ETNO’s Ideas of the Future of Telecoms the Modern Equivalent of “Beggar thy Neighbour” Trade Policies
CCIA was glad to see that the telecommunications regulators of
Europe chose to reject the proposals of the European Telecommunications Network
Operators' Association (ETNO) at their meeting in Istanbul yesterday. It was
the right choice for Europe but it also demonstrates Europe’s commitment to
looking for solutions for today’s issues today, rather than harking back to the
business models of the past.
While
yesterday’s step was important, unfortunately we understand that ETNO’s
proposals do have some interest, especially in the Arab world and amongst some
African countries.
ETNO’s
proposals have been evaluated by technical experts and been found impractical.
Internet freedom experts have demonstrated why they would cause serious harm to
the availability of information. The Center for Democracy and Technology, for
example, released an excellent analysis of ETNO’s proposal in June of this
year. Similarly, many of the various ISOC chapters signed a letter to ETNO,
describing their opposition to the proposals.
The
heart of ETNO’s proposals are to enshrine in international treaty law telecoms
firms’ right to charge to send data from one country to another, just like we
used to pay to make long distance calls.
If
you apply this concept to the bricks-and-mortar world, it would be as if each
country were to create a tariff on the export of goods. This is a
discredited concept that is widely known to be harmful as it reduces your
export competitiveness. It is only used now as a temporary, extreme measure
when, for example, there’s a shortage of food for domestic consumption and the
price of that commodity is high on export markets, so a government puts an
export tariff on the commodity to make export unprofitable - keeping food at
home to prevent scarcity for citizens.#
In
the Great Depression, countries tried to create tariff walls to protect
domestic production and encourage domestic consumption of domestic products.
Economists famously called this a “beggar thy neighbour”# policy, arguing it
would not work and would hurt everyone. They were right - and the result was
the concerted effort over the last several decades to reduce tariffs and make
trade fairer.
Even
advocates of protectionism today would never in a million years advocate that
countries should create export tariffs - making all the goods produced
by their countries more expensive for export. Yet this is exactly what ETNO is
proposing with regards to all data.
ETNO’s
proposals are the modern equivalent of “beggar thy neighbour” policies for the
Internet, on steroids. We learnt from the Great Depression, though, that if you
beggar your neighbour, you beggar yourself.
1) 1) An example of this is a Chinese temporary export tariff on grains
in 2008 - see http://www.chinadaily.com.cn/china/2008-01/02/content_6365352.htm
2) 2) Wikipedia has a good explanation: http://en.wikipedia.org/wiki/Beggar_thy_neighbour
