This fall, The European Parliament (EP) approved a new package of legislation on electronic communication networks and services. Soon the European Union’s Council will start discussing these expensive and misguided new rules that seriously threaten the nature and delivery of Internet services in the Baltics.
The EP’s new regulations, if approved by the 27 EU member states, would empower regulators to monitor the inner operations of communication networks and delay future upgrades based on bureaucratic objections. Such regulatory oversight of the Internet is troubling for many reasons. First, there is a clear privacy concern that must be addressed. If officials are going to monitor the digital data in our Internet communications, how can citizens be certain of our right to privacy?
Second, minimally regulated Internet has served the Baltic States well so far. The 2008 United Nations E-Government Survey grouped Estonia, Latvia and Lithuania together with the Nordic countries, not with other Central and Eastern European states. Estonia is among the world’s leaders in online banking and online government services. All three countries have high per capita Internet diffusion rates in comparison with other new members of the EU. Rural areas benefit from high-speed wireless access while advanced fiber optic lines are being deployed in urban areas. This has brought new choices for entertainment and entrepreneurship to the Baltics. The future economic and social development depends on the ability to continue deploying advanced new technologies faster than other countries in Europe. But the EP’s new rules directly threaten this as an increase in government regulation brings about unintended consequences. This may create bottlenecks for developing and offering new online services.
Third, the EP included in its regulations a prohibition against "hindering or slowing of traffic.” One and a half years ago the cyber-attacks against Estonia clearly demonstrated that the Internet is not always a force for good. Instead, it can be used by outside forces to create serious problems. Cyber-attacks can substantially harm economy and cut off communication between the government and citizens during a crisis. The answer to this threat is to have a network that recognizes these dangers and responds rapidly. Yet the EP’s new rules are so broad and vague that even potential technologies identifying and repulsing a cyber-attack could be prohibited.
Fourth, even if the EP’s rules eventually are interpreted in a way or changed to allow for "national security” technology that helps repulse cyber-attacks, then this regulatory overkill brings about broader negative externalities. The reason goes to the heart of the way we increasingly use the Internet. While 10 years ago we used the Internet just for email and Web site browsing, today there are dozens of exciting new applications. We are streaming television shows and movies. Skype calls go over the Internet and so do gaming and file sharing.
These Web 2.0 type applications are creating a crushing new burden of data on our networks. The BT Wholesale recently calculated that 30 minutes of TV content accessed over the Internet consumes the same amount of online bandwidth as about 78,000 e-mails. As companies push more content onto the Internet, our networks at some point will reach capacity. For users, the Internet will resemble traffic in the center of Riga during a rush hour or even on the Narva-Ivangorod Bridge.
This data growth is also adding significant new complexity to the way the Internet works. Some data (a live sports event or phone call) must go immediately from one party to another or the experience is ruined. Other data (an e-mail) can be delayed a few seconds and the user will never notice.
But the EP’s new rules do not recognize this new Internet reality. It is as if our traffic laws began mandating maximum roadway speeds regardless of whether the road is a highway between Riga and Vilnius or a country road without pavement and full of potholes somewhere in rural Estonia.
The Internet has a special role in the Baltics. Our economy and our security both depend on it. The EP approved its new Internet rules in an effort to maintain what it calls an "open” Internet but unfortunately it let vague, ill-informed lobbying interfere with this laudable goal. The EP is right that the Internet must remain accessible to all. But for the Baltics, its new regulations are a giant step backward.
Meelis Kitsing is a PhD Candidate at the University of Massachusetts Amherst and a Doctoral Fellow at the National Center of Digital Government in the United States.
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