ICT Global Governance

1. ICT Global Governance Presentation to the Stanhope Centre’s 2003 ICT Policy Training Seminar in Budapest August 27, 2003 William J. Drake Director, Project on the Information Revolution & Global Governance Senior Associate, International Centre for Trade and Sustainable Development wdrake@ictsd.ch

2. Session I: The Transformation of the Global Communications Order International Institutions & Global Governance Overview of ICT Global Governance The International Telecommunications Regime The International Trade in Services Regime Defining Public Interest Objectives: Criteria & Conundrums

3. International Institutions and Global Governance What Global Governance Isn’t (necessarily) Global Governance as International Collective Action International Regimes Governance Mechanisms Vary Greatly in Form… …Generic Functions ….Participation …Substance …and Power Dynamics Do These Issues Really Matter?

4. 1. What Global Governance Isn’t (necessarily) Not synonymous with government, can be done by private actors Not necessarily “good,” although that’s desirable Not necessarily collective and participatory, can be unilateral, although to have legitimacy this often necessary. Nevertheless, this is how it is now conventionally understood. Not necessarily global in the sense of universally agreed or applied. PS: “Internet Governance” is not synonymous with management of Internet identifiers

5. 2. Global Governance as International Collective Action In practice, common usage= Systems of collective rules (social institutions) that shape actors’ behavior in some realm of global interaction A more expansive view could also entail= collective programs and projects that significantly impact those rules, e.g. by redefining issues, capabilities, power relations

6. 3. International Regimes First half of definition really means regimes The principles, norms, rules, and decision-making procedures around which actors’ expectations converge in an international issue-area Development Stages: creation, adaptive evolution, change (in framework vs. of the framework), decay International regimes and organizations are two different things; often related, often not. Some organizations run projects of value but have no real role in rule making and enforcement; ex: UNESCO

7. 4. Governance Mechanisms Vary Greatly in Form… Organizational Settings: linked or unlinked to formal intergovernmental organizations Agreement Type: Treaties, recommendations, guidelines, declarations, MOUs, etc. Rule Strength: Formal or informal, binding or voluntary Domain: Public/private sector, universal/smaller group Scope: range of issues covered Compliance: Monitoring, enforcement

8. 5. …Generic Functions Constrain actors from doing things they would otherwise like to do Empower actors to do things with community assent that might otherwise be controversial or costly to undertake unilaterally Reduce transaction costs in devising frameworks for international transactions Reduce information costs for members Facilitate individual and collective learning Establish rules of liability and, in some cases, mechanisms for sanctioning non-compliance

9. 6. ….Participation • Intergovernmental Multilateral • Intergovernmental Regional & Plurilateral • Private Sector “Self Governance” • Tri-sectoral • Type 1: actors serve on delegations of others that control the process • Type 2: actors directly participate in processes controlled by others • Type 3: Nominal/formal equality of actors

10. 7. …Substance Guiding social purposes, e.g. facilitate markets vs. administrative allocations of resources; management of public goods Distributional biases: which actors & forms of social organization favored, which are not These & other attributes present design choices Which mechanisms are best suited for which issues? Where is it most effective to focus in pursuing the global public interest?

11. 8. …and Power Dynamics Some institutional environments give dominant actors free reign to set the agenda and control negotiations, outcomes, and enforcement/implementation Other have rules and procedures that empower non-dominant actors and increase their influence Most lie somewhere between these two poles

12. 9. Do These Issues Really Matter? Institutional characteristics often influence the shape of policy outcomes and effects By extension, they have strategic and tactical implications for public interest advocates---what works in one environment may not in another “Knowledge is power”---to many policy insiders, a clear understanding of institutions distinguishes who they will deal seriously with, or not. Knowledge of both individual institutions and comparative or cross-institutional lessons crucial

13. B. Overview of ICT Global Governance Four Additional Functions for the ICT Environment The Old NetWorld Order The Information Control Revolution Power Shifts in the Great Transformation Effects on National Policies and International Interests Effects on ICT Global Governance The New Global Policy Architecture Criticisms of Intergovernmentalism Criticisms of Industry Self-Governance

14. 1. Four Additional Functions for the ICT Environment Physical interconnection, logical interoperation of networks Manage collective resources, natural & logical Terms and conditions for cross-border services Non-competitive “joint supply” vs. trade Terms and conditions for cross-border content of information exchanged

15. 2. The Old NetWorld Order International Telecommunications Regime (ITU) National sovereignty & mutual consent, joint service provision, standardization for connectivity International Radio Regime (ITU) Sovereignty, shared resources, non-interference, allocation & allotment, assignment notice International Satellite Regime (Intelsat) Joint near-monopoly provision; technical & operational standards; inter-system coordination Information Flow Quasi-Regime (UN/ITU/other) Fragmented, weak, contradictory instruments

16. 3. The Information Control Revolution Technological change Industry’s changing preferences, new interest configurations, and demands for policy change Market pressures New ideas about sector and macro-economic governance Government institutions and political power balances At the international level, State power

17. 4. Power Shifts in the Great Transformation (deliberate allusion to Karl Polanyi) from the public to the private sector From suppliers to users from sector-specific regulatory concepts to systemic and trade-based thinking from Europe to the USA from PSTNs & accounting rates to IP networking & new modes of operation (resale, VoIP, callback)

18. 5. Effects on National Policies and International Interests Domestic realignments of industry, consumer interests and dominant ideas Intra-state shifts in power, e.g. from communications to trade & industry ministries Consequent Spread of national liberalization and privatization In broad terms: US from late 1950s; UK & Japan early 1980s; other EU and OECD from mid-1980s; developing countries from early 1990s

19. 6. Effects on ICT Global Governance Gradual, asymmetric, and highly contested realignments of preferences regarding international institutions 1850 to 1980s = state-centric models, stable cooperation; from 1990s = more market-oriented models and conflict Old intergovernmental regimes transformed or eroded, New intergovernmental/private regimes erected Move from a limited number of intergovernmental organizations to a heterogeneous public/private mix of rule-making forums

20. 7. The New Global Policy Architecture 1. Old intergovernmental multilateral regimes Telecommunications (eroded), satellites (transformed), radio (less change) 2. New intergovernmental multilateral regimes International trade in services (WTO), Intellectual property (WIPO, WTO), Cyber-crime (COE), e-commerce (UNCITRAL), proposed Hague Convention 3. Intergovernmental regional/plurilateral regimes Various in EU, NAFTA, APEC, CITEL, OECD, Wassenaar 4. Self governance regimes for Internet infrastructure Internet identifiers (ICANN); technical standardization 5.Self governance regimes for Internet “content” privacy, digital contracting, etc. (various)

21. 8. Criticisms of Intergovernmentalism Intergovernmental organizations said to be too slow-moving and bureaucratic to formulate rules for dynamic global markets Too wedded to “old paradigm” models of governance inappropriate for the new environment Too subject to laborious “UN-style” decision-making and “politicization” of “technical” issues Clearly some truth to these & related charges; but government authority & accountability is still key!

22. 9. Criticisms of Self-Governance Who is the “self ?” Significant problems of accountability, transparency, & potential “capture” by dominant interests Strong incentives for non-compliance when monitoring, detection, & sanctioning are weak Business anyway has driven the agenda in intergovernmental settings in recent years Self-governance can be a useful addition to the menu of choices, but it is optimal in a narrow range of cases (private contracting without negative externalities) & often is not a good substitute for intergovernmental authority

23. C. The International Telecommunications Regime Instruments Historical Evolution Guiding Principles A Regime in Decline Consequences

24. 1. Instruments Organizational Context:The ITU ITU Convention & Constitution (treaties governing the ITU organization and establishing broad purposes & principles of member behavior) International Telecommunication Regulations (treaty comprising restrictions on networks & services) International Telecommunication Recommendations (non-binding rules on networks, services, equipment, including both operational/regulatory measures and technical standards)

25. 2. Historical Evolution 1850 to 1960s, stablegrowth & success 1970s through 1980s incremental politicization late 1980s to mid-1990s, liberalization & transformation Since then, decline

26. 3. Guiding Principles National Sovereignty & Mutual Consent Convention & Constitution: sovereignty, mutual Convention: stoppage, monitoring, etc for public order Recommendations: leased circuits, private networks, etc---sovereignty as monopoly control Joint Service Provision Convention, Regulations, Recommendations: priority of JS parallels mutual consent (recent diversification) Interconnection & Interoperation Convention, Recommendations: Technical standards

27. 4. A Regime in Decline Privatization & liberalization = shift from treaties to contracts Trade agreements & concepts The Internet “New Modes of Operation,” e.g. Call-back, Refile, International Simple Resale, Internet Telephony U.S.-led opposition, e.g. accounting rates, bypass, proposed revision of the International Telecommunication Regulations

28. 5. Consequences Shift toward more competitive, flexible, market-driven development of ICTs Marginalization of PTT-led Coalition, especially in the developing and transitional countries, which cannot drive the agenda or use the instruments to support their market positions and authority Decay in compliance, authority, relevance = a “legacy system” in tension with the new NetWorld order Decay in ICT multilateralism more generally

29. D. The International Trade in Services Regime Instruments Historical Evolution Guiding Principles The Reference Paper A Regime on the Rise Consequences

30. Instruments Organizational Context:WTO The Framework Agreement (General Obligations and Disciplines---GODs) The Annexes, including on Telecommunications National Schedules of Commitments

31. Historical Evolution 1986 to 1994 Uruguay Round & the General Agreement on Trade in Services (also: creation of WTO, TRIPs Agreement, etc.) 1994 to 1997 Basic telecom negotiations, conclusion of the 4th Protocol including the Reference Paper 1998 to 2000, pre-negotiations & e-commerce work program 2001 to present, Doha “Development Round”

32. Guiding Principles General Obligations and Disciplines: most favored nation, transparency, domestic regulation, competition, restrictive business practices, general exceptions (inc. consumer and privacy protection) Specific Commitments: market access, national treatment, additional commitments negotiated for each of four “modes of supply” Cross-border, movement of the consumer, commercial presence, movement of the supplier (natural persons) Sectoral Annexes: Telecom Annex on Public telecom transport networks and services (user empowerment)

33. The Reference Paper Competitive Safeguards. Majorsuppliers must not engage in anti-competitive cross-subsidization, misuse information on competitors accessing their networks, etc. Interconnection. Majorsuppliers are to provide market entrants with interconnection at any technically feasible point in the network, at nondiscriminatory terms, conditions and rates. Universal Service. Such obligations are to be administered in a transparent, nondiscriminatory, and competitively neutral manner that is not more burdensome than required to meet the policy objectives.

34. The Reference Paper (continued) Public Availability of Licensing Criteria. Where licenses are needed, information and decision making procedures are to be transparent. Allocation and Use of Scarce Resources. Procedures for allocating and using frequencies, numbers, and rights-of-way are to be carried out in an objective, timely, transparent, and nondiscriminatory manner. Independent Regulators. Regulatory bodies are to be separated from service providers and not accountable to them.

35. A Regime on the Rise • Strong support in the industrialized world and global business community, mixed feelings in the developing and transitional countries; but faces Challenges: • Extending and deepening market access commitments, especially on cross-border supply • Conceptual and boundary issues in e-commerce (generally: Adapting to the Internet Age) • Domestic regulation, e.g. transparency, necessity • Policy options in responding to techno-market change: • Develop New Disciplines? • Revise General Obligations? • Legislate through Dispute Settlement Panels?

36. 6. Consequences • GATS + TRIPs = WTO could become the most important forum in ICT global governance • Strength & Effectiveness:strong normative pressure, variable implementation; dispute settlement to be tested in telecom (U.S.-Mexico) • Over time, progressive re-evaluation of multitude of domestic and international policies & rules according to anti-trade restriction baseline

37. E. Defining Public Interest Objectives: Criteria & Conundrums • What guiding principles and policy models strike the right balance in the difficult, non-obvious cases, e.g.: • Call-back, Internet Telephony and PSTN bypass • Accounting and settlements • Interconnection and competitive safeguards • Domestic regulation and Internet-based delivery of goods and services (including media) between small and medium-sized firms and individual customers • How should public interest advocates position themselves in relation to the key players & debates?

38. Session II: Governing Networks & Services in the New Environment • What Works, What Doesn’t?: Some Cross-Institutional Lessons Learned • Six Overarching Challenges for the Global Community • Enhancing the Role of Civil Society Organizations in ICT Global Governance

39. What Works, What Doesn’t?: Some Cross-Institutional Lessons Learned Agenda Setting Negotiation Implementation and Compliance Reactions to Noncompliance A word on Defining “Works” ---Functionally, Politically, Normatively

40. Agenda Setting • States’ control of the international agenda has eroded in the great transformation. • The information revolution and global liberalization have greatly increased private sector influence. • Skewed private sector participation can preclude effective agenda setting. • Civil Society Organizations can make valuable contributions, but special measures are needed to facilitate their participation. • Prior forms of institutionalization can have a powerful impact on the paths that new issues follow to the international agenda.

41. Negotiation The quality of powerful states’ leadership is important, particularly when negotiating changes to the status quo. As intergovernmental, hybrid, and private negotiations all have strengths and weaknesses, the desirability of one model or the other depends on the issues and interests involved. Excessive formalization of regime negotiations and instruments can diminish their effectiveness and impede change. A capacity for innovation is necessary to agreement. Non-binding instruments can be very useful tools with which to build international consensus.

42. 3. Implementation and Compliance Technological change and market liberalization sometimes can make it difficult to determine whether private firms are behaving in accordance with the commitments undertaken by their home governments. Centralized monitoring systems are more demanding but more effective than are decentralized systems. Private sector monitoring can help to fill in the gaps of decentralized systems (could CSOs help here?). The behavior of leading actors can have a significant effect on the compliance of other regime members. Obtaining the compliance of developing countries often requires technical assistance, resource transfers, and flexibility.

43. 4. Reactions to Noncompliance • The lack of strong enforcement mechanisms in the regulatory regimes has made it difficult to deal with noncompliance. • Conversely, the presence of strong enforcement mechanisms in the more market-enabling communications regimes has promoted compliance. • Some variability in compliance does not undermine the overall value of regime cooperation.

44. B. Six Overarching Challenges for the Global Community Assessing the Global Architecture Improving Individual Policy Frameworks Re-Mapping Global Political Space Enhancing Inter-National Participation Improving Transparency & Accountability Getting/Keeping Powerful Actors On-Board

45. 1. Assessing the Global Architecture Analyze Institutional Design Choices What lessons learned from past experience, which substantive and procedural models have worked best under which circumstances, how well do our institutions work together, what gaps and needs remain? Analyze and Map the Diversity of Interests On which issues are there what levels of (dis)agreement among which parties, what space exists for more cooperative solutions? These and Related Steps Require Bridge Building between Analysts and Practitioners

46. Improving Individual Policy Frameworks Some especially pressing priorities… International Trade in Services and E-Commerce in the WTO Intellectual Property (WTO TRIPs, WIPO) Spectrum Management Security (Network and Informational) Internet Identifiers (ICANN) Global Digital Development programs and projects

47. 3. Re-Mapping Global Political Space Domestic/global interfaces in transition--- How to avoid the proliferation of extra-territorial extensions of national laws? Establishing Applicable Jurisdiction for dispute resolution, consumer protection, etc. Balancing between cross-border transactions and governance commitments and national laws and regulations, e.g. in the GATS Change will come and must be done right

48. 4. Enhancing Inter-national Participation Raising the voices of developing and transitional countries--- • Balanced and equitable participation is an undeniable end in itself and a means to effective governance, not a detriment • Identify and attenuate international institutional/procedural barriers where possible • Build nations’ organizational, analytical, human capacities through partnerships

49. 5. Improving Transparency & Accountability • Reform Governance Mechanisms • Cope with unintended consequences, e.g. dispersion • Overcome Knowledge Gaps to Take Advantage • Under-supply by academia, think tanks, NGOs, etc. • Fragmentation by issue-area, lack of cross-sectoral learning, so blind men & the elephant • Need to build independent capabilities for substantial, accessible public interest analysis

50. 6. Getting/Keeping Powerful Actors On-Board • Experience demonstrates that effective global governance is impossible if the most powerful governments and corporations refuse to play • Examples: U.S. and corporate defections from the traditional telecom regime, EU privacy, etc. • When dissatisfied with “old paradigm” or “bureaucratic” approaches, powerful actors have withheld compliance and/or moved the real action to exclusionary groupings • So how to co-opt without being co-opted?