‘Tis the season for think-tanks and prognosticators – plus political analysts and operatives – to prioritize the Internet outlook for the coming year. This week has been particularly fertile, with webinars and seminal seminars about the state of the broadband industry, both domestic and global.
Much of the soothsaying has implications for the competitive broadband landscape, although as always none of the visionaries guarantee their forecasts, most of which are built on interpreting lessons for 2012 into visions of the digital future.
From global perspective, Ambassador Terry Kramer’s comments at the Internet Society’s Washington, DC, chapter on Wednesday were particularly difficult. In his first public statement since returning from the World Conference on International Telecommunications, Kramer described a dismal outlook for global agreement on policies affecting Internet operations.
He cited “notable challenges” from Russia, China and Arab states that want to place controls on the Internet – a plan supported by 89 countries at the WCIT conference in Dubai, which just ended. Fifty-five countries, let by the U.S., most western European and Latin American nations, opposed the WCIT proposal or are reviewing it for a later decision or revision.
Fundamentally, it comes down to separation of conduit and content – a familiar concept in the cable TV and U.S. telephony industries. WCIT’s report has implications on cable firms that are looking to expand into new global territories that seem ripe for broadband service – but with restrictions.
“We made it clear that the Internet discussion was off the table,” Kramer said – insisting that WCIT was intended to focus solely on telecom regulations, not Internet and censorship topics. He cited stumbling blocks including network security, SPAM (which some countries consider political commentary as they strike it down) and Internet governance.
“I hardly call 89 nations ‘a broad consensus,’” said Kramer, who headed the 120-person U.S. delegation. He also noted that the outcome will have implications on broadband deployment in developing markets. Kramer characterized WCIT as “a tragedy [because] it did not deal with … open, competitive markets,” which he believes need to be resolved as part of “a global agreement.”
The WCIT stalemate takes on additional weight as U.S. communications companies – including MSOs – seek to expand into the fast-evolving global telecom/media market. Diplomatically, Kramer and other U.S. participants at the Dubai meetings acknowledged that much of the world is not interested in bringing the U.S. model to their lands.
That viewpoint resonated in the wake of Tuesday’s webinar “Broadband US.TV 2012 Year in Review, What Lays Ahead.” Familiar Washington talking heads --- Scott Cleland of the Precursor Group, Gigi Sohn of Public Knowledge, Jeff Silva of Medley Global Advisors and others – voiced their predictable screeds about the U.S. broadband situation.
Cleland, often a stalking horse for telephone companies, envisions action on telecom legislation in 2013, calling the current law “embarrassingly obsolete” and envisioning a “transition to bring everyone forward into the twenty-first century.”
Silva warned that such a legislative transition “won’t be like going from analog to digital TV. It is far more complex,” he said, citing billing, content control and other factors that will make it “inevitably messy.”
In a comment that presaged the WCIT discussions elsewhere, Sohn emphasized that “Interconnection is really critical.” She singled out “cable companies [that] are not subject to the same contracts as the telcos.”
Another panelist, Paul Gallant, a telecom policy analyst at Guggenheim Securities, asked whether, “as we transition to IP [Internet Protocol] … are we going to retain the rights from our basic competitors or cut off our rights?” He called it a “big issue” – again, akin to the global problems cited at the WCIT review the following day.
The panelists acknowledged that in the U.S., IP traffic is exchanged via contractual arrangements. Several of the panelists see the competitive impact of the move to IP delivery will mean that the government is likely to be “pulled into the process” of assuring distribution.
“The only way [suppliers] will connect is if the FCC tells them they have to, Gallant said, characterizing “interconnection” as an obsolete term.” Cleland agreed that “peering” will be the term to replace the archaic “interconnection” of the telecom interconnect era.
Sohn predicted that municipalities will look at Google’s Kansas City broadband experiment (and a similar new project in Chattanooga) experiment and say “I want a piece of that.”
The panel also touched quickly on retransmission consent: Silva said it will continue to be a “relevant and sore topic” but he foresees “no great leap forward.” Gallant opined that If Congress “decides it wants to get back in and the rules need to be rebalanced,” then broadcasters “have all the leverage.”
Collectively, the two Washington blab-fests offered a tough outlook for domestic and global communications in the year ahead – although as always, it’ll be profitable for lawyers.