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Ambassador Kramer Previews the World Conference on International Telecommunications
Special Briefing
November 30, 2012

Terry Kramer
Ambassador U.S. Head of Delegation, World Conference on International Telecommunications

Via Teleconference
November 29, 2012

MODERATOR: Morning, everyone. Thanks for joining us for a call on the World Conference on International Telecommunications. We have with us today Ambassador Terry Kramer who is the head of the U.S. delegation. He’s going to make some opening remarks, and then we’ll get started with your questions. This will be on the record, and we will be sending around a transcript later on.

With that, Ambassador Kramer.

AMBASSADOR KRAMER: Right. Chris, thank you. Thank you very much. And this is an especially an opportune moment to speak, because as all of you know, on Monday the World Conference on International Telecommunications will formally begin with negotiations starting and running for about two weeks. And importantly this conference will be looking at telecommunication regulations. The last time these regulations were reviewed was 24 years ago in 1988. And as you can imagine, the telecom sector has changed significantly since that point in time. So if you think as an example of where mobile communications was, it was just beginning. And you look at the growth that’s happened not only in the U.S., but across the world, where in many places 100 percent of the population have got service today. There’s been significant advances.

The same thing has happened on the internet front, that people now through broadband access have access to the internet for a whole array of services that have improved people’s lives. So as we’re entering this conference, it’s important to think about what is it we’re trying to do. These sectors, telecom and internet, are incredibly valuable to our societies. We need to make sure we have that mindset as we go into this conference and think about what we’re trying to advocate, as we think about who are the three constituencies we have for the telecom and the internet sectors.

Number one, it’s citizens. The internet provides an incredibly valuable service to allow people to gain access to information, to share their points of view, and to fundamentally create a vibrant democracy with, again, two-way sharing of information.

Number two, consumers benefit from all of this by being able to transact, by entrepreneurs being able to create new services, local for their environment. We create commercial opportunities.

And then most importantly, societies have benefited. Economic growth has been directly correlated to internet access and continuing to drive that is important.

So coming into this conference, our view is be very careful we’re not making proposals that are going to work against that effort. We’ve got to make sure that we bring the regulations up to today’s current dates, that reflect liberalized markets, that reflect commercial agreements, et cetera.

And so we put through two proposals recently that talk about the importance of these regulations and these negotiations being high-level, allowing a lot more flexibility for future innovation, acknowledging the importance of liberalized markets where you have a variety of providers that create a range of services that are affordable to consumers and citizens, and that also that we rely on multi-stakeholder organizations as we look at the internet. Multi-stakeholder organizations being organizations that are open, they are organizations that have technical expertise and an agility. And so we’ve put through two to three proposals, all that reflect this high-level approach ensuring that we allow flexibility for future growth.

I have to be candid. There have been a variety of proposals that have come in that are alarming. There have been proposals that have suggested that the ITU should enter the internet governance business, they should be actively involved in that. There have been active recommendations that there be an invasive approach of governments in managing the internet, in managing the content that goes via the internet, what people are looking at, what they’re saying, et cetera. These fundamentally violate everything that we believe in in terms of democracy and opportunities for individuals, and we’re going to vigorously oppose any proposals of that nature.

There’s also been a variety of proposals that would affect economic opportunities. These proposals have to do with what are called “sending party pays” pricing regimes where basically internet providers that generate content in applications would have to pay to have that traffic delivered abroad. If you can think about the implications of this, today much of what we get via the internet is free. In these models, there would now be a paid model. And many of the organizations that send content are nonprofit organizations, they’re universities that provide free online courses, they’re organizations like the Khan Academy that provide YouTube clips for free online education for young people. So we are not going to support any type of proposal that seeks to set up new payment regimes that would undermine internet traffic.

Finally, there’s a variety of proposals on cyber security. And again, this is an area that is a critical challenge that we’ve got to protect our networks from malware and hacking, et cetera, but many of the proposals we’ve seen seem to open the door for content censorship, for routing of traffic, and the ability of governments to control what’s happening on those networks. And again, we find that concerning.

So what do we see as success out of this conference? Number one, that we encourage the availability of affordable broadband and internet access. Let’s continue to see that development in a variety of developing markets where there’s huge upside. This growth opportunity is a very global one, one that’s interconnected in nature. And so supporting that we think is absolutely critical.

Let’s understand also that there are threats to networks in areas like cyber security, but let’s be very, very careful about who we assign to deal with these issues. We feel the multi-stakeholder organizations with their technical expertise, with their agility, and importantly with their openness are the best organizations to deal with these.

So we come to the conference in Dubai, number one, feeling encouraged about the opportunities, we remain concerned about a variety of proposals that have come in, but we also feel very encouraged with a variety of our partners, whether they be in Europe, whether they be in Asia, whether they be in our own region, Central America, and Latin America, that we are going to the conference with that good partnership. So let me stop there and take any questions you have.

OPERATOR: Ladies and gentlemen, if you would like to ask a question, please press *1 on your touchtone phone. You will hear a tone indicating you have been placed in queue. You may remove yourself from queue at any time by pressing the # key. If you are using a speaker phone, please pick up the handset before pressing the number. Once again, if you have a question, please press * then 1 at this time.

And the first question is going to be from Eliza Krigman with Politico. Please go ahead.

QUESTION: Hey. Thanks for taking my call. Good morning, everybody, or afternoon. I don’t know where you are. But the question is: Given that it’s one vote per country, why is there – continue so much concern about the proposals? Is there a realistic chance that there’s enough support for any of these extreme proposals? I mean, correct me if I’m wrong, but I think there’s 193 countries participating, no?

AMBASSADOR KRAMER: Yes. So, Eliza, thank you for the question. Hamadoun Toure has been very clear – he’s the Secretary General for the ITU – that he wants this conference driven by consensus. He feels that if you go to a vote, you’ll have winners and losers, and that’s a bad outcome. So one of the critical elements here is to ensure that we have a broad set of partners with us on a variety of issues. So assuming that posture, that approach to consensus, happens, then I think that we’ll end up with a good outcome.

Now if there’s a change in how that gets implemented, and the approach to consensus, then it’d be worrisome. Our important task here is to make sure we’re putting forward our messages, that they’re clear, that we have a rationale, and importantly that we’re doing a lot of outreach. So a lot of my time is spent with a variety of nations, whether they be in Africa, whether they be in Latin America, whether they be in Asia, et cetera, to really do a reach-out. And again, if consensus is the approach and we’re getting some positive messages from our partners, then we’re going to hope that there won’t be adverse proposals coming out of this.

OPERATOR: And once again, ladies and gentlemen, if anyone would like to ask a question, please press * then 1 on your touchtone phone.

The next question is going to be from Grant Gross with IDG News Services. Please go ahead.

QUESTION: Hi. Good morning, Ambassador Kramer. This morning, there was an internet governance conference in D.C., and Andrew McLaughlin, a former Deputy CTO for the Obama Administration, called on the United States to advocate for the dismantling of the ITU. He said it’s no longer necessary, that it’s not transparent, that it puts too power in the hands of governments instead of internet users. Any thoughts on that? It doesn’t sound like you guys have that position, to dismantle ITU.

AMBASSADOR KRAMER: Yeah. Thank you for the question. Yeah, I don’t think per se the ITU is the problem. The ITU does some very important work on best practice sharing, on some development activities in developing markets. They do some great work. The big issue is what the charter of the ITU is, and the big issue is the member nations and the proposals they’re putting forward. At the end of the day, the ITU is reflecting positions that different member nations are taking. And so some of the proposals, candidly, that have come out of the nondemocratic nations, to me is the most worrisome issue. So I don’t believe per se that dismantling the ITU is the way to effectively solve that.

These opportunities we’re talking about – as you know, I come from industry, from the mobile industry – these internet opportunities and mobile industry opportunities, these are incredibly interconnected global opportunities. What we don’t want to have happen out of this is a Balkanization of the internet, where everybody develops their own approach, their own standards, their own sets of rules. That creates a losing environment for everybody. We will reduce dramatically the exchange of information, the commerce, and all the work being done to drive economic opportunity, reduce digital divide, et cetera, that will be lost.

So I think the more fundamental issue is: Why are some of the nations putting forward the proposals they are, and how do we really get everybody to see that we’re going to hurt these sectors by some of these proposals? And I think that one of the positive aspects of this conference is it’s allowed us to get explicit about the importance of these sectors, about who’s benefiting from them, and how taking wrong actions, prescriptive regulations, et cetera, how those things can create problems for the broader global opportunity.

OPERATOR: Jennifer Martinez with The Hill is next. Please go ahead.

QUESTION: Hey, thanks so much for taking my question. I guess I kind of have a two part question, and the first is: I mean, right out of the gate, when you first get to Dubai, what is the first thing on your agenda? Is it helping to define what the scope of the treaty is, so that it is focused mostly on telecom and not on the internet? And then also, can you say which of the countries U.S. would consider allies, I guess, going into the conference?

AMBASSADOR KRAMER: Mm-hmm. Absolutely. So the first priority, and we made a submission just last week that said that we feel there are two foundational elements that need to be discussed upfront in this conference, and that is what’s called recognized operating agencies. Defining number one, what organizations are subject to the regulations that we’re talking about? And our fundamental belief here is this is a telecom treaty, so public providers of telecom – in the U.S., it would be AT&T and Verizon, as an example – are the ones that we should be talking about here. This should not be the charter to review private networks, internet networks, cloud computing networks, and on the other side, government networks. That’s not the charter of this treaty.

So we need to get that clear. We also need to get clear that what we call the definitions, that what’s going to be focused here are telecom services, not ICT, not IT, not internet, not processing related businesses. All the terms you’d hear associated with the internet space, that that should not be the area of focus, because that opens the door again to content and content censorship. And we think, again, that’s completely inappropriate.

So when we get on the ground, that’s the first issue that we want to discuss. And I’ve already spoken to Hamadoun Toure and shared with him a copy of our proposal. I’ve sent a copy of it Mohamed Al Ghanim, who is the conference chair from the UAE. And we’ve sent the proposal to a variety of nations. As you know, that proposal was sent out jointly by Canada and the United States.

So regarding your second question in terms of who are our partners and our allies, we’ve had excellent partnership, first of all, within our own region. Our own region are the Americas: Central America, South America, North America. Our partners, whether they be Canada, whether they be Mexico, a whole variety of countries in Central and South America have been very well aligned with us about the importance of liberalized markets, about the worrisome nature of proposals that get into content censorship, et cetera.

Europe has been a very good partner of ours – again, very similar values in foundational elements. One of the messages coming from Europe is a concern about actions they need to take to stimulate their own economy. So they’re very concerned about proscriptive regulations, actually, that would slow a lot of the sectors that are driving growth there. Asia has been, in most part, very good partners, including markets in Japan and Australia and New Zealand, et cetera, have been very good partners of ours. And there’s a variety of nations that are still forming their positions or we have some disagreement with and we’re going to spend time with and hopefully reach alignment on these common principles about liberalization and internet success.

MODERATOR: We’ve got time for maybe one more question.

OPERATOR: Okay. Bill Gertz with Washington Free Beacon is next. Go ahead, sir.

QUESTION: Yes, hello. My question is about the proposal of the Russians to change the international regulations treaty. What’s the U.S. position on that? They want to bring IPN networks under UN control. Is the U.S. going to oppose that?

AMBASSADOR KRAMER: We will actively oppose the Russian proposal. I have to say, out of all the proposals that have come in, the Russian one candidly is the most shocking and most disappointing in terms of achieving the success that we are seeking globally. We have had good working relationships with our Russian colleagues, but the proposal that actually came out, to us, was shocking.

As you know, there’s been a lot of messaging that the conference is not going to be focusing on internet governance. And Hamadoun Toure, again, who’s been I think a very good leader in trying to find a good success path, has said that the ITU is not going to be focused at this conference on internet governance. If you look at the Russian proposal, it’s clearly focused on internet governance. It would basically move to governments the right to route traffic, to review content, and say that’s all a completely national matter – an extremely important precedent it would set for opening the doors, again, to more censorship.

There’s a variety of other elements. They’ve made it explicit that they think that the conference scope should be on the internet. So all the work that we’ve said that let’s make sure we’re staying consistent with the charter of this conference, which is telecom, they’ve said should be on the internet side. So we do find it very much of concern, and obviously we’re using that to in part highlight some of the views that we think are so harsh, that we think would risk success in the future.

OPERATOR: Okay. And we do have one last question from Tom Miles with Thomson Reuters. Please go ahead, sir.

QUESTION: Hello, Ambassador Kramer. A two-part question: One is just to follow up on the last one – I wonder if you could say who is behind the “sender party pays” proposal. I don’t know if that’s also Russia. And secondly, obviously a lot of the argument in favor of this is saying that there are a lot of developing countries in Africa and Asia have not sufficiently rolled out the internet because the funding model for the way the internet works is essentially, there’s no incentive to roll out, and changing the incentives would enable much greater broadband development and much greater internet development around the world. So obviously there are a lot of African and Asian votes in this. What do you say to that? Thanks.

AMBASSADOR KRAMER: Yeah. So first of all, where is the “sending party pays” proposals coming from? And by the way, some of the proposals have morphed into what are called quality of service provisions, where it gives the right of network operators to control and set commercial terms for delivery of traffic at certain levels. So they’re all basically designed to do the same thing that obviously we are very much against.

So who is putting forward these proposals? Several of the African nations – the African Telecom Union came out with a proposal that supported it. I think a lot of the Francophone countries are the ones that have been most vocal in supporting it. There’s a variety of nations in the Arab states that have been supporting it as well. And then you also have some countries that are still kind of deciding. India is an example – I think is still working through it. They’ve made some references that we find alarming. There’s a very good vision about telecom and internet, but there’s been several references to “equanet,” which is equality in network builds. This is the issue with all of this. We all absolutely agree the need to accelerate broadband deployment is one of the number-one goals. It helps societies, it helps global economies, et cetera.

The key question is, let’s be pragmatic here: What approach works? And a lot of the countries that are proposing these solutions have not liberalized their markets. In many cases, they have government-owned telecom networks, very limited competition, prices tend to be very high, and you have a problem with consumers being able to get internet access. And what we’re saying is the only model that has been proven to work is a liberalized one, where government will award spectrum – because this is mobile in a lot of cases – it’ll award spectrum to have multiple competitors; you have a variety of services that are launched; prices come down. You stimulate the economy with all of this, because when people have internet access, they can become their own entrepreneurs, they can transact and acquire things at lower cost. All the goodness of the internet then accrues to them. That creates that economic opportunity that then lifts the economy.

And so if you say, well, where has that happened? Is that just a U.S. model? This is a model that’s worked in Kenya, that’s worked in Ghana, that ironically has worked incredibly well in India, that has worked in South Africa. I mean, just country after country after country, that’s where that model works.

So if you say, where is the incentive here? There absolutely is incentive. If you take here in the U.S., where is the incentive for the mobile operators to build? They’ve got consumers that see the value of this data, this connectedness, the ability to be on the go and have access, and they pay for it. And they pay for it because there’s value driven by the service. And so creating that virtuous cycle of liberalization, of options, of affordability, of more access, of economic growth for individuals and citizens, that creates this virtuous cycle that has been the only one that’s been shown to work. And I think that’s one of our messages that we need to be more actively advocating, because that is the one that, again, we think is the most pragmatic.

MODERATOR: Thank you, Ambassador Kramer, and thank you all for participating. We appreciate you joining the call. And with that, we will end.

AMBASSADOR KRAMER: Thank you very much.