[governance] The ITU/WCIT: Thinking About Internet Regulatory Policy From An LDC Perspective?

[Cave, Jonathan]

I sit on both sides of this fence (yes, it is uncomfortable sometimes) and see a further issue of governance by proxy or even Potemkin governance. This cuts both ways.

On one side, in many MDCs (the opposite of LDCs) the regulatory relationship with (esp.) incumbent telcos has become corrupted (if that's not too strong a term) by a combination of acknowledge information asymmetry and the use of regulatory traction to encourage the telcos to provide a range of public goods like universal service... The latter may be 'uneconomic' (or the regulators may have become convinced that they are). The central issue may be the conflation of the regulatory and public good provision roles of government, especially in countries without full regulatory independence (independent of government as well as of industry). The interests, evidence, analysis and policies "produced" by governments and by dominant firms may not be distinguishable even to the participants. In addition, the closeness of these relationships may lead to one side getting the bulk of its information from the other, leading to a particularly persistent form of capture. But this applies even to the 'serious academic' folks - if the reward for investigating questions of a contentious nature is access to otherwise unobtainable data and other evidence, and especially where contrasting data may not be so easy to come by or may not even have been recorded, selection bias makes a mockery of scientific rigour. It is one thing to insist that all available evidence be taken into account - this does not help when the 'other side of the story' is not adequately elicited or recorded.

On the other hand, rejecting such analyses and the evidence on which they are based - rather than engaging with them initially on theoretical grounds and eventually on the basis of better evidence - is equally ineffective. How can such evidence be collected? In some cases by conducting natural experiments - and many LDCs are ideally suited for these, especially if the costs are reduced by the value of improved basis for policy decisions (and reducing the distortions due to 'capture').

I don't like the persistence of monopoly or the attempts to parlay incumbency in natural monopoly settings into control over markets where the incumbents do not have a particularly important role to play (e.g. sectors with weak recent and prospective innovation performance playing the innovation card in order to justify subsidy or policy influence in related sectors like the Internet). But I would not automatically assume that there are no forces driving towards monopoly (even if they are only 'tipping' externalities) or that competition supported by policies that minimise such externalities is better than tough-minded utility regulation that captures them in the public interest.

I also see no reason to love persistence in regulatory monopoly. That's why I do love civil society participation. It can make the issues simpler - but hopefully not too simple.

J.

From: governance-request at lists.igcaucus.org [mailto:governance-request at lists.igcaucus.org] On Behalf Of Milton L Mueller
Sent: 11 October 2012 17:55
To: governance at lists.igcaucus.org
Subject: RE: [governance] The ITU/WCIT: Thinking About Internet Regulatory Policy From An LDC Perspective?


From: governance-request at lists.igcaucus.org<mailto:governance-request at lists.igcaucus.org> [mailto:governance-request at lists.igcaucus.org] On Behalf Of michael gurstein
I should say that both of these reports are very interesting and contain a wealth of good information, however, the problem that I have with them and particularly the second report is that it so clearly starts off with its policy conclusion and builds a case to support this.

[Milton L Mueller] moan. Yes, indeed. This is a commissioned study, by a consultancy that is in the business of serving the interests of its clients. The substance of the study is not terrible, it makes the standard case for the Internet model as we know it. But still, as someone who does real scholarly studies, I am always irritated by the fact that these kinds of paid-for pieces get 1,000 times more attention than an honest, objective scholarly study, and that even purportedly critical scholars such as yourself seem to take them more seriously than real research simply because it's easier to read and because it arrives on your virtual doorstep so easily and quickly via a publicity machine that generates "buzz"

>From what I am seeing (and Kende's report is as good a signal as any) the Internet biggies are running a bit scared (the term "moral panic" comes to mind) as to what "madness" might come out of the WCIT meeting that the ITU is hosting in December in Dubai.
[Milton L Mueller] As I have argued elsewhere, it is a bit of a panic, and one that has succeeded in stampeding a lot of public interest groups into it as well.

And they are pulling out all the stops in trying to derail any real discussion on how the costs and benefits might be allocated of improving/extending Internet access in and into LDC's and within LDC's to the other 99% or so in those countries who currently have no possible means of access. This is of course because the ITU as the traditional venue for global telecom "governance" includes among its 195 or so Member States a very goodly proportion, probably a majority, who are currently experiencing net costs (including many regimes who see these costs in terms of lost political control) from Internet access and paticularly if attempts at extending access to rural and maginalized populations are taken into consideration, rather than net benefits and not surprisingly they are looking at ways of righting that balance.

[Milton L Mueller] The problem with your perspective, Michael, is that it does indeed represent the classic telecom monopoly perspective which is often held by the governmental Ministries and national telecom monopolies in LDCs. Basically they see international traffic not as an industry that supplies goods and services that benefit the consumers who pay for them, but as a source of monopoly rents that can be soaked to "distribute" wealth to their favored businesses and political causes. This concern with "equitable distribution" inevitably ends up both being massively inefficient and thus stifling growth, while not even achieving equity either, because it will always be a few privileged, well-connected businesses and politicians who benefit from setting up the national toll booths.

I myself am of two minds on this issue.  I well recognize the value/benefits that could flow from Internet access even to the poorest of the poor and the overwhelming benefits that Internet access provides to those for example in civil society who can take advantage of its more or less unlimited free flow of communications and information (including through undermining various repressive political regimes). On the other hand, the unlimited unregulated policy environment advocated by reports like that of Kende and others of that ideological ilk would I think, lead almost directly to a further enrichment of the already stupendously wealthy and overall a signifcant transfer of wealth and benefit from those with the least to those with the most.
[Milton L Mueller] I am glad you are honest about this two-mindedness. Factually, there is just no way around it. The liberalization and deregulation of telecommunications has massively increased access, decreased costs, increased diversity and innovation. The internet never would have happened without it. I know it provides cognitive dissonance for some people, but all you have to do is compare the penetration and price of ICTs before and after liberalization and the contrast will be very, very stark. True, there have been pitfalls here and there, usually due to remnants of monopoly power or not handling the complex transition from monopoly to competition properly, but on the whole the progress has been revolutionary.

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