<nettime> Article: Asian ISPs/content (fwd)

[Michael Gurstein <mgurst@ccen.uccb.ns.ca>]

------- Forwarded Message Follows -------
From:                   madanr@planetasia.com (Madanmohan Rao)

An interview I recently conducted on Internet datacom/content
imbalances between the U.S. and Asia appears in today's Economic
Times: http://www.economictimes.com/today/11netw05.htm The full
version appears below. Happy reading, and I look forward to your
feedback -

 - madan

[Madanmohan Rao, Principal Consultant, Planetasia.com; Columnist,
The Economic Times; Bangalore, INDIA]


"Distance does not die on the Internet: it is rewired"

Madanmohan Rao interviews Bram Dov Abramson of Telegeography Inc.

The old geography of countries and coast lines is being augmented by a new
geography marked by telephone codes, satellite "foot prints" and Internet
addresses. This expanding electronic terrain -- call it telegeography --
demands a new cartography. Washington-based Telegeography Inc. (TGI -
www.telegeography.com) is the world's leading research organisation
charting telecom links and Internet backbone maps for Europe, Asia,
Africa, and the U.S. TGI's publications are used by leading communication
companies, consultancies, governments and financial institutions in over
60 countries. Its 290-page yearbook "TeleGeography 1999" features a
special section on Internet topography and its impact on ISPs and telcos. 

TGI analyst Bram Dov Abramson was previously a researcher at the
Université de Montréal and a lecturer at the University of Ottawa. 

Q: What patterns and imbalances do you see in international Internet
traffic flows and tariffs as the Net continues its global expansion? 

A: Most Internet statistics show that, born in the U.S.A., the Internet is
becoming global. The Internet has been growing at an average rate of 90%
per year between 1993 and 1997, including a 120% average growth rate in
Asia. The Internet remains heavily tied to class and income, but it is
becoming less U.S.-dependent and more global. 

But this is only half the story. The recent statement by Asian telecoms,
charging that U.S. carriers are not paying their fair share of access
costs of the global Internet, was another reminder of what most statistics
miss. 

Usually, Internet globalisation is demonstrated by showing where content
is created, how many people are online, or the number of Internet hosts
per capita. These figures are important -- they represent the demographics
of cyberspace. 

Cyberspace isn't separate from the physical world, though. Cables and
routers, strung across the world's continents and through its oceans, mark
the Internet's material infrastructure. That infrastructure is built
around the U.S. 

Q: How is this traffic and connectivity imbalance growing? 

A: U.S. networks have always been central to the Internet, of course: but
what's important is how that persists when the Internet reaches people
everywhere. Data flows have been growing exponentially; most flow out of
the U.S. 

Internet backbone operators responded by building more bandwidth to the
U.S.; this, in turn, has reinforced the U.S.'s role as an infrastructure
hub. The fastest route between two regions, even neighbouring countries,
is often through the U.S. Maps of Asian or European backbones tell the
story vividly: the Internet is spreading, but the U.S. remains its central
switching office. 

The Internet is becoming more global, but it's still heavily centralised.
Someone at a computer in Brazil, for example, can move data to the U.S.
850 times as fast as to neighbours in Argentina and Uruguay. In
cyberspace, everyone is on America's doorstep. 

Q: How much revenue is being lost by Asia-Pacific ISPs each year, as a
result of tariff imbalances with U.S. carriers? 

A: This is very hard to say, particularly given the secrecy surrounding
many interconnect agreements. In 1997, I believe, Telstra claimed to
losing in the region of $10 million a year. I've seen figures as high as
$5 billion worldwide. But it depends on so many variables that it's quite
murky. 

Q: What resulting asymmetries do you observe in hosting and viewing of
content on the global Internet? 

A: 1997 was the first year since 1994 in which the U.S. share of the
world's Internet hosts grew, not shrunk, increasing to 58 from 54 per
cent. The Internet may have moved beyond U.S. users, but the cables wiring
the U.S. continue to be the global Internet's major destination. The U.S.
is home to 58% of the world's Internet hosts and more than 90 of the 100
most visited Web sites -- 40 in California alone. 

Officials of the Asia-Pacific ISPs claim that Americans viewing Asia-
Pacific content make up 30 percent of their traffic, but the Asia- Pacific
ISPs have to pay the entire cost of the lines -- allowing U.S. users, in
effect, to "free-ride" on Asian Internet infrastructure for that 30
percent. 

U.S. service providers are able to do this because, as we've seen, the
rest of the world needs their infrastructure more than they need everyone
else's. 

Q: What are your estimates of how much worldwide Internet data is hosted
in the U.S.? For instance, for India some analysts estimate that as much
as 90 per cent of its WWW data is hosted in the U.S. 

A: There are a lot of different ways of measuring this, varying from host
counts to top sites to terabytes. I think that the reversal of the
globalisation trend in 1997, when U.S. hosts increased as a proportion of
the world's hosts, is significant. 

But my feeling is that, however it is measured, the U.S. share of
aggregate data is not what's important. What we need to look at is
aggregate clickstreams -- that is, who goes where. That would tell us
where the Internet is becoming a local medium, and where it's still a
springboard to somewhere else. So far, that research data doesn't exist.
It needs to. 

Q: What are some ways of reducing this imbalance in Internet traffic
flows? Will increase in local relevance help? 

A: Outlining the problem in our yearbook "TeleGeography 1999," journalist
Kenneth Neil Cukier suggests that part of the answer lies in local
content. A substantial change in the Internet's physical architecture can
only follow changes in clickstreams, the paths users follow in their
travels from site to site. 

Asia must become a destination, and not just a starting point, both for
Asians and others. With large overseas diasporas, there's no reason that
this can't happen: portals, for instance, can be designed to serve as
surfing hubs to quickly reorganise users around regional content. 

Concerted efforts must also be launched to provide access through
community telecentres, and to ensure that content development is driven by
real needs. Extending digital alphabets to common languages can also help
the Internet take on a new identity -- not simply as a bridge to and
through the U.S., but as a tool in solving local problems. 

Q: At the level of infrastructure, what role can ISPs and hosting
companies play in this regard? 

A: As far back as November 1997 -- decades ago, in Internet time --
Andreas Evagora, international editor at the magazine Tele.com, wrote that
"[t]his isn't just about U.S. domination: non-U.S. service providers are
contributing greatly to the imbalance by hatching plans to add new
capacity to the States rather than to other countries in their region." 

For this imbalance to be reduced, of course, content development and
regional planning won't be enough. As the ISP sector in countries like
India opens up to competition, service providers must keep in mind that
they must cooperate if they are to foster the regional infrastructures
which local content will demand, and which will in turn encourage the
creation of such content. 

In Asia as everywhere, the only alternative to a U.S.-centric Internet is
a polycentric global Internet made up of connected local networks: as in
the Internet's earliest days, creativity will be needed to rethink what
the Internet is for, and roll it out using an appropriate mix of
resources. The success of such a global Internet will need to be judged,
not only by user numbers, but by maps of the network. 

Q: What about setting up mirror sites for heavily-trafficked portals and
destinations? How well have these mirrors worked in increasing local
traffic? 

A: Mirroring and caching are good ways to reduce congestion. By making
those sites more accessible, they increase local traffic to them.
Ultimately, though, the WWW's content architecture -- how those sites link
to others -- means that in many cases, and especially for portal-type
sites, you're only bringing a small part of the global Internet closer;
you've mirrored launching pads to elsewhere. 

The only sustainable solution to increasing local traffic is to decide
that the Internet is a local tool. Too often, local implementation of the
Internet is seen as merely a stepping stone to connection with others
parts of the world, especially the U.S. It is that, but it must also be
looked at in terms of what it can do locally. 

That is the most important lesson that the U.S. Internet experience has to
offer: for most U.S. users, the Internet is largely a domestic medium. For
all the talk about a global Internet, it can't be truly global until it
becomes local -- when the Internet starts to function as a domestic medium
for other regions, too, then it will have started to become more global.
Mirroring sites can be useful, but in the long run, it's not much more
than making Hollywood films available on videotape to save a trip to the
local theatre. 

To some extent, of course, what I'm talking about is already happening.
That's what fuels the accusations that U.S. ISPs are getting a free ride
-- people are realising that U.S. Internet users are starting to surf to
overseas sites, not just overseas users browsing U.S. content. That should
continue. 

Q: How are ISPs in Asia and Europe dealing with such traffic and tariff
imbalances? 

A: Asian ISPs pay for the entire leased line to the U.S. - in contrast to
non-Internet leased lines, whose cost is equally shared between the U.S.
and Asian parties. This is the problem pointed to in the 29 January joint
statement by eight Asian telcos (Communications Authority of Thailand,
Chunghwa, Indosat, KDD, Korea Telecom, Philippine Long Distance Telephone,
Singapore Telecom, Telekom Malaysia). 

Their call for U.S. operators to share the costs of the international
cables connecting the U.S. and the rest of the Internet was nothing new:
Australian carrier Telstra, in particular, has for some years been
pleading this cause at the U.S. Federal Communications Commission, the
G-7, and in other fora. 

Asian ISPs have been the most visible in drawing attention to this problem
of late, though European Internet carriers like Deutsche Telekom have
certainly not been silent over the last few years. 

Regional players in Asia and elsewhere are beginning to react to the
situation, building out their backbones and improving regional
network-to-network links. The initiatives which have come together in
Singapore this March -- including APRICOT (Asia Pacific Regional Internet
Conference on Operational Technologies) and various Asia- Pacific
networking group meetings -- are a good example. 

Q: Do you have specific regional publications targeting Asia? 

A: In addition to our yearbook "TeleGeography," we put out a directory of
international Asian telecom carriers, titled "New International Carriers -
Asia." The book includes coordinates and comments on each operator which
carries international voice traffic in Asia. 

Q: How do you think voice and data convergence will change communications
topography in the future? 

A: The move of voice traffic to data architectures will certainly be a
broadband application that drives data backbone construction even faster,
especially if it converges on interoperable IP platforms. Right now data
infrastructures are heavily U.S.-centric; as voice migrates to these
platforms, better-distributed network maps will make more and more sense. 

In Asia, where the race has been on for some time to act as a regional
telecommunications hub, voice-data convergence sheds light on another
aspect of the race, which is about who will be the region's "cyber-hub".
While Hong Kong has licensed almost fifty leased-line international voice
carriers in the last few months, Singapore -- which has only one
international voice carrier, with a second due to come online in April
2000 -- has been hard at work trying to occupy that cyber-hub position.
It's an interesting contrast. 

Q: How is telegeography going to complicate the issue of Internet taxation
in e-commerce sales and purchases? 

A: Some Internet transactions deal with ordering material goods which have
to separately transported between contracting parties, often across
regional or national jurisdictions. Tax regimes already apply to those,
just as they do when you shop from catalogue by mail or over the
telephone. 

What's left is the transaction of nonmaterial goods and services, where
the Internet not only puts the buyer and seller in touch, but provides
most of the exchange infrastructure for electronic delivery. This appears
to represent a growing proportion of transactions -- that's what's meant,
in part, by a "knowledge economy". For this type of exchange, I don't
think we'll see tariffs for cross-border transactions: any tax regime
would have to be global. 

Now, the U.S.-led push to make the global Internet a tax-free zone for
electronic transactions has been on for a while. But the U.S. government
and, perhaps more importantly, the other jurisdictions whose governments
have supported its position, haven't adequately responded to critics who
say that this approach represents a massive transfer of public funds to
the private sector and is anyway too vague. 

In the Netherlands, for example, Luc Soete has been active in promoting a
"bit tax", and touched on it in a very interesting 1997 report for the
European Union by an appointed High Level Group of Experts. A similar idea
has been proposed by two Canadian economists, Andrew Cordell and the late
Ran Ide. And in the French-speaking world, the "Tobin tax" proposal which
would meter global financial flows has been generating a great deal of
discussion. The future of those proposals will depend on the extent and
breadth of public debate. 

Q: Any parting words of advice or suggestions for new ISPs in countries
like India? 

A: One of the roadblocks to better overall tariff agreements is the
secrecy that surrounds many interconnection agreements. As India's ISP
sector grows, it will be important to make sure that institutional spaces
be created for ISPs to cooperate on issues of common importance -- not
just on policy advocacy and representation, but on actual infrastructure
and content initiatives. 

The resources that will be necessary to create such an institutional space
among Indian ISPs shouldn't be neglected, especially if smaller and remote
ISPs are to have a voice within that kind of forum. 

Q: What kinds of Internet tariff regulatory challenges will we continue to
face in the future? 

A: Wherever the Internet goes, Internet service providers (ISPs) need fast
connections to U.S. ISPs if they are to exchange information without
slowing to a crawl. This gives U.S. ISPs a competitive advantage, and
makes international ISP interconnection an area of dispute. 

The recent spate of telecom mergers and acquisitions -- for instance,
MCI-WorldCom -- has focussed attention on those disputes. More and more,
the real-world regulatory status of Internet infrastructure is an open
question. 

Cost sharing of communications infrastructure is a difficult issue -- the
current round of disagreements over the telecom accounting rates regime is
a good example, and that's for a set of relationships about which much
more is known on how traffic is routed, how much of it is exchanged
between whom, and so forth. Internet traffic exchange is that much more
difficult to deal with; we need more publicly- available research and
better tools to measure how traffic is routed, where it travels, and so
on. 

Still, I think we can learn something from the accounting rates debate,
even if it's not an exact parallel for ISP pricing issues. In the
telecommunications world, fora like the ITU exist to work out the sticking
points in the relationships between interconnecting carriers, even if
those fora are currently under pressure as part of that debate. Governance
in the Internet world has evolved without that kind of place. Were the
different regions outside the U.S. to come together to talk about issues
like this, it might help promote alternatives. 

As virtual topography merges with physical geography, and cyberspace with
traditional institutions, understanding the Internet becomes impossible
without understanding its architecture. 

Distance doesn't die. It's rewired. 

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