SELECTIVE DOCUMENTS ON GII

THE GLOBAL INFORMATION INFRASTRUCTURE: AGENDA FOR COOPERATION*

Version 1.0

PREFACE

The Conference, held in Buenos Aires, Argentina, signaled a new undertaking by the International Telecommunication Union (ITU). Vice President Gore called upon every nation to establish an ambitious agenda to build the GII, using the following five principles as the foundation:

The purpose of this GII: Agenda for Cooperation is to amplify these five prin-ciples and to identify the steps the United States, in concert with other nations, can take to make the vision of the GII a reality. We hope that it will also serve as the basis for engaging other governments in a consultative, constructive, and cooperative process that will ensure the development of the GII for the mutual benefit of all countries.

In proposing this initiative, we recognize that market forces and technological advances have already begun to expand existing interconnections among our res-pective nations:

This Agenda for Cooperation sets forth the U.S. Government's vision for developing a GII that can yield the benefits described above and more. It identifies specific areas where intergovernmental, as well as government-private sector, cooperative efforts are needed. Also identified are proposals for concrete actions that the United States can take, by itself or with other nations, to accelera-te the pace of development of the GII. While we believe the private sector will build, own, and operate the GII, governments have the power to take actions that can either accelerate or retard its development. We believe that a concerted and coordinated international effort can achieve the former and avoid the latter, and we invite other countries to join us in this cooperative venture.

I. INTRODUCTION

A. Technological Convergence and the New Information Age

As we approach the end of the twentieth century, information is a critical force shaping the world's economic system. In the next century, the speed with which information is created, its accessibility, and its myriad uses will cause even more fundamental changes in each nation's economy.

These changes will be the result of technological convergence of the previous-ly distinct telecommunications, information, and mass media industries. Boun-daries that once separated the types of networks used to deliver voice, data, and video services are increasingly blurred. In a digital world, these services can be combined and offered over the same transmission system.

Multiple networks composed of different transmission media, such as fiber optic cable, coaxial cable, satellites, radio, and copper wire, will carry a broad range of telecommunications and information services and information techno-logy applications into homes, businesses, schools, and hospitals. These networks will form the basis of evolving national and global information infrastructures, in turn creating a seamless web uniting the world in the emergent Information Age. The result will be a new information marketplace, providing opportunities and challenges for individuals, industry, and governments.

B. New World Vision through Communications: The GII as a

Product of Technological Convergence and Competition

The Clinton Administration has made the development of an advanced National Information Infrastructure (NII) and the GII top U.S. priorities. A major goal of the NII is to give our citizens access to a broad range of information and informa-tion services. Using innovative telecommunications and information technolo-gies, the NII -- through a partnership of business, labor, academia, consumers, and all levels of government -- will help the United States achieve a broad range of economic and social goals.

Similarly, other governments have come to recognize that the telecommunica-tions, information services, and information technology sectors are not only dynamic growth sectors themselves, but are also engines of development and economic growth throughout the economy. With this realization, governments have sharply focused their public policy debates and initiatives on the capabilities of their underlying information infrastructures. The United States is but one of many countries currently pursuing national initiatives to capture the promise of the "Information Revolution." Our initiative shares with others an important, common objective: to ensure that the full potential benefit of advances in infor-mation and telecommunications technologies are realized for all citizens.

The GII is an outgrowth of that perspective, a vehicle for expanding the scope of these benefits on a global scale. By interconnecting local, national, regional, and global networks, the GII can increase economic growth, create jobs, and improve infrastructures. Taken as a whole, this worldwide "network of net-works" will create a global information marketplace, encouraging broad-based social discourse within and among all countries.

The GII will depend upon an ever-expanding range of technology and pro-ducts, including telephones, fax machines, computers, switches, compact discs, video and audio tape, coaxial cable, wire, satellites, optical fiber transmission lines, microwave networks, televisions, scanners, cameras, and printers -- as well as advances in computing, information, and networking technologies not yet envisioned.

But the GII extends beyond hardware and software; it is also a system of applications, activities, and relationships. There is the information itself, what-ever its purpose or form, e.g., video programming, scientific or business data-bases, images, sound recordings, library archives, or other media. There are also standards, interfaces, and transmission codes that facilitate interoperability between networks and ensure the privacy and security of the information carried over them, as well as the security and reliability of the networks themselves. Most importantly, the GII includes the people involved in the creation and use of information, development of applications and services, construction of the faci-lities, and training necessary to realize the potential of the GII. These individuals are primarily in the private sector, and include vendors, operators, service pro-viders, and users.

The GII will both stimulate and respond to global demand for new informa-tion technologies and services./1/ The GII can offer consumers in each country unprecedented access to information from a variety of sources on a global basis. With appropriate changes in regulatory structure, the GII can also help usher in an environment more responsive to user demands by providing companies oppor-tunities to offer any information or telecommunications product or service to any customer, rendering obsolete past regulatory labels or technological niches.

The business community has become the principal force for the pro-competi-tive restructuring of telecommunications and information markets. Business users, whose commercial activities are becoming increasingly global, require access to advanced services at higher speeds and capabilities, and at lower costs, to manage their global operations effectively. When the national carriers cannot provide the unified international networks and services that companies need to conduct business and research, frustrated users develop their own international "private" networks, often leasing private lines from different national carriers. However, these private networks -- even the most sophisticated -- still suffer from the high cost of leased lines in most countries and the difficulties inherent in attempting to create global networks based on a patchwork of services subject to widely varying capabilities and regulation.

The scientific and academic communities also have stringent demands for access to information resources and powerful computing capacity around the world. The international research and academic community was instrumental in developing the Internet, an already global mass of interconnected computer networks. The astonishing growth rate of the Internet network -- over ten per cent per month for more than five years -- is just one indication of the growing demand for and supply of digital information.

C. Cornerstone of the GII: A Community of Global Interest

The nations of the world are diverse in size, levels of economic development, political, economic and social structures, and language and culture. We believe, however, that despite these differences a broad community of interest exists among countries to better the lives of the citizens of the world -- all citizens. Regardless of a country's overall level of technological development, active participation in the evolving GII can provide the tools to improve the quality of life.

For example, the GII can facilitate health care delivery through telemedicine, linking rural physicians to major medical facilities for off-site consultations on difficult diagnoses. If only a computer and a wireless link are available, they can provide a data base search and on-line questioning of a consulting expert. If fiber optic networks are available, telemedicine services can include remote visual examination. Such services are a boon to rural physicians. Similarly, the GII can quicken response time for disaster relief. It can transform education with compu-ter-based multimedia systems that teach with both sight and sound, greatly increasing retention rates and providing children access to greater educational opportunities. It can provide new tools to assist persons with disabilities. The GII can also make factories more efficient, speed the creation of new and better goods and services, cut the cost of business by improving efficiency, develop new jobs and markets, increase trade, and facilitate flows of information across borders.

That is not all. A well-developed GII can enhance democratic principles and limit the spread of totalitarian forms of government. Representative democracy is founded on the premise that the best political processes are those in which each citizen has the knowledge to make an informed choice and the power to express his or her view. The GII will allow wider and greater citizen participation in decision-making by providing the additional means for individuals to keep in-formed, as well as to express their opinions. Through the GII, the world's citi-zens will have the opportunity to share information and cultural values, fostering a greater sense of global community. By encouraging exchanges of ideas, goods, and services among all countries, the GII can contribute to a framework for lasting peace.

Realizing these benefits will not be easy -- our vision of the GII presents a challenge that cannot be undertaken by a single country, nor overcome by government fiat. Rather, its success will depend in large measure on innovation and investment by the private sector. As the principal source of expertise and capital, the private sector should, in response to marketplace demands, determine what technologies to pursue, set the pace of development, establish the appro-priate standards, and develop new services and applications. For their part, governments can facilitate these activities by creating a legal and regulatory environment that supports efficient investment and innovation, and promotes full and fair competition. Governments can also provide leadership by supporting testbeds for new technologies, fostering the transfer of resulting technologies to the private sector, promoting the assimilation and use of applications and tech-nology through government procurement, and developing applications that support government operations and dissemination of government information.

II. BUILDING A FOUNDATION FOR THE GII -- FIVE BASIC PRINCIPLES

The United States believes that five basic principles -- encouraging private in-vestment, promoting competition, providing open access to networks and ser-vices for providers and users, creating a flexible regulatory environment to keep pace with technological and market developments, and ensuring universal service -- should serve as the foundation for the development of the GII. In our view, this foundation will facilitate information infrastructure development in indivi-dual countries and the interconnection of networks on a global basis. It will also accelerate development of useful applications, and increase sharing of informa-tion among people around the world. We believe these principles apply equally to the telecommunications, information technology, and information services industries. In partnership with the private sector and all users, we believe that governments should take action to adopt, apply, and advance these principles at national, regional, and global levels.

A. Encouraging Private Investment

Given the facts that the worldwide market for information technology, pro-ducts, and services is currently valued at $853 billion, and that worldwide invest-ment in telecommunications infrastructure alone is expected to exceed $200 billion by 2004, both developed and developing countries need to find ways to share in this growth and prosperity. Attracting private sector investment is the most effective way for countries to do so -- as well as to improve their networks and services, promote technological innovation, and succeed within the compe-titive global economy. The reasons extend beyond the purely financial: In addi-tion to providing inflows of capital, private investment also stimulates develop-ment of new technologies, equipment, services, new sources of information, and managerial skills -- all of which help speed infrastructure growth and improve-ments, increase efficiency in the provision of services, and permit greater respon-siveness to consumer needs.

To attract greater investment from both domestic and foreign sources into their telecommunications sectors, nations are adopting a variety of approaches, ranging from revenue sharing initiatives and joint ventures to direct foreign investment, licensing of privately-owned competitors, build-operate-own or - transfer schemes, and privatization of government-owned public telecommunica-tions operators. Countries as diverse as Chile, India, Jamaica, Japan, Malaysia, New Zealand, the United Kingdom, the United States, and Venezuela have encouraged multiple private companies to provide telecommunications services, drawing in private investment to varying degrees and leading to lower service prices and improved communication.

In other countries where privatization is not currently considered a politically viable option, governments have taken steps to attract foreign investment in the form of joint ventures for the provision of new services, such as cellular tele-phone and Very Small Aperture Terminal (VSAT)-based overlay networks for business users. Some countries have permitted lease and franchise arrangements that include private expansion of part of the telecommunications infrastructure, often allowing the private equity share in the network operation to build up over time. Although providing fewer benefits than full privatization might, these approaches can also be attractive to private investors, and they provide quanti-fiable benefits -- new lines, upgraded switching capabilities, new services and sources of information, and lower costs to consumers.

The need for capital investment is particularly acute in countries with under-developed telecommunications infrastructures, where limited government resour-ces often make private financing a necessary complement. To attract private capital, many countries that seek to improve their information infrastructures, which will improve interconnection to the evolving GII, are taking concrete steps to:

Recommended Action

From the wide range of available options, governments can develop a strategy best suited to their particular needs. At the same time, they must institute the appropriate regulatory, legislative, and market reforms to create the conditions necessary to attract private investment in their telecommunications, information technology, and information services markets. To facilitate this process, the United States will join with other governments to:

Nationally and internationally, the information technology and information services markets have flourished in the past decade. The highly competitive computer equipment, software and networking industries are among the most dynamic in global markets, providing users with steadily increasing computing power and functionality and stimulating further demand for more advanced, integrated capabilities. Similarly, the information services industry has expanded as barriers to cross-border trade and investment have been removed. In many countries there are few or no restraints on the services provided. In other markets there are varying, but fairly light, degrees of regulation. As a result, the world market for information services is expected to grow from $275 billion in 1993 to $465 billion in 1998, a growth rate of 11 percent annually./3/

One important exception has been a tendency in a few countries to erect bar-riers to foreign competition in entertainment programming services. There is no body of evidence that limiting foreign competition has been successful in achiev-ing the desired effect of stimulating local entertainment programming industries. The effects of such measures in retarding the development of private investment in infrastructure also deserves greater attention.

In contrast to the liberal market and regulatory environment for information technology and information services, the pace and scope of liberalization and privatization in the telecommunication sector is varied, ranging from competition in particular market segments to full liberalization. For example, there has been a discernible trend over the past decade toward increased competition in the provi-sion of both value-added services and telecommunications terminal equipment. Some countries have liberalized further, taking steps to open their long distance, local fixed telephony, cellular, communications satellite, cable, and broadcast markets.

Evidence of positive results from such increased competition is mounting: Networks have steadily incorporated innovative technologies, producing greater efficiencies; both residential and business users enjoy lower prices and greater choices in equipment and services; service providers are more responsive to user needs; and lower costs of service have stimulated increased network usage.

However, in the largest and most profitable market segments -- basic public voice telephone services and the underlying network infrastructure -- both com-petition and foreign investment have been restricted. Maintaining barriers against potential new entrants in these markets will inhibit infrastructure deploy-ment. Moreover, these barriers will retard the introduction of new information and telecommunications services that require competitive access to underlying networks in order to flourish.

Competition in basic telecommunications services has been growing, how-ever, in a number of key markets around the globe. In countries such as Australia, Canada, Chile, Japan, New Zealand, Sweden, the United Kingdom, and the United States, the introduction of alternative service providers and net-works, which often deploy advanced technologies at lower costs, has reduced bottleneck control by the dominant facilities-based providers. These results have spurred other countries to reconsider their policies. The member countries of the European Union (EU), for example, have agreed to introduce competition in the provision of basic telecommunications services and infrastructure by 1998. The EU considers these steps to be critical to advancing the goals of their action plan to create a European Information Society.

Increasingly, countries with national monopoly operators have begun to ques-tion whether they can compete effectively in the dynamic international telecom-munications market. Difficulties in raising capital and in meeting users' demands for low cost, sophisticated network capabilities and services are forcing a recon-sideration of the monopoly approach to telecommunications. A recent Organiza-tion for Economic Cooperation and Development (OECD) study comparing the relative cost of providing international service among OECD members found that the performance of countries with competitive international markets was superior to the average of all OECD members. Furthermore, the OECD study revealed that the quality of service had improved simultaneously with the implementation of competition./4/

Competition within the communications satellite market has also burgeoned. The intergovernmental International Telecommunications Satellite (Intelsat) and International Mobile Satellite (Inmarsat) organizations now face competition from several separate satellite systems, including Astra, Columbia, AsiaSat, Orion, and PanAmSat. Due in part to competitive pressures from these separate satellite systems and from alternative technologies, serious consideration is being given to restructuring both Intelsat and Inmarsat. Each of these organizations is engaged in an internal effort to review a range of options for reorganization, from reform of the cooperative model, to corporatization, to full privatization.

As governments liberalize particular market segments, regulators, operators, and new market entrants must grapple with evolving definitions of the boundary between those networks and services reserved to the monopoly operator and those open to competition. During the transition from monopolistic to compe-titive telecommunications markets, incumbent operators still play a dominant role as network infrastructure providers. Incumbent operators not only control under-lying facilities and services that new entrants often need to deliver their services, but frequently compete directly with these new service providers in particular market segments. In these circumstances, effective competition cannot emerge and flourish unless incumbents are subject to competitive safeguards while they maintain market power over critical bottleneck facilities and services.

Competitive safeguards serve two main purposes. Some are intended to eliminate or reduce barriers to entry for new service providers that are seeking to challenge the incumbent operator. Other safeguards serve to ensure that incumbent firms with market power do not employ anticompetitive means to prevent or hinder the development of truly competitive markets. Market entry opportunities are effective only if the incumbent service provider is required to compete fairly. For this reason, some administrations have required incumbent carriers to permit resale of their networks and services. Resale provides an important source of competition in markets in which telecommunications infrastructure costs are high. Similarly, market entrants that choose to provide facilities-based services in competition with the incumbent service provider typically will need to interconnect their facilities with a dominant service provider's network. In a pro-competitive environment, the terms and condition of interconnection would be reflected in published rates that include nondiscriminatory cost-based access charges and technological "equal access" to bottleneck facilities.

Incumbent carriers may also be required to "unbundle" network facilities and services so that telecommunications and information service providers can order only those elements of the dominant provider's network they need to provide a service. Finally, establishment of a transparent regulatory scheme open to all interested parties, and administered by a regulatory authority independent of the incumbent service provider, helps ensure that rules governing competition are fair and that private investment is given a reasonable degree of security.

While the political challenges posed by attempting to restructure the telecom-munications market are significant, the increased opportunities provided by introducing competition far outweigh the potential difficulties of pro-competitive market reform. Further, the interconnection of competitive national information infrastructures can increase the pace of development of the GII. The more competitive an information and telecommunications market, the more productive will be its interaction with other markets participating in the development of the GII.

Recommended Action

The most effective means of promoting a GII that delivers advanced products and services to all countries is through increased competition at local, national, regional, and global levels. To that end, the United States will join with other governments to:

Achieving the goal of a global information market will require government action to ensure that all information service providers have access to facilities, neworks, and network services on a nondiscriminatory and low cost basis. By ensuring open access to facilities and networks, and thus promoting competition, govern-ments can dramatically increase the availability of information services to all consumers.

Maximizing consumer choice among diverse sources of information should be the primary objective. As the information needs among consumers will vary, both within and among nations, attempts to predict the information resource requirements of citizens should be avoided. Rather, governments should foster market and regulatory climates conducive to the broadest possible access to and distribution of information. As countries accelerate the development of their respective information infrastructures, more and more consumers will seek access to networks and services that cross national and international boundaries. Improving consumer access to diverse sources of information has direct social and economic benefits. The ability to generate, exchange, and use information, technology, and ideas is central to economic growth and development, increased competitiveness in a range of industries, and to the improvement of the quality of life.

An essential technical element of the open access concept is interoperability, i.e., the ability to connect applications, services, and/or network components so that they can be used together to accomplish tasks. As the GII will be based on many different existing and emerging components at local, national, and global levels, it is imperative that these components be interoperable. The key to interoperability is the development of global standards. We believe such stan-dards should be voluntary and developed through a process that is largely market-driven and that takes into account the views of both the large and well established and the smaller, newer market players.

Three principal international standards organizations involved in the develop-ment of information technology and telecommunications standards are the Inter-national Organization for Standards (ISO), the International Electrotechnical Commission (IEC), and the International Telecommunication Union (ITU). The ISO and IEC develop information technology standards through the ISO/IEC Joint Technical Committee 1, while the ITU concentrates on telecommunications standards. Further, there has long been coordination and collaboration between the ISO/IEC Joint Technical Committee 1 and the ITU, which has helped mini-mize the duplication of standards development work and the possibility of con-flicting information technology and telecommunication standards.

The vast majority of countries adhere to the processes of developing inter-national standards and the resulting recommendations from all three organiza-tions. In the U.S., and increasingly in other countries, the private sector plays an essential role in these international standards development processes by provid-ing the technical expertise and resources to develop standards at national and international levels.

It may also be constructive to consider encouraging greater collaboration and cooperation both domestically and internationally among the different standards bodies, including less formal organizations. In recent years in the United States, a significant number of new standards consortia, whose principal focus is in the standards implementing arena, have been established outside of the traditional national standards development organizations. These new consortia have often sped up the widespread adoption of internationally generated standards, and their memberships have included small and medium-sized companies.

Given the convergence of technologies and the rapid changes in national and international market structures, the development and acceptance of voluntary, international standards are critical to the development of the GII. The interna-tional standards organizations and their memberships must redouble their efforts to ensure that standards are developed that assist the rapid delivery of informa-tion. Moreover, the pace of the work in international bodies must continue to increase to better reflect marketplace needs for technological development, so as not to impede the realization of the GII. In the absence of timely development and implementation of standards on a global basis, the benefits of improved interoperability will be delayed.

Recommended Action

In partnership with the private sector, governments can take action to improve access to facilities and networks, and promote the availability of a wide range of diverse services and information, including strong support for the development of international standards that promote interoperability. To achieve these goals, the United States will join with other governments to:

Policymakers worldwide face a daunting challenge: Creating an appropriate regulatory regime that minimizes regulation and fosters competition through transparent rules and processes and is sufficiently flexible to be responsive to changing technologies and markets. As the pace of technological innovation quickens, this will become increasingly difficult and yet increasingly necessary.

With the U.S. experience as our guide, we offer the following observations about the characteristics of telecommunications legislation that are necessary to respond to changes in this dynamic sector. The optimal regulatory and legislative frameworks will:

Regardless of the regulatory model that countries adopt, regulations should clarify the respective rights and obligations of incumbent operators and new entrants. New market entrants need assurances that incumbent operators will not be allowed to use their dominant market positions to hinder the evolution of successful competition. Similarly, public and transparent regulatory processes create stable commercial environments, which are necessary to attract private investment. As such, rules and regulations should clearly indicate:

Governments should avoid burdensome regulation that stifles innovation and new service offerings. Governments must guard against the expansion of regula-tion into market segments that have not traditionally been subject to regulations and that have functioned extremely well on an unregulated basis. The examples of Australia, Canada, and the United States in computer and business information services are illustrative. They are among the leading nations in personal compu-ter penetration rates among consumers. Not coincidentally, they also provide an open, dynamic, and almost totally unregulated market for information technology and services. Equally important, while some government regulation is necessary as a marketplace transitions from a monopoly to a competitive structure, once competition is achieved, continued regulation can be unnecessary or even coun-terproductive in promoting efficiency, innovation, and customer responsiveness. In short, governments must be prepared, and must invest their regulatory agen-cies with the authority, to adjust regulatory structures as the demands of the marketplace and technology require.

Just as national regulatory environments need to be responsive to emerging market and technological developments, so too must the overarching interna-tional environment continually adapt to new developments. The successful efforts of governments and industry to improve global interconnectivity and liberalize international telecommunications demonstrate the value of working together in various international fora to promote progressive and flexible national regulations. These efforts must continue.

Recommended Action

Although national regulatory environments necessarily reflect the specific social, economic, and political needs of each individual country, the essentially global nature of the markets for telecommunications, information technologies, and information services require that national regulations be responsive to global developments. The United States will join with other governments to:

The goal of providing access and affordable service to all members of society is fundamental to the development of the GII. The definition of universal service, however, necessarily varies from country to country -- ranging from the provi-sion of high quality telephone service to every home and business in most indus-trialized countries to access to a public telephone in many developing countries.

The ability to provide universal service on a national basis depends upon a number of factors, including the level of infrastructure development, the reach and technological capabilities of national networks, and the cost of access to the network and services. Other factors to be considered include the availability and use of advanced methods of network planning and maintenance, and explicit performance and service quality goals.

The definition of universal service is also being expanded by the advent of digital technologies. In many countries, including the United States, policy-makers face increasing pressure to expand universal service beyond "plain old telephone service" to include a broader array of new telecommunications and information services. In fact, universal service has always been an evolutionary concept, expanding as the capabilities of the network and the types of service demanded by the great majority of users have increased. For example, in the United States fifty years ago, a party-line was deemed sufficient for universal service purposes; now an individual line for each subscriber is generally viewed as a component of universal service, together with such features as direct dialing for long distance calls and 911 emergency service.

In both developed and less developed countries, wireless technologies can help meet the needs for both basic and more advanced services. For example, by augmenting terrestrial-based facilities with satellite facilities and services, national networks can maximize their potential. The point-to-multipoint and mobile communications capabilities of satellites, which are global in reach, permit the extension of services to even the most remote regions.

Moreover, in helping meet universal service goals, one option for govern-ments to consider is the establishment of community "access points." For exam-ple, institutions such as schools, libraries, or hospitals could be equipped with basic and advanced information and communications technologies for use by members of the public. Such community access points would facilitate the effi-cient provision of broader public access to a core set of services.

Although several countries have raised concerns that competition diverts revenues from the public operator and undermines its ability to provide universal service, experience shows that access to the telephone has been improved in the most liberal national markets. In the United Kingdom, for example, many customers are ordering a telephone for the first time largely because increased competition -- cable television companies are now offering telephone service -- has made it more affordable. In the United States, concerns were raised a decade ago that increased competition in the provision of long distance services, which had traditionally subsidized basic local rates, would threaten universal service. These concerns abated as competition spurred innovation and price reductions, which in turn have expanded universal service. Further, studies by the OECD indicate that telephone penetration has not been eroded in any member country that has introduced infrastructure competition. The OECD concluded, "Universal service has not been impaired by market liberalization; [rather] facilities compe-tition can be applied to complement and enhance universal service."/5/ Indeed, many now argue that full and open facilities-based competition, by reducing prices, is the most effective way to promote universal service.

As together we strive to expand the worldwide telecommunications infra-structure and build the GII, we must all keep the goal of universal service con-stantly in mind. With significant decreases in the costs of information transmis-sion and processing, the creation of the Information Society has the potential to improve the quality of life of all citizens. Recognizing that information leads to empowerment, the nations of the world must work together to ensure that as many citizens as possible in all societies have access to the resources of the Information Age.

Recommended Action

Although the provision of universal service varies from country to country, the goal of providing all people with greater access to both basic and advanced services is a crucial element of the GII. The United States will join with other governments to:

While we believe that the adoption, application, and advancement of the five core principles are necessary to create an environment in which the GII can realize its full potential, such actions alone are insufficient to guarantee it. Regardless of the sophistication of the technology or services being offered, users must be assured that they can allow the GII entry into their homes, offices, and lives to access and share information safely and without forfeiting any of their rights. Governments, companies, and public-interest groups, by working together on information policy and content issues, must address these concerns.

An equally important task for governments and private sectors is to demons-trate the potential benefits of the GII to citizens. It is only when people see tangible results of applications that they will begin to appreciate how it can be used to improve their lives. This appreciation is the key to stimulating demand for the services and content of the GII, which in turn will provide the impetus to remove institutional and regulatory barriers to its full utilization.

A. Information Policy & Content Issues

Developing an effective information policy will provide governments with perhaps their greatest challenge. The central objectives of information policy include ensuring that: 1) the privacy of individuals and organizations using the GII is protected; 2) the security and reliability of the networks and the informa-tion that passes over them are preserved; and 3) the intellectual property rights of those who create the information, education, and entertainment content are pro-tected. To assure the growth of an information infrastructure accessible and accountable to the citizens of the world, governments must develop and imple-ment these objectives in close partnerships with each other and with represen-tatives from business, labor, academia, and the public.

1. Privacy Protection

By bringing news and information to people on a global basis, and thereby allowing them to communicate more freely with each other, communications technologies serve a democratizing function. These same technologies also permit both governments and the private sector to transmit, process, and store vast amounts of information about individuals. While these capabilities are increasingly essential for governments to function effectively and for businesses to operate efficiently, questions continue to grow about an individual's right to privacy and the accompanying responsibilities of holders and transmitters of this information to safeguard this right.

In many nations, the past two decades have seen the primary gatherers and users of personal data shift from government entities to private sector firms. In the 1970's and 1980's, businesses were quick to exploit the explosive growth in low cost, high performance computers, adapting this technology to a wide range of economic, financial, and marketing applications. As electronic commerce spread during the 1980's, there was growing recognition that the electronic trans-fer of data across national boundaries required an international consensus on individual privacy protection.

In 1980, the OECD developed and adopted a set of voluntary privacy guide-lines that were accepted by its 24 member countries. In 1981, the Council of Europe, whose membership consists of the European Union Member States and other European countries, adopted "fair information practices" similar to those of the OECD to regulate the collection, storage, and automated processing of per-sonal data, and transborder data flow. Both the OECD and Council of Europe privacy guidelines, which generally recognize that the free flow of information is critical to transborder economic activity, provide a framework for domestic legislation that has been used by both member and non-member nations. They also recognize diverse means of protecting information privacy, including self-regulation and industry codes of conduct. The North American Free Trade Agreement (NAFTA) and the General Agreement on Trade in Services (GATS) Annex on Telecommunications also contain provisions that recognize national privacy protection regulations.

The United States and other countries around the world are re-examining existing privacy policies to ensure that they apply comprehensively to the transfer of personal data over global networks. A balanced privacy policy -- preserving the individual's right to privacy while maintaining the free flow of information across national borders -- is important to the development of global networks and services. Working together, nations should ensure that the transport of personal data adequately takes into account the following agreed-upon international privacy principles:

In order to foster consumer confidence in the GII and to encourage the growth of interconnected global networks, users must feel that they are afforded adequate privacy protection. To this end, the United States will join with other govern-ments to:

A network as vast and complex as the GII will pose difficult security challenges for all nations. The same modern technology that makes communication faster and easier also makes communications systems vulnerable to ever greater securi-ty risks. These risks are not new -- most are well-known among security mana-gers. What is new is that these risks are much more widespread, are potentially much more serious, and affect a population of users who do not have the infor-mation or training to deal with them.

The anonymous and impersonal nature of computer crime, for example, makes this problem particularly unsettling, for legal systems depend upon their ability to identify the malfeasors. Yet serious violation of privacy or property rights can be accomplished by destruction or alteration of information by anony-mous individuals in remote locations, with not a fingerprint in sight. The tech-nical challenges of protecting the privacy and integrity of information stored in computer systems are even greater than those that apply to information trans-mitted by telephone. And as was true with the telephone, legal as well as tech-nological solutions are needed.

Security includes the integrity, confidentiality, and reliability of the networks and of the information they carry. If users do not believe that an information infrastructure is a trustworthy, reliable system, they will be reluctant to use it, thereby diminishing its value. To gain maximum benefit from global networks, users must be confident that the messages they receive are authentic, that sensi-tive information is available only for authorized use, and that unauthorized users cannot access, alter, or destroy information.

In addition to protecting the security of information that is transported over the GII, governments and industry must guarantee the reliability of the network itself. In the event of breakage or service interruption, network operators must work quickly and cooperatively to repair damage and provide backup systems to minimize the duration of any such interruptions. To have a truly global infra-structure, greater emphasis must be placed on resolving reliability concerns, including such issues as network performance, network connections and intero-perability, the development of new technology, and regional and demographic differences in reliability.

Recommended Action

To promote the development of a secure and reliable GII, the United States will join with other countries

to:

Protection of intellectual property rights is essential to the development of a successful GII. In order to promote creativity and provide the broadest possible access to the world's media and information sectors under viable commercial conditions, countries will need to protect the creative content of the GII -- text, images, computer programs, databases, video and sound recordings, as well as multimedia products.

Providing for adequate and effective protection of intellectual property in the digital environment requires complex legal and technical solutions. Some of these solutions may be viewed as controversial by some users of the system. However, the cost to society of inadequate intellectual property protection far out- weighs these concerns. Inadequate protection of intellectual property dis-courages the creation of copyrighted works, creates barriers to innovation, stifles the use of new applications, and diminishes foreign investment. It jeopardizes the work of researchers, creative artists, and a wide variety of entrepreneurs.

It goes without saying that if creative works are not adequately protected, their creators will be reluctant to permit them to be distributed over the GII. For this reason, rightsholders must not be compelled to license rights to their works. Instead, GII participants should cooperate to find legal, market-based alternatives to compulsory licensing. Reliable and efficient means of transferring intellectual property rights must also be assured. They might, for example, adopt various licensing arrangements, such as on-line and off-line licensing, direct licensing, and voluntary collective licensing. More sensitive issues, however, may have to be addressed on an individual basis. For example, licensing of rights may be done on a per-use, per-work, or other basis. Licensing of rights for multimedia works, which involve a number of copyrights - not all of them with obvious attributions - could be facilitated by special licensing arrangements.

Recommended Actions

The GII cannot achieve its promise if authors, producers, and other content creators are not guaranteed adequate protection of their intellectual property rights. To achieve this protection, the United States will join with other govern-ments to:

Given that the value of the GII will be determined by how people benefit from it, governments must cultivate active participation by consumers and businesses in the application of new technologies. By working together in creative partner-ships, the public and private sectors can apply information and telecommunica-tions technology to a variety of critical and complex issues: improving producti-vity and economic growth in an increasingly competitive and interdependent global economy; providing adequate health care; ensuring the development of workforce skills through education and training; providing equitable access to information through public institutions, such as libraries; enhancing leisure-time activities; protecting natural resources and the environment; and ensuring the delivery of government services and information.

Many governments are already examining ways to promote the development of the information infrastructure and to demonstrate, through pilot projects and testbeds, the myriad benefits of new technologies. In the United States, the National Information Infrastructure (NII) initiative includes a Federal matching grant program that provides support for planning and demonstration projects initiated by state and local governments and non-profit entities in such fields as health care and education./6/ The U.S. NII initiative also includes a number of other federally supported applications in the areas of environmental monitoring, digital libraries, international transportation and trade, and the electronic dissemi-nation of government information./7/

The reach of applications being developed around the world can be expanded internationally through collaborative projects among commercial entities, aca-demic institutions, and private, voluntary, and multilateral organizations. Inter-national applications have the unique potential to permit countries not only to bring diverse global resources to bear upon local problems and needs, but also to find solutions to needs that transcend national boundaries, such as environmental monitoring and global trade and commerce.

These applications can transform the possibilities of the GII into realities for citizens around the world. What follows is an illustrative, but not exhaustive, list of examples that demonstrate the value of expanding collaborative efforts in the development of international applications:

The roles played by governments, the private sector, academic institutions, and non-profit organizations will vary depending on the nature of the application. In some cases, such as global electronic commerce and entertainment services, the private sector should take the lead, while in other areas, such as international public health, cooperation between public health agencies, hospitals, clinics, and universities would be appropriate. Whatever the application, governments must recognize that while they can play an important catalytic role in fostering inter-national collaboration, they should not attempt "top-down" management of this process. The Administration hopes and expects that many of the best ideas for global cooperation will bubble up from the grassroots with little or no govern-ment involvement.

Successful applications will set in motion a continuous cycle of demand that will encourage future development of the GII. Demonstrating the power of the GII to successfully address pressing problems will stimulate consumer demand for a variety of products and services at affordable prices. This demand will provide the necessary incentive for the private sector to broaden the reach and expand the capabilities of the GII, enhancing its ability to deliver benefits to people and again increasing demand. As a "network of networks" linking people and information, the GII can leverage the collaborative potential of existing efforts and provide real solutions to existing and emerging global issues.

Recommended Action

International applications are the best way to demonstrate the potential power of the GII to affect lives all over the world. The United States will join with other countries to:

The various approaches governments have taken in response to the technological convergence of telecommunications and information industries have resulted in the development of asymmetric markets and regulatory environments around the world. These asymmetries often impede the cross-border transfer of services and information among business users, entertainment providers, and consumers. The United States believes that these differences can be overcome, in part through the work of market forces and technological developments, but also in part through collective agreement among all countries to adopt, advance, and apply the core principles of the GII. By working through existing international and regional organizations, and engaging in bilateral efforts, government and industry can remove obstacles blocking the effective development of the GII.

Multilateral organizations will play a vital role in this effort. In particular, the International Telecommunication Union (ITU), the Organization for Economic Cooperation and Development (OECD), the International Organization for Stan-dardization (ISO), and the World Intellectual Property Organization (WIPO) are uniquely able to contribute practical solutions to problems affecting the develop-ment of the GII.

As the preeminent international organization dealing with telecommunications issues, the United Nations' ITU was the first multilateral forum in which the GII was discussed. With its broad membership of 185 developed and developing countries, the consensus-based ITU serves as a global forum for technical discus-sions ranging from voluntary standards development and frequency allocation activities to network development. Accomplishments already achieved under ITU auspices in technical telecommunications and development issues suggest that the ITU can play a significant role in the GII development process.

The OECD, an international think tank which undertakes economic research on various aspects of its members' economies and policy concerns, has been constructively addressing telecommunications and information policy issues for several years. Its policy and statistical analyses have contributed to a broader understanding of the economic benefits of liberalization in the information and telecommunications sectors.

Organizations such as the ISO and the WIPO, which deal with specific cross-sectoral issues, can serve as important fora to discuss and advance issues of open access and information policy. For example, any changes made to bilateral or regional intellectual property regimes may ultimately become issues in the WIPO.

In addition, both Intelsat and Inmarsat, the treaty-based satellite communica-tions organizations that have played a significant role in advancing global telecommunications, are now contemplating options for restructuring. Because of these organizations' broad international memberships, they could serve as useful fora for review of commercialization alternatives.

The General Agreement on Tariffs and Trade (GATT) is a multilateral agree-ment setting out the rules and principles by which countries trade, primarily in the area of goods. The Uruguay Round of GATT negotiations led to the esta-blishment of the World Trade Organization (WTO), which deals with services, investment, and intellectual property -- areas that substantively affect telecommu-nications trade. The General Agreement on Trade in Services (GATS), under the new WTO, includes an Annex on "access to and use of" the telecommunications networks of WTO members, and includes substantive commitments from a number of parties on value-added telecommunications services. More generally, the GATS "access to and use of" telecommunications annex applies to all services for which countries have scheduled market access commitments. Now that it is in effect for the U.S. and most of its major trading partners, the GATS can substantially reinforce the principles of the GII. In addition, there are on-going negotiations, to be concluded by April 1996, to liberalize basic telecom-munications services through the Negotiating Group on Basic Telecommunica-tions.

Regional organizations also have important roles in achieving regional consensus on issues pertaining to telecommunications and information markets. Organizations such as the Inter-American Telecommunication Commission (CITEL) of the Organization of American States (OAS), the Asia Pacific Econo-mic Cooperation (APEC), the Southern Africa Transportation and Communica-tions Commission (SATCC) and the European Conference on Postal and Tele-communications Administration (CEPT), among others, frequently serve as fora for the exchange of valuable information and as test sites for implementation of the most expedient and beneficial policies. These bodies also serve as effective vehicles for improving and enhancing network development and technical cooperation among participants on a regional basis.

Finally, plurilateral and bilateral dialogues can be arranged among and between nations to focus on particular issues. In addition to the deliberations in regional and international organizations, these discussions can become building blocks for cooperation as together we seek to construct a truly global GII. For example, the G-7 Ministerial Conference scheduled for February 1995 is one of several such opportunities for focused, high-level discussion of the Global Information Infrastructure.

As important as these international governmental organizations are, perhaps even more important are the numerous formal and informal groups within the private sector. These groups, which range from international trade organizations to professional associations to advocacy groups to industry-led standard-setting bodies, provide communication channels between the people who will actually build and use the GII. Such private sector groups facilitate the international teaming and strategic alliances that will ensure the development of a truly seam-less "network of networks," rather than a patchwork of incompatible systems and services.

V. CONCLUSION

As Vice President Gore noted in Buenos Aires, it is possible to create a global information network that transmits messages and images with the speed of light from the largest city to the smallest village. Through the interconnection of disparate but interoperable networks, these information highways will allow us to communicate as a global community* giving individuals, businesses, and econo-mies greater access to each other and to a wider range of information. Equally important, the GII will offer governments an unprecedented opportunity to equalize global disparity in telecommunications and maximize the economic and social benefits of the Information Age for their citizens.

Harnessing the global potential of information and communications technolo-gies to this end will require collaboration among the industries that will build, operate, provide, and use services and information available over the evolving national networks. It will also require cooperative efforts among countries, working together bilaterally, regionally, and through multilateral organizations, to facilitate the interconnection of their respective networks and the sharing of information among nations.

In our interdependent world, technological and regulatory choices made in one country can affect those made in neighboring countries, creating a multiplier effect for the GII's development. To help guide this development, the Adminis-tration proposes five core principles -- private investment, competition, open access, a flexible regulatory environment, and universal service. These princi-ples, we believe, along with effective information policies, will provide a foun-dation upon which the GII can be built.

The overarching goal of the Agenda for Cooperation is to foster the coopera-tion that will be needed to spur the transformation of a thousand discrete net-works into a connected, interoperable global information infrastructure. As all nations take steps to develop and upgrade national information infrastructures, we invite you to join with us in ensuring that the benefits of the GII will be available throughout the world.

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ENDNOTES

II. BUILDING A FOUNDATION FOR THE GII -- FIVE BASIC PRINCIPLES

A. Encouraging Private Investment

From the wide range of available options, governments can develop a strategy best suited to their particular needs. At the same time, they must institute the appropriate regulatory, legislative, and market reforms to create the conditions necessary to attract private investment in their telecommunications, information technology, and information services markets. To facilitate this process, the United States will join with other governments to:

The most effective means of promoting a GII that delivers advanced products and services to all countries is through increased competition at local, national, regional, and global levels. To that end, the United States will join with other governments to:

In partnership with the private sector, governments can take action to improve access to facilities and networks, and promote the availability of a wide range of diverse services and information, including supporting the development of international standards that promote interoperability. To achieve these goals, the United States will join with other governments to:

Although national regulatory environments necessarily reflect the specific social, economic, and political needs of each individual country, the essentially global nature of the markets for telecommunications, information technologies, and information services require that national regulations be responsive to global developments. The United States will join with other governments to:

Although the provision of universal service varies from country to country, the goal of providing all people with greater access to both basic and advanced services is a crucial element of the GII. The United States will join with other governments to:

A. Information Policy & Content Issues

1. Privacy Protection

In order to foster consumer confidence in the GII and to encourage the growth of interconnected global networks, users must feel that they are afforded adequate privacy protection. To this end, the United States will join with other govern-ments to:

To promote the development of a secure and reliable GII, the United States will join with other countries to:

The GII cannot achieve its promise if authors, producers, and other content creators are not guaranteed adequate protection of their intellectual property rights. To achieve this protection, the United States will join with other govern-ments to:

International applications are the best way to demonstrate the potential power that the GII has to affect lives all over the world. The United States will join with other countries to:

The International Telecommunications Working Group of the Information Infrastructure Task Force's Telecommunications Policy Committee gratefully acknowledges the contribution of all those individuals and organizations who offered testimony, either oral or written, at the public hearings on the emerging Global Information Infrastructure, held in Washington, D.C., on July 27 and 28, 1994. The views and information shared during the hearing process were invaluable, and helped shape the Global Information Infrastructure: Agenda for Cooperation.