Convergence

Updates

The Telecom Regulatory Authority of India (TRAI) may decide soon whether to regulate over-the-top companies like WhatsApp and Skype. The Telecom regulator is under pressure from telecom companies that have demanded a level playing field and are allegedly incurring huge losses due to these OTTs players competition. Telecom service providers claim that there is a regulatory imbalance because OTTs offer similar services without the licensing and regulatory burden they face. If the TRAI decides to bring OTT services under telecom regulation then they will be required to get a license from the government to operate in the country.

The Australian Competition and Consumer Commission (ACCC) has decided to no longer regulate SMS services because over-the-top (OTT) messaging services like WhatsApp, Facebook Messenger and iMessage provide enough competition in the sector. With several competitors, SMS services do not represent a bottleneck to accessing the end user. Therefore, companies will be free to set SMS charges. In 2015, the ACCC had regulated SMS pricing for the first time, however, the Commission recognizes the market has changed considerably since then. The ACCC holds that voice services will continue to be regulated, because OTT voice services do not replace yet mobile voice calls. They do not offer the same access and quality of traditional voice services.

The Advocate General of the Court of Justice of the European Union (CJEU) issued a legal opinion to the CJEU, affirming that Airbnb is an information society service. The legal opinion is not binding, but the court takes the advice of its advocate general in the majority of the cases. The judgment is expected later in the year. The case was referred by a court in Paris, where a French tourism association claimed that Airbnb should be submitted to the same accounting, insurance, and financial obligations as providers of real estate. The advocate general holds that Airbnb is not a real estate broker, therefore, should not have its activities ruled by French real estate laws. He believes that Airbnb provides a service to connect potential guests with hosts offering short-term accommodation ‘in a situation in which the provider of that service does not exercise control over the essential procedures for the provisions of those services’. Under the terms of the E-Commerce Directive, this practice concerns information society services. The directive allows businesses to provide information services across EU member states without restriction. This case will have significant consequences on how EU member states regulate Airbnb activities. The platform has been fighting claims from European cities, including Paris, Brussels, and Madrid, that it should be more heavily regulated. If its activities are understood as information society services by the CJEU, states in the EU will be more limited on how they can regulate the platform. In 2017, the CJEU had ruled that Uber was not only an information society service but a transportation service provider. This ruling allowed EU member states to impose restrictions on Uber’s activities.

Airbnb reversed a previous decision to remove around 200 listings of Israeli properties in the West Bank. The rental sharing-economy decided to allow settlement properties to be listed on its platform. However, all the profits from the rental of those properties will be donated to non-profit humanitarian aid organisations in different parts of the world. The decision was criticised by human rights activists who claimed that Airbnb will remain complicit in the violations the settlements provoke by continuing to do business in the settlements. Airbnb decided to allow these places to continue being listed on the platform after being sued in the US federal court by 12 American-Israeli citizens with homes in the settlements. They alleged, in the lawsuit, that as a provider of a service to the public, Airbnb is not allowed to refuse to provide its services to particular religious groups. ​

City of Madrid passed a law that obliges any housing unit that is rented to tourists for more than 90 days a year to have a private entrance, including a separate elevator or staircase. The new regulation may make about 95% of the current listings on Airbnb illegal. The city council of Madrid announced that rising rents (around 7.2%) and low long-term rental accommodation were the main reasons to pass the new regulation. The regulation is aimed to preserve the residential use of the city centre which is called the Almendra Central by locals. Madrid is one of a growing number of cities restricting short-term rentals. In Amsterdam, properties are only allowed to be rented through Airbnb and other rental platforms 30 nights per year. Paris, Barcelona, and New York also limited the number of nights that private properties can be rented short-term.  

The Municipality of Montevideo prepared a comprehensive economic study on the operation of ride-hailing services, including Uber, Easy Taxi, Cabify and Uruguay Present, and its consequences in the transportation sector. The study indicates that the ratio between the number of available taxis and the number of vehicles per app is 1 to 4, which means that at peak time the ride-hailing apps cover the demand that taxis cannot. In addition, most part of the drivers who work for ride-hailing platforms do so in part-time, and more precisely in peak hours, when the deficit of taxis has been historically high. Since May 2018, the admission of new permit holders to operate in ride-hailing platforms was suspended. Due to the restriction, ride prices have raised. After the study, the authorities decided to reverse the decision and give more permits to ride-hailing drivers. The department government also intend to prohibit drivers who do not own a vehicle from working with a third party’s car. The purpose is to avoid a relation of subordination between the car owner and the driver and preserve the driver’s self-employment status.

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

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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.

(GSMA)

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

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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

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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

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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.

(EBU)

In an environment increasingly characterised by digital convergence, the EBU is working on supporting its memb

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In an environment increasingly characterised by digital convergence, the EBU is working on supporting its members in their digital transformation processes, in promoting and making use of digital channels, and in identifying viable investment solutions for over-the-top (OTT) services. The organisation has a Digital Media Steering Committee, focused on ‘defining the role of public service media in the digital era, with a special focus on how to interact with big digital companies’. It also develops a bi-annual roadmap for technology and innovation activities, as well as a Strategic Programme on Broadcaster Internet Services, and it has a dedicated Project Group on OTT services.

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)

Papers

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

Public innovation and smart regulation for the 2030 Agenda (2018)
Session 3: Policy and regulation perspective – Privacy and beyond (2018)
Roundtable Discussion: AI for Development (2018)
Leadership Debate: Emerging Technologies for Digital Transformation (2018)
Opening Session and Session 1: AI and Cybersecurity – The State of Play (2018)
Session 4 – Ways forward and closing (2018)
Session 2: AI and IoT – Exploit the potential for building confidence and security in the use of ICTs (2018)
Applying Technology to Reinforce Security and Promote Development (2018)
Artificial Intelligence, Ethics, and the Future of Work (2018)
Competition in a Data-driven World: How to Ensure Sustainable Growth? (2018)
Implementations of AI to Advance the SDGs – Panel 4: Safe and Secure AI (2018)
Projects in Action: Towards AI and Data Commons – Part 2 (2018)
Projects in Action: Towards AI and Data Commons – Part 1 (2018)
Ideas for Impact: AI Breakthrough Team Project Pitches (2018)
Collaborating and Investing in Beneficial AI (2018)
Celebration of the World Telecommunication and Information Society Day AI-Powered Moonshots – Meet the Astronauts (2018)
Building Trust for Beneficial AI – Trustworthy Systems (2018)
AI for Outbreaks, Emergency Response, and Risk Reduction (2018)
Storytellers (2018)
Building Trust for Beneficial AI – Developer Communities (2018)
AI Fostering Smart Government (2018)
AI Empowering Smart Citizens (2018)
AI + Smart Cities and communities (2018)
Building digital competencies to benefit from existing and emerging technologies with a special focus on gender and youth dimensions (2018)
Transformations on the Horizon (2018)
How to Keep AI from Slipping Beyond Our Control (2018)
AI for Good Global Summit – Opening Keynote (2018)
Killer Robots in the Battlefield and the Alleged Accountability Gap for War Crimes (2018)
[Side-event] The Human-Machine Relationship: Lessons from Military Doctrine and Operations (2018)
[Side-event] Meaningful Human Control of Weapons Systems (2018)
[Side-event] Defining Lethal Autonomous Weapons Systems (LAWS) - Campaign to Stop Killer Robots (2018)
[Side-event] Article 36 Reviews and Emerging Technologies: The Case for Autonomy in Weapon Systems (2018)
Disrupting Development through Science, Technology and Innovation (2018)
Expert Workshop on the Right to Privacy in the Digital Age (2018)
Where and How to Protect Legal Interests in the Digital Era (2017)
Remedy against the Machine (2017)
Are Emerging Technology Innovations Driving Better Access to Remedy in Global Supply Chains? (2017)
GPW 2017: Summary of Discussions on Conflict Prevention and New Technologies (2017)
The Future of Work (2017)
The Role of Artificial Intelligence in Conflict Prevention: Will it Polarize or Unite? (2017)
Looking Ahead: What to Expect in the Cyber Realm (2017)
Can we put artificial intelligence at the service of mankind? (2017)
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)

Processes

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WSIS Forum 2019

WBDS 2019

13th IGF 2018

UNCTAD 2018

  • 12:30 - 14:00
    Platforms as an Orchestrator of Digital Re-organization: Strategizing for Long-term Development Impact

WSIS Forum 2018

12th IGF 2017

WTO Public Forum 2017

WSIS Forum 2017

IGF 2016

IGF 2015

IGF 2016 Report

 

Several sessions at IGF 2016 tackled issues related to convergence and over-the-top (OTT) services. It was stressed that any regulations in these areas should consider the need to foster innovation and future market development (Are We All OTTs? Dangers of Regulating an Undefined Concept - WS191). Human rights aspects also need to be taken into account, especially when it comes to blocking access to services such as Voice over Internet Protocol - VoIP (VoIP Crackown: Implications for Gov, Telecom & Civil Society - WS262).

 

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