Nobody here remembers ICAIS? This is actually an old story/ambition, which started elsewhere, and not long after the the 1997-1998 "rebalancing" of ITU-mediated switched telecom settlements. Two nuggets from the history books pasted in below. Of course, just because it's not new doesn't mean that it's not newsworthy. As I recall, this issue precipitated a fairly titanic behind-the-scenes struggle last time around... TV _____ AAP NEWSFEED July 15, 1999, Thursday Telstra chief calls for equitable Net traffic cost sharing SYDNEY, July 15 AAP - Telstra Corp Ltd chief executive Ziggy Switkowski today called for an equitable arrangement for sharing the cost of carrying Internet traffic to and from the United States.In an address to the Asia-Pacific Economic Cooperation (APEC) business conference here, Dr Switkowski said US operators were currently enjoying an implied subsidy of 30 per cent of the costs of international Internet connection... The charging system operates on a similar principle to that used in international phone charging arrangements, he said. "For Australia alone, that represents approximately $50 million a year, and the sum varies from country to country depending on usage," Dr Switkowski said. "Telstra's view is that the future of e-commerce could be undermined if investment in capacity growth does not match growth in demand. "But infrastructure providers outside the US need to have sufficient confidence in cost sharing to invest in new capacity to meet the exploding demand for bandwidth"... _____ Economist October 19, 1996 Too cheap to meter? The fact that the Internet seems free to many of its users has been one reason for its success. Now it may have to change. But how? ...If the costs of the telephone companies and the Internet are similar, why are their methods of pricing different? The answer is that telecoms charges bear little relation to costs. The telephone industry is regulated nearly everywhere and in most countries prices are set by bureaucrats and commissions; real costs are hidden by a layer of crosssubsidies. The Internet, on the other hand, is essentially unregulated. At present, telephone companies typically make less than half their revenue from fixed charges rather than from the price of each call. Tim Kelly, of the International Telecommunication Union in Geneva, reckons that the share of revenue from connection charges and monthly rentals has risen in the past decade from about 33% to 40%; he expects an increase to around 60% over the next ten years. The companies are not keen on such "rebalancing", since it usually involves reducing lucrative call charges rather than increasing fixed charges. But without it, they are vulnerable to competition, including competition from the Internet, which can offer rival services far less expensively... ...Such settlements are a source of endless argument: America's long- distance carriers complain that local telephone companies overcharge them. Moreover, they transfer huge sums of money between countries: in 1994, carriers based in the United States handed over a net $ 4.3 billion to foreign carriers. Because countries in which telephoning is cheap (such as America) tend to ring countries where calls are dearer, American carriers grumble that they are subsidising the inefficient and uncompetitive. Gradually, therefore, telephone companies are moving towards a "sender-keeps-all" system, where they will charge each other a flat fee for access to a certain amount of transmission capacity, rather than bill each other on the basis of use. That would bring them increasingly into line with what happens on the Internet, where settlement is rudimentary. There are payments between each of the Internet's hierarchy of links: access providers pay their regional network and regional networks pay the companies that operate the high-capacity long-distance parts, the backbone of the system. But such payments are mostly based on the availability of capacity, not its use: service providers simply agree to carry each other's traffic without totting up precise bills. This encourages a "hot-potato" approach: Internet access providers hand traffic on as quickly as possible to the carrier taking it to its ultimate destination. That benefits small service providers and irritates big ones, who say they get little reward for the effort of carrying the traffic for most of its journey. In turn, this lessens their incentive to invest in new capacity. The problem of settlement is worse for access providers outside America. Led by Singapore Telecom and Australia's Telstra, they complain that they have to pay all the cost of leasing lines between their country and the United States. "The rest of the planet subsidises the United States," argues Barry Greene, who works for Cisco, a maker of routers, but was previously with Singnet, the Internet arm of Singapore Telecom. The high cost of leasing international lines means that upgrading them to ease congestion can cost a non-American company ten times more than in America.