ICT Global Governance

Presentation to the Stanhope Centre’s 2003 ICT Policy Training Seminar in Budapest

August 27, 2003

William J. DrakeDirector, Project on the Information Revolution

& Global GovernanceSenior Associate, International Centre for Trade

and Sustainable Developmentwdrake@ictsd.ch

Session I: The Transformation of the Global Communications Order

A. International Institutions & Global Governance

B. Overview of ICT Global Governance

C. The International Telecommunications Regime

D. The International Trade in Services Regime

E. Defining Public Interest Objectives: Criteria & Conundrums

A. International Institutions and Global Governance

1. What Global Governance Isn’t (necessarily)2. Global Governance as International Collective

Action3. International Regimes4. Governance Mechanisms Vary Greatly in Form…5. …Generic Functions6. ….Participation7. …Substance8. …and Power Dynamics9. Do These Issues Really Matter?

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

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

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

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

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

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

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?

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

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

B. Overview of ICT Global Governance

1. Four Additional Functions for the ICT Environment

2. The Old NetWorld Order3. The Information Control Revolution4. Power Shifts in the Great Transformation5. Effects on National Policies and International

Interests6. Effects on ICT Global Governance7. The New Global Policy Architecture8. Criticisms of Intergovernmentalism9. Criticisms of Industry Self-Governance

1. Four Additional Functions for the ICT Environment

a. Physical interconnection, logical interoperation of networks

b. Manage collective resources, natural & logical

c. Terms and conditions for cross-border services

Non-competitive “joint supply” vs. trade

d. Terms and conditions for cross-border content of information exchanged

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

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

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)

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

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

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)

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!

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

C. The International Telecommunications Regime

1. Instruments

2. Historical Evolution

3. Guiding Principles

4. A Regime in Decline

5. Consequences

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)

2. Historical Evolution

• 1850 to 1960s, stable growth & success• 1970s through 1980s incremental politicization• late 1980s to mid-1990s, liberalization &

transformation• Since then, decline

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

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

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

D. The International Trade in Services Regime

1. Instruments

2. Historical Evolution

3. Guiding Principles

4. The Reference Paper

5. A Regime on the Rise

6. Consequences

1. Instruments

• Organizational Context: WTO• The Framework Agreement (General Obligations

and Disciplines---GODs)• The Annexes, including on Telecommunications• National Schedules of Commitments

2. 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”

3. 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)

4. The Reference Paper

Competitive Safeguards. Major suppliers must not engage in anti-competitive cross-subsidization, misuse information on competitors accessing their networks, etc.

Interconnection. Major suppliers 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.

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.

5. 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?

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

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?

Session II: Governing Networks & Services

in the New Environment

A. What Works, What Doesn’t?: Some Cross-Institutional Lessons Learned

B. Six Overarching Challenges for the Global Community

C. Enhancing the Role of Civil Society Organizations in ICT Global Governance

A. What Works, What Doesn’t?: Some Cross-Institutional Lessons Learned

1. Agenda Setting

2. Negotiation

3. Implementation and Compliance

4. Reactions to Noncompliance

A word on Defining “Works”

---Functionally, Politically, Normatively

1. 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.

2. 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.

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.

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.

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

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

2. 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

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

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

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

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?

C. Enhancing the Role of Civil Society Organizations in ICT Global

Governance

1. The Past as Prologue

2. The Current Scene

3. Capacity Building: What Are the Priorities, How Best to Pursue Them?

4. Conclusion

1. The Past as Prologue

• Historically: Unlike some global issue-areas, CSOs little participation or influence in ICT.

• Few exceptions: Amateurs and the radio regime, the aborted New World Information and Communication Order process in UNESCO, etc.

• Different story at the national level; ex: telecom and media policy in the USA

2. The Current Scene

• What’s Changed: The Internet and globalization broadened the menu of issues, raised the stakes, and provided new tools for activism

• Growing links with CSOs in other fields• Inside Players: ICANN Noncommercial Users

Constituency vs. looser consultations, e.g. OECD e-commerce, privacy, current WIPO efforts

• Outside Players: Anti-WTO groups• World Summit on the Information Society: an

important opportunity for organizational development and coalition building

3. Capacity Building: What Are the Priorities, How Best to Pursue Them?

Beyond the obvious, e.g. Money and Staff---• Information: Monitoring, analysis, tool kits,

tactical best practices from both the sites of international institutions and national/regional, generic and customized to local conditions

• Knowledge: Training and hands-on experience • Networks: links and partnerships with other CSOs• Friendlies: Links with key policy insiders• What Else? What Specifically Would be Most

Useful to You?

4. Conclusion

• Little coherent debate to date on these issues; WSIS quite obviously is not enough

• Governments, IGOs, CSOs, businesses, think tanks all have roles to play; lessons of DOT Force

• Special attention needed to the interests and views of non-dominant actors that have been marginalized in the digital “Washington Consensus”

• The substantive objectives and institutional architecture of global governance should reflect the full diversity of interests, ideas, and activities involved in a globalized NetWorld Order