IIC Annual Conference

Citation

De Prato, G. (2013), "IIC Annual Conference", info, Vol. 15 No. 3. https://doi.org/10.1108/info.2013.27215caa.003

IIC Annual Conference

Article Type: Conference report From: info, Volume 15, Issue 3

Trends in Global Communications: Devising Digital Policies for Tomorrow’s Needs and Aspirations; Singapore, October 8-9, 2012

Giuditta De Prato and Jean Paul Simon

In his introduction Y. Ibrahim, Minister for Information, Communication and The Arts of Singapore highlighted the position of Singapore as “one of the world’s most connected nations” (since 2006, 7,500 public Wi-Fi hotspots have been used by 2.1 million subscribers, household broadband penetration reached 85 per cent last year with each household owning at least one computer and mobile penetration stands at 152 per cent).

Moving to the interconnected age

In his presentation of the “Challenges for communications policy in a digital age”, E. Richards, the CEO of OFCOM, delineated four “ages”: analogue, digital, on-demand and interconnected, all characterised by specific products and networks across four different segments – broadcast, internet, mobile and storage.

Richards listed a number of emerging challenges:

• •

  Network investments: will mostly come from the private sector but government must find ways to encourage such investments.

• •

  Spectrum: as there is a tension to meet the exploding demand.

• •

  Content funding: will national and local content be supported? EU fragmentation is an issue as well as illegal access.

• •

  Consumer empowerment: are consumers able to switch to services as we are moving from the physical ownership of content, to renting (with 45 percent of UK consumers now taking bundles)?

• •

  Protection of viewers: licensed TV was easy to regulate but this is not the case in a connected environment. Even if regulators do not know the answer, families will assert their rights and demand solutions. Consumers are concerned about the availability of services and the reality of speed as the latter can be very opaque.

• •

  Competition issues with new bottlenecks emerging that are both difficult to define and to regulate.

Consumer demand for data and speed is growing along staggering curves. According to B. Pepper (VP, Global Technology, Cisco1) we are moving toward a “zetabytes”2 world with mobile data traffic expected to have a CAGR of 78 per cent in the period 2011-2016 with the Asia-Pacific region growing faster. At the same time new business models are changing the value chain, with new functions and players appearing: platforms providers, data hosting and supply.

E.Gabla (French commissioner for audiovisual, CSA) explained as well the global trend for consumer electronic devices: connectivity. All TV manufacturers offer connectable devices and that means a probable extension to all TV product lines without any extra costs for consumers rather than specific connectable TV product lines. He claimed that a connected experience was bringing a profound revolution over television. In 2011, 20 per cent of the TV sold were connected TVs, in 2012 it will go up to 40 per cent, to reach 80 per cent by 2013.

In this environment, barriers of geography are breaking down, but at the same time there are some attempts to create new ones for instance when imposing payment at borders for internet traffic. Therefore, R. Milch, EVP and general counsel, Verizon, advocated keeping the internet as open as possible especially during the forthcoming review of the ITU.

Enabling policies

There was an agreement among speakers about policies being crucial for the new markets to blossom […] but not agreement on solutions. Some players stressed that a different environment request a different regulatory framework (AT&T) as one should be “mindful of rapid changes” (Verizon) with no “one size fits all” approach. For instance, speakers disagree about the role of service v. infrastructure competition to enable the deployment of broadband. Some participants quoted an “Asian” model that differs from the EU model, with Australia, Taiwan and Singapore enforcing structural separation between networks and services, others held it did not work and deemed that, for instance, the Australian plan was likely not to be sustainable.

The “pillars” of the policy can vary from one country to another, Freddy Tulung, DG Information and Public Communications, Ministry of Communications and Information Technology from Indonesia, reminded the audience of some of the Indonesian pillars: faith in God (“the most moderate Moslem Country in the world”), unity with 500 ethnic groups spread over in 17,500 islands, democracy (third largest and peaceful democratisation process). He told the audience that the Jakarta Newly elected Government won through ICT. The question he pushed forward was: how can ICT help gain social benefits while maintaining a sustainable opportunity for equitable growth of all? He noted that “ICT- Broadband brings us closer” but that “a wealth of information creates a poverty of attention”.

He gave an overview of the Indonesian case. He highlighted that the highest proportion of users of Twitter in the world was to be found in Indonesia (over 20 per cent) and that the country was ranked fourth (after the US, Brazil and India) for Facebook users (17 per cent penetration for social networks). Internet penetration reached 17 per cent (population of over 270 million but 98 per cent of ICT access in over 40 million households as 57 per cent of the population is rural), an 89 per cent mobile penetration (i.e. 200 million cellular and smart phone users). 13 per cent of the national GDP is generated by ICT contribution.

During the session devoted to attracting investments, G. De Prato set the scene by explaining the role of clusters, reminding the audience of the conceptual background of policies focusing on clusters3 and its role within the EU framework. She took the examples of London (an increasing of the share of London’s tech employment by a third since 1997) and Berlin (between 2000 and 2006, the software, games and telecoms sector saw a 113 per cent rise in companies, to 2900 firms).4 J. Patrick (SVP, Canadian Wireless Telecommunications Associations) was optimistic about the access to finance for carriers even in countries like Australia or Canada where 70 per cent of the territory is still unserved. The Canadian industry has spent 30 billion US $ over the last decade.

J. Sullivan (Head of Asia Telecom Research, JP Morgan) was a bit less optimistic as he considered that owning a network was “a very troublesome proposition” as the sector went through a dramatic deceleration of returns, offset to a certain degree by the growth of the wireless space but the latter started to stabilize. Over the last 15 years the “magic was simple” with pure players but it gave birth to a misunderstanding about the scalability of the wireless voice infrastructure. However, in a voice-centric environment there is no such relation to the infrastructure, in a data-centric environment it does matter. The changes collide with the way business models were designed for a voice-centric world. Carriers must either become no-dumb pipes providing a lot of service (like HD) or the most effective dumb pipe, like in Hong Kong for instance. However too many companies remain in-between.

Spectrum

G. Mundy, chief research and strategy officer, Microsoft, stressed it was time for a change of our spectrum model, as the legacy ones were designed a century ago, much in the wake of the sinking of the Titanic. Mundy was highly critical of past policies that delayed such changes and kept what he called “beachfront spectrum” within the hands of “poor users”. The “poor users” he was aiming at were broadcasters leaving much of their allocated spectrum unused, while at the same time there is a growing need for more spectrum for telecom applications. The data explosion is bringing a spectrum crisis. He forecasts that mobile communications will grow by a factor of 1,000.

From a technical viewpoint, spectrum will have to be more and more shared (away from legacy vertical silo allocation) and smaller cells should be used to deal with a congestion era. He stressed the unlicensed explosion with WIFI as a model5 to be further used with access to the TV white spaces (unused part of the spectrum allocated to TV), now possible with radio software technology.

Offloading through Wi-Fi was used when AT&T introduced the i-phone to deal with the issue of the lack of spectrum reminded B. Pepper. He predicts a growing role of fixed wireless (Wi-Fi) in 2016 with 10 per cent of the data traffic on mobile networks, 39 per cent on fixed and wireless but 51 per cent on fixed wireless (Wi-Fi). He claimed that with Wi-Fi we were going though a fixed/wireless convergence and not a fixed/mobile convergence.

According to Pepper this explosion of mobile data, due to the growth of people connected, number of devices (19 billion devices, 8.7 billion in the Asia-Pacific region, 3 billion for North America and the EU), faster software and richer media content is highly disruptive. By 2016, smartphones would be replacing laptops for access to the internet, tablets are even growing faster, and the machine-to-machine market (narrowband data) will grow by 20 times between 2011 and 2016. As a consequence carriers are looking for business models to support this change in incremental revenues. In the US, carriers changed their business models and now “voice is free” as they consider themselves as “data company” which does not seem to be the case in the EU. Obviously there is a need fore more spectrum for broadband mobile. White spaces will be useful but not likely to be sufficient.

Taking the viewpoint of the internet of things (IoT), W. Webb (Neul, former Ofcom’s head of R&D) argued that this low cost narrowband was lost in a broadband world not designed to that end. According to the CTO of Neul, IoT turns out to me a massive global market for machine communication: with 50 billion devices it is becoming a self-fulfilling prophecy, with ten devices per person each at ∼5-10 per cent of cellular Average Revenue per Unit or per user (ARPU); it means an industry of the same magnitude as the cellular industry. However, this is not achieved to date because of a lack of suitable spectrum, and cellular cannot serve this market. According to Webb, white space again provides a near-perfect solution to the spectrum problem, but it requires a new standard to work efficiently – as does IoT.6

C. Perera, Senior Director GSMA, Asia-Pacific, stressed the amazing number of active mobile connections worldwide: 6 billion out of which 3 were already in the Asia Pacific region. He argued for the allocation of the so-called digital dividend7 to telecom services rather than broadcasting services as the economic impact of such an allocation to telecom would be much greater: a GDP increase, for the period 2014-2020, of US $1,070 billion compared to only 111 for broadcasting services (Boston Consulting Group, 2012).

Media and content in a connected world

L. Boswell (General Manager, AETN All Asia Networks, Singapore) stressed that most of the TV viewership remains with linear channels. Besides, the Asia region was characterised by a low level of pay TV penetration: 8 per cent in India, 18 per cent in Thailand. They were signs of changes but they did not translate yet into an industry shift.

T. Spiller (VP Disney, EMEA) explained that the entertainment company was at the forefront of innovation, being present on around 15 platforms as “media becomes personal”. It was the way to go to able consumer to access: “embracing is the way”. Still on the positive side, he explained that iPhone users consume 40 per cent more contents and iPad users 60 per cent more. A recent OECD report (with Unesco and ISOC) shows a positive relationship between broadband deployments and local contents. He concluded that, “for Disney everything begins with a mouse”.

Table I The Indian scenario, growth of media

In contrast with Boswell, D. Jacob (President and General Counsel, Legal and Regulatory Affairs, STAR, India) described the growth of media markets in India (see Table I) 8. The growth was the output of a complex policy and regulatory system he described with numerous government agencies and body of legislation, but also with the right blend of self-regulation and independent regulation.

Copyright issues

R. Hooper (former deputy director Ofcom, now in charge of the digital copyright feasibility study)9 described copyright issues as a “battlefield” with on one side “the internet should be free” players, on the other “you have to monetize” players. Tech companies and consumers are usually arguing against copyright, content and media companies, for. His work is to try to improve the licensing process as very often the data to identify the “author” are missing or difficult to find, to allow to better find out whom owns the right to what. A second issue in a digital world it that there is a high volume of low monetary transactions, in the physical world a small number of works created big data (e.g. J.K.Rowling).

He disagreed with the music industry pushing forward a “complexity” argument to clear away attempts to change. For him, it was possible to simplify and complexity could not be accepted as an argument to do nothing. The question is: “how to streamline copyright to offer a better service”. He reminded that “illegal services are easier to access than legal services” which he described as “completely crazy” for creative industries: “make it easy” was his advice. The music industry made a strategic mistake in the US while trying to force down Washington to legislate, it should have instead developed a proper service.

He made three recommendations to the UK government: first copyright education, second a way to find who own the rights with the creation of “rights register” a controversial proposal as, as opposed to patents or trade marks, under the Berne convention this is not mandatory, and third the creation of a “digital copyright exchange” with automated platforms for the film, music and still image industries.

S. Monteiro (president of Universal Music Group, South East Asia) agreed it has been a “battlefield” but argued it was changing. Universal Asia went through its most profitable years in 2009, 2010 and 2011. In Malaysia, a MOU was signed between music publishers and IT industry. Moreover, he summed up the options to deal with piracy: “sue them” or “license them”. They took the latter approach in South Korea where the major pure player was operating illegally. They arranged meetings and found an agreement in 2006 for legal services. However in the region, the largest search engine was in China operating illegally, they took the same approach: “why an illegal service”. 2011 is a turning point with China falling into a legal landscape. Finding ways to license is key, with simplification and some kind of regulation.

R. Summer (director, government and industry relations, Ericsson) backed this approach of making illegal, legal. He took the example of Norway which used to be plagued by piracy (with a decline of 50 per cent of the sales) but saw a dramatic decrease of piracy since Spotify started operating. It was time to make copyright “technology neutral”. He reminded the audience that South Korea has already a copyright music exchange in place.

Is piracy the issue?

For Boswell, looking at the TV landscape in Asia, one of the reasons of the delayed changes was the role of piracy absorbing pent-up demand in the absence of a legitimate service; this was an unexpected consequence of the deployment of broadband in a country like Singapore. The TV industry must react with quality and convenience of services. The issue of piracy can be dealt with in two ways, on the industry side by building a legitimate offer to make pay offer a better option, on the policy side with “a little help from the regulators”. The onus is on the industry to invest but without a strong protection it will fail.

He claimed that OTT players were not regulated at all and were acting as “the elephant in the room”. The internet is regulated but could be better regulated even if it will trigger hot debates about liberty and freedom of speech as illustrated by the derailing of the US attempts with SIPA/POPA10. He deemed, on the opposite, that the French attempt with the Hadopi laws has been successful which was challenged by part of the audience (Ericsson, consumer associations …) but backed by the French regulator, E. Gabla (CSA).

The latter also deemed that the principles adopted by the CSA for linear services should be valid for non-linear services. Linear services are regulated but the AVMS directive imposed minimal/complementary obligations on non-linear ones. However, the frontier between linear and non-linear services is becoming less and less clear given current and future technology developments: connected TV potentially will amplify this phenomenon and raise new regulatory issues, second screens are also at stake.

He therefore argued that the fundamental principles should apply to non-linear services and that it was the approach adopted by France, for instance for the protection of sensitive audiences but also for the funding of creation (an obligation to invest 3 per cent of the turnover). On funding, the principle was: “each company making money from the use of work should contribute to the funding of the creation”. This principle sounds nice and (almost) fair but it is unclear how it would work in practice.11 For “derivative rights” Hooper adopted a similar view, arguing that if companies like YouTube (Google) were making money through advertising out of music, then the music companies should get some share.

Gabla also told the audience of two (very French) initiatives from the government: two missions on related issues, one on the fight against online piracy (to assess Hadopi) and the other about setting up a tax system for digital sector. The French government is also considering merging the telecom (Arcep) and audiovisual (CSA) regulators to better deal with convergence. Later during another session, B. Lanvin (Executive Director, Insead e-lab) speaking about the right governance approaches pleaded for a balanced view and jokingly summed up the French approach: “it works in practice, but does it work in theory?”

Despite being accused of not being regulated, or not intervening, K. Yu-Chuang (Regional director Public Policy, Yahoo) explained how Yahoo tried to bring some guidelines and to educate their consumers in 27 countries in Asia for codes of conducts. It started with the “project civility” in Singapore and will be extended. The project is part of a global project initiated with Google and Microsoft.12 Yahoo is also working with regulators to find solutions. He also added later during the Q&A session that the idea of having one solution for all platforms was “pure wishful thinking”.

A quick summary

F. Colasanti, president of the IIC, summed up the conference:13 “The Conference addressed many subjects that telecom and audiovisual communities across the world have been discussing for years: how to encourage the deployment of more powerful communications infrastructures and how to increase interesting content”. “This led to a discussion on the appropriateness of the regulatory solutions deployed to re-create competition where it does not exist, national plans to develop high speed networks, and the availability of spectrum sufficient to cope with the expected and substantial increase in data traffic. As for content, the conference re-examined the perennial question of appropriate interventions to protect copyright - outright repression, increased ability to buy content legally and other, still elusive, solutions.”

In his concluding remarks he noted that the discussions on spectrum were much constrained two years ago on the broadcasters’ side but that progress was made on these discussions. However for copyright/ piracy this is still not the case, it does not go beyond animosity.

Notes

1. 1.

   See Cisco Global Data Traffic Forecast 2011-2016.

2. 2.

   A zettabyte is a unit of information or computer storage equal to one sextillion (one long scale trilliard) bytes.

3. 3.

   IPTS study for DGConnect: http://is.jrc.ec.europa.eu/pages/ISG/EIPE.html

4. 4.

   Demos, 2012.

5. 5.

   In November 2012, the UK telecoms regulator Ofcom published details of a framework to allow the first consumer “white space” devices to be launched in the UK towards the end of 2013. The FCC opened up the white spaces earlier.

6. 6.

   For the standard see www.weightless.org

7. 7.

   Spectrum that became available after the transition from analogue to digital broadcasting. The digital dividend usually locates at frequency bands from 174 to 230 MHz (VHF) and from 470 to 862 MHz (UHF), 698-906 for the APAC region.

8. 8.

   The forecasts from PWC Global (2012) are similar with, for instance, a 9.6 per cent growth over the same period.

9. 9.

   Available at: www.medialaws.eu/copyright-licensing-is-not-yet-fully-fit-for-purpose-for-the-digital-age-the-uk-could-do-better-still/

10. 10.

    The US Congress considered in 2011 the introduction of specific legislation: “Stop Online Piracy Act” (SOPA) and “Protect IP Act” (Preventing Real Online Threats to Economic Creativity and Theft of Intellectual Property Act, or PIPA). Both generated petitions against the legislation. The two proposals were withdrawn. References: Stop Online Piracy Act: http://judiciary.house.gov/hearings/pdf/112%20HR%203261.pdf Preventing Real Online Threats to Economic Creativity and Theft of Intellectual Property Act of 2011: www.govtrack.us/congress/bills/112/s968

11. 11.

    Spain (Andalusia) where the authors live is a major producer of strawberries that are distributed throughout the EU mostly by truck. Truckers make money charging for the transport and most likely it is a key business for their companies. However it does not follow that truckers should contribute to the production of strawberries. The argument seems an oversimplification of business relations and value chains.

12. 12.

    The Business and Human Rights Program of the Global Network Initiative, www.yhumanrightsblog.com/blog/our-initiatives/the-global-network-initiative/

13. 13.

    Source: www.iicom.org/annual-conference/annual-conference-2012

Acknowledgements

The International Institute of Communications also organized three times per year the IIC Telecommunications and Media Forum and publishes Intermedia. Available at: www.iicom.org/Giuditta De Prato: European Commission, DG Joint Research Centre (JRC), Institute for Prospective Technological Studies (IPTS): Jean Paul Simon: JPS Multimedia (corresponding author). The views expressed are those of the authors and may not in any circumstances be regarded as stating an official position of the European Commission. Neither the European Commission nor any person acting on behalf of the Commission is responsible for the use which might be made of this paper.