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IGF 2016 - Day 2 - Room 2 - DC on Net Neutrality

 

The following are the outputs of the real-time captioning taken during the Eleventh Annual Meeting of the Internet Governance Forum (IGF) in Jalisco, Mexico, from 5 to 9 December 2016. Although it is largely accurate, in some cases it may be incomplete or inaccurate due to inaudible passages or transcription errors. It is posted as an aid to understanding the proceedings at the event, but should not be treated as an authoritative record. 

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>> LUCA BELLI: Good morning to everyone. I think we can get started. So welcome to this fourth annual meeting on the meeting of Net Neutrality. Together we'll discuss today some very critical issues. Not only the implementation and exceptions to net neutrality and various frameworks that have been adopted so far but also a very prominent issue. The first segment of the session will be dedicated to discussion of net neutrality implementations and we'll have Ornulf Storm and Roslyn Layton, Carlos Brito from Mexico. In the second segment we'll have a discussion with -- I would introduce with a couple of remarks and we'll have Robert Pepper from Facebook that we're waiting for, Tomiwa Ilori from Paradigm Initiative and obviously last but not lease Javier Pallero and the session will be introduced by Mr. Guy Berger from director of freedom of express at UNESCO who is our keynote speaker. And one other important element is that many of the teams that we are going to discuss today are in this fourth annual report of the Dynamic Coalition on Net Neutrality. There is a box full of copies somewhere in this room there. And the report is also already accessible online if you go on Internet governance you can download any copy. Without losing any further time I would like to ask Mr. Guy Berger to introduce our session speaking to us about the great work that UNESCO is doing on this topic. Thank you.

>> GUY BERGER: Good morning, everybody. Thank you, Luca, for inviting me and congratulations to the Dynamic Coalition for this really excellent work that you have been doing. You may know that UNESCO, which I work for, has 195 member states so as you can see from the work in the -- here, it's very difficult to get agreement among the participants here. Can you imagine 195 states to agree on a position on net neutrality? There is no position so you can therefore be thankful I am not able to speak for very long. Because there is no UNESCO position on net neutrality except I would say a few things. One is that UNESCO as a political organization is not fundamentalist in this regard. Most likely if you were to ask the member states they would say net neutrality is a means to an end, not an end in itself. Bearing in mind, of course, that net neutrality as a means can have unintended ends as well. Or violations of it can. The second point I with like to say UNESCO has a conceptualization of the Internet that can discuss and assist some debates around net neutrality. So in that regard, I would just tell you a little historical experience.

At the time of the snow den revelations UNESCO had a big debate about privacy and also freedom of expression, access on the Internet. As happens in the U.N. system when there is a big complex issue, instead of taking a decision, the secretariat, like me, you have to do a study. So we did a very big study over 18 months with a lot of consultation. The study came out as this booklet here called key stones to foster knowledge societies and if any of you have received this publication, this list of UNESCO publications on the Internet there is a summary there and other ones. So what is interesting about this study that we did, it discussed these issues, access to information, freedom of expression, privacy, ethics and it did touch on the question of net neutrality. But at the time when the research was done about 2014, the debate around net neutrality was particularly as regards what had been happening in the U.S. about the debate about fast lanes and two-sided markets for payment and so on. And this was assessed in the study pretty much from the point of view okay, net neutrality openness of the Internet. What are the implications for freedom of expression? The whole period was to say well, the debate at the time was whether if you gave fast lanes to certain actors, you would really have unequal playing field and new players wouldn't have to enter very easily. From a freedom of expression point of view net neutrality was important you want an open playing field for anybody producing content to enter without disadvantage. That was in 2015. You'll find that discussion in the study.

Since then what interesting is things have changed a bit and as is evident in the report of the coalition, the big issue is now perhaps less net neutrality and freedom of expression and more net neutrality and access. And this happens to parallel one of the developments that came out of this study. This is where UNESCO, which the member states anticipated, and it came out of the study and a conference called connecting the dots. And it's pretty simple. But simplicity conceals more complicated things. It says if you want a universal Internet you need and Internet based on four principles. If you look in this little leaflet it has it all graphic there. The four principles are easy to remember under the acronym of ROAM. Rights based, open, accessible and multi-stakeholder governed. And the point of this is to say that you have a package here and that if you really want the Internet to fly, to be universal and to play a role in sustainable development and everything else, then one has to strive for these principles. So as I said, when you went back to 2013, 2014, the debate was how does openness and net neutrality relate the freedom of expression. Now with zero rating it is no longer so much the O versus the R, the right to freedom of expression and always A, accessibility. So this is an interesting shift. And of course as people here will very well know, the debates about whether you compromise openness to improve accessibility is essentially -- is access to a closed garden, a garden that may have apples and snakes, if you will remember certain garden in religious history. Is access to a closed garden better than being outside Eden, okay? This is the debate which has a lot of cost benefit analysis and lots of studies will talk about this.

Just a small comment. I think that part of this debate, of course, came with Facebook's open basics and one could in retrospect Facebook ought not to have proposed a closed garden. If they would have had an open system people would have used Facebook. Facebook did have a relatively closed garden and that's what has caused -- some countries banned this all together. In India as I understand, I'm not an expert on this question, part of the reason for banning zero rating on this model, the closed garden model, was partially under the media concept of you are going to entrench a dominant power and that's equivalent to media concentration and you can't allow that anti-competitive development. So in a sense, the Indian argument was more to the R versus the A -- the O, and the A was less important, the R was the important argument. I think most people would say the A, accessibility, is the trade-off more than the rights. When you do access a closed garden and you have Facebook and free other sites your choice is constrained but nevertheless your ability to express is less constrained because you are not just a consumer of media content, you are also, of course, a potential producer of content on Facebook even if that's the only thing that you've got. It is a complex debate.

I think it ties in a bit with the paper that we'll hear from Luca Belli about. To come back to my basic point, I think that this model of ROAM is an interesting kind of context because when it is talking about tradeoffs, where there is trade-off of rights in relation to openness or openness in relation to accessibility and the interesting thing, of course, is that in all tradeoffs you have to figure out cost and benefits and I think with this model what's also important if you're only thinking of net neutrality in terms of restricting openness in favor of access, you are missing out the rights I mentioned. If you are only thinking of openness versus rights you are missing out the access dimension and if you think of all those but you don't think of the multi-stakeholder  dimension you're missing out. This is good to try to think about how policy making on net neutrality can best develop, by having a holistic perspective. And the last thing I want to mention is we have these lovely normative principles at UNESCO, ROAM, I think they're quite influential. The member signed off on them and some said they would be helpful in decision making. A norm is one thing. Giving it impact is another. So fortunately in the study various member States and other actors proposed there should be indicators for the ROAM model. That's quite a challenge. You would have to develop indicators for how is country X performing on balancing rights, on the Internet. What becomes very interesting for us is where would net neutrality fit into these indicators? How would you develop indicators that could give you a map of a country in terms of net neutrality within this model and the relevance of net neutrality to openness, accessibility and rights?

And, of course, then the multi-stakeholder connection. Having said that I will be listening extremely carefully to what people say because it may be valuable to this development of indicators. If they get these indicators developed and we get the indicators accepted by the member states, then you have standards. Now they're endorsed by the community. It could be influential in terms of ROAM. I have to attend another session and I have to leave in half an hour. So I do have the book and I've read your summary and I look forward to hearing what you have to say. Congratulations again to the coalition.

>> LUCA BELLI: Thanks for those interesting remarks. Let me also say that the elements that are included and discussed in the book are also included in very short survey that you can take using the -- going on the IGF website and so you can also after this session maybe form your opinion and say evaluate if you agree or not or feedback on the various topic that we will discuss today. Without losing any further time I would like to ask Ornulf storm to give us some elements what has been done at the Norwegian communications -- I was co-chairing the working group that drafted the new guidelines, so please listen as he tells us something more about this.

>> ORNULF STORM: Thank you, Luca. My name is Ornulf Storm, I work for the Norwegian Communications Authority. As Luca said, the reason why we're here, the colleague of mine was the co-chair of the body of European Regulators Expert Working Group that developed guidelines on net neutrality. So I think I'll start with just saying a little bit of why the guidelines, why were they developed, and also what are they, and also a little bit on how are we going to use them and how are we going to conduct supervision of this regulation?

The background is that the European Parliament and Council passed a new regulation on the 25th of November last year, which is in effect of mid this year. Which regulates requirements for an open Internet. And in that regulation, it states that BEREC shall develop guidelines by the 30th of August, 2016. And the reason for this, the guidelines are supposed to contribute to a consistent application of this regulation, so it shall provide guidance to the different regulators in Europe on how to supervise -- supervision and enforcement of these regulations to safeguard the open Internet.

So basically it is important to understand that the guidelines are not a second level legislation. They are guidelines developed for the regulators and also, of course, guidelines to provide guidance also to the market. But first and utmost, it is a guide for the regulators in how to conduct supervision and how to interpret the maybe unclear or ambiguous provisions in the regulation. So that is the main purpose for that. I think that is basically the foundation for it, and I just briefly on how we are going to use the guidelines in our work in Norway, we are going to provide guidance to the market in Norway and especially we're going to use our website to provide that guidance. We will continue to have meetings and dialogue meetings with the Norwegian operators to discuss the matters and, of course, we will investigate cases on a case-by-case basis if that is needed. If we have cases of the different commercial practices or different practices on traffic management and so on.

We will also use -- we currently have a system for measuring speeds of broadband connection in Norway, so we will continue to use that speed test system, and we are also currently developing an app to be used for mobile terminance and also measure space on mobile terminals. That will be ready, I think, beginning of next year. And also we will investigate if we need to make adjustments or alterations to the system to be able to measure other things that is required in this new regulation. We will, of course, also use and what BEREC is planning to do to develop a set of questionnaires to be sent out to the operators and how their practices are. So we will also use that in Norway to ask them how they conduct their business and, of course, we will also gather inputs from the market, end users, whatever, that is notifying us about possible breaches of these regulations. And then we will also then produce a report, which is also required in the regulation, and the BEREC guidelines also are helping the regulators on how that report should be written and so on, and the dates when they are to be submitted. They should also be submitted to BEREC and the commission which we will then be able to compare within the European market.

So I think that is -- of course, we will continue -- we will continue our national net neutrality forum. We had in the past also since 2009 a national forum to discuss with stakeholders how to treat net neutrality. And, of course, we also used BEREC net neutrality working group to seek guidance from the other regulators in Europe to discuss difficult cases on, for example, commercial practices. So I think that's basically what I have -- I will start with and if you have questions, please.

>> LUCA BELLI: Thanks for highlighting the role of the BEREC guidelines is not only to specify some elements that could be a little bit vague in the regulation but also to allow harmonization of the implementation. It is an essential tool for regulators in Europe and it is very good to know that you are all celebrating an app so that you also involve the user into the monitoring of the regulation, which is a very excellent strategy. I would like to ask now to ask Roslyn to provide insight on another very tricky issue that has been emerging over the past couple of years that is ad blocking and what implications with the net neutrality regulations.

>> ROSLYN LAYTON: Good morning, everyone. It is a tough act to follow UNESCO and the Norwegian regulator. I want to salute you, Luca. You have two books you presented at this IGF and this is the third year I've been involved in this report. Luca is a dynamo. He has done an amazing job to organize two coalitions. This report is the fourth report. Anyone can submit a paper. We have a peer review process. I think if you look at the quality and the depths and breadth of the articles they get better and better. I'm delighted to be part of it and thank you for putting this all together.

So I want to talk about ad blocking today and human rights and one of the discussions we hear in amongst our net neutrality, this is not about economics, it's about human rights. I think that has been a fairly of economists to connect economics to human rights because, in fact, economics comes from human rights. Going back even before Adam Smith and the theory of moral sentiments it was all about, you know, we have limited amount of resources and we have an unlimited amount of needs. How do we do this in the most ethical and equitable way? So this attempt is to try to help bridge that gap and an issue has emerged since European union net neutrality process with BEREC and this kind of informed this particular paper. And it's also interesting before I worked in academia I worked in Internet advertising, so I know a lot about this industry, how it works and so on.

It is an interesting issue when we talk about net neutrality and not bringing in economics we don't talk about the ad platforms. A lot of what is driving the Internet is oh advertising. It's a huge part of what goes on. I would like to bring this into the discussion to help us understand some of these issues. What's interesting, if we take the Indian case that was referenced before, you know, this is kind of a critique, we couldn't have a free Facebook. But on the other hand what you do have in India today is an advertising monopoly. The Indian government in this decision not only banned the ability of Facebook to compete with monopoly but any Indian company. So I think it's important to just say this is only about human rights. You are limiting the discussion about human rights because the rate of ads that people see is also a human rights issue, at least according to the European charter of fundamental rights and the E-privacy director.

In the paper they reference a number of sources. There is an estimate on the typical mobile subscription anywhere between 20 to 80% of the traffic will be advertising. Users see upwards of 5,000 ads a day when they -- from all the various media that they see and it is estimated 1 in 5 people employed ad blockers just at the show of hands. Anybody using an ad blocker? Okay. So roughly -- so this is -- let me explain something. Ad blocking doesn't mean you are against advertising. I will go into that. A lot of people are okay with brand messages. They just have a concern about a lot of ads for a variety of reasons. So one of the issues, though, with net neutrality is the sense that if all data is the same and all packets are the same and all traffic is the same, that we have to meter and value advertising to the end user financially the same as let's say the news content or the video or so on. And maybe it didn't matter so much if we all had fixed line networks but it may matter on a mobile network where we're paying for data, limited bandwidth and the way the ads behave on the network can be -- this has been an issue brought up by Ellen Goodman at Princeton. She talked about her critique of the European BEREC guidelines engaging in ad centrist many where we have putting the rights of the advertisers above the end users. A particular issue was that the Internet Advertising Bureau of Europe was objecting to ad blockers at the network level. They were okay with them at the application level but they said we can't have them at the network level. And this from the perspective of this human rights activist was a form of ad centrism. One of the other challenges is we have almost a billion people using ad blockers today but it is somewhat difficult because for example Google Play you can't download ad blockers. There is an issue around certain regulators say some kind of ad blockers are allowed and others aren't. It is an issue in developing countries because of the cost constraints. And there is another challenge here especially if you went to Luca's session on Monday when we looked at community networks. There is a real challenge of getting networks in rural areas and remote areas and poor areas. If we're considering a lot of traffic may be advertising, this is an economic question for end users. If we're requiring these traditional models, traditional net neutrality model that all data has to be treated the same it will make it more difficult for poor and disadvantaged communities to build their networks. They don't have a way to recover and price the services appropriately based on what's most necessary for them.

So a very interesting survey from one of the most widely used ad management solutions said of 100 million people who were using a survey of these users, when did they use it? 20% said they used ad blockers for digital self-defense. They believe privacy is their right and felt ads were violating their privacy. That was one reason. Usability was another reason. A lot of -- you may experience yourself the way ads appear they could be popping up different ways that make it difficult to engage with the website, with the content, also people have the various phones that they have if they try to turn off an ad it makes the ad turn on and so on. Usability was an issue. The number one reason that people had deployed ad blockers was security. 40%. And we have an increasing challenge with mal advertising. Fake advertising embedded in advertising. $10 billion of losses a year. One of the issues why cloud or network level blockers are important is if you're interested in security, we all increasingly are, that you need to stop any kind of malware at the network level. You don't want it in the network, on the device, close to your users, so in many respects there is a legitimate case to have ad blockers. They protect the safety of the user and they improve the user experience. Cost control was there.

The other issue is speed, a lot of ads will delay the speed of mobile content and you have another case of battery life that many cases ads will have blinking and signaling and so on. That also drains the battery in the device.

Legitimately there are arguments against ad blocking. Of course, how do we pay for Internet content? This is the crucial issue of Internet any way you slice it is we have to have a way to be able to pay for Internet content. In some ways you could say this is perhaps opposed to the idea of free culture, right? So there is an essential tension between the essential idea of net neutrality and free culture from a person talked about and content providers want to be -- well, artists want to be compensated and make a living and the commercial interest to create platforms to deliver content. You need to do that. If ads are an important part of that. We wouldn't have the Internet today if we didn't have ads. Legitimately ad blocking is a violation of free speech. In the United States it's part of the first amendment. Advertising goes back to the founding of the United States. So that is an issue.

And the other issue is maybe privacy. So let me wrap up here with the solutions. Could we make a regulatory solution? Should we make a class of traffic called advertising that regulators could regulate and make sure it's -- advertising is not unfair or deceptive. Interestingly, ad blocking more than regulation has forced a lot of advertisers to improve their advertising. So the Internet advertising bureau has adopted the lean standards, light encrypted ad choice supported non-invasive ads. In many cases this market responds to a problem of too much advertising has forced the advertisers to make better advertising that's less invasive. One solution is saying no data caps. That is one way to go. The challenge with that is we don't address the security concerns.

Another would be could we have new business models? Micro transactions. The other area could be user compensation. I think this goes back to the key message here that in many cases, maybe advertisers should be paying for the transmission of their ads. We know this model from television, radio and print where advertisers were helping to pay for the cost of the network. So this may be something we need to think about as we go forward in saying how do we optimize our goals or network investment and human rights and we may have to allow the advertisers to participate in the -- to help pay for the transaction, not just the end user.

>> LUCA BELLI: Thanks for highlighting the complexity of this issue and also not only focusing on the fact that advertisement consumes data but also on the fact that advertisement blocking tools could be also used directly by users but also by network operators. That is also a very crucial element that should be taken into consideration when any kind of reply is wanted. I would like to speak about regulation, I would like to ask Carlos Brito to provide us some elements what is going on here in Mexico. You have had a very interesting reform. There is consultations going on and you have not -- there should be consultation going on. And well, and I know that you have a very insightful perspective on this study that you did last year.

>> CARLOS BRITO: Thank you, Luca, good morning, everyone. I presented for the book here is pretty much a brief version of a report. A research, report in 2015 because according to the regulators' plan, the IFT, they net neutrality rulemaking process, we'll start with the consultation process, was supposed to start in August 2015 and now we are in December 2016. That's not happening and that's pretty much 2 1/2 years of unappliable loss. But what I want to tell you is to make up a framework on how is -- in 2013 there was a major talk about reform on telecommunications and competition. And so we created mainly two new institutions. They were taken off the press -- they are Constitutional regulators for competition and telecommunication. The telecommunication regulator is also competition for only telecommunications matters. It is kind of complex when we deal with net neutrality because when we talk about net neutrality it is not only in Telcos but Internet content. At some point there probably will be judicial issue on who and what the role of the institution we created will be in the net neutrality issue. So we reformed the article 6 of the Constitution to be in these terms, telecommunications are public services of general interest. Therefore the State should combine -- universal coverage, interconnectivity, convergence, free access and without arbitrary interference. From the discussion of that Constitutional reform and the paragraph I just mentioned, in the Congress we wanted to know what does that mean. What will that mean in the secondary law? And many lawmakers say well, probably this will lead to a net neutrality law when it comes next year. It makes sense when you see what is the specific phrasing they were using.

And so as you can see when your State and Constitutional reform telecommunications are general interest public services, the whole discussion that they have in the United States on this public utility versus information services debate we just went through it, it's a public service here of general interest. And well, we created this kind of different regulator. I have had the chance to talk with the regulator this time on what is their perspective and that's very important. What is their perspective on their own work? Are they dealing with human rights or not? You'll find many regulators say no we're dealing with the economics. That's not human rights. We're dealing with information services. That's not human rights.

But in the design, the very core design of Mexican's regulator, a Constitutional term. It doesn't depend on political parties like in the U.S. Not on government. So the Constitution say that the regulator should be what we call here the -- an institution that is protecting humans rights, which freedom of expression, access to information, access to competition and regulation unit. And we have this reform because we had major concentration problems in telecommunication services and we were discussing in the case of television concentration it was a national television concentration, we had the issue of the relation of why people like so much soap operas? It is not probably the best content when you want to educate people as well. So I'm not against soap operas but why people want them? Probably for 70 years that's the only thing they have been offered. But -- so this is a circle argument on why is the demand on that specific content. I'm mentioning this because of the debate I will mention later.

So we have this enormous concentration in broadcasting services and telecommunication services and we have to do this reform, which is working pretty much well. It's slowly in some cases and not so much in others. And right now well, we also have a problem of vertical concentration in terms of for example the major player for mobile services, it is also right now having tell sell has stores, soccer teams, stream services, music services. They are developing games, video games, so it is getting broader, the vertical concentration and that may be an issue. Sorry, I have the feeling that it may be.

We go and say what is the public opinion of Telcos in net neutrality? They are silent very much. Not talking about it as being an issue. But on their own alliance to talk about public policy issues in the public sphere, they are a telecommunicationist and they are shy to talk about net neutrality. But the whole thing is we reviewed what has happened in other places because we want to tell the regulator who was supposed to have the rulemaking process what has happened in Mexico.

We found we have some cases of blocking. We found the fixed services from companies, they were blocking Skype in 2007 and 2008. But it -- there were different opinions on what was -- shall the  State do on the blockings of Skype. It ended up because of consumer pressure. We have the full -- everywhere. In the major players and in the smallest of players they do exactly the same. Because there is also this saying that probably will foster diversity of different rates and services. The same three, Facebook, every single player -- how much time I have? One minute? Whoa. So there is no evidence of -- that is the problem. There are some signs that there may be a problem with it but the whole game in this issue is that actually the user has no possibility to actually say okay, this is a problem. No possibility to create evidence. So summing it up, we have -- may have a problem with zero rating and also or possibilities of -- the deal is we have a regulator who has to take into consideration so many human rights that I have to say in Mexico have come to a different tradition. Is not the same tradition, for example, the privacy right in Europe is not the same in Latin American context in this human rights system is not the same on Mexican tradition. The same with expression and specifically in the obligation, the four kinds of obligations the State has to answer to how to manage those deals. So we have a very complicated deal in my perspective. BEREC's guidelines are a good base. However, we will have to be -- to create a very strict control of Constitutionality and conventionality for the specific Mexican case. Thank you very much.

>> LUCA BELLI: Thank you very much, Carlos. Before we pass to the second segment discussing zero rating I would like to open the floor for comments and remarks. Please be quite concise so we can go to the second segment. If you want to raise your hand to make comments or observation on this, okay. One, two, three. Start, please. Introduce yourself.

>> I'm Rojan Matthews and representing India. COI is the organization I represent. Two quick comments. One is this notion of rights is in our opinion a bit dangerous because it leads to law and legality, enforcement, which is very antithesis to an open Internet and the reason it was started in the first place at private domains. I think we would be very concerned about this notion of the Internet in terms of a rights-based. Maybe an opportunities-based discussion might better serve tint of the discussion. The second point I would like to raise is the issue that the professor has made in terms of the economics of the deal. Invariably what we find in that in all of these discussions the access service providers get the short end of the deal, right? The rest of these folks who play the Internet are excused of the cost lands up as a result of these discussions on the access service providers. As in the case in India are licensed and under government control in most instances. Two things I would like to make sure is part of the discussion. Thank you.

>> LUCA BELLI: May I ask a quick question? It is concerning the ad block panel. You mentioned the notion of self-defense. Do you believe that -- I believe when you have the notion of judicial self-defense you create some kind of opposition between the user and the business and each one is going to try to choose to overcome the other over time. Do you believe that competition can be healthy by itself? Or it needs some kind of regulation as to how far business can go to try and overcome ad blockers? Or how far ad blockers can go to overcome advertisement? Basically if it can be healthy to leave it be or we should have some regulation to make it healthier?

>> Luca, you make a differentiation on ad blocking, stating that it was a difference between consumers implementing ad blocker and net operators. What is the difference of downloading an app and a user activating it or asking an ISP provider to block the ads? It is the same approach and not a differentiation in that regards.

>> ROSLYN LAYTON: Thank you for the questions. In terms of the gentleman from -- I think it is a concern in many cases. If we look at the economic side. Two-sided markets are interested in finding efficient outcomes where -- and that is -- this is where we have a debate in net neutrality. Is it net neutrality, which is the edge provider wins, which is the edge provider -- that is the idea, or the two-sided markets where you try to find an efficient outcome? I understand his perspective. In the idea of digital self-defense. There are definitely scholars who work on digital self-defense. I use it more in a colloquial sense. Interestingly, they have succeeded to force the advertisers better than any regulation. The EU adopted a cookie law which people have said has been a disaster. Upwards of $2 billion a year in lost productivity, wasted time. People don't go onto the website because a pop-up comes up. They don't know how to disable it and so on. Ad blocking in a short period of time succeeded to make the largest advertisers improve their ads. So certainly maybe not the best solution, but it was effective to send a signal pricing is a signal. Send a signal to the advertisers, improve it. And then finally, I don't necessarily buy into the view there is necessarily a conflict or antithesis. Some users feel pressed or offended from the amount of advertising they see. Many cases feeling like they can't control it and they're happy to pay their mobile operator to block the ads for them.

Personally, I don't make a distinction if the user downloads the ad or the network providers does it but I would say the network provider offering a network level ad blocker solution has a better solution to manage the security and many cases you are working with a mobile operator and rely on them to block malware, to block -- governments ask them to block offensive material and so on. So I would in this case maybe disagree with perhaps those in BEREC saying maybe network level blocking was not acceptable. Incidentally, those guidelines are not binding so even though I know that regulators in the EU want to work together, the operators are not required to follow those guidelines. I don't think they want to necessarily object to them, but there is a considerable amount of debate about the guidelines in the EU. It is not -- not everyone is happy about them.

>> LUCA BELLI: Just a quick reply to the question. I think the point I wanted to stress before is indeed that when a user downloads an ad and knows how to define the setting of the ads is actually in power of what ads he is blocking. Whereas when the telecom operator that define blocking, they define what kind of ads are blocked and how and also it requires a previous monitoring of traffic. In Brazil it would be illegal because the inspection would be monitoring the content of the traffic and contrary to the law. That is also some attorney issue in Europe where also the guidelines and regulation were quite explicit in saying the monitoring practices have to be reviewed by data protection regulators. But that is just a beginning of an answer. If you want, we can discuss this more later and I would like now to pass to the second segment of the session because we only have 40 minutes left and to start introducing the very prominent debate and issue that is occupying probably the minds of net neutrality opponents and proponents over the past couple of years, which is zero rating.

Zero rating is basically the -- there are seven chapters dedicated to zero rating in this book. Some are pro and some analyze it to try to define a different kind of zero rating and I think it is very useful to inform the debate. Zero rating is sponsoring specific application, right? In the first chapter when I speak about zero rating -- I ask the question indeed, if it could be a switch from a generic Internet to a mobile -- for those who do not know what that, it was a popular network in France in the 1990s where the operators -- which kind of application the user could receive and telecom regulator approved which kind of application receive so it was a centralized model with a control from operator and regulator basically. The question I asked and I would like to ask to have reflection on is whether zero rating could not turn a generic Internet into a mobile -- the Internet differs from its predecessors because Internet users -- the Internet as an end-to-end distributed open architecture and the Internet users are not only recipients of a pre-defined service, the network was optimized for voice. It was optimized for the pre-defined set of applications. The Internet is completely different. The user is at the center. Although at the edges of the network, it is at the center because it cannot only access content and application, but also produce and freely share its creativity, its content, its application. It is not a mere consumer, it is a producer. He can produce and consume at the same time.

What is important understanding zero rating models is that they are based on two elements. The sponsoring of applications or a set of applications on the one hand, but also the existence of a data cap. Frequently a very reduced data cap because a study by a consultant says users have an interest in zero rating practices when data cap is particularly low. So in that case that could trigger a sort of circle where the operator keeps the data caps low in order to maintain zero rating offering attractive and that is something that's actually has been observed in the EU market and also in OCD market the monitoring reports in 2014 have shown in the markets where zero rating practice were introduced, there were considerable increases in the price of the open Internet. Why? Because the operators kept the data cap low so it could be kept low to attract new users. On the other hand in the market where zero rating have been banned like in the Netherlands, the opposite phenomenon have been observed. A week after the ban on the rating the domain national operator doubled the -- are you hearing me? I've been sabotaged.

So yeah, exactly, I've been capped. The opposite phenomenon has been observed in the Netherlands when the national consumer regulator decided to ban zero rating, the week after the domain operator doubled data caps to promote careless usage of the Internet. Those were the words of KPN CEO. So the goal was indeed to promote usage by increasing volume. And that is something that has been also observed in Brazil when one of the operators decided to eliminate zero rating offerings and the week after doubled the data caps, therefore reducing by 60% the cost of Internet access. So another important element that is in the chapter -- the first chapter of the book is that I think it is very important we have a distinction amongst different types of zero rating. We cannot only speak about zero rating as if it was a unique thing. There are zero rating plans where an operator selects the applications and can select maybe vertically integrated services and others the provider can sponsor the application and in this case mainly content application provider have good financial resources can sponsor applications. There are zero rating platforms such as Facebook, free basics that could be opened. Such as a version of Facebook Basic where everyone can build and include services but they can also be closed such as the first Internet version where only 12 or 13 applications were provided.

Finally, there is also some zero rating that is fully compatible with net neutrality where I call application agnostic zero rating. The M sent application or in India air sell program that provides data package per month that the user is free to use as he or she wants. And for a couple of months he will have this data package so that the user of the Internet as an Internet user could do in receiving but imparting information and innovation can be promoted. So that was my very long introduction. But I actually as we have lost two panelists, I think we can have a little bit more of time to discuss this. I would like now to ask Javier. You have to be very close to the mic.

>> JAVIER PALLERO: Okay, let's hope this keeps working. Great. How much time do I have? Seven minutes, okay. Well, my name is Javier Pallero, a work at Access Now. I'm here to talk about the first of the articles you will find in the book in the part of zero rating pros and cons, this article was authored by three people, one from our team. Basically we are in the opinion of the cons of zero rating. Especially not as a matter of principle, but on the implementation and flavors that we have seen so far on the Internet. So to start I would like just to assert a couple of basic arguments that found much of the work we do at Access Now. We believe the Internet is a rights-based technology. Why do we believe that? We think that the design and agnostic end-to-end network, which was the main idea behind the Internet and actually promotes free speech and makes it a really useful resource to do that.

And on the rights-based rhetoric we think that Internet is and how it should keep working. We think that the role of regulation in the States quite important actually. We can find that part of the world of the Internet in the U.S. is also a response to some regulatory decisions. For instance, the idea of deregulating in market in the 80s and 90s of the telecommunications industry. It is a regulation decision even if it's deregulating something. And the communications act and other similar legislation have actually encouraged the participation of more actors on the Internet allowing them to express their opinions without the fear of repression in the case of intermediaries, for instance. That's the base about all of our arguments and our understanding on these issues. How we arrived to the conclusion that I am going to share with you.

So in the beginning we just would like to say that while we in the article we define what zero rating is. Luca has just offered an explanation and it is something that is quite easy to understand. But we differentiate two kinds of zero rating practices we've seen in the world. We call the first one the telco model. The practice where a telecommunications Internet provider strikes deals with specific partners or just to benefit their services or the services that the telco is going to provide. Their own video platform or probably striking a deal with a music service to exempt it from data caps. So that would be what we call the telco model.

The other model we have identified is what we call the sub Internet model which I call the man in the middle model. Which is the model that arrives from services like Facebook's free basics, especially at the first iterations, which is an intermediary between the user and the experience they have of the Internet. The intermediary designs what applications you have access to and in the middle of the exchange of traffic. So we have an opinion against both of those models. At first on the telco model the main objection that we have is actually the main objection where is the containment of speech and choice. In the telco model we've seen there is a usage of some quality of service technologies in order to identify and promote a specific content or to exempt it from data caps. Actually we assert in the paper that quality of service technologies were in the beginning created to offer to the user the ability to shape their own experience in their home. So this understanding that because we have heard that some telco proponents of this telco model of zero rating say quality of service exists in the design of the technology and therefore this means that the creators intended to allow this kind of practices by using this technology to shape the traffic. But we say that this is intended actually for the user to shape their own experience and instead of getting this forced experience over there their access or enjoyment of the Internet.

And the other model we identified is the sub Internet model. The most controversial one. We see there is an intermediary between the person using the web and their experience. There is a problem here because actually there was mention by the person from the UNESCO at the beginning about the importance of privacy and revelations about spying and stuff like that. One of the ways in which users themselves and some market actors have developed solutions for that is encryption. For instance, this sub Internet model offered by for instance the free basics experience is incompatible with encryption. Encryption would be a way of going around the necessary monitoring that has to happen in order to exempt these specific applications from the data caps. In this sense this is incompatible with encryption it restricts the control of surveying or monitoring traffic and provides less innovation and less opportunity for Internet users to actually use the Internet and engage in businesses and all of the benefits that arise from the Internet. The assertion that these restrictions and control are negative for the adoption of Internet is also in the report by the portable Internet where it was found that zero rating did not bring most mobile Internet users online for the first time and 82% -- instead of content limitations. So there was already mentions about how regulators are dealing with it.

We also covered that in the short report we wrote. And there was mention about BEREC, which, by the way, banned this sub Internet model in the guidelines of the implementation by national regulators of the rules. It's in the articles in rule -- you can see the sources in the paper.

Bottom line we think any solutions for enabling access or incentivizing the conception of the Internet need to be compatible with basic human rights information. The guarantee to the rights of privacy and the free flow of information. And that sometimes gets a little bit lost in the discussion about the zero rating models, which is how the network traffic should be or not be surveilled or monitored or whatever and what extent and which technologies and which limitations should those technologies have. That's it, thanks.

>> LUCA BELLI: Thanks, Javier. As we have lost two of the panelists, we have more time for discussion, excellent. So I am pretty sure we will have some reactions to this and some comments. So if you want to have -- to raise your hand to make a comment, please. The gentleman in the back. Do we have the mic for the gentleman there?

>> Hello, everyone. I represent the -- community foundation. Some of you may know our foundation started four years ago started a program by Wikipedia zero and we've been partnering with mobile operators to provide free access to the full Wikipedia service. Not only read-only but also to edit. I have a question for the room that is something that we have been discussing internally and two years ago we came up with what we call our operating principles, which are 10 rules by means of which we want to have the program to be aligned with open Internet principles and at the same time aligned with our mission. That said, we currently are evaluating not only the impact of the program, but the impact of those operating principles. Are those principles, in fact, fulfilling or satisfying the questions that come out with zero rating and specifically with Wikipedia 0?

My question for the room and panelists would be going a little meta. Are principles or rules something that could be applied to zero rating in a way to keep what we believe is possible from zero rating practices like ours, providing access to freely licensed information, providing people the opportunity to also contribute back their content on the encyclopedia in countries where affordability is still a barrier to access the Internet? We see from many other platforms that there are not a list of rules or a list of principles and we were the first ones to kind of like come up with the idea. I wonder if people would consider that creating a line of principles or a line of rules to do zero rating positively or responsibly could be a good way to move the debate forward instead of going at a black and white yes or no model, which I think that's what's going on right now.

Secondly, I think everyone in the room has it on their minds. We need more information and more data to actually see if these models and platforms are actually impacting the people that needs to be impacted. The alliance for the affordable Internet did a great job with this. We are starting our own research. We're starting to do a little bit of surveys and interviews with people that we think could be helping us inform our decisions, but I want to keep that question open about principles for responsible zero rating to the room. Thank you.

>> LUCA BELLI: Do we have -- I think -- I would take two other comments, please.

>> I'm Javon Macedonia. Any time Wikipedia or someone like that with such credibility makes the case for something like this, we're all convinced that it is a good way to go. And I would immediately as you were speaking I was kind of attracted to supporting that. But the thing is it's a dangerous floodgate to open. Net neutrality is a very important principle and if we start playing with that, it is going to go much more in a different direction that I don't think we wish.

>> Good morning, am I on here? My name is Allen and here with privacy fundamentals. However, for the last nine years until some months ago I was with Comcast, before that I spent time with AOL and before that with PBS and so I've dealt with these Internet backbone and net neutrality issues for a bunch of years now. And I really actually like to respond to the last comment a bit. But in general for the panelists, when we talk about net neutrality, and I haven't yet reviewed in very much depth the new European regulation. My question really is, we need to mess with the important principle of net neutrality, I believe, because I notice that the European regulation has a basis of all traffic treated equally, no throttling, no blocking. Limited exceptions for reasonable network management for protecting the integrity and the safety of the network. Is there a prioritization capabilities allowed for things like suppressing child pornography? For things like paying to build pipes big enough to have massive content providers able to get their content through? For instance, aside from the massive ones, very high-level important traffic. If we have online medical resources available, should that be prioritized over other types of traffic? I don't know to the extent this is built into the EU reg. Maybe there are other people that share my ignorance and we could get a comment on that.

>> LUCA BELLI: One comment here and then we can open.

>> I think that cap is crime against the consumer. But the question is how to build the capacity to support the growth of the traffic. Maybe the answer is in the public interest. And this is a question just to make alive this debate and not to running up the --

>> LUCA BELLI: Actually to the last comment, one of the reasons why zero rating plans have been deployed is it has been announced as a way to connect the unconnected, right? And I think there is some sort of misconception because the fact that zero rating is maybe a possible option doesn't mean that it is the only option. And I was thinking about this because I know that you are very much involved in community networks, which are actually a very feasible option, and we are presenting another report in two hours in room 8, I think, -- room 9, sorry, on community networks and how can people -- local communities develop their own network to enhance infrastructure. Actually that does not only mean that they could be connected, it also means that they could -- having created local infrastructure, the infrastructure and connectivity can also create demand for other traditional operators. They are not incompatible things. They are very much compatible elements that could be built in synergy. I don't want to monopolize the debate. I will let the other panelists reply.

>> I think answering to him, I think we're well beyond the platform-wide discussion. I was asking in the India position as a country, I think no country is going there. We are going to the gray areas what to do. In terms of principles, yeah, principles of Wikipedia, principles of the regulator? What can you do with those principles? That's the main question. But even above that is what do you want to protect? We want to protect freedom of expression and user rights and innovations and a bunch of things. It's an environment, very complicated environment ecosystem.

The next question is how to do it? That's an important part of the BEREC rule I think. Integrating the human rights discourse. Is this tool necessary, enforceable? What are the consequences not applying them? There is this saying that let's make it principle based but principles without consequences and that's the main issue. I want to say I find this discussion in every single world panel I participate on. When we talk about rights. Here on my left talking about rights, let's talk about opportunities. I think that it happens a lot but the human rights is the phrase is understood very differently in every single part of the world. Even in my own country many people when they hear human rights they think of money, for example. Oh, human rights are expensive, therefore we don't have enough money, therefore you don't have to have humans rights. Let's agree that the concept of human rights is very different and maybe we are talking at the same time position. So this kind of -- that's very important.

>> ROSLYN LAYTON: Let me start again by saying I also want to thank Luca. It is a very rich discussion and to make sure that you get a copy of our book and I'm also going to point out and make three quick points. If you go to social science research network, SSRN.com I have three papers going into a lot of these details. What I want to give you are maybe the other perspectives when you look at these issues of data caps and zero rating, which you should take into account.

I think for those who are looking at net neutrality in the introduction of this book written by Tim WOO he is talking about the Internet as a utility. Even in utility markets there are limits. There are concepts that data caps and utility markets and zero rating in you it markets. We have more pricing flexibility in electricity markets than Internet markets and they have less -- this is a case where you have just one net. They have more pricing flexibility than most mobile operators. In this case if you look at an issue of data cap. I may want to go further on the train but I can't. I can't complain to the train company, gee, you are violating my rights to go further on the train. There is a data cap on the train. If you look at the history of data caps over time, the bundles that we consume, the prices that we have, the bundles get bigger and the prices are falling. If data caps are not -- is a temporary solution, it is not the prices that we have today are changing quarter by quarter. They -- so the sense that data cap is, you know, a threat to the existence and so on, it actually changes very quickly.

On top of that, where we have the case of the KPN in the Netherlands, it's easy for the incumbent to remove a data cap because they have the largest network. The data cap practice is more important for the entrant operator because they have restrictions on their spectrum. They have smaller networks and they need to be able to ensure they can control their capacity and make sure that the users get the adequate amount for what they've paid. So you need to just square the idea of data caps with utilities. With regard to this very important point about principles.

I think you also have to put regulators in the real world perspective. They are trying very hard around the world to address this issue. Even if you look at the alliance for affordable Internet their incidence of the zero rating plans were 1% to 2% of all the plans they covered. We have to understand in the regulators' world they have a lot on their table and we're asking them to look at a small part of the market when they have huge responsibilities on their plate. Managing the competition issues, managing security and privacy. A whole range of things we need to be able to have the proper perspective for this particular concern in light of the amount of revenue we're talking about and in light of the number of people for whom it's an issue. I have done a lot of research on Facebook free basics. I have contacted the app developers who use it. How many net new users do you get as a result of free basics? A case of a foundation in Africa they have 10 million net new users who want basics for aides and maternity. This is a legitimate case where people who are truly suffering because they can't walk and can't work, this is the only kind of healthcare that they have. They live in remote areas. And I think this idea that this is how is a sub Internet that it is a less than viable means to use the Internet it is an affront to people that avail themselves helping them save and extend their lives and we need to recognize just because it may not be your idea of what is a perfect Internet. For these 10 million people it S. it doesn't mean they won't continue and do other thing. Real people are using the services every day who take good value from them and we can't devalue that because it doesn't fit our ideal sense of what the Internet should be.

>> LUCA BELLI: Before I get to you, we have I think a rare occasion of having two Internet pioneers in the same room by chance. I would like to ask -- I hate to put people on the spot but I would like to ask Louie, one of the fathers of the Internet, vin CERF. He was an inspiration to him. I would like to ask Louie, he is here with us today. Thank you, Louie, and also to Bob Frankson, the father of home networking to give us a couple of maybe -- one minute of what is your perspective on the debate we're having here.

>> Very brief. I do agree that Facebook Basics serves a need. And we shouldn't confuse that with the discussion of the Internet. But I also think there is a larger discussion of the difference between utility and infrastructure. And I think we need a different narrative for the Internet. I don't want to confuse the two discussions. That's a longer discussion.

>> LUCA BELLI: Bob will be introducing the session at 12. I would like to have maybe two words from Louie Pazon who can also tell us what are the basics of mini tell. I think he has some thoughts on that. Can someone pass a mic to him?

>> Thanks for giving me a few minutes. I've been involved a few years ago in net neutrality discussions but mostly because it failed. There was a lot of technical matters involved and they were misunderstood. Now it looks like it's no longer the major problem as far as I can hear here, most of the matters in the end impact the whole society. It depends how we want to share capacities, share opportunities, and share benefits among the citizens of a certain part of the world. Obviously there is no single solution to that. The world is diverse. Some countries are still suffering, not all. And I guess there is no solution if we want to come up with a scheme or a model which would apply everywhere in the world and everywhere on the Internet. We have to accept that the world is not really compatible in every part. The world is I would say specialized everywhere you want to use, which is fashionable. But we have to admit that a solution, whatever it is, is a political solution in each country or in each segment of the world, and as -- we don't debate on what we want as a society, but we will just balance from one proposal to another indefinitely. Thanks.

>> LUCA BELLI: You had some final comments and then I think we can close the debate.

>> Thank you, and I think also as you said, one size does not fit all so, of course, it must be -- we also think that a different approach it must be allowed different approaches. That is also true in general in a lot of cases. Just a quick comment to the gentleman of filtering and blocking and blocking access to images of sexual abuse of children is still allowed under the new regulation in Europe. So that will continue to -- our law enforcement will continue to do that. That is not constraining that activity. A comment on the zero rating. I think the BEREC guidelines are discussing a little bit on clear-cut cases, which is not allowed under the regulation. But I think that is -- was the most challenging part of the BEREC guidelines and also I think will be the most challenging part for the regulators to assess cases of zero rating and the guidelines have provided with five, six prints criteria to assess whether a certain practice is allowed or not. But I think that is the most difficult part. And I think that is also true that you said that as the regulators, we have a lot of issues to deal with. So, of course, this is also adding up to put resources into this area as well.

So, of course, we would also not like to regulate too much if the market can also provide solutions for a lot of issues, then that is also a very good thing. So we really hope that we will not have too many complicated cases. But I think there will be some cases in Europe and that will be challenging and we'll see how it develops. Thank you.

>> LUCA BELLI: Thanks. For those interested in chapter 8 of this book is dedicated to the new guidelines that has been altered. I think what is emerging clearly is that a lot of more accurate and in-depth debate is needed. Those are the questions we are discussing here are not clear-cut questions. There is no silver bullet. It is necessary to have public debate on this. The reason of this report is to inform people and policymakers. It is necessary to have also some political vision as reminding us and to take some steps in the direction or another because we want to pursue a specific vision and that vision, I think, we all agree, should be in the public interest. So I would really like to thank you for the excellent comments, presentation particularly the audience. You have had very good comments, interactions and thanks a lot. I hope we will see you next year at the next meeting. Thank you.

(Session ended at 10:30 AM CT)

 

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