May 2022, 14:00 - 15:30 (UTC+2)
Scribe: Gergana Petrova
Chairs: Johan (Julf) Helsingius, Desiree Miloshevic, Achilleas Kemos (online)
Status: Final

Julf welcomed the attendees.

Panel Discussion on Network Neutrality

Desiree Miloshevic (moderator)

Panellists:

• Maarit Palovirta, Senior Director Regulatory Affairs, ETNO
• Thomas Lohninger, Executive Director, epicenter.works
• Alex de Joode, Regulatory, Risk & Compliance, AMS-IX
• Frode Sørensen, Nkom
• Klaus Nieminen, Traficom
• Fredy Künzler, Init7

The archives of the panel discussion, including presentations are available at:
https://ripe84.ripe.net/archives/video/846/

Desiree introduced the panellists. She explained that the idea of the panel originated from the EU’s call for large content platforms to contribute to the cost of the European digital infrastructure that carries their services.

First, Maarit Palovirta, speaking on behalf of the European Telecommunications Network Operators’ Association (ETNO), shared some of the history predating the EU proposal. Following calls from operators, the EU included this issue in late 2021 as part of its European Digital Principles document. They recognised the need for a framework that guarantees a fairer contribution to the digital infrastructure in Europe. ETNO commissioned a report, which was published recently: Europe’s Internet ecosystem: socio- economic benefits of a fairer balance between tech giants and telecom operators. The report explains some issues faced by telecom operators, the socioeconomic impact on EU citizens and on innovation, and finally proposes potential policy solutions. Maarit shared that the report was well received in Brussels. EU telcos have invested 500 billion euros on infrastructure over the last 10 years. During the same period, data volumes have also increased exponentially. Around 55% of all data currently comes from six big tech players. This is challenging for operators from two perspectives. First, there is the cost of delivering traffic. At the IP-markets level there seems to be an imbalance of negotiating power - on which terms should operators deliver this traffic? Secondly, Maarit mentioned that there is an asymmetry in regulatory obligations. Some of these rules, which came into effect in Europe after 2012 are no longer in effect in the US. There are direct and indirect consumer price regulations in wholesale markets. There is a competition policy framework which makes it difficult for the telco sector to consolidate. There are a hundred operators in Europe, and there are some places where the market is not very populated.

Maarit concluded that at this stage, the cornerstone of the discussion is to better understand the imbalances of the IP markets. Anything ETNO does should respect the open Internet rules that are currently in place. At the moment there are very few violations of these regulations in Europe. ETNO would like to address the perceived imbalance of power in the IP markets and to see if there should be a fair contribution to the network deployment by the companies who are generating most of the traffic.

Alex de Joode, responsible for regulation and risk compliance at AMS-IX, explained that the same topic was under discussion when he started to work in the political arena about a decade ago. In the end, the EU Commission concluded that the reason people pay for Internet connectivity is to access content from these big platforms - they provide the services for which the telcos sell connectivity. He asked why the same discussion was taking place once again. A few years ago, there was a discussion about Google and Facebook publishing news articles and the publishers lobbied unsuccessfully to have a slice of that. In the same light now, Brussels views the US tech giants in a bad light, and European telcos have had an easier time convincing the EU to raise the topic again.

One of the tenets of today’s Internet is that if you have a network, you pay for your own costs. You can get cheap transit for 10 cents per MB. Tollgates already exist. If you want to reach one of the bigger telcos, you must pay 40-50 cents, which is 4-5 times the rest. In effect, telco customers pay for their connectivity, but now they are trying to get extra money from the big platforms too. Alex stated that he didn’t think this was the right way to do business. 

Thomas Lohninger of epicenter.works, a civil society organisation fighting for digital rights, drew a parallel with the telephony network, where the idea that you deserve money for keeping a customer reachable was discussed at the ITU and rejected unanimously. Similarly, today’s debate is based on a flawed understanding of how the Internet works. Commissioners Esther and Breton talk about traffic being produced in the network by big tech in the US, while in reality the traffic is requested by paying customers. Only South Korea has a sending-party-pays system. Thomas invited the audience to scrutinise the consequences. Following this model would significantly alter the standard setting function, fundamentally changing global Internet interconnectivity. In its report, ETNO talks about OTTs negotiating direct agreements with telcos. He asked what would happen with the traffic and all other connections if the content provider does not reach an agreement with the transit provider. ETNO says it is committed to net neutrality and the open Internet, where content services and applications should not be unjustifiably blocked or degraded. Last year, the EU High Court declared zero rating as illegal. We have to scrap zero rating products in all but two countries, because they are everywhere. A 2019 study showed that only four out of the top 20 zero-rated applications were from Europe, the rest were from the US. Thus, telcos cannot use zero-rating to incentivise traffic from the big US companies. Now they are saying this traffic is flooding their networks and they want money for it. The European net neutrality law obliges operators to provide connection to all end points and treat all traffic equally, technically and commercially. They are not allowed to change the price of the product based on the applications used. To succeed in their request, ETNO must scrap net neutrality.

Finally, Thomas invited the audience to join the debate. He mentioned that so far only closed-door meetings have taken place in Brussels, with no representatives of civil society or the technical community present.

Fredy Künzler from Init7, a Swiss ISP, explained that despite the asymmetric traffic flow broadband customers are causing traffic, not the content providers. The sole exception is email which is well below noise level. Requiring payment from both broadband customers and content providers is a double-sided payment that would be an abuse of technical monopoly. In addition, he pointed to the huge profits incumbent telcos are generating and wondered what created their need for this discussion to begin with 

Frode Sørensen drew on his experience working for the Norwegian Communications Authority (Nkom), and also previously chairing the BEREC net neutrality working group. He explained that, in telephony, the dependence on telephony providers to connect a call has necessitated regulation to avoid these providers needlessly increasing prices beyond what is optimal for the market. If Internet traffic is charged by the sending and receiving side, they would need regulation in a similar manner.

There is a dependency between the access and content provider. The servicers of the access provider will not be needed without any content and vice versa – the content will not reach the users without the access connection. End users request and pay for content transfer. The ISP receives its income from its own end users.

In 2012 in response to ETNO’s proposal for ITU/WCIT, BEREC concluded that “This model has enabled a high level of innovation, growth in Internet connectivity and the development of a vast array of content and applications to the ultimate benefit of the end user. Attempts to undermine it could put these benefits to risk”. It is especially important to maintain this model in order to protect the small content providers.

Frode further explained that the big content providers have become even bigger in 2022, prompting European regulation over gatekeepers – such as the Digital Markets Act (DMA). In a few weeks BEREC will publish a report on the Internet ecosystem, which will discuss, among other things, the relationship between ISPs and content providers.

Frode concluded that the principles from the BEREC paper from 10 years ago are just as valid today.

Klaus Nieminen, Chief Expert at Traficom, the Finnish telecoms regulator, and co-Chair of the Open Internet WG, is happy to see how the Internet has evolved. ETNO feels that the EU Commission should investigate whether the cost of building Internet infrastructure is distributed fairly, if they want to meet the Gigabit society targets for broadband connectivity. The EU will investigate, and so will BEREC. He pointed to a few sources for more information such as the consultant study conducted for BnetzA, the German regulator. He added that BEREC had received contributions from several ISPs that were very critical of ETNO’s proposal and expressed concerns around competition issues. They will look at the situation in South Korea and consider the impact of the proposal on end users and on competition. He remarked that not all ISPs are against the proposal. Finally, Klaus asked the audience to think about the concept of fairness and how relative it is.

Desiree encouraged all panellists to share their thoughts concerning the discussion.

Maarit responded that ETNO doesn’t see the proposal as a net neutrality issue, since interconnection is outside of the net neutrality rules and the open Internet rules. She also mentioned that the week before there were two public meetings in Brussels discussing the topic. In addition, ETNO has been proactively reaching out to stakeholders and want to encourage feedback from all sides as the solution to the problem they raised is not very clear.

Maarit added that the regulatory framework for telecom operators in Europe is tighter than that in the US and other parts of the world, leaving little room for alternative solutions. She pointed out that the EU has very ambitious targets to provide fibre and 5G to everybody in the EU, but the current financial state of the telco sector does not allow for them to be achieved. She suggested that 5G deployment in the US is at a more advanced stage because of their easier regulatory environment.

Thomas responded that access fees or sending-party-pays fees was illegal according to the 2010 and 2015 Open Internet orders of the FCC in the US. These were scrapped by the Trump administration, but individual state net neutrality laws would still prohibit it. And the same goes for India. Paragraph 4 and 5 of the BEREC net neutrality guidelines state that interconnection cannot be used to circumvent the net neutrality protections. Using interconnection to circumvent the protections would mean that certain traffic is treated differently in the network, that it would be delivered in a lower quality to the end user, which would also affect the prices. Interconnection between access networks is not included in the current net neutrality framework.

Next, Thomas remarked that the ETNO report has been quite vague on several points but is very concrete when talking about how the money should be used. They are excluding any taxation or fund-based model, but instead only propose that the money is given to them.

Finally, Thomas mentioned that studies show that countries with the highest termination fees have the lowest levels of investment. He encouraged taking all information into account when making policy.

Patrick Tarpey, Ofcom (UK Communications Regulator) asked whether ETNO’s proposal would seriously disadvantage small operators who do not have negotiating power, which would be of further detriment to rural and other unsupported areas. Secondly, at the moment we enjoy near ubiquitous encryption. He asked the audience to comment on how the proposal would affect encryption.

Thomas agreed with the urgency of Patrick’s questions.

Jim Reed, an operator, made the point that what is considered fair for an incumbent telco, a content provider and an ISP are different things. He urged caution when using language such as “fair” as there is no common understanding of the terminology.

He added that the discussion about net neutrality is different compared to ten or twenty years ago, because the technology and architecture of the Internet has changed. He recommended Geoff Huston’s talk which looks at the day-to-day Internet transit, where he expresses concern that the big content operators have their own global fibre network, and they are still inside the eyeball networks. The eyeball networks are not able to transit to get the content. All they are doing is distributing it over their own internal network to the end user. So we have to be careful when we say that the big six content providers account for 55-75% of traffic.

Fredy agreed that about 80% of traffic comes from just 10 ASNs. He disagreed with Maarit that it’s a challenge for eyeball operators – to the contrary, they can optimise traffic because they only must talk to a few content providers. The cost of Layer 3 is almost nothing compared to the total cost of providing a service. He disagreed with Maarit that the issue does not concern net neutrality. Finally, he said that there is no lobby in Brussels for the end users. End users expect a service which is not broken.

Maarit asked what happens if you are too small and big content providers don’t want to talk to you.

Fredy said he is a small operator and big networks talk to him because they have a joint interest to provide good service to our end customer. Just yesterday he spoke with people from Netflix.

Maarit suggested Fredy has a privileged relationship.

There was loud laughter from multiple areas in the room.

Fredy denied this adamantly.

Fredrik Korsback, Amazon Web Services, stated to applause from the audience that he represented one of the big players and said they would talk to anyone.

Maarit said that she understands that big tech is investing in global infrastructure and that they are bringing content closer to end customers. She explained that ETNO’s proposal concerns the network layers from the CDN, from the cache to the end user, not the global Internet.

Alex commented that if the content providers put caches within the network of a telco, whatever happens within that network is covered by net neutrality. If you want to get paid extra, you are directly interfering with net neutrality.

Maarit asked if the regulators online can offer an interpretation.

Klaus commented that the commercial practices from an ISP cannot circumvent the net neutrality rules and the user rights. The fair treatment obligation covers the pricing practices. The Commission is not regulating interconnections, but they are relevant in this context.

Frode agreed with Klaus. He added that net neutrality varies as per jurisdiction. The EU Open Internet regulation is very clear about the access side of the service but not very explicit about the interconnection aspects. How interconnection should be regulated based on net neutrality is not very obvious, which is also why BEREC does not refer to net neutrality in their 2012 paper but speaks instead about termination monopoly. He believed interconnection is more explicitly covered in regulations in the US and India.

Wardner Maya, LACNIC, shared that there are 16,000 small ISPs in the LACNIC region deploying fibre. There is at least one ISP in each small village. He explained that this was due to the Internet governance model created in 1995 and still present today, due to strong net neutrality laws, and due to the fact that they don’t rely on big companies to deploy in remote locations. 

Blake Willis, Zayo France, commented that the Internet has proven that it doesn’t care about national borders. He gave the example of France where certain media companies have monopolies, so streaming companies stream through other EU markets. He suggested that if the EU implements ETNO’s proposal, that will shift the interconnection market for European traffic to nearby markets, such as the UK.

Fredy commented that in Switzerland there are data centres that rent space and connection. 

Maarit commented that the Accent paper is different from the ETNO proposal and has a very short policy chapter. She explained that the purpose of the ETNO paper is to put some options on the table for discussion, with the goal of achieving network investment objectives.

Regarding the discussion on fairness, Maarit said that this was not for telcos, but for policy makers to decide. They would first have to evaluate whether there is an issue to begin with, and if there is – how it should be fixed.

Torsten Sommer, rrbone, a newcomer to RIPE Meetings, commented that as someone with some political background, it seems to him that this discussion is not just about commercial benefits but about controlling who can enter the market. Big companies can decide to only allow the ones who can afford it. Governments also own large shares in big telcos in Europe.  He added that the next step to controlling who can enter the content market is controlling the content. He invited the audience to share their thoughts on this.

Fredy responded that shareholders, rather than customers, are the real clients of the incumbents. This discussion is about how the incumbents can protect the revenue streams of the shareholders.

Desiree invited the panellists to share their thoughts on next steps going forward.

Klaus commented that the Commission is currently studying the topic and BEREC will contribute to the discussion.

Frode agreed with Klaus and mentioned we still don’t know the next step related to net neutrality. There was no net neutrality law in 2012, so this will be the first time to that  both of these issues will be considered together. BEREC will launch a report for public consultation in mid-June. There are also upcoming work streams for the next year related to other aspects of the Internet, and not limited only to net neutrality.

Fredy commented that the request to the Swiss regulator to regulate the IP connection on a cost orientated basis has now been pending for nine years and that he hoped it wouldn’t take another nine to get a result. He referred to a study that shows that the true cost of interconnection is zero, so zero settlement peering would be the result. He suggested that could be regulated. It would certainly make it attractive to host the content in Switzerland.

Thomas remarked that what happens in Brussels is very isolated from arguments. Commissioner Breton announced that the Commission will move to binding legislation later this year. He called on practitioners in the room to inform regulators. A lot of arguments that were logical to them need to be heard by politicians, because those arguments are not common sense to the politicians. He said that operators need to lend their knowledge and expertise and help politicians understand what the true consequences of such a proposal are likely to be.

Alex agreed with Thomas and urged people to act immediately. He added that the EU likes to support SMEs (Small and Medium Enterprises) and innovation. He encouraged people to find a coalition to make their voice heard.

Maarit agreed with Klaus’ understanding and mentioned that the European Commission is looking for data. ETNO is also waiting for feedback.

Chris Buckridge, RIPE NCC, thanked all the speakers for their different perspectives and especially Maarit for coming to present the proposal in spite of knowing the reception her proporal was likely receive.

EU CSAM (Child Sexual Abuse Material) Proposal

Konstantinos Komaitis

The presentation is can be viewed at:
https://ripe84.ripe.net/archives/video/850/

Konstantinos provided a high-level analysis of the EU proposal on Child Sexual Abuse Material. If passed, the legislation would require tech companies to assess the level of risk, but also install and operate software to detect CSAM or instances of grooming in current and previous messages. The draft legislation does not specify what these technologies are but says they should be in use even when encryption is in place. The proposal violates fundamental rights including privacy, freedom of expression and information. Konstantinos encouraged everyone in the room to take part in public comments on the proposal, which was currently open.

There were no questions.

Introduction to the Open Technology Fund

Corinne Cath, Vice President, Open Technology Fund

The presentation can be viewed at:
https://ripe84.ripe.net/archives/video/852/

Corinne introduced the organisation she works for – the Open Technology Fund which provides grants for individuals and organisations who work to keep the Internet open and accessible. They support people who develop VPNs, censorship resistant browsers, but also research and researchers, most recently on how ISPs in India and Pakistan implement the filtering mandate imposed by their respective governments. She encouraged people to apply for funding.

There were no questions.

AOB

Sander Steffann, 6connect, reminded everyone that the terrorist content online regulation kicks in on 7 June, and operators will be required to remove content within one hour.  

Chris Buckridge, RIPE NCC informed the working group that Marco Hogewoning had left the RIPE NCC and joined the Dutch government as their ITU representative. He wished Marco success at his new role. He introduced the new RIPE NCC staff: Bastiaan Goslings, who worked for AMS-IX in the past and Jelena Cosis, who will focus on engagement in Southeast Europe. Suzanne Taylor is taking a more leading role in the policy team at the RIPE NCC. 

He added that it is a busy year for the ITU with the WTSA having taken place and the WTDC in the next month, building up to the Plenipotentiary later in the year. EuroDIG would take place the next month in Trieste. He reminded the room that at the UN level, the deadline for the call for sessions at the IGF was 3 June and further there was a proposal for a global digital compact – a document the UN is hoping to publish in the coming year.