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EIGHTH INTERNET GOVERNANCE FORUM

BALI

BUILDING BRIDGES-ENHANCING MULTI-STAKEHOLDER COOPERATION

FOR GROWTH AND SUSTAINABLE DEVELOPMENT

OCTOBER 25, 2013

10:00 A.M.

WORKSHOP 282

INTERNET TELECOM “CONVERGENCE” AND GLOBAL INTERNET GOVERNANCE

 

 


The following is the output of the real-time captioning taken during the Eigth Meeting of the IGF, in Bali, Indonesia. 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 session, but should not be treated as an authoritative record.


>> WILLIAM DRAKE: All right. Ahh, here you are. Good morning, everyone! My name is is William Drake. I'm from the University of Zurich and I also teach Internet Governance and I'm also the Chair of the Noncommercial Users Constituency in ICANN.

This is workshop 282, Internet/telecom "convergence" and global internet governance.

And I'm happy to see you all here. I know there's a lot of other things going on at the same time, including an interesting debate about Prism. But we have some interesting things to debate here as well.

I'll just briefly give you the genesis of this workshop. I must say I'm very happy, it is my eighth and final one of the week. So it's the one that I have been looking forward to the most.

Because it is on a topic that has been eating at me for awhile. I myself started my career, long a political scientist I studied international telecommunications arrangements. I spent a lot of time around telecommunications regulatory and standards type institutions. When the Internet took off in the early, as a commercial medium globally in the early 1990s I was based at the International Telecommunication Union in Geneva doing research there in offices they provided. And I remember the reaction of the people on the staff and some of the people from the national delegations to the Internet was negative. They presented it as they viewed it as an academic play thing or a plot to destroy PTTs and undermine the open system interconnection model. Of course, all those things were true as it turned out. But there was a sort of "not invented here" kind of mind set.

Over time as the Internet took off, I found more and more both at the international level and at the national level that there was a lot of differences of view about the Internet in the telecom world. Governments at the national level an international institutions struggled to figure out how the telecom world and the Internet world related to each other. We used to talk a lot if you remember about Net Heads versus Bell Heads, so on, different ways of seeing the world.

And it was always very complicated, I thought. And everybody struggled for solutions to this.

Last summer when I was at the Asia-Pacific Internet Governance Forum in Tokyo, I went to a meeting, strategy meeting with a bunch of government officials and there was a discussion about the up coming world conference on international telecommunications. And the question of whether or not the ITU's definition of the Internet and the ITU's jurisdictionally covered -- I'm sorry, of telecommunications, the definition of telecommunication naturally covered the Internet.

I was told yes, of course it does. And I thought wow, that's a very interesting view coming from a senior policymaker and third largest economy in the world and major OECD player.

When we went to the WICT negotiations in Dubai we heard that from other players as well. The view that indeed the distinction is artificial. Internet is part of the telecom world. The standards, processes and so on associated with the telecommunications world increasingly would apply to the Internet and these things would converge together.

Undoubtedly that would be a difficult and contested process of convergence. So I thought it would be good to use the occasion of the IGF where all topics are fair game to look at that interrelationship between those two worlds and say what might it mean for the global governance of the Internet.

How do we see the trajectory of that relationship? And how would it relate then to the search for international rules of the game that so many people say we need more and more in different contexts?

That's what this workshop is about. The workshop is cosponsored by the University of Zurich, noncommercial users constituency, Association for Progressive Communication, the Internet Society and Public Interest Registry.

The speakers are as follows. And we have had some churn due to unfortunate events with people not being able to fly to Bali due to the late agreement to hold it. We have Ms. Fiona Alexander, head of International Affairs and Telecommunications in the U.S. Department of Commerce, a U.S. agency. Mr. Jari Arkko, an expert at Ericcson Research and Chair of the Internet Engineering Task Force in Finland. Somebody who knows a little bit about Internet technology.

Another person not in the dark on that topic is Avri Doria, independent consultant and former Chair of GNSO in ICANN from the U.S. Next to me Mr. Michele Bellavite, the Digital Society Working Group at the European Telecommunications Network Operators Association. And he works for Telecom Italia in Italy.

And seated now, happily, is Theresa Swinehart. Theresa is now a Senior Assistant to the president on strategy at ICANN, but when I asked her to do this she was working for a telephone company, Verizon. So that was part of the thinking having her there.

Wandering in the back with a cup of coffee is a remote moderator, Anriette Esterhuysen, whose views I would like to welcome should she want to get in on the discussion.

We are going to look at the association between the two worlds. We will start with each of the panelists offering four to five-minute presentations on the issues as they are explained. There is a background paper uploaded to the website which has the questions, the discussion questions and the background text for this event. You are welcome to download it.

They will do a quick tour of this and go through laying out basic positions. Then we'll have a discussion around some questions that I posed to them in the group.

That said let's begin. And I guess we might as well go in order alphabetically. So Fiona, perhaps we can start with you.

>> FIONA ALEXANDER: Should I sit next to you or behind you?

>> WILLIAM DRAKE: You don't want to start? Would you like to ... all right. Would somebody else like to start? Who would like to start? We'll just pass the talking particular to whoever wants to go.

>> AUDIENCE: (Speaker away from microphone.)

>> THERESA SWINEHART: I'm Theresa Swinehart, now with ICANN but when I agreed to be on the panel I was with Verizon. I am offering a different perspective.

So I was a little late. Sorry about that. I lost track of time. There's a relevance to this conversation. I actually misplaced my phone. From that perspective, it also caused me to think how reliant we are on these devices for a multitude of purposes.

And how we use these devices not just for keeping track of our contacts and various other things but also looking at documents.

So I think what we are facing right now is that we are in a situation where there is no industry that is not touching the Internet in some capacity. But as users, we are also becoming more reliant on small things that are easy to misplace. But they are no longer small things for a phone call but they are actually small things for a multitude of activities that we have in our day-to-day activities.

But it is not just the phone or the communication or the laptop but also automobiles and devices in homes and security systems and all sorts of or things.

So as we look at the dialogue around the conference, it's a dialogue around a multitude of things around the Internet and how the policy frameworks around those are across a range of stakeholders and across industry sectors. As we are looking at developing policies or looking at dealing with issues around privacy or security or IP networks or telecommunications networks we actually have to incorporate into that the fact that this communications medium which was traditional used for one aspect is touching now a multitude of things in our day-to-day lives and from that perspective need to be taking a different perspective on it.

That also mean that is we need to be working with new players and how to look at developing and evolving frameworks to address the new interest areas, the new entities that touch on this, and finding new ways to engage and build on existing ways to engage to solve areas that impact it. So it is not directly related to the point in the paper, but I think it's relevant to the discussion.

>> WILLIAM DRAKE: Okay. Go ahead and pass it around. Whoever wants to speak next.

>> JARI ARKKO: So maybe I'll continue. I'm Jari Arkko, based in Finland and Chairman of the IETF. As I looked at the writeup for this workshop on the Web, it seemed it was quite focused on various WICT negotiations and treaty discussions. Let me say that is not necessarily where I'm personally coming from. I don't have a lot of experience on that. I am not the expert on that. My perspective comes mostly from working in the telecom industry. That industry has a good part of the last two decades been involved in this convergence process and by and large the industry has seen the light and is well positioned to continue its existence in the new form that it has got into.

That is making one observation here. Look at how fast smartphone revolution and people usage pattern changes have been. And another observation that the general financial health of the telecom industry is pretty good, I claim. I won't go into average revenue per user numbers, but new does not necessarily mean bad. And then I want to analyze a little bit further the convergence topic when we say convergence, depending on circumstances we could mean like marriage of equals or more of a revolution, perhaps, in some case. And I think we have that case here actually. So it is more of a big change than equal merge.

And when something changes dramatically, it usually mean that the rules that we used to have for something else is not so applicable anymore. Used to be the case that distance mattered. For instance, I don't think it does anymore. At least not so much. Used to be the case that you had very small number of players like one country might have had only one telecoms entity, state-owned perhaps and large. Today there's a large number of players in different categories, lots of place, content, individuals, the playground has really changed dramatically. It used to be also the case that we were administering scarcity. We no longer are, although some of us may actually lose sight of that when we are setting up new links to poorly served areas, for instance, or when we deal with difficult things like the IDD address or TLD allocations.

But I think if you look at the big picture, the truth is still there are very few real limits. Bandwidth keeps on growing. Price of equipment, price of bandwidth keeps going down. The technology allows infinite creation of various spaces.

We all are very focused on in these kinds of fora on names and numbers, for instance, but I am not sure if the users perceive it this way. An infinite number of new things and spaces that can be created very easily and hashtags and such.

So it is not so much about limited resource anymore.

And this is not to say that we don't work on addresses or many other core things that the Internet really fundamentally needs. I want to show that the nature of the technology is very different from what telecoms used to be. Will there be debates about how revenue is shared among the players? Of course there will be. There always is.

But does that mean that we should add up models developed for something very different? Definitely not. And this is not to say that there isn't some convergence in adoption of the old things quote-unquote. But it is not that we start from them. We need to look at the new world and we will add up certain things and specific areas and one example area is emergency calls and Voice Over Internet Protocol, how do we deal with that? That is an important thing to discuss. But the world has changed. So that is what I have to say.

>> AVRI DORIA: Okay. For awhile I worked for a company, did research for a company that was actually working on all this convergence, next generation network and all that. And I thought about the word convergence for a long time. At a certain point I decided I thought it was nonsense because really there were two separate entities. There was the telecommunications and for awhile the Internet did layer itself as a service on top of the telecommunications, but it was really just an application on top of that service. And then at this point we started to have the Internet as something that existed in itself and would say not dependent necessarily on telecommunications services although sometimes it did share the same infrastructure. It was indeed a different service that people might layer telephony on top of. So then starting to look at the notion of voice services versus telephony. And then when I look at the Internet I certainly don't see it as a telecommunications system. It is something different. It was once layered on top of telecommunications. It now allows telecommunications type services to be layered on top of it.

So when I look at all of the regulatory systems that came out of the telecommunications industries, I think that by and large they do not relate at all to anything that one might call the Internet. Now, there's a slight caveat in all of that. I would certainly say that extends to anything that is voice services on the Internet, whether it is the Voiceover IP or some of the other variants that have been more proprietary. Those are Internet services and they are not telecommunications and should not in any way be subject to assumptions telecommunications regimes. On the other hand, there are telecommunications entities that have decide the to move their telecommunications infrastructure to a IP packet-based type of network that is separate and stands alongside the Internet. So it is not the Internet. It is telecommunications using IP. In that case, yes, you still have telecommunications and I would think that the regulatory framework would apply to telecommunications that uses IP as its medium. But to try and confound the two and sort of say that telephony services on top of the network are in some sense telecommunications misses the point that they are a different service, that they are not bound by those regimes, just as the Internet itself should not be bound by those regimes, but indeed if a telecommunications company says I am going to build myself an IP network that I control, that is not a global everyone can connect to everyone, and for example, I have what people have called -- you showed your phones, but when I come here I can't use my phone. I can use it as an IP device where yes, I can get some telephony services or some voice services, rather, on top of it. But because of roaming and all the other insanity that people are imposing upon the telecommunications services so that everybody can make their bucks, I cannot use it as a phone and can't consider it a phone. It is an IP device that uses networks, that allows me some voice services and such. I think we really need to keep the two very separate and recognize those cases where telephony, telecommunications is just something that happens to be instantiated using IP. Thanks.

>> FIONA ALEXANDER: This is Fiona, just for your transcript. And maybe I can speak to more of a policy perspective than the more technical presentations that have been made. I think the paper that Bill put together for the workshop highlighted the tensions that have been around for awhile and the WICT that was the latest incarnation of that and conversations ongoing since then continue to demonstrate that. These tensions are inevitable because of the history of the networks.

So the original telecom system of government sanctioned, government monopolies or government-owned companies depending on the world you lived in where you had to have intergovernmental solution to develop things versus the Internet, the public Internet that was described developed by people like Jari and others and was permissionless and ad hoc and what you see as the worlds are -- not merging, but I would say that as they become substitutable, which Avri is describing with the phone here. The Internet becomes substitutable for the network. You see these tensions become sharper and then you also see governments wanting to understand what is their role in the system here. This idea that the ITU, the jurisdiction of the ITU covers these things is challenging. Different Member States have different views. They are allowed to have different rules obviously and different interpretations, but I find it challenging to accept and understand how definition that I think was the most recently updated in the 1950s, which I believe is in the last definition of the telecom in the ITU wasn't yet created. It is a hard argument for me to understand as we go through the exercises. Maybe I'll leave it at that.

>> MICHELE BELLAVITE: Yes. My name is Michele Bellavite, for the record. I will do some reflections around three main points. First of all, I have gone through your paper, Bill. I think it is very interesting. It raises a number of very interesting points we have to look at. Reacting, Fiona, to your point from a European perspective, the situation with us in Europe is likely different from that of the U.S. As you know broadband in Europe is considered a telecom service and the situation we look at is slightly different.

But then that's the first reflection.

I would like to tell you a bit what we are thinking about within ETNO, the Italian telecom industries and what we are doing with the European Commission and very soon with the European parliament as well.

We find ourselves confronted in a situation where telecom regulation in Europe as around the world basically has been developed under the three main areas of intersection, access and universal service and has been translated into legislation in terms of rights of consumers an in terms of obligations for service providers.

So that is the situation.

And no if we look at how the Internet has evolved and all of the Internet services, we now have another set of policy areas that we have to look at which is not like regulating wholesale input to bring down prices and granting access to competitors and all these new areas. They are very Ala Mode, the protection, security, also in terms of national security, copyright, liability.

So we have a set of rules applying to telecom services as defined in the ITU telecom classification and in the European framework as well. And then we've got a new set of areas that are applied for new conversation services but close to telecom services.

 

So when we speak about convergence, I think we have not to be too speculative and just making debates over terms that we don't understand very well. Let's try to look at things very precisely. We have a number of rules that are worth for the segment of a value chain and another number of rules that are worth for -- services. What do we mean when we say we would like to reach a level playing field? We definitely don't want to say that we want regulation today very hard regulation that today applies to the telecom sectors to be applied to the services. Definitely not.

>> AUDIENCE: (Speaker away from microphone.)

>> MICHELE BELLAVITE: Over-the-top services like Internet services, or other services that run over the top like PSTN, voice telephony, but rather, I don't know, anything like Skype, Google, Facebook, any sort of service than runs over the network.

What you said so.

(Chuckles.)

>> MICHELE BELLAVITE: But so when we argue we need a level playing field, the question that we are asking ourselves is can we keep going in the next ten years with this division of rules? Or is it beneficial and better for everybody along the value chain to look at how things are and how to best craft policies so that the Internet really becomes better and better and more widespread? It is interesting to note that the European Commission also points to these issues in the very recent communication adopted if in September. They look at the future, review of the overall ICT policies. Also in terms of reviewing, reaching a level playing field for the rules on over the top services compared to telecom services.

We want to contribute to the debate, look at how things are. And try to see whether we can work together and find a good way forward. Probably that is something we are really going to need to think, begin thinking of. As of today to give a precise mean to the word convergence. What does it mean? What does it apply to? And what is the best way out for everybody. Few points but I am happy to try to answer questions.

>> WILLIAM DRAKE: Fantastic. Thank you very much.

I wonder if the remote moderator who does a lot of work around telecom issues might want to make any kind of comment of her own? Yes? You would? Okay. Is that one working? Did you figure out how to turn it on?

Ahh, there's more. Give that young lady your mic.

>> ANRIETTE ESTERHUYSEN: I'm Anriette Esterhuysen. Thank you, Bill. I think, I can't find a good analogy but I think we are talking about, it's a little bit about talking about who controls the shipping lanes when most freight is being transported by air already.

Two points. In the whole WICT, how it was approached, I think some of the potential benefit that could come from a more open approach to these murky layers of convergence was lost and I'll give one example. That's Avri's example. Many people in the world are still accessing the Internet through telecommunications networks or systems or platforms that are governed by telecommunications regulation.

And should we not be exploring how Internet and attitudes in Internet Governance and development can influence that? Shouldn't as an Internet community instead of telling the ITU get out of our backyard or our front yard, tell the ITU why don't you regulate, why didn't you issue guidelines to ensure that roaming and the other thing is the mobile buy-in systems. What is that called? We don't have that in South Africa. It's illegal. You can't put a SIM card from another network into your mobile phone. What is it called? Lock-in! Why don't we engage with ITU and say please issue guidelines to national regulators to stop these types of regulations which actually limits people's access to the Internet.

So I think there's a lost opportunity resulting from the paranoia of the ITU is going to take over the Internet. I am not saying that they are not ITU Member States who are not using the ITU as a platform to pursue more government-centric approaches to Internet policy. But I think we can fight those two battles at the same time.

And then secondly, I think the issue for me really is that we are talking about the real issue is not how much convergence between the Internet and telecom, the real issue is market regulation. On this horizontal layer that everyone talks about, the transport layer, content layer, application layer, et cetera. The real issue is that we have companies that are operating vertically across all those layers and market regulation structures are not yet able to really cope with that effectively. And consumer interest groups are not really able to cope with that effectively. And I think that is the issue that we really should be talking about.

And it is kind of, it sits on top of this concern about convergence, but I think if we don't actually look the at it from that perspective we will be having a debate that is kind of almost a non-debate or soon will be.

>> WILLIAM DRAKE: Thank you. Well, I wouldn't want to have a non-debate. That would be kind of boring, but I do want to ask some questions around this topic anyway. Because there are things that bothered me. I am going to start with, for example, the point you mentioned about the roll role of the ITU comes back to me again and again. Back to the conversations I had with policymakers.

So the ITU treaty instruments define telecommunications as any transmission, commission or reception of signs, signals, writing, images or sounds or intelligence of any nature by wire, radio, optical or other electronic, electromagnetic system.

Telecommunication service as the offering of a telecommunication capability between telecom offices or stations of any nature. That one is easier that are in or belong to different countries.

So I'm just curious. How the people on this panel view this question. To what extent do these definitions apply to the Internet? As many governments apparently believe. If they do not apply, on what grounds do they not apply? Does the Internet not provide for transmissions, admissions of signs, intelligence, yada yada?

What would be the argument there about this? Really, as I say, many governments have advanced the view that indeed the ITU is the natural place for these things. Yes, it is fully within our mandate. Avri, you are shaking your head. I'll start with you.

>> AVRI DORIA: I thought I had this on. I do have this on. I think, first of all, there was a point in making a definition so broad at some point in ancient history that it can cover just about anything in the universe. It can't in any way be binding on new inventions. So for that I would sort of say, when I look at those regulations I look at them this terms of what they were meant to discuss. That was the notion of telephone Y. They were defining the notion of telephony. I argued that when a telephony communications company wants to layer its telephony system on top of IP, certainly they still fall in that because it is telephony being overlaid on anything.

When, however -- but that doesn't mean it applies to the Internet, which is an entirely different set of services that have nothing to do with telephony even if one of the services happens to be a voice service. So that's why indeed I made the division that I do. If it's a country's telecommunications system that is the telephony system that is provided to the country and they are overlaying it over IP but not the Internet. That's one of the things that we often mix up is whether we are using IP protocols on a completely separate set of capable cables or virtual wires versus the Internet where we are working within sort of the open governance system.

>> WILLIAM DRAKE: Just to press you, you are saying that the definitions are archaic and so on and was written with telephone in mind.

But the ITU people will all tell you that this applies fully to data communications and did for decades.

If you go back to the 1960s and '70s ITU was developing standards for data communications. They weren't widely deployed but through the public switch data networks and on and on and on, X dot 25, they see that as all fully within the scope of this definition.

>> Sure, they have an expansive definition of things they would like to control. The point is that the Internet is a separate thing that is different from that. And just because someone says that because you once used it over our system, it therefore is forever more a telephony system, does not make it so.

>> WILLIAM DRAKE: I'm looking for the strong basis to respond to the governing people who believe this is perfectly adequate. Fiona?

>> FIONA ALEXANDER: So I think, I have to go back and look at the research we did going into WICT but it would be interesting to trace the definitions in the ITU context. They don't start with telecom. They start with telegraph. And the definition that you read out, if I remember correctly is pretty consistent with the telegraph definition. The only things added were electromagnetic.

>> Intelligence.

>> FIONA ALEXANDER: So the definition is from the 1880s. How can it apply to today's world.

>> WILLIAM DRAKE: So like the U.S. Constitution it is outdated.

>> FIONA ALEXANDER: You have to look at how things were developed. The Internet was not developed through government owned companies and government networks and the same way the telephone systems or telegraphs were as well.

>> WILLIAM DRAKE: I see the people in the audience already waving at me. I'm willing to bring the audience in as well. We have the Chair of the IETF here. You must have thoughts about this. If anybody shut, you should.

>> JARI ARKKO: I agree with what Avri said and sort of go back to the shipping lane example maybe as well. So people can have opinions about that they have a definition or significance beyond what they were originally working on, but I don't think the rest of the world should necessarily heed to that claim just like that. It could be -- I'm sure there's like a car regulation, a regulatory framework. Since cars now communicate through the Internet, we can make the argument that Ahh, the car and regulatory framework there, that's the same as the Internet. That is, we throw out such a ridiculous claim immediately.

One area where I would disagree with Avri a little bit, you talk about telecommunications services, that is on top of the Internet being directly with the Internet.

I agree with that largely but we have to recognize that the voice use as search is -- it used to be that PSTN and mobile services and we had Skypes and services like that. Now we are getting to a world where we have Whip Art BC and every computer is capable of being a voice provider. When you go from a couple of players to millions of players, certainly the situation changes. That's maybe something that the ITU and the regulatory frameworks need to take into account. It is not static.

>> WILLIAM DRAKE: Okay. Michele, and I'm going to the audience. I see Frederick there and Chris -- we're going to have fun here. I'm still stuck on the existential point. If the argument is this is an old definition that some guys threw up in the day of Bismarck and therefore it doesn't apply, that is not compelling to some governments. Plenty of governments in Dubai saying perfectly vital principle here that captures what the Internet does. We have a mandate to work with the Internet. Look at all the opinions we've adopted on the Internet. Look at all of the standards we're involved in. It all goes back to our mandate, and our mandate is here. We do telecom. Why is that Internet not that?

And so if I just tell them well, that's an old definition, they won't buy that as an argument. So I'm just looking for fire power here from you guys. Michele?

>> MICHELE BELLAVITE: Just one quick point. I think I agree with what has just been said and I agree with your point as well. Maybe what we have to keep separate here is should the definition be reviewed? And to what extent? And then the question is to what extent is the ITU or any other worldwide agency entitled or empowered to take decisions and make definition on new things that happen in the world. Whatever, whatever new happened in the world like the Internet, for example. Are international agencies empowered and to what extent by governments to make definitions? That's the first question.

The second separate area is what are the risks associated? It is a different thing. I think no one can argue around the world that the government cannot take a decision over what happens in the world. That is the first point. What are the risks associated? Like I do remember before the week, I don't want to get into the WICT discussion at all.

>> WILLIAM DRAKE: You told me many time, ignore the WICT.

>> MICHELE BELLAVITE: I do remember before the WICT there was a huge campaign of Google urging and wanting to inform people of what was going to happen in Dubai. I think it was a well done campaign but the question I raised myself was: Okay, are they really arguing that there are risks associated to it or are they arguing that an international agency can take decisions on something which is very two different levels. That is very important from my point of view.

>> WILLIAM DRAKE: I think most people in that coalition were making the first argument, but okay. I want to start to bring some people in here. I see Frederic. Please, identify yourself for the transcript when you make an intervention and, of course, let's keep them concise. Let's take several comments from the audience and come back to the panel again.

Starting with Frederic, please.

>> AUDIENCE: Good morning, I'm Frederic Riehl from OFCOM Switzerland and I represent the Swiss amendment in the ITU, too. For me it's quite clear, telecom and Internet is very different things. When we speak about telecom, we speak about infrastructure. We speak about technology. Economic related to these technologies. When we speak Internet, for me it is related to the content. Of course, the problem is and not only for Switzerland but for all, most of all of the countries that ITU is only responsible for the infrastructure, for the technology, but not for the content.

If we want to discuss in an international organisation about content, we discuss that in UNESCO but not in ITU.

The problem with the WICT, there was a tendency in Dubai to put some item about content and that is the reasons that the European doesn't sign on this treaty because we were not ITU dealing with content. It is so simple. There is so much big difference when you speak about content. It is another word. We have problem with privacy, problem with freedom of expression and other things. And you know, we don't like that ITU is dealing with that.

And our problem also when ITU tried to give advice concerning cybersecurity, we say sorry, but cybersecurity is not technology. Cybersecurity is also related to very difficult problem. It is a problem between privacy, program for, protection from piracy and freedom of expression but sorry, ITU is not ready, has no competency to deal with this items. That is the point. Thank you.

>> WILLIAM DRAKE: Okay. So it is a simple matter. Internet as content.

Chris and next the gentleman here.

>> AUDIENCE: Just to help Bill with the idea of the over --

>> WILLIAM DRAKE: Identify yourself.

>> AUDIENCE: Chris Marsden, University of Sussex for people remotely and others.

Really great panel. There should be far more people in the audience but I guess fatigue is setting in.

On the extend definitions, I always start teaching my classes with Edison, an Attorney General of the, which extended telegraphy to telephony in 1880. I don't see anything stopping the ITU from doing what it wants to but I weren't to, a couple of problems I think emerge.

And everyone knows that I talk a lot about net neutrality and clearing convergence and net neutrality is where the rubber hits the road on these issues. Would be of the problems we have, of course, is when we talk about telecom services being extended into the network, one of the issues that is really a burning issue right now is how one defines special services. IP services not on the open Internet, which may, of course, be a route for telecom companies to achieve an actual very extensive deregulation of their services by avoiding both net neutrality regulation and telecom regulation which would be a real double whammy for those people who want to see telecom services not controlling traffic that is over their legacy copper and fiber.

But there's two other things that are really interesting here which maybe some of the people on the panel want to comment on. The first is the danger that we have regulation being imposed from other directions which may be more corporately captured even than the ITU is. There's debate from European parliamentarians about HTML5 and what that means and what W3C's legitimacy to be involved in our re-engineering of the Web experience. If we are going to kick the ITU, let's they about kicking the W3C as well perhaps. A lot of telecom companies are very keen to move ahead very fast with carrier grade NAT, Network Address Translation, rather than moving to IPV6 and whether or not this is really a significant issue showing that we really are hide-bound by our old telecom way of controlling things. British Telecom is particularly keen on carrier grade NAT because they like the idea that they can do network grade control of the experience rather than moving to IPV6. Significant issues remain here.

>> WILLIAM DRAKE: IPV6 is another can of worms and if we go there we will never solve any existential problem. Gentleman in the front.

>> AUDIENCE: I'm Harry Susanto from the local operators in Indonesia. To my understanding, what the people need is the ability to communicate to each other globally, whether we can sharing or communicate using voice, data, and also video.

And to be able to do that, now they have two alternatives to do that. First, through the Internet protocol services IP service that is we call Internet on using application on top of the Internet network.

And also using the traditional telecos. So they can do the telecommunications through that way. But then under the current situations, the business term and also the business model is is not supporting the teleco operators to deploy the massive network. Which we do understand that without a teleco networks there would be no global connection Internet, for network Internet. The teleco has been enabler for developing application and also for move forward towards application, provisions of the global Internet.

So the key issue is how we can have a fair business models and also fair regulations to enhance or support their cooperators to prevent massive and more global network. This will become enabler two in the development of the Internet services. Because if you know, current the teleco regime or current teleco regulations prevent the teleco to compete directly with the Internet services. Teleco operators cannot be confronted and we face to compete with the Internet services. Because they are two different kind of things and two different kind of business game. In teleco if you like to communicate with other teleco operators, you have to pay a connection fee. That does not happen in the Internet. These are two different things in my opinion. Teleco more on the positions to prevent the enabler, to become the enabler for the possibility or assistance of the global Internet services. Thanks.

>> WILLIAM DRAKE: These economic issues are really important. I want to come back to them in the next question. I want to try, take one more shot at seeing if I can nail down the specific point. Ahh, we have clarity.

Three quick interventions. Madame, and then here. And Sam Paltridge, you undoubtedly have a thought or two on the relationship. You know you didn't your hand. I'm going to turn to you. Think about it, if you would shed some light. The OECD has done enough work in this realm to be helpful. But if you don't want to, that's fine.

Could we get the camera, the talking stick to this young lady?

>> AUDIENCE: I'm Lea Kaspar from Global Partners U.K.

I have a question for the panel, it's not an intervention but a question. Something that the gentleman before mentioned about cybersecurity being discussed in the ITU.

I'm actually curious what the panel thinks about where we should discuss cybersecurity and what the appropriate venue to discuss it is.

At the moment there are a number of processes that are very close that discuss cybersecurity within the first Committee of the General Assembly, the London process. If not the ITU, then where do we go to address this issue? Thanks.

>> WILLIAM DRAKE: Okay. That's really off my question, but that is an important one. The gentleman here? Yeah? He had his hand up for a while.

Nobody wants to help me figure out the definition of -- who does? You have it down?

>> AUDIENCE: You might be getting -- Dan McGarry, I work with the Pacific Institute of Public Policy. We work throughout the Pacific Islands Region and for the last decade or so I have been involved trying to get us basically from zero, from no telecommunications, no communications technologies, generically speaking to modern Internet. We are still a long way away, but if I can offer a bit of polemical response to the question that you've done, the monarchy in the U.K. as it exists under constitutional law is quite similar today to what it was a century ago or even two centuries ago.

Definitions may not change. The political manifestation of these definitions emphatically do change. I'm 100 percent with Avri in that regard. I think that's probably the best example that we can use.

Yeah, we make up definitions all the time. The way in which we apply the definitions is really the key. To my mind, I love these conferences and there are any number of technical issues that I find endlessly fascinating.

But let's be quite frank here and admit that what we are dealing with is a political issue. All the definitions, all the terminology in the world aren't going to save us from the fact that this is a power play. It is quite a simple one. There are -- fundamentally, the way it manifests itself is vastly complex. That's why we have this screaming disagreement across numerous fora.

But the bottom line is do we control communications and whether we -- who gets to do it if they do, you know?

The telecommunications companies are facing a choice of either moving forward, expanding and embracing continuing to embrace the definition as you've stated it or becoming completely commoditized and becoming utilities, which is anathema, I would think if I were sitting on the board of any telecom company.

All I want to say really is while we are at this, you know, like I say, I love the details. I love the technical stuff. But let's not ever forget that when the negotiations happen, that is not going to be the conversation. The conversation is --

>> WILLIAM DRAKE: But it was.

>> AUDIENCE: Well, that will be, if you look at the verbiage, sure. But let's, you know, let's remember that essentially what we are talking about is a lot of people disaffected with the state of things. A lot of people seeing a threat, either to their opportunities or to their continued control over certain sectors.

And if we don't pull that subtext into the fore we'll have another series of WICTs.

>> WILLIAM DRAKE: Okay. That was not too polemical.

I want to come back to the panelists getting itchy, but the gentleman in the front has been waving for awhile. I know you are going to resolve my question. I have the feeling.

>> AUDIENCE: So you asked -- Christopher Yoo from the University of Pennsylvania. You asked to what extent should this be governed by old legal and to what extent do the legality and words matter. It matters. This is an active fight in the U.S. The predominant question, the statutory languaged in 1994 and amended in 1996, how does it affect jurisdiction over the Internet which has direct implications.

I think that politics clearly matter in terms of playing that out, but the legal background in front of which that happens is vitally important. Fiona is right, there are certain texts that are designed to be more open-ended than others. The definitions in U.S. law are not among them. They are precise, verbose, designed to get at something. The problem is how they apply to the Internet is largely an accident because no one had this particular technology in mind. And the other question is, is it a cable service? There are all these very specific questions.

It may apply accidentally, but in fact courts will literally apply the language and find out whether they fit and it ends up being rather procrustean. You look at how the words fit on there and there has been an active legislative discussion in the U.S. whether we need to create a new title to govern the Internet to actually think through, one of the advantages we have had up to this point is we have unmoored from the previous definitions by declaring it to be a Title I action, which is term of art, but basically allow the agency to make up its own regulatory regime. That is smart money says about to end in the U.S. because they don't believe that is valid.

So in answer to your question, the words, the old words don't answer everything. It is about interpretation. But do provide a background of what courts will do and if you shift to the ITU they have a different decision making body where they are going to apply the scope of the ITR and normally it is jurisdiction by consent in international law, but people who signed the treaty and we interpret the literal terms of the ITR will go through the dispute resolution mechanisms of the ITU and come up with a resolution based on what they decide and admittedly on words being applied in a context that were not intended and may create some results that other people may not like.

>> WILLIAM DRAKE: Definition is also in the constitution, right?

>> FIONA ALEXANDER: Yes. Also the ITU is somewhat different. It is not the same as the court system. There is no dispute resolution mechanism. What you are talking about with the ITR, if you sign the ITR then incorporate them in the national law. If the U.S. signed the ITR, the State Department would have given them to the -- that is what happened with account can rates. It's different, you are talking about international consensus and local implement indication. All this conversation about a definition, you can't have in isolation of what is the definition for. And that's why the discussions of definitions are problematic. You can't just say that definition is okay from the 1880s or 1950s or from now. It's what are you going to use it for. I think this is what the argument is about at WICT or ITU or other places. ITU is a good institution that does good things on spectrum. We shouldn't, you know, ignore that part. The reality from our perspective, though, is when we talk about Internet policy and issues, we like it to be in a place where the Internet is developed and not an institution that is government only. It's one of the reasons we are very much against the ADD. net proposal going into WICT. It is not the right venue to have these conversations.

>> WILLIAM DRAKE: I understand. I'm hung up on how to respond to the government people who are saying to me: Look, I think this covers it and it is not a problem for me. Thank you for using Procrustean in a sentence. Doesn't happen often.

We have two people waiting. So sorry the gentleman back there I know you had your hand up a long time.

>> AUDIENCE: Andrew Sullivan and I don't speak for anyone.

I want to thank the panel for this discussion. I am a hopeless geek, right, I can't tell you what the political realities of this are. In terms of the definitional foundation I think this relates to Avri's opening remarks and Fiona's remarks just now. That is, the reason this definition looks like it applies to the Internet is a category mistake. The definition that we have in telecommunications that underlies the ITU actually creates an international system. Before you have this definition of telecommunications, you don't have an international telecommunications system at all. Because what you have are national systems that need to be interconnected in some way and maybe bilateral agreements but you don't have any international system whatsoever.

The IP network didn't get created that way. The IP network gets created by voluntary routing of packets between networks that connect to one another. It's an internet. Because it is a voluntary network by definition it is not created by this creation that is embedded in that definition.

So that's the reason that this definition doesn't apply to the Internet. The Internet stands outside of that international system that is created by this definition.

That's the only thing I wanted to say about it.

>> WILLIAM DRAKE: That is most certainly true about the second definition I read about telecom services about the offering of services between stations. Parminder.

>> AUDIENCE: Parminder Singh, IT For Change. The definition question is important, but a subsidiary level to the fact that there is an Internet. Whether it is inside telecom definition or outside. And we need to know what needs to be done about what needs to be done about it. And to that extent I wonder how much of that thing at WICT was converting the U.S. struggles over whether the Internet should be regulated and the telecom companies saying we are now all IP and the definition needs no regulation at all and everything is redefined, whether that is transferred to WICT that the Internet does not need regulation.

My point and it has been raised earlier here in different ways, it is not important what the definition is. Either the Internet is regulated, I don't know the words, get infested with the wrong means but whatever governance is around to be done inside or outside the ITU. It is not a problem if it's inside or outside ITU as long as we know that if it is not inside ITU where does the global governance of those kind of things get done outside the ITU within the global space. That is a global discussion.

And I am happy either way. I mean I don't like ITU because it is a private sector government coalition since long and that is my primary problem and I have to do the unpleasant task of pointing out this is a global discussion and WICT failed partly because a global modern of certain thinking was being imposed, kind of a western model was being imposed on a global system. I'm unhappy to see there is a panel which just consists of people from the north. I'm not even counting the nationalities from the U.S. on the panel.

And that really, you know, IGF in this setting is not what we need to do. The point is that we get crashed because there wasn't a meeting of mind and we need to have a dialogue. I also wonder how these kind of panel composition passes the max stringent diversity issues. Sorry, some day I hope the diversity will improve.

>> WILLIAM DRAKE: The diversity is a function of who is able to come, number one, Parminder. People dropped out. We didn't even know if this event was going to be held. It was difficult to recruit people and keep them on. Around is from South Africa which I believe is in the Global South. Either way, I take the first point that there are some interesting questions there now let's go back to the panel and for thoughts on how we put all these wonderful juicy things on the table, what it all means and whether any of it matters.

Jari, what do you think?

>> JARI ARKKO: I want to go back to the comment of the gentleman from the front that that is a power play rather than a discussion of definitions. That is absolutely right. This is important stuff with real world consequences and which are arguing about legal standing committee definitions from some text from way back. It seems somewhat silly. But you also said that you think this is, the choices are either moving forward and sort of embracing the more extended definition or being in danger of being commoditized. And there I would like to disagree very much. So I think by and large the industry has realized what is happening and has already moved on and is healthy and you don't actually have to control the business or the value chain end-to-end as the telecoms industry traditionally has in order to make money.

Just to give you some examples, awhile ago the average revenue per user from PSTN services in Finland was smaller than the average revenue from say a DSL connection. And surely the technology has changed dramatically in the service you provide. It doesn't mean you wouldn't be able to provide the service and do it profitably. And I mean, that is basically what the users want. They want more bids. There is competition on where can you provide the service and what areas and how fast and what quality and many other things.

So I think the world has become more complicated. There's different roles now. Not just one role but there's this access role and other roles in content providers and such. We have to recognize that.

>> MICHELE BELLAVITE: I wanted to take up again on president point raised by -- I don't remember your name, here in the front row.

I guess the point about definitions as they are written black and white and the political dimension of it is dentally the right thing we have to look at.

How and to what extent are we looking at convergence because I thought that was the theme of the panel today. How do we look at convergence? How can we define services, telecom services or Internet services? Is it worth doing it? And what is the political intention of looking at how things are moving on and how the Internet is developing, which was exactly the point I was making at the beginning, which was like -- I was making the same point by the way yesterday speaking on a panel on net neutrality which is: What we talking about? Let's try to define two or three main issues, main points, how do we want to approach them? How can the way out or the solutions be beneficial to everybody? Like if I look at in my office in Brussels, I have a book with EU telecom regulations this big. It is, I don't know, probably a thousand pages.

But I think it works in a political way. People, consumers and NGOs, companies want to get the best out of it. So if we speak of convergence what do we mean? Is an international organisation entitled to make a decision, make a definition and take decisions over something that is happening in the world with this wonderful, that is the Internet, but what do we do about that?

>> WILLIAM DRAKE: It's the Member States that do that, not the organisation, right?

>> MICHELE BELLAVITE: Yes.

>> WILLIAM DRAKE: They take it upon themselves that they do have that ability. Okay, I feel a little bit empowered next time I have this conversation. The ITU is currently trying to define the Information Communication Technology. That has been going on for a couple years. We'll see whether the Plenipot decides to come back and think about telecom, but I kinds of doubt it. I want to return to McGarry -- is that your name in the front? The agency? Right, right, the money stuff.

At the end of the day as has been pointed out the definitions matter because it ties into everything else, and that's particularly the cash. And what WICT had a lot to do with was money. And not just WICT but the larger lay of the land and the relationship between telecom and Internet, money is all over the place.

Telecos and ISPs in many places raised grave concerns about their financial prospects and ability to invest in broadband roll out because of distribution of costs and benefits among providers and users.

Michele's boys gave an interview, head of ETNO. Don't worry, you're not out of line. He said there was a desperate need to establish a real level playing field between OTT services and telecom services which will ensure that nobody enjoys unfair competitive advantages and consumers can enjoy the same rights when using these services, okay? Again, during the WICT and just more generally the question of who is paying? Who is benefiting in terms of the relationship between the underlying providers of transmission and the folks that are sending services over them. It has been a hot one. You talk a lot of people in developing country governments who say all this stuff comes in from Google. My people watch YouTube and we have to pay to suck all those bits through the pipe. This is unfair to us. Some means of solving this must be found.

There is a real issue there from the standpoint of some players, even if perhaps for others that's a misframing of the problem.

And then there's the interconnection questions and whether the existing model of interconnection among private entities through contracts, you know, should be different in some manner. So the money aspects of the Internet environment and its relationship to telecom are certainly at the for front of a lot of people's thinkings.

I'm curious if people have thoughts about that. Somebody in the audience would like to make an observation. Then I will look to the panel. Could you get the stick to her? Is there anybody else who would like to get in on this point? Anriette and the person.

>> AUDIENCE: Louise Bennett, BCS. But not speaking with my BCS hat. I was IT director in EMI. That's a music company, as many people will know. Its original work was and business model was to find artists and make money out of them in live shows and producing vinyl records.

I went through the era when we went from vinyl to tape. We thought that was great. We sold the content a second time in a new immediate yup. Then even better we went from that to CD. Sold it for a third time. And we were very, very profitable.

Then suddenly we couldn't stop the pirating of those things and we couldn't stop the data streaming and the company has gone bankrupt.

Has been taken over. The reality that the ITU is not prepared to admit and companies being disrupted butt by the Internet have got to accept is that you have to change your business model with the technology that is available at the time. If you don't, you will die. Is like bricks and clicks in retail. And I think that the music model is a very salient one to the discussion that you are having.

>> WILLIAM DRAKE: Panel? Anriette, not an audience member, but you're sitting out there. By the way, if there's remote participation comments.

>> ANRIETTE ESTERHUYSEN: I'm checking. We have two. We have Inez Martinez and another one, but neither want to ask questions. They are following the transcript and having difficulty with following the Webex, but the transcript is coming through.

But it's fine. No problem. Don't worry.

And I think Bill, your question is similar to Parminder's question and Michele's question, do international organisations have the right to make these definitions? I think they are issues that Developing Countries feel are not being addressed. I think Michele the answer to your question in a simple way is yes. But in the case of the ITU it becomes a "yes, but".

That is the difficulty. And just to take the example that Bill mentioned, which is about the cost to the telecommunications networks of massive content being downloaded from Google, et cetera, et cetera.

Now, that is a problem. But restricting it is not the answer. In fact, as we said in our advocacy around the WICT is that some of these large companies, Internet companies would simply cut the whole country off. If it doesn't represent a lot of revenue rather than have to pay for traffic download. The user interest there is not served by the type of approach that some Developing Countries were advocating for but that doesn't mean that the problem does not exist.

So I think that that is one issue. I think that the other thing is that what we have in the ITU is the alternative communications approach. Where Member States and telecos are looking for sources of revenue and looking at the Internet as a potential source of revenue.

So it is a practice that is not necessarily going to help users at all. In fact, it could harm them. So the question is Michele, yes, I think it's legitimate. But the ITU as it is instituted at the moment and operates at the moment is not necessarily a reliable entity from a civil society perspective.

I also think some of the most concerning things that the ITU is doing is the cyber crime discussions. The child protection, the work being didn't and the guidelines that are being issued by the ITU on child protection completely disregards freedom of expression and freedom of association. So for me, that is where the real issues are lying. But just in response to that, I think the other thing that people tend to ignore when they have this discussion about the ITU is that at national level, this convergence is happening. Many regulators are regulating the Internet and regulating Internet content. So we talk about not having stuff happen at the ITU when in fact within the ITU universe that stuff is happening at national level and not necessarily in a good way.

Sometimes yes, sometimes when it is a strong regulator that can actually regulate the market, regulate interconnection and roaming charges well, it can have good outcomes. If it is one that interferes too much in content it has bad outcomes.

I think what I want to just ask and maybe it is a terribly naive civil society perspective, but isn't it possible to identify the area of overlap? The area where there is a need for more cooperation? And not necessarily change the mandate, but have some protocol or some procedure for more collaboration between the telecommunications regulation universe and this Internet non-regulation universe.

For example, just as a devil's advocate type of example, IPV6. Every Internet conference I come to I have to hear the NROs complain about IPV6 not being taken up and I hear it again and again and Vint Cerf says it when he goes to church, when he goes to the movies. Vint Cerf talks about IPV6 whenever he talks.

To me this sounds like marketing, regulatory intervention. It sounds like a problem that can and should be solved with some form of regulatory intervention. I see Avri pulling a terrified face. Isn't there a way when a one-off agreement on a particular kind of regulatory agreement, maybe not with the ITU, maybe with some other regulatory level.

So that is really what I'm saying. Can't we sometimes work together across these two universes when it can actually benefit users?

>> WILLIAM DRAKE: Avri, stop scaring the audience. It's a bad thing. Quick because I want to come back.

>> Quickly I wanted to clarify that in the discussions that I have had and it's in a small area representing a very small population I have never heard an economic argument concerning the influx of data. It is usually based on social more rays more than anything else. So I don't know whether that -- it seems to me at any rate when that argument came out, you know, the all send are pays, it seemed to me like a construct and artificial thing based on my own experience. The other thing I wanted to come back on quickly was my point about commodification. We, developing nations, especially least-developed nations face extreme economic stringencies. We are working under straightened circumstances. In the Pacific the geography is horrendous when it comes to cost per capita to roll out infrastructure.

That is the context that, from which that comment was made. I'm sure that Europe significant parts of Asia, North America and even significant parts of South America would not look at all the same.

But just be advised that there is, there are parts of the world where this is a really significant issue.

>> WILLIAM DRAKE: Okay. So panelists what do we think about the money? Where is the money? Who should have it? How should it be divided up? I think Jari, we'll roll down this way.

>> JARI ARKKO: I'm not sure I have the full answer for your big question, but I wanted to touch on the issue of, I think you phrased it that there is a large number of users and they all go to use tube and a lot of other places and there is data moving around it causes a lot of cost to the providers.

Two observations. One, a technical, there are technical solutions. We can consider placing a device in your network, transport cost for this is minimized and you only have to communicate with your customers, which I suppose the customers are already paying for anyway. So that is one aspect.

And then the other aspect is, I mean, of course, it is desirable to think about ways in which, can we finance developing connections, build out of infrastructure with some mechanisms where more of the money from content comes into the actual infrastructure.

But that has some issues, too. So one of the problems is preventing future innovation. Now, if someone has a service on the Internet and if there is a requirement somehow that the content provider has to pay for that content to be delivered around, then that is a fairly significant burden on that small player who is only beginning. And it is difficult to imagine that any small player would actually sort of exit to providing content all over the place. They can predict how popular some particular content will be or how successful they will be.

So it will have a chilling effect on future new things.

>> WILLIAM DRAKE: You are not going to ... (Speaker away from microphone.)

>> FIONA ALEXANDER: So the money issue is always a big one in all the discussions underlying, people won't say it but it underlies it. The answer to a lot of the questions goes back to what you do with the national or regional regulatory regime. If you have a local regulatory model that stifles innovation and doesn't allow for predictable investment, doesn't support the development of local ISPs you have problems with content coming into your country.

>> WILLIAM DRAKE: How about the U.S.?

>> FIONA ALEXANDER: Talking about anywhere. Also, the Internet topography changed and maybe Sam should speak to it. He's done a lot of good work on this. How the topography of the Internet used to look and how it changed and traffic flows have changed as countries allowed for local ISXs, but comparing the U.S. and Europe, people keep throwing around the world net neutralities in both countries. It means, both Chris sitting next to each other could plain that but it gets back to accessing the network. We don't have local loop environments they were thrown out in the court system because the foundation ownership laws in the United States. Your problem in Europe is how the access is regulated. That's not an international problem, a European problem.

>> WILLIAM DRAKE: Turns into an international problem.

>> FIONA ALEXANDER: Instead of going to the court to fix ITU to fix the problem, they went to the -- to fix the problem and that was a mistake.

>> WILLIAM DRAKE: You want to address that? She through the gauntlet out to you.

>> MICHELE BELLAVITE: Yes, we all have problems around the world. That is my answer.

About money, what I would like to point out is, you also have problems in the U.S. now. So each one has their own problems.

>> FIONA ALEXANDER: But our telecom companies have a business model that, we didn't regulate ...

>> MICHELE BELLAVITE: Our regulators are not as enlightened and forward looking as yours probably but no, again about money, what I would like to say is that a lot of that happens around the Internet is about money. And we telecom operators in the EU perspective we are under political pressure to reach -- we call them the (non-English phrase) you can call them whatever, network deployment targets. Those targets cost a lot of money and we are facing decreasing revenues, margins are going down.

Somehow I would also refer to the point that she raised, I don't remember your name, but the point you raised about changing your business model because the industry changes. A lot we do as telecom companies is about deploying networks that are necessary for the Internet to work. So it business digging. It is about bringing fiber and putting BTS, acquiring spectrum. Then we can discuss whether this can be something that the States should do or private companies should do, but I don't see a lot about changing business model when it comes to deploying networks. That's the first point.

And if you need money to do that, you need to get money somewhere. So we need to find a way to, to find a way out of this situation and then there are some sort of, we were accused recently in Brussels, but that is totally unacceptable that we are not investing in networks because we are giving dividends to shareholders. That's something a private company cannot accept. So maybe regulation should help us have a better regulate inventory environment to develop networks, but you cannot accuse a company of giving dividends to shareholders. That is, I would like to make this point clear.

>> WILLIAM DRAKE: Okay. Somebody has to pay for the shovels. Theresa has been waiting.

>> THERESA SWINEHART: I would like to say this, too, because I was reaching for it.

>> AVRI DORIA: I actually have very little to say about money except it seems to have unfortunate tendency to always flow in the wrong direction and I have actually found it to be one of the intractable problems of all of this. And now I'll pass it on.

>> THERESA SWINEHART: We've gotten into a bit of thing, I want to pull it back a little bit. The reality is business models are changing and I can't think of a single business model that has remained the same over time, ever.

You had the automobiles. You have everything. Washing machines, everything has changed business models.

If you look at the printing industry you used to go to an office to print. Now most people have a printer in their home.

Unless somebody can think of a business model that has remained stagnant, the reality is business models change. And user demands change and consumer demands changed. In 1975 it cost $5 million to have a computer system that had the equal performance to an iPhone4 today, which is about $400.

So if you think about that, you've got a situation where you have users running with whichever device it is that have the equal computing power that a different mechanism had in 1975 that was only accessible to the few people. And so the reality is, the world is changing. We have disruptive technologies that are impacting everybody globally. With that we need to start looking at the realities of how we are looking at dealing with policy issues over time. And we can't retain the same arcane rules and we can't retain the same arcane business models with all due respect to any business model whether it's the automobile or the banking.

And that is just the unfortunate reality, but it is also the reality of opportunity for global economic growth and investment in reaching societal needs and new opportunities. In particular for regions of the world that have not had a lot of the opportunities that have been in existence in parts of the world that had it on a day-by-day basis. I think we need to get out of some of the weeds on some of this. This is not about the U.S. or the EU or anything like that. The reality is the world is changing. We can be a participants in that and deal with solving solutions around it or sit around and not do that.

>> WILLIAM DRAKE: As often happens, Theresa has provided a perfect summary of where we are now, and at a nice moment on which to end. It is 12:30.

So I want to thank the panelists for their participation in this discussion and thank the audience for your participation as well. Have a good lunch.

(Applause.)

(The session concluded at 12:30 p.m.)

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This text is being provided in a rough draft format. Communication Access Realtime Translation (CART) is provided in order to facilitate communication accessibility and may not be a totally verbatim record of the proceedings.

 

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