The first annual Association of Pacific Rim Universities (APRU) Internet Economy Summer Seminar was hosted at Keio University’s Mita Campus in downtown Tokyo August 24 – 29. The program was funded by a generous grant from The Sasakawa Peace Foundation and was led by a faculty of academic Internet policy experts drawn from APRU member universities.
A diverse group of APRU fellows nominated by governments in the region and a number of Japanese corporations were enrolled in the Seminar, joining an intensive program of presentations, workshops, debates, and evening dinner discussions on a range of challenges in the Internet policy space.
The APRU Internet Economy Summer Seminar has two major goals: first, to promote a greater sharing of knowledge and expertise on Internet policy issues within the Asia Pacific region and second, to strengthen and further consolidate the human networks necessary to sustain and grow a broader dialogue on Internet policy issues in regional institutions, such as APEC and ASEAN, as well as bilaterally.
The Seminar is part of a broader APRU initiative on “Governing the Internet Economy” launched in 2014 at the APRU’s 18th Annual Presidents Meeting and reflects our commitment as scholars to help shape the burgeoning regional conversation on the future of the Internet, based on sound, unbiased research and analysis of the issues. We also believe that universities in the region have a special and unique role in training and equipping the next generation of Asia Pacific leadership in the Internet policy field
The agenda for the 2015 Summer Seminar and biographic information on the APRU Faculty and Fellows participating in the program can be found here. The discussions at the Summer Seminar were under Chatham House rules and “off the record,” except as noted. The summary of the discussions presented below is offered for the most part without attribution and the positions expressed do not necessarily reflect the views of the APRU as an organization.
Day One of the APRU Summer Seminar was divided between a morning round of welcoming speeches and self introductions and an afternoon session focusing on a new report, Going Digital: The Status and Future Potential of Internet-based Economies in Asia, by TRP-Corporate. The welcome dinner featured an informal discussion among three pioneers on the history of bringing the Internet to Asia.
Welcome and Self-Introductions
The Seminar was formally opened by Keio University President Atsushi Seike, under whose leadership the APRU Initiative on Governing the Internet Economy was proposed and launched in 2014. President Seike welcomed APRU Faculty and Fellows and underlined his expectation that the Summer Seminar would contribute to training the next generation of policy experts on the Internet and help build a policy consensus in areas like privacy, security, and competition policy. He urged a firm but flexible approach to governance of the Internet Economy.
Keio Vice President for International Collaboration, Jiro Kokuryo emphasized to Fellows that the Summer Seminar is a unique opportunity to learn how leading academic policy experts foresee the development of the Internet in the Asia-Pacific over the next 10-20 years. He expressed hope that that the Seminar might lead to increased exchange and cooperation among the academic, government and business communities.
Junko Chano, Executive Director of The Sasakawa Peace Foundation positioned the Seminar as an important part of the Foundation’s commitment to promoting greater dialogue and improved relations between Japan and neighboring nations in the region.
National Center for Infrastructure Readiness and Strategy for Cybersecurity (NISC) Counsellor Mari Ichikawa graciously keynoted the opening session. She took the opportunity to briefly outline the Japanese government’s positions on Internet governance issues, highlighting the diversity of the global debate and the difficulty of reaching consensus on key challenges, such as cyber security. She stressed that Japan is committed to international cooperation in facing cyber threats, based on the recognition of their global and pervasive nature. In this context, the government is looking at confidence-building measures with potential adversaries and working with developing countries to strengthen their cyber capacity. She concluded by expressing thehope that the Summer Seminar might strengthen mutual understanding among countries in the region and build new sets of relationships on key Internet policy issues.
The following round of self-introductions highlighted the diverse perspectives and interests of the APRU Faculty and Fellows. Among the issues and interests pinpointed were:
1) The challenges of bringing the Internet to remote areas
2) Worries about DDOS attacks
3) Concerns with where to draw the line on censorship
4) The evolution of telecom and spectrum policy in the region
5) how privacy law affects technology
6) The IPv4/IPv6 transition
7) Net Neutrality
8) Online dispute resolution
9) The weakness of the “multistakeholder” environment in Asia
10) Data use restrictions in Japan
11) The application of the “right to be forgotten” in Asia
12) Internet related compliance issues
13) Research on “smart cities”
14) Ways to diffuse best practices on Internet policy
15) Closing the “digital divide”
16) New rules for e-commerce
17) The deployment of free Wi-Fi
18) The future of ICANN and interconnection issues
Special Session: Reinventing Japan’s Digital Economy
As a prelude to the week’s discussion of regional issues on the Internet Economy, the first day’s afternoon session was dedicated to a set of briefings on recent developments with respect to the Internet in Japan.
The session was kicked off by the newly named Director General for Global ICT Strategy at the Japanese Ministry of Internal Affairs & Communications (MIC), Makiko Yamada, who recent completed a two year assignment as a Special Assistant to Japanese Prime Minister Shinzo Abe.
DG Yamada offered a broad overview of the PM Abe’s three prong economic policy program (monetary easing, fiscal stimulus, and deregulation), specifically addressing the ICT related aspects of the policy. This included advances in research in robotics, expanded training opportunities for women, and making data more widely available for commercial use. She also spoke of new uses of ICT in agriculture, medicine, and online education. Yamada also reaffirmed that the Abe government is committed to the introduction of its National ID system in January 2016 which is aimed at streamlining tax, pension, and other government services.
TRPC Director, Dr. Peter Lovelock, who oversaw the research report, described its high level message as that the region is moving steadily from an “Internet” to a “Digital” economy as advances in cloud computing and big data analytics are diffuse into other areas of the economy, transforming healthcare, education, supply chain management, and financial payments systems.
As traditional sectors of the economy from local drug stores to taxis are disrupted, the question now is how we deal with the “winners” and “losers” in the new digital economy. Lovelock recommends that successful management requires governments and industry to develop a national vision for the Digital Economy, with attention to minimizing unintended consequences, promoting greater transparency, simplifying regulation, and supporting increases in digital capacity.
Twin panels of experts then offered specific insights into how the Internet holds the potential to transform Japanese education and agriculture, with presentations on the progress of online education in and out of universities and efforts by a number of pioneers to use advanced sensor technologies to improve the efficiency and flexibility of a stagnant agricultural sector.
Despite a few promising initiatives in these sectors, there is a clear need for more work in addressing structural impediments. Restructuring incumbent bureaucracies within universities and the agricultural cooperatives as well as improving scalability, access to venture capital, and promoting greater labor mobility remain of utmost priority for Japan.
Welcome Dinner: The Origins of the Internet in Asia
Day One’s Dinner Session brought together three pioneers in introducing Internet technologies to Asia and the US. The evening program aimed to establish for Fellows what early policy challenges were faced in the United States, Japan, and China as they worked to network the region over two decades ago. The program provided an historical context to the contemporary issues that the APRU Faculty and Fellows would be wrestling with over the succeeding days of the Seminar.
Dr. Robert Pepper, former Chief of Policy Development at the US Federal Communications Commission (FCC), related to Fellows how a crucial decision in the late 1980s by the FCC not to impose telecom regulations on the budding Internet paved the way for an unprecedented wave of innovation and growth. Pepper gave much of the credit for the rapid diffusion of the Internet in Asia to the work of the Internet Engineering Task Force (IETF)—describing it as a model for standards-making in its “bottom up” and “rough consensus” approach. He opined that the current multistakeholder process needs to preserve this decision-making style, with governments opting for regulation only in cases where users are fundamentally affected by technological advances. Pepper concluded by arguing that continuing innovation on the Internet is contingent on preserving that flexibility for companies or future investment would be held hostage to the vagaries of government regulation and political pressures.
Jun Murai, Dean of the Faculty of Environment and Information Studies at Keio University, played a major role in bringing the Internet to Japan and later to greater Asia. He recalled that the foundational work for the Internet began as early as 1969 with the development of the UNIX operating system by AT&T and work on the Internet protocol suite (TCP/IP) in the 1970s. He emphasized that academic communities, especially in the US and Europe were key to growing the Internet free from political borders. Murai added that it was largely private funding that financed the deployment of the Internet in Japan and stressed that a key question for the future of the Internet is keeping the proper balance among government, business and the academic/engineering communities in managing the Internet.
Professor Xing Li from Tsinghua University led the construction and operation of the China Education and Research Network (CERNET), which pioneered the introduction and utilization of Internet technologies in China. CERNET currently connects over 1000 universities in China and its programs have served to educate the current generation of Chinese business leaders in companies like Baidu, Tencent and Ali Baba. Li highlighted the growing number of connected individuals as a persistent challenge for the future growth of China’s Internet. Managing network congestion with the increase of new services and users while avoiding fragmentation remains a challenge. Issues related to politically sensitive routing within Internet Exchange Points (IXPs) are now being considered—with Chinese authorities showing increasing concern over the trend towards the encryption of user data.
Day Two focused on the “Internet Economy in Asia.” It sought to provide the basic tools and framework for the major issues to be taken up over the course of the APRU Seminar. APRU Fellows participated in sessions discussing key economic trends, recent technological developments, and infrastructure challenges in the region.
Benchmarking Success: The New Internet Economy in Asia
Session I was a thought-provoking overview of the projected growth of the digital economy over the next five years. The forecast is for some USD$ 19 trillion in growth associated with the deployment of the Internet of Things, with $5 trillion coming in China and nearly $1 trillion in Japan. 75 percent of the potential new value would come directly from greater use of the Internet and associated devices in traditional sectors, such as agriculture, mining, and healthcare.
Despite the promise of exponential growth, these figure evoked skepticism among some in the APRU Faculty who questioned how ready ASEAN economies, in particular, were to take advantage of the potential represented by IoT. Problems of access and connectivity remain a continuing challenge for many developing economies in the region. Last mile connectivity and access to new technologies are out of reach to many urban and rural consumers. Concerns were also expressed over inadequate legal infrastructures to support the emerging digital economy. Only three ASEAN countries have a comprehensive legislative framework for managing the digital economy.
Last mile connectivity and access to new technologies are out of reach to many urban and rural consumers
While Faculty and Fellows argued to what degree the short-term benefits of IoT can be realized, all concurred that the potential is real. The digital economy is upending traditional business sectors and creating new opportunities for growth. Continuing to facilitate this change requires that governments maintain open economies and avoid “localization” requirements that interfere with interoperability and experimentation.
New Technologies Defining Asia’s Future: Cloud Computing, Big Data and the Internet of Things
In Session II the focus shifted to device deployment and usage. Figures show that machine to machine communication will expand dramatically in the region, representing nearly 70 percent of all Internet usage in Japan by 2020. In this new world, the home will be center for most devices and healthcare will be the most rapidly growing sector.
There are serious challenges associated with this impending tidal wave of new devices and applications. Networks will be stretched to capacity and new standards are urgently needed to preserve interoperability.
Networks will be stretched to capacity and new standards are urgently needed to preserve interoperability.
While seemingly technical in nature, these concerns stand to cascade into a new digital divide for the region. Some countries will leap forward, while others fall behind due to infrastructure and human capacity bottlenecks, failing to allow small business (drivers of innovation and job growth) to harness the value of the Internet of Things and Big Data. Instead of spurring new growth and innovation, these costs could become new market entry barriers.
Looking to this future, there are four policy areas where innovation is required. First, is Intellectual Property (IP) where the current copyright system will have to be fundamentally reformed or discarded in favor new ways to protect and share data. Second, is cyber security, with the issue of encryption likely to emerge as point of contention between countries as governments both seek to protect data and balance traditional law enforcement and security concerns. Third is privacy. Here there is a growing conflict between a personal right to privacy and the many societal benefits to be gained from leveraging big data. Finally, there is the question of governance. How will traditionally stove-piped bureaucracies deal with a connected society that ignores borders?
Bridging the Digital Divide: Internet Capacity Building in Asia
Session III examined the issue of the digital divide from a number of perspectives. Beyond the gaps in economic development and infrastructure, the nature of the divide has grown to encompass gender issues, cultural and linguistic diversity (Indonesia), and growing ageing societies (Japan, China, and Korea).
Compounding these challenges are serious human capacity issues. Japan remains in serious short supply of CIOs and cybersecurity professionals.
Much as the US and EU have struggled with a lack of engineers, so too does Japan lack expertise in areas such as data analysis and systems engineering. The APRU as a university consortium with an educational mandate for the Asia-Pacific region, may wish to consider how university curriculums and degree programs could be realigned to train and expand the next generation of IT professionals.
Further research and academic attention is needed to examine how the growing digital divide impacts on the cultural dimension of the Internet. Social media has dramatically affected youth development and patterns of social interaction in countries such as Malaysia and Indonesia. Young Malaysians spend over three hours a day on social media, while Facebook is increasingly becoming the public face for governments and business in Asia—extending beyond commercial activities and blurring the lines between official and private communications.
These developments suggest greater attention is necessary at the regional and national levels in Asia to measures aimed at eliminating basic infrastructure gaps, promoting greater labor mobility and training for IT professionals and encouraging the development of a diverse range of digital content for use in education.
Day Three focused on privacy and cyber security concerns in preparation for an Oxford-style debate among APRU Fellows on two propositions:
1) The issues of privacy should generally be left to the market and private Internet service providers
2) The Internet should be protected as a “global commons” from unilateral assertions of national cyber sovereignty.
An evening discussion brought together a number of Japanese business leaders for an informal exchange on how new business strategies are changing the Asian Internet.
Protecting Privacy and Sharing Data in Asia
Session IV of the Summer Seminar looked at approaches to regulating privacy. While some 100 countries have privacy regimes, there are significant gaps in Asia and no consensus on the key elements of an effective regulatory scheme. The growing uncertainty is a key obstacle to cross-border data flows in the region and a significant compliance problem for small businesses. While control of privacy through a “consent” based framework appears increasingly as a norm, serious questions remain as to whether consent is a realistic basis for a regulatory regime. “Trust” based frameworks are an attractive alternative, but are difficult to operationalize. Moreover, this debate is fast being eclipsed by technological realities associated with the emergence of the Internet of Things.
Japan’s privacy law has borrowed from both the US and EU experiences, but it is unclear as to whether it can develop as a model for the rest of Asia. An effort to incorporate the OECD principles on privacy into the new framework has complicated the creation of effective guidelines for business. Japanese companies collect significant amounts of data in the course of their business, but absent new guidelines they face limits (both legal and societal) in utilizing this data for economic purposes.
China, the world’s largest Internet Economy, currently does not have a personal information law, but maintains generalized norms that companies follow associated with consent notification. The slowing economy is increasing pressure from the corporate sector to discover new ways to utilize big data. Larger ICT companies are looking to confirm their ownership of the personal data that they collect and are watcin closely observing the US experience in managing data as a model for future domestic policy. In this context, China may in principle support rules agreed to within the Trans-Pacific Partnership (TPP) negotiations regarding cross-border transfers and prohibitions against data localization.
Guarding Critical Infrastructure and National Security
Session V explored the dimensions of cyber threats and national responses to these challenges in Asia. A key concern for all parties remains the lack of necessary economic incentives and human resources to tackle the issue. Security was not designed into the contemporary Internet. Absent a major redesign of its foundational architecture, greater international cooperation, further training, and promotion of stronger user awareness remain the best lines of defense in an environment where over 200,000 new instances of malware are being deployed every day.
This conclusion underscores the need for more discussion of potential governance models for cybersecurity, borrowing from existing experience in other areas where a mixture of government and private sector participation is occurring. The Council of Europe’s Convention on Cybercrime might serve as a useful starting point, however only the US, Japan and Australia are signatories within the Asia-Pacific region. The multi-tier system of cyber standards for cloud computing in Singapore is an example of a successful national government partnership with the private sector. Other examples of private sector collaboration are the 19 sectorial Information Sharing and Analysis Centers (ISAC) organized in the US in sectors such as aviation, nuclear power, and healthcare.
The fundamental problem in developing more comprehensive cybersecurity mechanisms may be that the appropriate economic incentives are not yet in place for widespread adoption.
The fundamental problem in developing more comprehensive cybersecurity mechanisms may be that the appropriate economic incentives are not yet in place for widespread adoption. Security upgrades mandated by governments are expensive and complex to implement especially for small-to-medium enterprises (SMEs). Moreover, government standards can also serve as cover for protectionist measures. International norms are still being developed — for example, the US appears to still reserve the right to use cyber weapons for both preemptive and defensive purposes.
The fundamental problem in developing more comprehensive cybersecurity mechanisms may be that the appropriate economic incentives are not yet in place for widespread adoption.
The digital divide also makes regional cooperation in the Asia region difficult. Many ASEAN countries lack the capabilities and resources to manage an effective cybersecurity strategy. And while international cloud services providers may do a better job protecting sensitive data than local enterprises, there remain powerful economic and nationalist rationales to keep data “at home.”
Group Discussion: “Is Common Ground Possible?” Debating the Future of Privacy and Cybersecurity in Asia
The group debate was the highlight of the day, with APRU Fellows forcefully taking both sides of the argument. Possibly the greatest takeaway from the exercise was a recognition of the still great gaps in the collective understanding of these issues. Fellows were asked to engage in a simulation designed to highlight the national sensitivities involved with privacy and cyber security questions while seeking to maintain a regional perspective. No conclusion emerged beyond the need for additional research, and more frank dialogue, if Asia-Pacific nations are to develop a stronger set of common principles in this area. The APRU Summer Seminar, in bringing together leading academic experts together with government representatives from around the region and the next generation of business leadership from Japan’s corporate sector, may well qualify as a “best practice” in this regard.
Evening Dinner Session: New Business Strategies Shaping the Asia Internet
Dr. Richard Dasher, Executive Director of Stanford University’s US-Asia Technology Management Center kicked off the second of the Dinner Sessions by asking a group of prominent Japanese business panelists what the biggest future challenges and trends are for business in the region.
Yoshiyuki Koseki, Vice Chair of “BIGLOBE”, one of Japan’s largest Internet Service Providers said that he sees opportunities in the emergence of the Internet of Things and growing demand for Internet-connected devices that leverage Japan’s traditional strengths in manufacturing.
Jun Takei from Intel’s Global Policy Office introduced his company’s Global Digital Infrastructure Initiative, which argues the need for a government – industry partnership in responding to cultural and legal differences. Divergent national security priorities in the Asia region remain a top concern for Intel’s future business.
Masanobu Katoh, CEO of Intellectual Ventures which maintains one of the world’s largest patent portfolios, spoke about the tensions between open and closed business strategies for the Internet in Asia and how innovation and growth depended on making the right choices.
Yoshihiro Obata, CEO of Bizmobile, a mobile solutions firm, picked up this theme in explaining how his company offers its customers technology to manage closed user groups over an open network. He worried that the looming challenge is the need to build a separate network to support the burgeoning Internet of Things. He also pointed to new business opportunities in the related fields of artificial intelligence and robotics, saying that he did not see them as replacing but enhancing human capabilities.
Day Four centered around an offsite trip to the Kurohime Highlands and the Afan Forest Preserve in Nagano prefecture, where the APRU Faculty and Fellows heard from one of Japan’s leading environmentalists, hiked on mountain trails and enjoyed a meal of venison and local salmon sashimi. An intensive 90-minute session on the sensitive and controversial issues of user access and government filtering of content followed.
User Access and Filtering: Getting the Balance Right
Participants in Session VI generally agreed that access to the Internet was an important human right. It was also recognized that in most jurisdictions some degree of government filtering of Internet content is permissible.
In the US, the FCC has this authority as part of its power to manage communications. Japan allows for some filtering under the framework of a non-profit review organization funded by the telecommunications companies and sanctioned by the government. However, the dynamic nature of the Internet makes the tracking and deletion of objectionable content difficult.
In most societies, the issue boils down to freedom of expression vs. the preservation of social harmony. In Asian countries, this balance tips toward filtering sexual and religiously sensitive content. However, as Asian societies become more secular, the balance could shift.
The Internet has become both too broad and complex to wipe clean. National policies on filtering need to reflect this reality.
Policies in this area will also be influenced by technological trends. The “right to be forgotten” may be a stated policy goal, but erasing information from search engine result is not the same as removing any references to the topic from the Internet at large. The Internet has become both too broad and complex to wipe clean. National policies on filtering need to reflect this reality.
Day Five took a detailed look at policies fundamental to building an Internet Economy in Asia. APRU Fellows from Japanese industries outlined the challenges that they saw for their companies in adapting to the rapidly growing and changing Internet Economy in the region.
Protecting Content Online: New Business Models and New Regulations
Session VII was kicked off with remarks on how Japan’s copyright policies are restricting the use of copyrighted material in public education. For example, copyrighted materials cannot be used outside the class, stored on local on-campus servers, sent via email to students or provided in the context of an on-demand lesson.
Japan, like many continental law countries, does not recognize the “fair use” of copyrighted materials. More significantly, Japan has not revised its copyright law to reflect the changes and opportunities presented by the development of the Internet—putting it out of sync with the rest of Asia. Reasons include pressure from domestic interests to preserve the status quo and the reluctance of Japanese courts to provide guidance from an intellectual property or competition policy perspective.
Outside the Japanese context, it was pointed out that just as business models in other sectors are changing as a result of the Internet, copyright law must also change since current interpretations are both unenforceable and unproductive. For Internet related businesses, reliance on trade secrets law might be the answer, since analytically this might provide a “shut off” valve and a dispute resolution mechanism.
Challenges for Japanese Business: Perspectives of the Next Generation of Leaders
Session VIII on net neutrality and spectrum allocation was replaced with a more general exchange led by the group of young Japanese executives selected as APRU Fellows. These Fellows addressed the challenges facing Japanese business in developing a coherent business strategy for the Internet. A significant portion of their presentations related to companies’ need for better training and smarter management of human resources in the cyber security area.
The point was made that Japan needs not just “data security officers” but “data protection experts” since the issues are not only technical but legal — and many issues involve dealing with customer concerns, not just operational problems. It was suggested that companies work with universities to develop programs for graduate training in security management. Additionally, Japanese companies need to build stronger communities of security experts both within and across sectors. This requires the sharing of information, which is difficult in the stove-piped Japanese environment.
Competition among firms still has a largely domestic focus rather than a regional or global perspective.
Concern was expressed that knowledge about international trends in the ICT field is not widely available in Japan. Competition among firms still has a largely domestic focus rather than a regional or global perspective. In addition, there are social and cultural obstacles to the delivery of innovative services as well as gender inequality and a lack of labor mobility.
Standards, Interoperability and Competition on the Internet
Session IX provided a quick-moving overview of issues in the area of standards, interoperability and competition. There were strong complaints that the current international standards process is too slow and not broadly inclusive or transparent. On the other hand, in the view of many, reliance on the engineering community or the corporate sector to create standards is no longer workable. Governments must be involved.
The likely first step is to strengthen coordination among various standards setting bodies and to realize that standards-setting entails meeting consumer needs and expectations with regard to Internet services in addition to harmonizing Internet operational requirements. A further matter of concern is the growing tendency of national governments, such as China, to set unilateral standards, as well as the gap between EU mandates on privacy and the principles-based approach being taken within APEC.
Day Six addressed the challenge of governing the Internet Economy and its implications for Asia. The transnational approach to Internet governance found within ICANN and the UN-based Internet Governance Forum (IGF) was contrasted with the growing interest for solutions in international and regional trade organizations, such as the WTO and APEC, and international trade frameworks, such as the recently revised and expanded Information Technology Agreement (ITA). The day concluded with a discussion on the issue of “fragmentation” of the global Internet.
From Tunis to Now: The Challenge of Internet Governance and the “Multistakeholder” Process
Session X found that, while the “multistakeholder” (MS) process has firmly entered the vocabulary of how Asian governments regard the Internet, implementation remains weak. Many governments routinely express support for MS, but do not participate actively in the IGF or work regularly with civil society and other stakeholders to address domestic Internet-related issues. In addition, Asian businesses generally find the MS process difficult to understand and thus leave Internet policy questions to their governments.
The question of MS governance and the Internet will be discussed at the UNGA in December 2015 as part of the World Summit on the Information Society (WSIS) ten-year review of the IGF process. A key point of discussion is whether governments need to go beyond an advisory role in managing issues related to the Internet. Related concerns include measures that reduce barriers to business involvement and better structure civil society participation. The role of academia also needs to be considered. For example, ICANN, another major platform for Internet governance, is interested in promoting academic involvement, but time and resource commitments for individual academics are often too high. One question is whether the APRU can help to facilitate research, unbiased policy analysis and a more accessible framework for academic involvement.
The debate over the Internet governance process and the management of issues surrounding the growth and development of the Internet are not necessarily one and the same. The ICANN gLTD process, which involves the management and expansion of generic domain name extensions as well as the routine assignment of IP addresses, functions well. On the other hand, ICANN as a private corporation has explicitly removed itself as a forum for debates on issues such as privacy and cyber security. Thus, while the IANA transition has evoked great controversy, ICANN’s role as a facilitator and guardian of basic Internet infrastructure is still necessary and will likely continue.
The Intersection of Trade Policy and the Internet
Session XI addressed the management of the economics of the Internet. The Chinese government, during its APEC incumbency in 2014, called for discussion of the Internet Economy and the creation of an adhoc APEC Internet Economy Steering Committee. This committee has a mandate to help coordinate APEC activities across such policy areas as health, education, logistics, e-commerce, connectivity and service.
The Pacific Economic Cooperation Council (PECC) is supporting the work of the Steering Group through focusing on development of general principles as well as concrete areas for driving greater alignment among member states. Key questions raised by PECC for discussion include: 1) how to measure the economic and social benefits of the Internet; 2) addressing infrastructure gaps in the region related to the cloud and connectivity; 3) steps to facilitate the cross border flow of data; 4) promoting greater use of Cloud Computing and Big Data; 5) growing e-commerce 6) protecting cybersecurity
While the Internet is a new and transformative technology, managing the emerging Internet Economy in the region may not require a new and unique set of tools and measures. TRIPS, GATS and the recent expansion of the Information Technology Agreement (ITA) all offer frameworks for facilitating cross-border trade flows. The US-EU Trade Principles on Information Communication Technology concluded in 2011 and their extension to Japan in 2012 may provide a set of “soft” trade commitments around which government policies, e.g. on “data localization,” can be more closely aligned and serve as a model for developing similar sets of principles in areas such as cyber security.
While the Internet is a new and transformative technology, managing the emerging Internet Economy in the region may not require a new and unique set of tools and measures.
Already, the APEC Privacy Framework is an example of how a soft “approach” can help promote both stronger dialogue and the alignment of policies among nations in Asia. Another example is the successful liberalization of telecommunications services within the GATS context. However, there is a long way to go. Discussions of ICT trade principles between ASEAN and the US have been stymied by definitional issues, capacity problems among ASEAN nations and a lack of clarity concerning the application of these principles.
Avoiding Fragmentation: What is the Regional Agenda for the Internet in Asia?
Session XII focused on the challenges of Internet fragmentation and its implications for continued growth and innovation on the Internet. Defining what we mean by “fragmentation” is key; e.g. is Apple’s “walled garden” a serious challenge to the global Internet or just a business model? A similar question might be asked with respect to proprietary protocols chosen to improve performance rather than divide the internet, e.g. Google DNS. While this kind of technical fragmentation produces problems, it is also part of the innovation and growth of the Internet.
In the absence of a global legal framework, fragmentation will occur.
More concerning is the patchwork international legal framework around the Internet. The Internet is vital for national, social and economic systems. In the absence of a global legal framework, fragmentation will occur. Currently, the EU is consolidating a legal framework for the Internet across Europe. Similarly, in the United States, the federal system provides a measure of consistency though rules differ from state to state.
In Asia, however, the challenges are much larger. APEC cannot enforce solutions and ASEAN has found it difficult to collectively move forward due to financial and other constraints among member countries. That said, there is recognition that a a fragmented legal framework for the Internet in Asia means lost opportunities. There is a compelling need for forums like the APRU to bring different parties to the table. In addition, the academic community must provide the research and analytic perspectives needed to develop practical solutions in the long term.
This is the start not the end of a process. Thanks to the generosity of The Sasakawa Peace Fund and the strong support of the Keio University community, funding and facilities for the APRU Internet Economy Summer Seminar will be available through 2017. We look forward to greeting the next group of APRU Faculty and Fellows in Tokyo next year and to continuing the open dialogue and highly interactive exchanges that characterized the Seminar sessions this year.