Broadband and telecom

Access and Pricing for Information Infrastructure Services: Communication Tariffication, Regulation and the Internet

 

Access and Pricing for Information Infrastructure Services: Communication Tariffication, Regulation and the Internet

Meeting Report

The OECD, together with the European Commission (DGXIII), and COMTEC (Dublin City University), held a workshop on the pricing and regulation of Internet in Dublin on the 20th and 21 June 1996.

The workshop was attended by nearly 80 participants from government, industry and academia. Sessions ranged over a number of existing and emerging issues in respect to Internet developments and a brief summary is recorded below. A background report, Information Infrastructure Convergence and Pricing: The Internet prepared by the OECD secretariat, was distributed at the meeting.

Session 1: Welcome and Keynote Address

Chair John Dryden, OECD
The workshop was opened with welcoming remarks by John Dryden, Head of Information, Computer and Communications Policy Division, OECD and Svend Kraemer, Head of Sector, DG XIII -- IS2 , European Commission. The keynote address in Session 1 was given by Michael Sheridan, Commercial Director of Telecom Eireann. Mr Sheridan described the current telecommunication regulatory framework that exists in Ireland and planned changes in respect to liberalisation. Mr Sheridan summarised current Telecom Eireann initiatives in the field of the Internet and related these developments to regulatory and pricing issues in Ireland. In this context he introduced the subject of tariff rebalancing, and said that in Ireland as elsewhere, this had been an extremely difficult process.

Following this presentation, Mr Peter Harter, Public Policy Counsel, Netscape was invited to make some remarks on the decision of the United States Court for the Eastern District of Pennsylvania in respect to Internet and the Communications Decency Act of 1996. Mr Harter summarised the main points of the Court's decision and their implications for future consideration of Internet regulation in the US. More generally he suggested US policy toward 'convergence' of data/voice/video services should avoid regulation of Internet and Internet communications and promote competition amongst new and traditional services. However Mr Harter added that US policy should, from Netscape's perspective, pre-empt state/provincial regulation of the Internet because it was inherently a national/international medium. Towards this Mr Harter urged that Internet expansion be promoted through co-operative international efforts.

Session 2: Presentation of the OECD paper on information infrastructure and pricing

Chair: Dimitri Ypsilanti, OECD
Sam Paltridge, OECD Secretariat, presented the findings of an OECD study on Internet pricing and regulatory issues. Mr Paltridge highlighted the very uneven growth in the use of Internet services throughout the OECD area. He noted that for European OECD member countries, Scandinavia had just 5 per cent of the population but 25 per cent of Internet hosts. While noting that many factors influence Internet expansion Mr Paltridge pointed to the strong correlation between those countries with telecommunication infrastructure competition and high growth rates. He noted that access to the Internet was expanding five times faster in Member countries with competitive telecommunication markets than monopolies. Two of the main reasons he suggested for this were lower prices and a more innovative approach to setting telecommunication tariffs. He noted that there was a vast array of tariff structures in the OECD area, particularly for local calls. While not producing large differences in the total bill paid by users of traditional telephony services, because of the relatively limited time spent on the telephone, different tariff structures engendered vast differences for users of Internet. In many cases, he noted, tariff rebalancing was exacerbating the unsuitability of traditional tariff structures for new applications. In the final part of his presentation Mr Partridge reviewed some of the new approaches to pricing being developed in competitive markets to deal with this problem and the progress of alternative network infrastructures such as cable networks.

During question time a number of participants felt that while the OECD work on pricing was very useful it should be extended into looking at other influences on the rate of Internet growth such as the price of personal computers, user friendliness of Internet and so on. Questions were also raised as to what optimal network pricing for Internet access might be. In response the speaker and Chair of this session noted that the work of the OECD's Telecommunication and Information Services Working Party primarily addressed the impact government policies had on the development of communication services. It was noted that 19 of the 27 Member countries of the OECD still had monopoly provision of the underlying infrastructure used to carry Internet services. The main issue for governments, they suggested, was policy reform to create a greater role for the market in creating price innovation and discipline.

Session: 3: Pricing New Services over the PSTN

Chair: Dr Paschal Preston, Comtec
Pat Boner, Manager, UK and International Pricing, BT led off the Session by stating the BT saw the Internet, including voice over the Internet, as an opportunity rather than a threat. Mr Boner summarised developments in pricing relating to Internet services in the UK. He noted that a range of discounts had been developed for telephony services in the UK market in response to competition and that further packages were now being planned around Internet access. Mr Boner highlighted a new BT pricing plan which would enable users accessing the Internet or other online services a 25 per cent discount on local calls after the first 10 minutes.

Peter Dawe, Independent Consultant and founder of Unipalm Pipex opened his remarks by saying that the Internet was challenging many of the assumptions of how to price traditional telecommunication services. He noted that Internet pricing was in a continual flux as both Internet Access Providers (IAPs) and more slowly, but equally importantly, public telecommunication operators (PTOs) adjusted to the new environment.

Mr Dawe sketched the evolution of data exchange between IAPs and what this meant for the IAPs in terms of network infrastructure costs and its implications for downstream pricing. He noted that one of the reasons IAPs outside the US face higher costs is that the bulk of international Internet traffic transits through interconnect points in the US. Mr Dawe said that because the existing structure of the Internet meant European or Asian IAPs needed to leased capacity to provide links to major US interconnect points they had higher costs than US IAPs paying domestic rates. Mr Dawe said this contributed to IAP prices often being higher outside the US. While the existing arrangements were in one sense 'not fair', in his opinion, they worked very well. Accordingly Mr Dawe said he did not favour a settlements based approach. In closing Mr Dawe noted the different taxation regimes between countries were causing some IAPs to look closely at where they based their operations.

John de Ridder, Manager of Pricing Strategy, Telstra described the pricing approaches to Internet access being taken in Australia. He noted that Telstra had a 'flat rate' for local calls, with calling radius extending to 40 km for Sydney and Melbourne, so that dial-up users could access Internet services for unlimited amounts time for the same price. Telstra's rate was US$0.18 per call and that this method of charging was fixed until December 1998. Mr de Ridder noted that tariff rebalancing had been occurring in Australia but because of the flat rate for local calls this had not impacted adversely on Internet users. He noted that the ratio between a 3 minute call measured call between Sydney and Melbourne compared to a local unmeasured call had been 45 to 1 in 1966, 30 to 1 in 1976, 15 to 1 in 1986 and 4 to 1 in 1996. On the other hand, while noting that Australia was relatively expensive for leased line access to the Internet, Mr de Ridder said that Teltra's emphasis had been on providing ISDN access to the Internet. If ISDN prices to end users for 64 kbit/s access were used instead of ISDN 'wholesale' prices he believed Telstra prices compared very favourably on an international basis. Mr de Ridder added that prices at this speed were being reduced in Australia and prices for access at higher speeds increased. Mr de Ridder closed by saying Telstra was aiming to make ISDN more affordable for residential users in addition to exploring the use of other technologies to provide Internet access.

Takahashi Yamakawa, Board Director/General Manager, Nifty Corporation addressed the issue of PTO pricing from the perspective of an online information service provider. Mr Yamakawa said that between 1987 and 1996 NiftyServe had gained over 1 million customers and that they hoped to gain a further 1 million over the next 12 months. While not advocating any particular pricing structure for PTOs Mr Yamakawa emphasised the importance of reducing the price of telecommunication access. In terms of online information pricing, he said NiftyServe preferred a measured rate and that for the moment he did not foresee advertising as being able to replace revenues drawn from customers accessing databases.

In the discussion a number of questions were raised relating to the costs and benefits of unmeasured local calls for dial-up users. Peter Dawe noted that one reason IAPs in the UK have used flat rates for customers was that they did not have, and still in the main do not have, the necessary billing infrastructure in place. He believed this situation would change in the future not only as IAPs developed billing technologies but that with the development of electronic payment over the Internet that traditional billing may not be needed as payment would be transaction based. Pat Boner stated that he believed measured pricing for local calls was most efficient for the UK because it encouraged rational use of networks. He said BT's network had been designed with traditional patterns of telecommunication use in mind and that unmeasured local calls could lead to network congestion and inefficient allocation of resources. Mr de Ridder said it was still too early to see the impact of on-line use on average call duration in Australia.

Session 4: Pricing new services over alternative infrastructure

Chair: Matthew Copeland, Regulatory Manager, Telewest
The Chair opened the session by briefly sketching initiatives by the UK cable communication companies to provide Internet access including Cable Internet. By way of introducing the panel the Chair raised the issue of how Internet services over broadband networks (what he termed non-PTSN Internet access) might get 'caught up' in regulation intended for broadcasting services. The first speaker in this session, Peter Harter, from Netscape expanded on this theme. He commenced by stating that the positions of Netscape on Internet regulatory issues such as Telecommunications Efficiency and Deregulation (including universal service issues), Regulation of Internet Communications and the "Pricing of Internet Transport and PSTN Interconnection" are available on the Internet.

Mr Harter stated Netscape believed Internet growth requires competitive and efficiently priced telecommunication infrastructure. To achieve this, he said, governments should aim to reduce entry barriers and promote effective competition. In addition he believed governments should not regulate Internet transport and access providers on the same basis as 'common carriers' in respect to pricing and tariff regulation. Nor, he added, should governments favour circuit switched telephone network providers over packet switched networks and providers. Mr Harter stated that governments should promote 'intermodal' competition between Internet and circuit switched telephony.

In respect to pricing, Netscape had come to the view that telephony based interconnection charges are not suitable for Internet in the light of efficiencies of packet-switching and data compression. He noted that the present system of network to network data interchange agreements has supported geometric growth in global Internet transport volumes. According to Netscape much of the discussion in the academic community of "congestion" pricing alternatives ignores the dynamic efficiency of the decentralised Internet model. By way of example Mr Harter contrasted earlier arguments about the number of 'hits' a home page could receive before congestion based pricing was imperative with the number of hits now being received by Netscape which were vastly in excess of those levels. As such Mr Harter suggested that any government effort to impose regulatory pricing structures ("usage based pricing") on a decentralised Internet cost structure would create network overheads, inefficient transaction costs and contradict the fundamental model of Internet transport. He added that because the Internet was a 'connectionless' medium, usage based pricing for networks would generate multiple accounting records for each Internet session per user. Furthermore, in the view of Netscape, Internet congestion can be best managed by competition in the market place (citing the example of MCI/BT's announcement expanding backbone capacity) rather than artificial scarcity through 'priority' pricing schemes. He added that the proposed Internet protocols (e.g. RVP) could avoid 'wasted bandwidth' congestion through prioritising packets without the imposition of data transfer pricing. Finally Mr Harter proposed that any 'settlements' process for Internet data should be developed and implemented on a global, non-governmental basis, based on consensus in the Internet community.

Margo Langford, Corporate and Regulatory Counsel, iStar opened her remarks by summarising Internet developments in Canada from the perspective of the largest IAP in that country. Ms Langford noted that competition was increasing dramatically amongst IAPs but that Canada's PTOs, as with all OECD countries, still controlled most of the infrastructure necessary to configure networks and access customers. In respect to competition between IAPs Ms Langford noted that as Internet access expanded a growing number of 'new users' needed greater customer support (e.g. help desks) which would stretch the resources of smaller IAPs. She also noted price competition was increasing amongst IAPs. By way of contrast, in respect to accessing the underlying PSTN infrastructure, the experience of iStar had been that there was a great deal of potential for anti-competitive practices by PTOs looking to enter the same market. iStar's experience had been that PTOs resist co-location of facilities (after long and protracted negotiations), deny access to 'dark fibre', and price some services below published rates or attempt to make some existing services unavailable to IAPs. Ms Langford noted, that apart from regulatory safeguards, governments could minimise such problems by promoting infrastructure competition. Accordingly, the Canadian government is making spectrum available for high speed digital wireless local network access and not allowing PTOs and cable companies to bid on the first round of licences.

Dai Davies, General Manager, DANTE commenced by describing the difficulties of putting together a pan-European network. Mr Davies contrasted the prices paid by users in Europe with those in the US for the same Internet transport services. Based on his analysis of the existing prices paid by Dante he concluded that users are currently paying 10 times as much as they would for a similarly configured Internet network in the US. While the additional capacity currently being made available by PTOs in Europe for Dante's Ten-34 network would reduce the costs to users the difference would still be in the order of 5 times more expensive than in the US (and would increase based on projected ATM pricing).

Dr Lee McKnight, Associate Director, Research Programme on Communication Policy, MIT described the research programme underway at his institution on Internet pricing. Dr McKnight outlined a number of approaches to pricing Internet services and discussed their strengths and weaknesses. By way of example he noted that some schemes for congestion based pricing (such as tagging for priority transport) might provide incentives for infrastructure providers to artificially limit the amount of capacity available. More generally he reported that his research led him to believe government regulation should be avoided as much as possible except in those instances where there was a clear public interest issue and to support open network provision. One reason for these conclusion was the extremely dynamic nature of the Internet such that unwarranted government intervention may hinder growth.

Session 5: New Applications and Regulation

Chair: Peter Harter, Netscape
The Chair opened this Session by saying that convergence, including real-time voice and video Internet based services, should be welcomed because it provides consumers with new services and greater choice. At the same time he noted that it was often difficult to categorise services. By way of example he cited the Pointcast technology which while acting as a screen saver for a PC also provides a news and information service combining many of the elements of other traditional media. Mr Harter also made the point that it would increasingly difficult for information to be regulated according to its origin as some services received data from multiple sources.

The issue of defining services was taken up by Nathalie Gautraud, French Ministry of Posts, Telecommunications and Space, who stated that the Internet defies traditional classifications. According to Mme Gautraud neither broadcasting (mass communication), nor telephony (individual communication) take into account its specificity and development potential. Nevertheless, Mme Gautraud noted that the experience in France had been that while new communication technologies bring benefits they can also generate problems that governments need to address such as the protection of minors and consumers. Accordingly Mme Gautraud suggested that reflection and action are required at the national, EU and international level to meet new needs arising from Internet.

In France these issues were being addressed within the Telecommunications Bill recently adopted by Parliament. French Government initiatives included increasing parental awareness of their responsibilities and ensuring that screening software was available for parental use and drawing together industry professionals and concerned groups to draft ethical rules of conduct for service providers. The Committee established to undertake this work will also be responsible for commissioning studies, international co-ordination, and informing service providers of their liabilities under the new law. Mme Gautraud noted that under the third stage of the new legal framework suppliers that merely provide transmission, and are unaware of content of the services they provide, will be exempt from criminal liability. However she noted they shall not be exempt from liability when they do not provide control devices; they provide access to a service which has received an unfavourable opinion from the Committee or if they provide access to services they know to be unlawful.

Mme Gautraud made reference to the remarks by François Fillon, the French telecommunications minister during the EU Council of Telecommunication Ministers meeting (Bologna April 1996) proposing international collaboration to discuss the guiding principles of applicable legislation; the common principle of liability between different actors on the Internet and the basic principle governing policing and legal co-operation. In respect to determining which legislation should apply Mme Gautraud said two options were available. One option was to apply the legislation in force in the country of reception which in theory had the advantage of enabling the content of services to be controlled and legal decision to be effectively carried out. A second option was to apply the legislation in force in the country or origin (transmission) along the lines of the European directive on television without frontiers.

Turning to the subject of liability, Mme Gautraud said that in France the legal regime governing private communication services is different from that of public communication services and that the Internet incorporated both private (e.g. e-mail) and public (e.g. web servers) services. She noted that the principle of editorial liability did not apply to private communication but that with public communication the main liability was borne by the author. Mme Gautraud added that if a web server is not the source of the content but only the physical site where the content is stored it may be held liable with the burden of proving that it was not able to control incriminated content. To enjoy partial liability the server must be able to identify the source of the service content precisely, to enable a judge to track the author with the main liability. Mme Gautraud said that France would propose that within the framework of the Maastricht Treaty that a unit could be set up to collect information on the current procedures relating to the Internet in each EU member state. Mme Gautraud concluded by saying that national and international action would not be enough to ensure the harmonious and secure development of the Internet. Each state has to inform the general public of the potential of the Internet and draw the attention of the players concerned to their responsibilities.

Peter Sandler, Legal Advisor, European Commission, DGXIII described his personal reflections on the approach which may be followed within the EC in respect to Internet regulatory questions. The basic issue was likely to be not whether to regulate new services but whether they would need to be regulated further than is currently the case and how the current framework in areas such as licensing, universal service, interconnection, IPR protection or content controls might need to be adapted to new technological realities.

Given that many aspects of the Internet were already regulated, Mr Sandler reviewed the underlying rationale behind regulation in the area of communications and whether that rationale held true in a digital age. In the past, regulation was traditionally linked to factors such as (i) allocation of scarce resources, (ii) protection of the public interest, (iii) universal service, (iv) consumer protection, (v) public order and national security and (vi) the need for specific competitive safeguards on certain market players. In Mr Sandler's view some of these factors would continue to demand intervention (as illustrated by the current high level political awareness of content issues associated with protection of minors), nevertheless the need for intervention might be satisfied by light-handed regulation and the promotion of industry led initiatives. On the other hand he questioned whether scarcity existed in terms of Internet capacity and whether regulatory enforcement would be practical in the context of a "self healing" system, such as the Internet which could easily route round regulatory controls in a particular country.

In his other remarks Mr Sandler highlighted a range of studies and initiatives which would allow the Commission and the European Union as a whole to develop a common approach to the challenges posed by content regulation, intellectual property rights, Internet telephony and pricing strategies. These would include a Communication on the Information Society and the Citizen (Summer 1996) - highlighting the extent to which the IS was touching the everyday lives of Europe's citizens; a Green Paper on new Audiovisual Services (Autumn 1996) - focusing on issues of protection of minors; a Communication on Convergence (end of 1996) - examining the developing environment and its impact on the current regulatory approaches in telecommunications; and finally, a monitoring Report on the scope of Universal Service (end of 1997). These initiatives would be complemented by two major studies in Autumn 1996 and Spring 1997: the former addressing convergence from an audio visual and multimedia perspective and the other examining developments from a telecommunication regulatory perspective.

Sarah Harrison, Director of the Independent Committee for the Supervision of Standards of Telephone Information Services) explained ICSTIS supervises the content and promotion of premium rate telephone services. It is a non-profit making regulatory body, funded by the industry. Ms Harrison said that many of the issues now arising in respect to the Internet were very similar in nature to those ICSTIS had dealt with in the supervision of premium rate telephone services. One way these issues had been dealt with in the UK was by ICTIS producing a code of practice for the premium telephone industry. This experience had allowed ICTIS to assist the UK Internet Services Providers Association (ISPA) produce a code of practice.

Fod Barnes, Policy Advisor, Oftel opened his presentation by echoing Peter Sandler's comment that many aspects of the Internet are already regulated. By way of example he noted the provision of leased lines, which provide the building blocks for the Internet, are regulated according to the telecommunication laws of each country. Mr Barnes' talk addressed what impact existing telecommunication regulation may have on the provision of Internet access by IAPs and PTOs. Noting that the regulatory distinction between voice and data services was increasingly less meaningful, as Internet applications developed, Mr Barnes said that a failure to adapt existing regulation to the Internet could stifle development.

Session 6: Internet Telephony, Pricing and Regulation

Chair: Dimitri Ypsilanti, OECD
Charles Helein, Legal Counsel, America's Carriers Telecommunications Association explained that ACTA was a trade association of interexchange US telecommunication companies. ACTA describes its members as 'non dominant' entities in the US inter-exchange market that provide services over network facilities that they own and those of the major carriers (AT&T, MCI, Sprint) which they resell. ACTA members providing long distance services are regulated by the Federal Communications Commission.

Mr Helein outlined the reasons why ACTA had submitted a petition to the FCC. According to Mr Helein the distinction between basic and enhanced services was no longer workable as a regulatory concept. As such Mr Helein said ACTA proposed that the providers of Internet telephony software were in effect acting as telecommunication carriers. The corollary being that companies providing Internet telephony software should be subject to the same FCC regulation as existing telecommunication carriers. If this did not occur Mr Helein said unfair competition would develop between Internet service providers and companies using traditional means to sell long distance services. In the view of ACTA this could eventually create serious economic hardship on all existing participants in the long distance marketplace and the public which is served by those participants. Mr Helein stressed that ACTA was not opposed to voice over the Internet but rather that such services should be regulated on the same basis as traditional telecommunication services.

Ohad Finkelstein, International Vice President, Vocaltec introduced his company and the evolution of their product range. Mr Finkelstein said that Vocaltec vigorously opposed the ACTA petition because as a software company they should not be subject to the same regulation as a traditional telecommunication carrier. Mr Finkelstein added that government regulation of an emerging technology would stifle innovation and lessen the expected benefits. Jeff Pulver, Chairman of Voice on the Net Coalition said his organisation had been formed to oppose the ACTA petition and had a longer term goal to educate consumers and the media by monitoring and supporting present and newly developed telephony, video, and audio technologies that are specifically designed and manufactured for the Internet community. VON Coalition membership includes 85 Internet telecommunications related companies plus more than 450 individuals in over 25 countries worldwide. Mr Pulver reported that Sprint was the latest addition to VON membership. The final speaker in this session Professor Masatsugu Tsuji, Osaka University reviewed developments in Japan and focused on the dominant position NTT derived from ownership and management of local access networks. Professor Tsuji also introduced some research he had been undertaking on communication pricing.

In the discussion questions and comments focused on whether Internet telephony was a complementary technology or a direct substitute for existing services. One participant stated that in his view Internet telephony would not develop as a widespread substitute for traditional telephony services because of the inability of the Internet to support large volumes of traffic. A number of participants and speakers commented on the various positions and eventual strategies of existing telecommunication carriers in the US in relation to the ACTA petition.

Session 7: International Traffic Exchange

Chair: Simon Forge, Director, Cambridge Strategic Management Group
Barbara Dooley, Commercial Internet Exchange outlined the evolution of existing arrangements for the exchange of data between Internet access providers. These included bilateral (the most common exchange), multilateral (CIX, IIX, HKIX and regional exchanges) and hybrid (e.g. Ebone) peering arrangements. Ms Dooley outlined the main trends and issues in each of these categories such as which peering arrangements may have problems with scaling. Ms Dooley said CIX is a world-wide trade association of Public Data Internetwork Service Providers and industry stakeholders working to promote industry development; facilitate global connectivity through a multilateral peering agreement at a public exchange point for its members; the evolution of scaling of the Internet; and a level playing field. Ms Dooley said that in respect to financial settlements the industry itself was divided and no consensus had yet been reached. Moreover she noted that neither the administrative infrastructure nor the metrics needed to operate a settlements system existed. Nevertheless she felt the industry was moving away from the traditional telecommunication models. More generally CIX felt the exponential growth of the Internet and the process of convergence in service provision demand administrative infrastructure; regionalisation of traffic and content, measurement tools and increased quality of service.

Barry Raveendran Greene, Deputy Director, Singnet made a presentation the current state of international traffic exchange from the perspective of an IAP based in the Asia Pacific region. Singnet is the IAP service of Singapore Telecom. Mr Raveendran Greene said it was in the interest of IAPs not based in the US for the Internet to become less 'US centric'. He explained that because the bulk of Singnet's traffic was exchanged in the US, international transmission capacity represented a major and growing cost to Singnet. Mr Raveendran Greene echoed early comments in respect to current arrangements by noting that under existing arrangements US IAPs enjoyed much lower costs in terms of the amount of international capacity needed. This was because cost of the infrastructure employed was paid by IAPs outside the US wanting to link to US exchange points. Mr Raveendran Greene outlined a number of measures Singnet was introducing to address this situation including bilateral peering arrangements in the region and local caching of data. Mr Raveendran Greene said to his knowledge the majority of data (as high as 70 per cent) being transported by Internet backbone networks was highly duplicative. If this data could be efficiently stored at local sites Singnet believed they could reduce their growing need for international capacity. Mr Raveendran Greene also stated that Singnet, along with several other PTOs in the region, favoured the introduction of a financial settlements system. To this end they were encouraging discussion and development of the metrics need to support any settlements system that might be introduced. In anticipation of a settlements system being introduced Singnet was working to promote the development of content as a means to balance the flow of incoming traffic. Mr Raveendran Greene noted that Telstra's pricing of Internet services in Australia -- charging for data received and not charging for data sent -- was another means by which IAPs could attempt to influence traffic flows.

Session 8: Internet Addresses and the Domain Name System

Chair: Albert Tramposch, Senior Legal Counsel, World Intellectual Property Organisation
To commence Session 8 the Chair briefly introduced the status of trade marks for the workshop. He noted that the same trade mark can be used for different products (e.g. ice-cream and soap) and that trade marks need to be registered at a national level. In contrast he noted only one unique domain name address is possible and that the Internet is inherently an international medium. The first speaker in this session was Donald Heath, President and CEO of the Internet Society. Mr Heath sketched the evolution of the Internet address system noting it had been created to name computers rather than identify products or be used by search engines to locate sites. Although addressing the trade mark issue Mr Heath focused on the administration of the domain name system. After briefly outlining the current arrangements Mr Heath raised a number of issues including how, and by who, the system should be administered in the future; whether new registers should be created to promote competition in the assignment of domain names; if so how many should be created; what would happen in the event that a registry went out of business; whether domain names could be shared across different registries; and the extent to which new top level domain names should be created. Mr Heath mention a discussion of the these issues could be found in an Internet draft paper by Jon Postel "New Registries and the Delegation of International Top Level Domains".

David Maher, Co-chair, International Trade Mark Association Sub-committee on Internet Trade Mark Issues introduced his remarks by setting forth the objectives of the Association: "...to protect the interests of the public in the use of trademarks and trade names and to promote the interests of the members of the Association and of trademark owners generally in the use of their trademarks and trade names..." Mr. Maher also quoted the resolutions adopted by the Association on the subject of domain names. These were (1) endorsement of the principle that domain names as addresses on the Internet, are capable of functioning as trademarks; (2) that the assignment of domain names and use of domain names without sufficient regard to the rights of trademark owners can result in the infringement of trademark and trade name rights; and (3) that the Internet Society, its affiliated organisations and the parties operating under contract with them should make available to the public complete lists of the domain names in a database format that is accessible through existing commercial or private computer search techniques.

Mr. Maher said that, from the perspective of trademark law, there are two separate issues that have arisen under the existing procedures for the assignment of domain names. One is the problem that may be referred to as the "access" problem - the ".com" domain can only allow one user to register any given name. This leads to the problem of unauthorised users registering a name which is a trademark, in the hope that the owner of the mark will pay to acquire the domain name registration, as well as the problem that the legitimate owners of trademark rights in a commonly used mark (e.g. "Acme", "Eagle" and "Excel") may be blocked from registering their mark as a domain name if another user has already secured a registration. The second problem is that of traditional trademark infringement - a domain name may be registered and used by someone who is violating the trademark rights of another party.

Mr. Maher commented that the first problem, the "access" problem might be alleviated by the introduction of additional registries that would enable the registration of the same name in different top level domains. e.g. "acme.com" as well as "acme.xyz" or "acme.zyx". There is, however, no consensus that this is the most appropriate solution for the problem. With regard to the second problem - infringement - Mr. Maher commented that existing national law on trademark infringement is now being employed to resolve disputes that have arisen. Mr. Maher summarised a number of legal proceedings that had taken place and are proceeding in the US. He then referred to the need for the creation of directories to make it easier for users of the Internet to find the owners of web sites, assuming that there is no longer a single top level domain such as ".com". For example, using the "acme.xxx" hypothetical, the person searching for the web site of a particular "Acme" business should be able to consult a directory to find the business he or she is trying to reach.

A related problem is that of the data base of domain names which does not exist today but is needed to enable businesses to determine who is using a given mark as a domain name. Finally, Mr. Maher pointed out that, at present, there is no generally accepted international jurisprudence for the adjudication of trademark disputes. There is no "international registry" of marks, and the questions of ownership and infringement are still the subject of national law. Until a treaty based system of international law (or other generally accepted system) is adopted, it will still be necessary to resolve conflicts between trademark users under existing national law, even though such disputes may arise in the global context of the Internet. Mr Maher said that this emphasises the need for the development of international legal and dispute resolution systems on a priority basis.

Robert Shaw, Advisor, Global Information Infrastructure, International Telecommunication Union gave an outline of how the current Internet address system operates and is administered. A full copy of Mr Shaw's paper is available on the Internet. Mr Shaw said the it was laborious process to learn how the domain name system was administered and by what authority different organisations undertook their activities. Mr Shaw listed organisations that have a relationship to domain name issues including the Internet Engineering Task Force (IETF), Internet Engineering Steering Group (IESG), Internet Architecture Board (IAB), Internet Society (ISOC), Internet Assigned Numbers Authority (IANA), Federal Network Committee (FNC), and Network Solutions Inc (NSI) with InterNIC.

Mr Shaw noted that since 14 September 1995 fees had been authorised to be charged for the registration of second level domain names in .gov, .edu, .com, and .org to pay for the services provided. The amount authorised to be charged was US$100 for two years for new registrations and US$50 per year for existing registrations. The revenue drawn from this process, which Mr Shaw estimated as considerable in light of the rapid expansion of the .com domain, is divided between NSI (70 per cent) and an interest bearing account (30 per cent) to be used for the preservation and enhancement of the "Intellectual Infrastructure" of the Internet. An explanation of InterNIC registration procedures in relation to fees is available on the Internet. It was noted that a growing number of registers perform registration procedures in countries other than the US (information is available for Europe and the Asia Pacific at RIPE, and APNIC.

Closing Remarks

In closing the workshop Mr Dryden thanked the European Commission and Telecom Eireann for their financial support and Dr Paschal Preston, and his Comtec team, for their excellent local organisation. Mr Dryden said a meeting report would be placed on the Internet and the agenda of the next meeting of the ICCP. Thought would also be given to further output from the workshop.

Access and Pricing for Information Infrastructure Services:
Communication Tariffication, Regulation and the Internet:

Dublin 20 - 21 June 1996

Registered Participants

NAME ORGANISATION
Mr Fod BARNES Policy Adviser, OFTEL, London
Mr Karsten BLUE President, Internet Solutions for Business
Mr Patrick BONER Manager, Telephony Pricing Packages, BT, London
Mr Pierre Ignace BERNARD Consultant, McKinsey, Paris
Mr Maurizio BONANNI Ministero PT Italia, Rome
Dr Dimitri BOTVICH TELTEC, Dublin City University
Mr Jarlath BURKE E-Sat Telecoms, Dublin
Ms Frances CAIRNCROSS Media Editor, The Economist, London
Ms Ayfer CANBAZOGLU Chief Engineer, Turk Telek. Company
Mr John CLANCY IT Director, Indigo, Dublin
Mr Matthew COPELAND Telewest UK
Ms Ermina CORSI Marketing Manager IUnet (Olivetti Tele)
Mr Dai DAVIES Gen.Manager, Dante, Cambridge
Mr Peter DAWE Consultant; founder of Unipalm PIPEX
Mr John de RIDDER Manager, Pricing Strategy, Telstra, Australia
Ms Barbara A DOOLEY Commercial Internet Exchange
Mr John DRYDEN Head of ICCP, OECD, Paris
Mr Håkan ENGSTRÖM Head of Pricing, Telia TeleCom AB, Sweden
Mr Ohad FINKELSTEIN International VP, Vocaltec
Ms Isabelle FLEUROT France Télécom, Paris
Mr Roderick FLYNN COMTEC, Dublin City University
Mr Simon FORGE Consultant, Paris
Mme Nathalie GAUTRAUD French Ministry of Posts & Telecommunications, Paris
Mr Tsagaratos GERASIMOS Tariff Manager,Hellenic Telecom Organisation, Athens
Ms Louisa GOSLING EU, Brussels
Mr Colm GREALEY (alt. Daragh Mulvey/Donal Harrington) Ireland-on-Line, Dublin
Mr Barry GREENE Deputy Manager, Singnet
Ms Sarah HARRISON Director, ICSTIS, London
Mr Peter HARTER Netscape
Mr Donald HEATH President/CEO, Internet Society, Reston, VA,USA
Mr Charles HELEIN Legal Counsel, ACTA
Mr Declan HUGHES Forfás, Dublin
Mr Willem HULSINK Research Fellow, Univsity of Sussex
Ms Pauline JONES COMTEC, Dublin City University
Ms Aphra KERR COMTEC, Dublin City University
Mr Derek KING (alt John Lyons) Pricing, Telecom Eireann
Mr Svend KRAEMER EU, Brussels
Mr Per KRISTENSEN Carta Corporate Advisors, Sweden
Mr Angelo La FARINA Ministero PT Italia, Rome
Ms Margo LANGFORD iStar Internet Inc, Canada
Ms Blanche LAUZERAL Chargé de Mission, France Câbles, Paris
Mr David MAHER Co-Chair, INTA Subcomm. on Internet Trademark Issues, Chicago
Ms Claire MASON Technical Research Manager, BT, London
Mr Tommy McCABE Irish Business & Employers Confederation, Dublin
Dr Lee McKNIGHT Lecturer, Massachussetts Institute of Technology, USA
Mr Sean McMAHON Department of Communications
Ms Camille MENDLER Senior Editor, Communications Week International, London
Mr Hidetoshi OWADA Corporate Planning Manager, NTT Europe Ltd, London
Dr Sam PALTRIDGE OECD, Paris
Dr Paschal PRESTON COMTEC, Dublin City University
Mr Jeff PULVER Chairman of VON Coalition
Ms Nora REDMOND Systems Administrator, Montell , Australia
Mr Gerry RICE Cable & Wireless
Mr Peter SANDLER EC Legal Administrator, EU, Brussels
Mr Seo SEUNGWOO Head of Economic & Systems Analysis Section, ETRI, Korea
Mr Robert SHAW Intl. Telecoms. Union, Geneva
Mr Michael SHERIDAN Commercial Director, Telecom
Dr Christian SINGER Ministry for Science, Transport & the Arts, Vienna
Mr Jurgen SPAANDERMAN OECD, Paris
Mr Helge STENTUN Product Manager, International Data Sevices,Telenor Carrier Services AS, Norway
Mr Nicholaos STAVRAKAKIS Internet Product Manager, Hellenic Telecom Organisation, Athens
Mr Ewan SUTHERLAND Lecturer, University of Wales
Ms Tiziana TALEVI Telecom Italia, Venice
Mr Graham THOMAS Senior Lecturer, University of East London
Mr Albert TRAMPOSCH Senior Legal Counsellor, WIPO, Geneva
Dr Masatsugu TSUJI Prof. of Economics, Osaka University, Japan
Mr Soichi TSUKUI Senior Assistant Manager, International Affairs, KDD, Tokyo
Mr Katsuhiko TSUYAMA Deputy Director of Tariff Division, Ministry of Posts and Telecommunications, Tokyo
Mr Tomaso VALLETTI Asst. Prof. Politecnico di Torino, Turin
Mr Guy VIDRA Vocaltec
Mr Paulo WANG REU JUEY Deputy Director, SingNet Sales, Sing Tel
Mr Derek WILLIAMSON Manager, UK Calls - Access Pricing, BT, London
Mr Takashi YAMAKAWA General Manager, Nifty Corporation, Tokyo
Mr Dimitri YPSILANTI Head Telecommunication Section, OECD, Paris

 

 

 

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