Convergence

Updates

22 Sep 2017

Transport for London (TfL), the regulator of transportation services in the UK capital, announced that it is not renewing Uber’s licence as a private hire operator (which expires on 30 September). In a statement about its decision, TfL said that ‘Uber London Limited is not fit and proper to hold a private hire operator licence’, as Uber’s ‘approach and conduct demonstrate a lack of corporate responsibility in relation to a number of issues which have potential public safety and security implications’. The company, which has 21 days to appeal the decision, said that it would do so, ‘to defend the livelihoods of all […] drivers, and the consumer choice of million on Londoners who use our app’.

20 Sep 2017

Saudi Arabia is removing a ban on Voice over Internet Protocol (VoIP) services, such as Skype. VoIP apps have been prohibited since 2013, as the regime claimed they didn't comply with the country's regulations. According to the ministry of communications, the decision to allow access to VoIP is 'an important step in the kingdom's Internet regulation', which would 'reduce operational costs and spur digital entrepreneurship.' The ministry said that it will continue regulating the Internet to restrict content that violates the Saudi laws.

18 Sep 2017

In its 2017 Global Internet Report: Paths to Our Digital Future, the Internet Society presents artificial intelligence (AI) and the Internet of Things (IoT) as main drivers of change. According to the report, AI and the IoT ‘will transform both the Internet and the global economy’, bringing both opportunities (such as new services and scientific advancements) and uncertainties (ranging from changes to industry, employment, and public services, to questions of transparency, ethics, and accountability). The report recommends, among others, that economies and societies prepare for the disruption that AI and IoT are to bring, while drawing attention to the fact that there is a risk of AI benefits being unevenly distributed, and thus widening the digital divides. It is also suggested that ethical considerations be prioritised in the design and deployment of AI, and that humans remain ‘in the driver’s seat’.

Pages

Historically, telecommunications, broadcasting, and other related areas were separate industry segments; they used different technologies and were governed by different regulations. The broad and prevailing use of the Internet has aided in the convergence of technological platforms for telecommunications, broadcasting, and information delivery. Today, we can make telephone calls, watch TV, and share music on or via our Internet-connected devices. Only a few years ago, such services were handled by different technological systems.

In the field of traditional telecommunications, the main point of convergence is represented by Voice over Internet Protocol (VoIP) services. The growing popularity of VoIP systems such as Skype and Viber is based on lower price, the possibility of integrating data and voice communication lines, and the use of advanced PC- and mobile-devices-based tools. With YouTube and similar services, the Internet is also converging with traditional multimedia and entertainment services. Such services – which use the Internet as the delivery platform – are known as over-the-top (OTT) services.

 

Convergence is also discussed in relation to new business models enabled by the Internet, such as the sharing economy, which, in general terms, involves the use of digital platforms for the provision of ‘offline’ services (e.g. Uber for transportation, and AirBnB for accommodation). With advancements in the areas of the Internet of Things and artificial intelligence, the integration of these new technologies into existing products, services, and business processes is also increasingly seen as a matter of convergence.

While this digital convergence is going ahead at a rapid pace, more and more attention is paid to the related economic and legal implications.

The economic implications of convergence

At the economic level, convergence has started to reshape traditional markets by putting companies that previously operated in separate domains, into direct competition. While new business models are emerging, existing ones see themselves threatened. For example, traditional telecom operators have been complaining about the fact that OTT services threaten their businesses; mobile telephony service providers, in particular, have seen drops in the usage of classical voice services, as customers are now more inclined to use VoIP services.

Faced with such challenges, companies take different approaches. Some insist that the competition brought by OTT services is unfair, as OTT providers are in most cases not subject to the same complex regulatory provisions. Others have taken proactive measures, by, for example, changing their business models to introduce new services to compensate for those less used. Another frequent strategy consists in merger and acquisition, when smaller, new-on-the-market OTT providers merge with or ar acquired by larger companies. In a more recent approach, OTT and telecom providers have started to conclude partnerships aimed to bring advantages to both sides: for telecom providers, partnerships with OTT providers bring them a competitive advantage, as well as added value for end-users; OTT providers, on the other hand, would have their services easier to find and access, thanks for partnerships with carriers. These models, however, raise concerns related to their compliance with the network neutrality principles, in cases when, for example, carriers choose to offer their clients unlimited and/or free access only to some OTT services.

Convergence has in many cases lead to fears of the ‘Uber syndrome’ among business leaders: the scenario in which a competitor with a completely different business model enters the industry and flattens competition. Such was the case when Uber entered the taxi market by innovating on the technological aspect; as a consequence, traditional taxi companies and drivers, who businesses were threatened, filed lawsuits in courts across the world in protest against the new unregulated entrant in the market. At the EU level, for example, the Court of Justice of the European Union was asked to determine whether Uber could be considered a transport service provider, or a digital platform facilitating the provision of information society services. Courts were also asked whether Uber drivers are independent contractors or Uber employees.

Regulation in a converging environment

The legal system was the slowest to adjust to the changes caused by technological and economic convergence. Each segment – telecommunications, broadcasting, and information delivery – has its own special regulatory framework. This convergence opens up several governance and regulatory questions:

  • What is going to happen to the existing national and international regimes in such fields as telephony and broadcasting?
  • Is there a need for new regulatory regimes that focus mainly on converged services? Or should they be subject to the same regulatory frameworks as, for example, traditional electronic communications services?
  • When it comes to competition and consumer protection, what rules, if any, should be imposed on providers of converged services?
  • Should the regulation of convergence be carried out by public authorities (states and international organisations) or through self-regulation?

At international level, governance mechanisms are mainly used for the exchange of best practices and experiences. The International Telecommunication Union's Development Sector (ITU-D) has a study group on the converging environment. The Council of Europe has a Steering Committee on Media and Information Society, covering one aspect of convergence: the interplay between traditional and new digital media.

At national level, countries are addressing convergence in various ways. Some countries, such as several EU member states, India, and Kenya have chosen flexible approaches towards regulating convergence, by simply addressing the issue from the perspective of net neutrality: users should be allowed to choose any type of applications or services provided over IP networks. Other countries have created new legal and regulatory frameworks for converged services. In Korea, for example, IPTV services are subject to legal provisions in terms of licensing requirements and service obligations. The EU is also exploring the introduction of legal obligations for providers of OTT services and the conditions under which such providers should be subject to the same regulatory requirements as traditional telecom operators. In some countries, convergence is addressed through self-regulation. And there are yet other countries – such as Belize, the United Arab Emirates, and Morocco – which have chosen, at one point or another, to explicitly ban OTT services through regulation, or to ask that access to such services is blocked by telecom providers.

Events

Actors

(GCSP)

As part of its Emerging Security Challenges Programme, the GCSP has a

...

As part of its Emerging Security Challenges Programme, the GCSP has a cybersecurity cluster which tackles cybersecurity issues through education and training activities, as well as policy analysis and events. The cluster also provides a platform for dialogue and exchanges on cyber challenges, among cyber experts from the public, private, and civil society sectors. The training and education activities cover areas such as cybersecurity strategy formulation, cyber diplomacy, and broader capacity building initiatives (e.g. workshops and student challenges). Policy papers produced by the GCSP examine issues such as computer network defence, future challenges in cyberspace.

(OECD)

Convergence is one of the digital policy issues that the OECD is paying attention to, especially in relation t

...

Convergence is one of the digital policy issues that the OECD is paying attention to, especially in relation to the challenges this phenomenon brings on traditional markets, and the need for adequate policy and regulatory frameworks to address them. In 2008, the organisation issued a set of policy guidelines for regulators to take into account when addressing challenges posed by convergence. In 2016, a report issued in preparation for the OECD Ministerial Meeting on the Digital Economy included new recommendations for policy-makers. Digital convergence issues have been on the agenda of OECD Ministerial meetings since 2008, and are also tackled in the regular OECD Digital Economy Outlook report.

(ITU, UIT)
...

The ITU Telecommunication Standardization Sector (ITU-T) develops international standards (called recommendations) covering information and communications technologies. Standards are developed on a consensus-based approach, by study groups composed of representatives of ITU members (both member states and companies). These groups focus on a wide range of topics: operational issues, economic and policy issues, broadband networks, Internet protocol based networks, future networks and cloud computing, multimedia, security, the Internet of Things and smart cities, and performance and quality of service. The World Telecommunication Standardization Assembly (WTSA), held every four years, defines the next period of study for the ITU-T.

(GSMA)

Net neutrality is one of the digital policy issues the GMSA is paying attention to.

...

Net neutrality is one of the digital policy issues the GMSA is paying attention to. The organisation, which represents the interests of the mobile industry, is of the view that, while the open character of the Internet should be preserved, technical and commercial flexibility for networks is essential. The four main issues the GSMA focuses on when it comes to net neutrality include traffic management, service prioritisation, zero rating, and tariff flexibility. The GSMA promotes its views through papers and other publications, as well as through advocacy activities. For example, it has been a constant contributor to the net neutrality debates and consultations taking place in the EU, USA, and Latin America, among others.

(UNECE)

UNECE, through its subsidiary body CEFACT, has been involved, together with the Organization for the Advanceme

...

UNECE, through its subsidiary body CEFACT, has been involved, together with the Organization for the Advancement of Structured Information Standards, in the development of the Electronic Business using eXtensible Markup Language (ebXML) standard. ebXML contains specifications which enable enterprises around the world to conduct business over the Internet, as it provides a standard method to exchange business messages, conduct trading relationship, communicate data in common terms, and define and register business processes.

(EC)

Over-the-top services, next generation networks, the collaborative economy, and artificial intelligence are am

...

Over-the-top services, next generation networks, the collaborative economy, and artificial intelligence are among the issues the European Commission is paying particular attention to. The Electronic Communications Code proposed by the Commission in September 2016 plans to introduce some level of regulation for OTT services. Encouraging the deployment of NGN networks able to better support the provision of converged services is a priority for the Commission, as part of its Broadband Strategy and Policy. The EU executive body has also issued guidelines and policy recommendations for the collaborative economy, while its Digitising European Industry strategy identified artificial intelligence and robotics are cornerstone technologies to be supported.

Instruments

Standards

ETSI standards dealing with convergence issues (2016)
Recommendation ITU-T Y.2001 - 'General overview of NGN' (2004)

Other Instruments

Resources

Articles

How the Sharing Economy can Make its Case (2015)
Universities Have a Choice - Partner with Industry, or Watch their Best Minds Disappear (2015)

Publications

Internet Governance Acronym Glossary (2015)
An Introduction to Internet Governance (2014)

Reports

Technology, Media and Telecommunications Predictions 2017 (2017)
A New Regulatory Framework for the Digital Ecosystem (2016)
Outthinking Disruption in Communications (2016)
Report on OTT Services (2016)
Connectivity: Broadband Market Developments in the EU (2016)
Over-the-Top Players (OTTs) (2015)
Redefining Boundaries - The Global C-suite Study (2015)
Trends in Telecommunication Reform 2015 - Getting Ready for the Digital Economy (2015)
OECD Digital Economy Outlook 2015 (2015)
Wired up: The convergence of Technology, Media and Entertainment (2015)
Regulation and Consumer Protection in a Converging Environment (2013)

GIP event reports

Artificial Intelligence, Justice and Human Rights (2017)
Report for EBU Big Data Conference 2017 (2017)
Report for Think Tank Talk - The Uberisation of the Labour Market (2017)

Other resources

Exploring Digital Convergence: Issues for Policy and Legislation (2015)

 

The GIP Digital Watch observatory is provided by

in partnership with

and members of the GIP Steering Committee



 

GIP Digital Watch is operated by

Scroll to Top