Internet backbone interconnection arrangements should remain unregulated, the International Chamber...

and sustained the massive growth” of the Internet, it said. But despite the huge success of these agreements, some governments have proposed regulating them based on claims that regulation could spur further investment, it said. The different forms of interconnection contracts, such as paid peering, settlement-free peering and transit, have made possible mushrooming Internet usage as well as corresponding increases in traffic from new multimedia content, it said. Routing of international Internet traffic used to be U.S.-centric, and then became more established in Organisation for Economic Co-operation and Development countries, it said. The latest trend is for routing to be “rest of world-centric,” with Internet Exchange Points increasingly prevalent in emerging markets, fostering global development of local traffic and content and further reducing inefficient international Internet traffic flows, it said. The impact of the trends on worldwide Internet traffic has been significant, it said. Bandwidth connections from each region of the world to North America have dropped over the last decade, and local IXPs in multiple countries have now supplanted most of the need for international connectivity, it said. As regional fiber networks roll out, bringing regional connectivity, expensive, non-optimal, trans-Atlantic and trans-Pacific routing has decreased, it said. Europe has surpassed the U.S. as the preferred transit point for African traffic, it said; Latin America is now the region most heavily reliant on U.S. connectivity. IXPs tend to be created in metropolitan areas where it’s less expensive for ISPs to connect, it said. A bottom-up, ISP community-driven approach that’s flexible in terms of voluntary interconnection has been shown to be more effective in developing nations than top-down mandates, it said. Current proposals to regulate international Internet infrastructure are an attempt to shift costs between countries instead of the underlying traffic flows that cause those costs, it said. But the latter approach has “been the successful market-driven model over the past 15 years,” and policymakers should promote successful competitive models before imposing rules that could suppress traffic flows and investment incentives, it said. There has long been long-standing interest expressed in the ITU-T study group on economic policy issues for moving from the commercially driven framework for international interconnection agreements to a model that would involve government intervention on the structure of such agreements and the payment mechanisms, the International Chamber of Commerce told us. Since 2008, there are growing calls in preparation for two major ITU conferences in 2012 for implementation of an ITU recommendation on alternative approaches to the commercially driven model, it said. The two events in 2012 are the World Telecommunication Standardization Assembly, and the World Conference on International Telecommunications (WCIT-12), it said. Going into WCIT-12, there are proposals to amend the International Telecommunications Regulations to include the principles raised in discussions, it said. The study group beginning in 1992 discussed “International Charging Arrangements for Internet Services” (ICAIS) starting in 1998, it said. The 2000 World Telecommunications Standardization Assembly (WTSA) adopted recommendation D.50, which included ICAIS proposals, it said. The study group examined the proposals from 2001 to 2004, it said. Certain countries proposed or supported the concept of a traditional settlement framework for measuring the flow of Internet traffic in each direction and assigning a payment methodology to the flows, it said. The concept would apply the traditional voice accounting rate/settlement model to Internet traffic, it said. Studies between 2005 and 2008 further focused on a new approach to Internet interconnection charges in particular for traffic between developed and developing countries, it said. The 2008 WTSA amended recommendation D.50 to include the possible need for a “network externality” premium to be paid to developing countries in the context of such agreements, it said. The WTSA amendment to add the network externality premium was adopted “notwithstanding an unprecedented 28 Member States taking a Reservation, and stating that they would not support the recommendation,” it said.