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EU set to fight Internet tax and "spying" at global summit

By Claire Davenport

BRUSSELS (Reuters) - European Union member states are preparing to fight as a bloc alongside the United States to prevent a move by Russia and countries in Africa to impose a levy on internet traffic and make it easier to track users' activities.

The showdown over the policing and administration of the internet will take place at a meeting of the International Telecommunications Union in Dubai from December 3-14, when the ITU's 193 member countries will meet to debate new net rules.

The EU's 27 states are staunchly opposed to sweeping plans to regulate the internet, including proposals from Africa, Asia and the Middle East that governments should be able to trace the flow of Web-based traffic and introduce a tax on companies such as Google and Yahoo! if they deliver content to networks abroad.

The United States, which plays a dominant role in administering the internet via ICANN, the Internet Corporation for Assigned Names and Numbers, is firmly opposed to any new restrictions, which it fears will limit innovation and commerce.

It is backed in its stance by the EU, Canada, Australia, New Zealand, Mexico and other ITU-member countries. As well as having support from African countries, officials say Russia has backing for some of its proposals from China.

"The EU believes that there is no justification for such proposals," the European Commission, the EU's executive, said on Friday, saying it was the view of all 27 member states.

Neelie Kroes, the European commissioner responsible for internet policy, says some of the proposals being made ahead of the ITU conference risk damaging the internet's evolution as a critical piece of global commercial infrastructure and a network for the free flow of information and data.

"The European Union's firm view is that the Internet works," she said this week. "If it ain't broke, don't fix it."

Leaked drafts of a proposal from Russia show it would like to have more say over internet traffic entering its networks, a proposal the United States has said is most troubling to them.

"Member states shall have the sovereign right to regulate... the national internet segment," Russia's proposal says.

The U.S. ambassador to the ITU, Terry Kramer, said Moscow's plans would give governments "the right to route traffic, to review content, and say that's all a completely national matter", a potentially profound limitation on speech and trade.

Any agreements which would allow governments to shepherd traffic at their will threaten U.S. business interests because most content on the internet either originates from, is stored in or routed via the United States.

With some of the world's biggest and most innovative Web-based companies, from Google to Facebook, Twitter and Yahoo!, based in the United States, the country has the most to lose.

While countries like Russia cite cyber attacks as a reason to monitor traffic, the EU see it as an excuse.

"Some countries treat this as a euphemism for controlling freedom of expression," said a commission official.

PAYING FOR CUSTOMERS?

The EU is also alarmed by proposals to make content providers pay for having their services delivered abroad.

As traditional phone revenues decline and internet access prices remain high, some countries argue that Google, Skype and Facebook ought to pay to have their traffic routed to that country, helping them fund the expansion of their networks.

A leaked proposal from Cameroon says traffic reaching a network operator would incur "full payment." Kramer said some Arab states were also favorable to the idea.

However, such proposals, known as 'sender party pays', are a potential boon to European telecoms companies, some of which announced in October that they supported such fees. Some European telecoms operators have or would like to have operations in developing countries such as Cameroon.

The German operator Deutsche Telekom tried to promote the principle by comparing it to the first postage stamp. But in practical terms, extending the way the postal service makes money to the Internet could mean that Google would pay each time someone in Cameroon read their Google-based email.

Critics say such proposals are unworkable because traffic usually crosses half a dozen networks in several countries before it lands in a person's browser.

"The idea that you trace and bill all of this is ludicrous," said James Waterworth of the Computer and Communications Industry Association, a U.S. group whose members include Facebook and Microsoft and which has an office in Brussels.

Internet activists say such fees would 'Balkanise' the internet and cause an information black out in poorer countries.

"Who would be interested in providing content, if they have to pay for doing so?" said Markus Kummer of the Internet Society, a think-tank with offices in Geneva.

"And developing countries might be shooting themselves in the foot, as reversing the economic Internet model might cut them off from accessing vital information."

(Reporting By Claire Davenport; editing by Luke Baker)

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