Is the U.N. Trying to Tax the Internet? (Forbes)

-   So are they or aren't they?

Earlier today, eyebrows were raised sharply when it was reported that the UN (United Nations) was considering a new internet tax on web content providers, including Google, Facebook, Apple andNetflix. The proposal, which was leaked today, has been allegedly introduced by ETNO (European Telecommunications Network Operators Association), a Brussels-based group representing such companies as Belgacom, SwissCom, Cyta, Eircom and Deutsche Telecom, and will be officially discussed at the UN International Telecommunication Union (ITU) in December.

Article originally published on Forbes.com by Kelly Phillips Erb - 06/08/2012

The proposal would allegedly amend an existing telecommunications treaty, the International Telecommunications Regulations (ITR), by imposing heavy costs on popular web sites and their network providers. The idea is that huge content providers like Apple and Google should be forced to pay fees linked to usage – data heavy sites like those tend to use lots of bandwidth. It’s akin to the system used for international phone calls, where the recipient’s network sets the pricing for calls; before the availability of voice over internet protocol (VOIP) like Skype, U.S. phone companies used to pay billions of dollars in fees for the privilege of facilitating calls abroad. In the world of the internet, the fear is that this kind of “pay as you go” system would restrict the availability of the internet to users in developing countries.

However, despite the reports, ETNO says that it is not asking the UN to tax the internet. While the ETNO does not deny that it believes that the way that content providers use the internet should be changed, it stopped short of calling for an actual tax, saying instead that it wants telecommunications network operators to consider making deals with content providers. Additionally, the ETNO has hinted that significant changes to the ITR are sure to come; the treaty has not been altered much in the nearly 25 years it has been in existence while the internet has actually changed dramatically.

ETNO claims that changes would lead to a “new sustainable model for the internet”, with its Executive Board Chair, Luigi Gambardella, saying:

The revised ITRs should acknowledge the challenges of the new Internet economy and the principles that fair compensation is received for carried traffic and operators’ revenues should not be disconnected from the investment needs caused by rapid Internet traffic growth. The ITRs should be flexible enough so as to further encourage future growth and sustainable development of telecoms markets, while respecting the guiding principles that led to the successful development of the Internet: private sector leadership, independent multi-stakeholder governance and commercial agreements.

But not everyone is on board with the proposed changes. Google’s Vinton Cerf has been vocal about the need to counter efforts to regulate the internet through the U.N., as countries gear up for the ITU. He worries that such regulations could restrict the freedom of the internet through such features as per-click taxes. Specifically, Cerf voiced concern that:

The open Internet has never been at higher risk than it is now… A new international battle is brewing — a battle that will determine the future of the Internet.

It’s clear that the explosive growth of the internet has both created challenges and opportunities for the private sector. How the intersection of government and the private sector might affect our use of the internet is worth watching. ETNO’s proposal won’t be officially discussed until December – but expect lots of chatter about it until then.

Article originally published on Forbes.com by Kelly Phillips Erb - 06/08/2012

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