International internet connections costs

A pivotal issue that has been discussed through all the preparatory process for both phases of the World Summit on the Information Society (WSIS) and in other international forums over the last seven years is international Internet interconnection charges.¹ Since, the perception of the developing countries on the issue is entirely different from that of the developed ones, the problem has yet to be resolved.

This chapter presents an overview of the impact of the current models of International Internet Connectivity (IIC) costs on the developing countries, and of the debate as to whether this issue requires global governance or not. The chapter then presents a brief case study of Egypt, a leading developing nation in the field of information and communication technology (ICT). The case study shows that IIC costs, despite having decreased rapidly over the past few years, are still considered a major component in the pricing of Internet services in Egypt. In the following sections, the chapter then summarizes the International Telecommunication Union’s (ITU) efforts to advance solutions and explains why its Recommendation on the matter has never been implemented. Accordingly, the chapter proposes actions to be carried out by international organizations in light of the WSIS Plan of Action and the Working Group on Internet Governance (WGIG) Report, and raises the question of whether IIC should not be covered under the World Trade Organization’s (WTO) framework. Finally, the chapter states that the IIC problem needs a grand collaboration among all stakeholders from developing and developed countries in order to attain practical mechanisms that would allow for fair distribution of cost among all Internet providers.

Background

The debate on IIC is not as widely known outside the industry as some other Internet issues as spam and cybersecurity. Nevertheless, a problem exists in ensuring that each provider of connectivity is fairly compensated for handling international traffic. This happens because Internet service providers (ISPs) based in countries remote from Internet backbones, particularly in the developing countries, must pay the full cost of the international circuits.

For example: “When an end user in Kenya sends E-Mail to a correspondent in the USA it is the Kenyan internet service providers (ISP) who is bearing the cost of the International connectivity from Kenya to the USA. Conversely when an American end user sends E-Mail to Kenya, it is still the Kenyan ISP who is bearing the cost of the International connectivity, and ultimately the Kenyan end user who bears the brunt by paying higher subscriptions.”²

This contrasts with the traditional accounting and settlements system in the telecommunication world, under which the operator in the country that originates the call has traditionally made a compensatory payment to the operator in the country that terminates the call.