Privacy, copyright and datacaps on InternetNZ's radar

Part one of Q and A with InternetNZ CEO Vikram Kumar

Vikram Kumar took over as InternetNZ chief executive in February 2010. His CV includes stints at Telecom and that State Services Commission. He speaks to Stephen Bell about the organisation’s role in debates to do with copyright, data caps and the upcoming 700MHz spectrum auction.

What difference do you think you are making to the organisation?

It is about building on the strengths that are already there. I don’t see radical change. There is a huge amount of goodwill that InternetNZ has already gained. To me the way forward is to make sure we still have that strong foundation, but we move forward.

Privacy is an example [of an area] which we had done little of in the past; we do a bit now. We did the PublicACTA conference; I have been involved in some of the TransPacific Partnership Agreement activities. There is copyright. Those are areas where it is about the use of the internet for society, as opposed to the internet itself, which is where InternetNZ has its foundation and traditional strengths.

I think it is really important for the organisation to continue to be in the ‘internet-itself’ space; things like broadband and access issues, net neutrality, data caps; these are all about the network itself, which continue to remain quite relevant for us.

What do you see InternetNZ doing in the privacy space?

Our overall goal is to protect and promote the internet for New Zealand. We can’t do that without looking at the factors that go to maintain trust in the internet. This is where privacy comes in. If people don’t have the confidence and the willingness to use the internet, we’re undermining the platform of innovation and communication.

But how much influence can InternetNZ really have on a question that is being debated internationally?

The Law Commission and InternetNZ jointly organised an open conference or workshop on practical issues related to privacy and suggestion for changes to the Privacy Act.

So it was focussed on what the Law Commission was doing. What we achieved was to have a wide spectrum of people, from technical people, the academic community and the business community, and they all looked at the specific area of privacy on the internet.

The outputs from that workshop were given to the Law Commission to consider for their final report. This was about a year ago.

Now Stage 4, the final report of the Law Commission, has been published, I can see all the issues we had raised in that workshop have somehow been addressed in their final report. And the feedback we got from the Law Commission was high praise for organising that workshop.

I think InternetNZ’s role isn’t necessarily to come up with answers, but to enable people and organisations to move towards the answers.

In your statement in the annual report to InternetNZ you referred to taking a more proactive stance. Will we be seeing the organisation taking definite positions rather than simply encouraging debate?

Yes [you will]. We had a strategy day last year, when the InternetNZ Council came up with four strategic priorities for InternetNZ and its subsidiaries. Number one was leadership.

There is a direct alignment between where the membership and the Council want InternetNZ to go and my role in making that happen.

To me leadership is about understanding the areas that will make a big difference, then focussing on them and doing something tangible.

I will give you two examples. We see some real issues with the changes to the Copyright Act, [which came into force] on September 1.

We have done our bit on submissions and in debate, but InternetNZ didn’t stop there; it decided it needs to have a role in educating people and organisations to know about the law and to prepare themselves for the law. So we set up That to me is a tangible example of leadership, where we chose an area important both to us and to people [in general] and did something tangible about it.

The second is the question of data caps. That, again, meets the test of being important to people, to New Zealand, to the internet and to us.

There have been discussions going on for some time, but we have now taken steps to [formulate] a report to look at the areas needing to be addressed – and we are getting on and doing things about it.

What are the current issues with data caps and what is the next step for InternetNZ?

We are still in the process of getting comments from other people. But we have identified within the membership two areas that are important to get right. The first is the international bandwidth wholesale market – the people Southern Cross sells to. If the rate at which Southern Cross sells to New Zealand and Australia is the same – as they say it is – then there is really a market failure at the wholesale level. So that is one area we’ll be doing something about.

What can you do about it?

To us it is about doing a proper and thorough analysis, to try and understand where the leverage points are.

There is no point rushing in without really understanding the issues and identifying where it is possible to go in and ask for change. We want to be really specific and say ‘here is what we think the issues are’.

It is becoming clear what we have to tackle is around the disincentives that New Zealand content companies have to hosting in New Zealand. At the moment the incentives are to host overseas where costs are substantially lower – and they’ll always be like that because of economies of scale. It’s very hard for New Zealand companies to offer the same rates.

What should be happening is a trade-off; if you host overseas, it is cheaper, but if you host in New Zealand you should be saving in international bandwidth and costs. But because we don’t distinguish at the retail level between domestic and international traffic then there is no trade-off happening; no disincentive [to hosting overseas]. I think that is an issue.

It reflects a number of underlying problems such as peering, backhaul, domestic transit and the lack of retail differentiation between domestic and international traffic. There are a number of issues that are combined there; you can’t take any one of them in isolation.

There are people who say we need to resolve peering, but you can’t resolve peering without resolving backhaul and transit links, or [considering the difference] between international and domestic costs. I think there are a number of factors that have to come together.

Transit links?

What happens in peering is the larger ISPs are making decisions on whom to peer with and where to peer. Those decisions have a huge impact on where content providers host their content.

Can we differentiate fairly between domestic and overseas content, taking account of caching, and will users countenance being charged differentially, as we were in the 1990s? Wouldn’t they see it as a step backwards?

I am not saying that is a stand-alone solution or even necessarily part of the solution. It is just that it is a factor that has to be taken into consideration. The report [by consultant Colin Jackson] says that is a very hard solution; there are many factors that go against it. The better solution might be to have a larger data cap, irrespective of the difference between domestic and international traffic. So there are still areas to work through there.

Is it necessarily desirable to have New Zealand content in New Zealand for local users? If latency were that much of a problem for users, wouldn’t market demand encourage providers to place content locally anyway?

But either you’re passing on costs to content providers or you’re passing on costs to the customer, through poorer customer experience. Analysis by people like Jonathan Brewer shows that even if you have a fibre network you will have huge latency with http. We’re solving the last-mile problem, but we haven’t solved the problem that the very fast fibre speeds will be crippled if you have to get material from overseas. That is a technical limitation of the way the protocols are working.

And that will become more obvious as we get more fibre?

Right. The minute you have a video that is hosted in New Zealand played to you over fibre at high quality — I’m taking about high-definition video — you will have a really good experience; but if it is hosted overseas, you will see the difference. Fibre will make the problem worse.

But won’t the market sort that out?

Not necessarily, because there needs to be an increased understanding and awareness of what the issues are.

Users could look at that and say ‘it’s my ISP’s fault’ or ‘it’s the content provider’s fault’. What we need to do is to provide a solid basis of analysis based on objective facts. I think that is what distinguishes InternetNZ in the way it is doing the analysis and establishing the facts, rather than having a stance that is not necessarily supported by the evidence.

Tomorrow, Vikram Kumar discusses the InternetNZ's public image.

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