Response to TD 372 (PLEN/3)

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Q9/3-C3 (170223)

Discussion: As the United States explained at the previous ITU-T Study Group 3 meeting, the draft Recommendation in TD 372 is unnecessary. Over the Top (OTT) offerings provide consumers additional choices for how they can communicate, and frequently at a significantly reduced - or no - cost as compared to traditional international voice telecommunications.

Importantly, OTT offerings stimulate demand for broadband services, thereby increasing revenues for traditional telecommunications operators – both wired and wireless - for these services. As markets transition to these new offerings, telecommunications operators are able to revise their business models to maintain revenues (broadband replaces traditional voice); and innovation and investment are encouraged, which result in increased revenues for governments in the form of fees and taxes. These benefits to consumers, operators, and governments demonstrate why no new OTT Recommendation is needed.

The Rapporteur Group has not completed any necessary studies to justify this potential Recommendation. The draft report commissioned by the ITU-T from Scott Marcus demonstrates that OTTs are beneficial and can thrive in an encouraging environment, and does not indicate the necessity for a Recommendation. In addition, the draft report was sent to the Rapporteur Group for review and revision and that group has not discussed the draft nor has Study Group 3.

Moreover, as required by the terms of reference of the Rapporteur Group, there has been no coordination with the BDT to understand what work has already been completed and what additional work might be appropriate, if needed at all. This draft Recommendation cannot be considered stable until this and other necessary coordination have been completed. Further, as shown in the attached edits, the draft in TD 372 addresses national policy matters and not the economic impact of relevant OTTs on international telecommunication services, which is the limit of the mandate of Study Group 3 as reflected in Question 9/3. Likewise, the proposed draft addresses matters that are outside the mandate of the ITU, as well as Study Group 3, specifically privacy.

Finally, the draft in TD 372 addresses high-level policy considerations and does not address “technical, operating and tariff questions and adopting Recommendations on them with a view to standardizing telecommunications on a worldwide basis” as required by Article 17 of the Constitution.

Proposal: For all of these reasons, the draft Recommendation in TD 372 should receive no further consideration. The Rapporteur Group should instead focus on the study for which it was created – the economic impact (including positive impacts) of voice and messaging OTT offerings on international telecommunication services. If the Rapporteur Group nonetheless continues to review this document, attached are suggested edits (in Annex 1 to this Contribution).

The United States also requests that this contribution be made available publicly without restriction.

Annex 1: Draft ITU-T D.xxxRecommendation

DRAFT RECOMMENDATION on OTT

1Introduction

With the increase of global mobile broadband penetration, as well as the rapid adoption of connected devices, consumers have been provided with an access to a wide variety of OTT servicesofferings, some of which go beyond themay replace or supplement traditional international voice and messaging services provided by telecom operators,.and some of which may facilitate calls and messages that would not otherwise be made or sent. The changes underway in the industry are supplementing existing services and are a natural evolution of existing technologies.

These OTT voice and messaging offerings services are reshapinghave the potential to benefit the entire international telecommunication services ecosystem, and have been of great social and economic benefit to consumers worldwide, to the global economy and ubiquitous connectivity. At the same time, the potential economic impact on the traditional model of the international telecommunications industry and on telecom operators is being increasingly recognized and considered. Such consideration of that potential economic impact should include an understanding of fundamental differences between traditional telecommunications services and relevant OTTs, including ease of market entry, the competitive environment, and interconnection to public switched telephone networks.

2Scope

This Recommendation seeks to provide guidance [If the goal is to provide guidance, how does this draft relate to the work of the BDT? The ToRs for this Rapporteur Group require that its work will be coordinated with BDT. Until that and other relevant coordination are completed, this document cannot be considered stable. If this provides guidance, a supplement should be considered.] to Member States in relation to the global growth of relevant OTTs in view of ensuringand their ability to promote fair competition, consumer choice and protection, dynamic innovation, sustainable investment and infrastructure development, and accessibility and affordability of international services to the largest part of their populations. It also recognizes the need to consider fundamental technical differences between OTTs and international telecommunications services

3Definitions

[ For purposes of this Recommendation, we adopt the following working definition of Over-The-Top (OTT): OTT refers to applications and servicesofferings delivered over the Internet using international telecommunications networks through the Internet and directly to end-users by entities that are not necessarily operators of those networks.These services and applications potentially compete with or substitute for traditional telecommunications and broadcasting services such as voice telephony, SMS, and video calling and video/audio content streaming/downloading. Online Internet services that do not compete with or substitute for traditional telecommunications and broadcasting services are outside the scope of this recommendation. [An agreed upon definition should be the starting point of any further work in this area.] ]

4Abbreviations and Acronyms

OTTOver the Top (voice and messaging services)

VoIPVoice over IP

IPInternet Protocol

SMSShort message service

5The level playing fieldEncouraging Competition, Innovation, and Investment

5.1In view of the rapid growth of OTT communication services that may compete and substitute with traditional services provided by authorized telecom operators, Member States are encouraged, in coordination with all relevant stakeholders, including service providers, to develop consider measures to strike an effective balance between these two types of players on the market, with a view topromote competition and encourage innovation and investment in the international telecommunications ecosystem. while ensuring a level playing field.

5.2In order tTo establish a level playing fieldpromote competition, innovation, and investment in a highly dynamic and fast-moving industry, Member States may consider the regulatory impact and consumer benefits of OTTsservicesdescribed herein, and the potential to reduce regulatory burdens on traditional telecommunications providers in a number of areas as a result of increasingly competitive markets and new players in these markets. The role and impact of all of these players should be considered in a variety of areas, including but not limited to: [This list includes a number of areas that are solely matters of national sovereignty and are outside the scope of the ITU]

Licensing framework

• International Ppricing and charging
• Universal service, access to emergency services
• Quality of service
• Security and data protection
• Interconnection and interoperability

Legal interception

Taxation Ease of market entry and levels of competition

• Enabling environment to promote competition, innovation and Iinvestment incentives

Innovation incentives

Consumer protection

5.3 Member States are encouraged to develop consider an enabling policy policies and/or regulatory frameworsk to foster fair competition between and among international network operators and providers of relevant OTTs services, including deregulation of traditional telecommunication networks and services, where appropriate.

5.4 An important element of competition policy is the identification and definition of relevant markets, and in this context, Member States should consider the fundamental differences between traditional telecommunications services and relevant OTTs, including technological differences and differences among discreet geographic markets, the cross-border and global nature of relevant OTTs, as well as low barriers to enter the OTT market, amongst other factors.

6Relationship between providers of relevant OTTsservices and network operators

6.1Given that network operators and OTT service providers of relevant OTTs are may be part of the same ecosystem, Members States should be encouraged to consider the important inter-dependencies between them, including how consumer demand for OTTs can lead to an increase in demand for data from telecommunications service providers.

6.2Member States should encourage a win-win, cooperative and collaborative approachcooperationas far as practical between providers of relevant OTTss and network operators, as this can contribute to sustainability and growth of their businesses, consumer benefits, and development of viable and innovative business models. This should be based on an analysis of investment capabilities, cost of service provision, return on investment, resource utilization and other factors.

7Fostering innovation and investment [This section should be added to section 5, unless the points are already addressed there, in which case they can be deleted]

7.1Member States should continue to foster entrepreneurship and innovation in relevant OTTsand other online serviceswhich are of benefit to users, while at the same timeandencouraginge sustainable infrastructure investments. ,.

7.2In the spirit of service availability and affordability, Member States should foster enabling legal and regulatory environments, and develop policies that are fair, transparent, stable, predictable and non-discriminatory; and that promote competition, foster continued technological and service innovation, and encourage private sector investment the contribution of a wide variety of stakeholders in the development of broadband access and services that will enable the continuing growth and adoption of online relevant OTTs services in the public interest.

7.3Member States and Sector Members should participate and contribute to global standardization efforts in order to ensure open, interoperable, portable, secure and affordable services and applications for consumers, anywhere and anytime, where practicable.

7.4More generally, Member States are encouraged to consider the benefits and ramificationsimpact that relevant OTTs can have on their economies and ensure promote the access to, and growth of, these services through, inter alia, support for innovation in the development of local OTTs, demand stimulation, and industry collaboration.

8Privacy Security,andpersonal data protection and consumer protection [Privacy policy is a matter of national sovereignty and thus this section should be deleted. Security of international telecommunications networks may be a relevant topic; however, Study Group 17 is the lead study group for this issue therefore if this draft proceeds, it must be coordinated with Study Group 17. The Rapporteur Group could recommend to Study Group 3 that this document be liaised with Study group 17.]

8.1Due to the ever-increasing volumes of personal data being exchanged globally,including throughoverrelevant OTTs services, as well as by traditional telecommunications services, Member States and regulators should may take appropriate measures to protect the rights and interests of OTT users in regard to their privacy and data protection.encourage all market participants to maintain the security of international telecommunication networks carrying such data and thus help protect consumers of relevant OTTs. [These are national policy matters, not subject to international technical standards]

8.2In the context of the borderless nature of OTT services, Member States should consider to what extent the transfer of personal data across the borders of Member States that have dissimilar data protection and privacy policies and regulations in place can affect adoption and use. [This is the subject of policy negotiations between and among sovereign countries and are not the proper subject of technical standards]

8.38.2Given the global nature of many relevant OTT services, collaboration across multiple Member States and Sector Members should be strongly encouraged.

[Given the inclusion of the study of the operational impacts of relevant OTTs on international telecommunication services within the mandate of Study Group 2 by WTSA-16, the Rapporteur Group should recommend to Study Group 3 that this draft be coordinated with Study Group 2 and that the necessary liaison be sent to Study Group 2. This should be done before this document can be considered stable.]

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