Potential Impacts of Revised ITRs on Global Companies Remain Unclear

The U.S. decision not to sign the revised International Telecommunication Regulations (ITRs) means controversial changes to the treaty-level document will have no effect on U.S. law or the telecom sector’s work within the U.S. -- but the treaty’s effect on U.S. businesses’ dealings internationally remain far less clear, industry experts and insiders say. The U.S. was among 55 ITU member nations to not immediately sign onto the revised ITRs last month after they were adopted at the conclusion of the World Conference on International Telecommunications (WCIT) in Dubai. Another 89 nations signed the treaty (CD Dec 17 p1). Non-signatory nations will continue to follow the original ITRs enacted in 1988, Terry Kramer, head of the U.S. delegation to WCIT, told us. The original ITRs are “antiquated, but they're very high level, they don’t get into any Internet issues,” he said. The revised ITRs will take effect Jan. 1, 2015.

Global companies that operate in nations that signed onto the revised ITRs -- and in non-signatory nations -- face the prospect of a “balkanized system” in which they will face differing rules “from one country or region to another,” Danielle Coffey, general counsel and vice president-government affairs for the Telecommunications Industry Association, told us. “Like others, we are still reviewing what the impact could be, including particularly problematic provisions related to spam and cyberissues, and will participate in other fora where these issues will surely be raised again,” Coffey said.

The actual effects of the Internet-related language in the ITRs also “remain to be seen,” said Sally Wentworth, the Internet Society’s senior manager-public policy. The revised ITRs cover a broader group of operators than the original treaty did, which “would suggest that some Internet companies -- global, multinational companies -- may find themselves subjected to the treaty,” she said. “So that’s a question mark for us and that was something we had stated at the outset was a concern.” Provisions on network security and spam are also concerning because of their potential impact on content, Wentworth said.

An Internet governance resolution attached to the ITRs -- but not a binding part of the treaty -- also caused controversy during WCIT’s final days and was one of several reasons the U.S. decided not to sign (CD Dec 14 p1). That resolution “emphasizes the role of government rather than the roles of all the different stakeholders and groups that come together to make the Internet work,” Wentworth said. “It also seems to carve out or expect a prominent or leading role for the ITU on technical and public policy related issues."

Global companies like AT&T already face regulation in any country where they have a business presence, said Amy Alvarez, AT&T executive director-international external and regulatory affairs. “We are … reviewing now how the new definition of the entities that will be under the ITRs, how that plays into our global business,” she said. Since years remain before the revised treaty takes effect, “we do have a bit of time to further digest what the impact may be for our business.” Verizon Communications is also examining how the revised ITRs will impact its business, said Jacquelynn Ruff, Verizon vice president-international public policy and regulatory affairs.

Many of the nations that pushed for controversial provisions on issues like network security and spam were already taking similar actions within their own borders, Kramer said. “It doesn’t change a lot in that area,” he said. “Now you do have 89 nations signing on to a global treaty that says these practices can be acceptable, so there’s going to be an ongoing discussion” emphasizing that such practices may not be acceptable in all signatory nations. The presence of 55 non-signatory nations “weakens a global interpretation that some of these practices … are going to be OK,” Kramer said.

Alvarez and Ruff were among the industry representatives who attended WCIT as U.S. delegates. Other major U.S. companies within the information and communications technology sector also had representatives on the U.S. delegation, including Apple, Cisco, Facebook, Google, Intel and Microsoft.

Cisco is also having internal discussions on the effects of the ITRs, said Chip Sharp, director-technology policy and Internet governance, at an Internet Governance Forum event last month. Like Alvarez and Ruff, Sharp attended WCIT as a member of the U.S. delegation. Cisco does business “in as many countries as we're allowed to, and we're going to have to be working with many of these countries,” he said. “We're going to have to work with both the signatory countries and the non-signatory countries. So as a business we'll have to start analyzing what does this mean to us, as a business, when we have to work across these boundaries. … I think a lot of the providers are going to have to look at that as well -- the multinationals, over the top providers -- are going to have to look at how their business is going to be affected by crossing these boundaries."

Industry representatives went into WCIT knowing that some member state delegations had made controversial proposals on issues like roaming rate regulation, interconnection and traffic exchange, Ruff said. “There were proposals going in that would have heavily constrained some of those voluntary commercial types of arrangements, required certain business models, required the institution of international access charges on Internet services,” she said. “I think in all of those cases, we came to outcomes that were very much moderated by the end of the conference.” Indeed, about 80 percent of the most problematic proposals did not make it into the ITRs as a result of negotiations, Kramer said, including the “sender-party-pays” proposal first proposed by the European Telecommunications Network Operators’ Association and sponsored at the conference by nations in Africa and the Middle East.

Many of the provisions in the revised ITRs were couched in “soft language” that could allow member states leeway in implementing them as national law, Ruff said. “At a minimum you have to take it seriously because it signals a direction and a concern, but it isn’t necessarily hard law.” There was also some ambiguity in the treaty over what agencies and organizations are subject to its regulations, Kramer said. “That’s going to have to get nailed down in more detail” before the treaty goes into effect, he said.

While WCIT was important because it set the tone for internal telecom policy, further ITU events in 2013 and 2014 will help determine how the ITRs affect international policy, Wentworth said. The World Telecommunication Policy Forum May 14-16 in Geneva will deal with Internet and telecom public policy issues. “That’s a non-binding forum, but what it does is it will set out a series of opinions which I think will set the stage for the ITU Plenipotentiary Conference,” Wentworth said. The plenipotentiary will be Oct. 20-Nov. 7, 2014, in Busan, South Korea. “What we're seeing now is a steady arch toward the Plenipotentiary Conference,” which will set out the ITU’s mandate and responsibilities over the following four years, Wentworth said. The Plenipotentiary Conference could also result in changes to definitions in the ITU’s Constitution, which “could actually change what the ITRs mean once they go into effect,” Sharp said.

The U.S. government’s bilateral meetings with other nations will also continue to play an important role in shaping the policy implications of the ITRs, Kramer said. “Those discussions will be critical opportunities for us to talk about where solutions come from,” he said. “That’s going to be a critical priority going forward.” Kramer’s own role in these discussions -- at least in his current role -- will come to an end in a few weeks. “I'll be back in [Washington, D.C.] for a final set of discussions and preparing some commentary thoughts about what played out in Dubai and what are the implications going forward,” he said. Many other members of the delegation will continue to be involved in the discussion as a way of “ensuring that these outcomes are positive ones,” Kramer said.