3.1.1.1. The UN

The UN seeks to establish world peace and it brings together the majority of States to this end. Its objectives are to facilitate cooperation, security, economic development and social progress. The UN Security Council is made up of five permanent members with the right of veto (the United States, Russia, China, France and the United Kingdom) and 10 members with 2-year mandates. The UN manages several specialized agencies to carry out its missions successfully, including the World Health Organization (WHO) for health, UNESCO for developing education, science and culture, the ITU for telecommunications standards, the Economic and Social Council (ECOSOC), and the World Bank Group.

The UN has not escaped criticism in its 70-year history. While it has saved lives and contributed to improving health and education around the world, its bureaucracy is excessive, undemocratic and too expensive. The enmity between poor and rich countries is glaring in the organization’s lack of adequate representation, in the impact of decisions taken and in the outcomes achieved. The governance of the UN is considered increasingly ill-suited to the difficulties bombarding the modern world.

3.1.1.2. The IMF

The International Monetary Fund (IMF) is an international institution created in 1945, bringing together 188 countries with the aim of “promoting international monetary cooperation, ensuring financial stability and facilitating international trade”. IMF funds are determined by quota subscriptions calculated according to each country’s relative size within the global economy. At the same time, these quotas determine the maximum contributions to the fund, the weighting of votes within the Financial Committee and access to its finances. The qualified majority of votes are fixed at 85%, with the United States having de facto right of veto with 17.68% of votes. The IMF collaborates with the International Bank for Reconstruction and Development (IBRD) and General Agreement on Trade in Services (GATS). In 2015, it readjusted the currency composition within special drawing rights (SDRs) by introducing the Chinese currency (see section 4.3.1.2). IMF actions can at times compete with or complement the activities of international banks.

3.1.1.3. The Organisation for Economic Co-operation and Development

Since its creation in 1961, the Organisation for Economic Co-operation and Development (OECD), an international organization producing economic reports, and with a consulting role, has sought to promote policies aimed at achieving the greatest possible expansion in the economy and employment. Its activity aims to improve the standard of living in member States, while maintaining financial stability and contributing to the development of the global economy. Every year it publishes the main economic indicators of member States, including their gross domestic product (GDP). As of 2016, it had assembled 34 member States with democratic systems of government and which follow the tenets of market economics. OECD actions have not escaped criticism. The organization has been rebuked in particular for participating in actively promoting economic liberalism and global capitalism.

3.1.1.4. The WTO

The WTO, created in 1995, is an international organization, independent of the UN, that aims to promote international trade between countries. It brings together the 162 countries that, as of 30 November 2015, have signed GATS. Its main objective is to encourage openness in global trade. Its strategy has led to the negotiation of free trade agreements and the proposal of solutions to potential conflicts. China joined the WTO in December 2001.

3.1.1.5. The GATS

The GATS, signed by 153 countries and entering into force in January 1995, is the result of work carried out by the WTO and addresses trade liberalization and the fight against protectionism. According to some, GATS should increase the effectiveness of the means of production, as the growth of trade favors the comparative advantage of the countries involved. According to other sources, its actions could bring about the gradual destruction of public services.

3.1.1.6. The G20

The Group of twenty (G20) brings together 19 countries and the European Union. Created in 1999, after the financial crashes of the 1990s, the G20 aims to encourage international cooperation by introducing the idea of a broader dialog that takes into account the growing economic influence of several countries. It accounts for 85% of global trade, two thirds of the world’s population and over 90% of the gross world product. The G20 supplements the economic cooperation actions mentioned in section 3.1.1 through regular meetings organized by the heads of State of member countries, the heads of central banks and other heads of State.

3.1.1.7. The Davos forum

Proposed in 1971 by Klaus M. Schwab, a professor of economics, the World Economic Forum in Davos has today become a non-profit organization, acting as an informal meeting platform for the main officials of public and private bodies who contribute to the globalization of the economy. Within this circle, the most pressing global issues, including health, culture and the environment, are discussed every year in a non-binding manner. The Forum also publishes a certain number of economic reports. It has acquired observer status at the United Nations Economic and Social Council.

3.1.3.1. UN/CEFACT

Topics relating to the Information Society are handled by the UN within CEFACT, the United Nations Centre for Trade Facilitation and Electronic Business. This body ensures that collaboration between governments and companies is maintained in order to guarantee the interoperability of information exchanges between the public and private sectors. It has particularly inspired the EDIFACT standard used in international electronic trade, the architecture for eXtensible Markup Language (XML) electronic commerce and the process used to produce components conforming to the “ebXML” standard, which determines the European framework for IT interoperability relevant to electronic commerce. This “ebXML” standard has also been adopted by China. The other interoperability standard (Dublin Core), which serves the United States as a repository for government metadata records, requires the authorities to implement registration management rules (ISO standard 11179). The European Union does not keep metadata records.

3.1.3.2. The International Organization for Standardization

The International Organization for Standardization (ISO) is a non-governmental organization that operates a network of national standardization institutions. Created in 1947, the ISO is an advisory body and its standards are voluntary. The ISO’s action areas relate to technical engineering, lasers, the audiovisual sector, acoustics, IT and data processing, cinema and sport, among others. New information and communication technologies are addressed with the International Electrotechnical Commission (IEC), within the framework of the JTC1 committee (ISO/IEC joint technical committee no. 1).

3.1.3.3. The IEC

The areas of the IEC, created in 1906, encompass electronics, magnetism and electromagnetism, electroacoustics, multimedia, telecommunications, and energy production and distribution, as well as general related subjects (terminology and symbols), electromagnetic compatibility, metrology, operational security, safety and the environment. Six thousand guidelines have been published.

The IEC cooperates with international and regional standardization organizations, such as the ISO, the ITU, the WHO, the International Labour Office, the United Nations Economic Commission for Europe, the International Council on Large Electric Systems, the International Maritime Organization, the International Organization of Legal Metrology and the Union of the Electricity Industry (EURELECTRIC), among others.

Following a cooperation agreement concluded between the IEC and the ISO, the two organizations created the joint technical committee JTC1/ISO/IEC, responsible for the field of information technology. The leading partner in the IEC is the WTO. This institution has drafted an international agreement on the “technical barriers to trade”, which recalls the vital roles played by industry standards and the development of international trade.

The IEC encourages developing countries to take advantage of the benefits that arise from participation in its work. To this end, it maintains close links with the IMF, EBRD, the World Bank and the United Nations Development Programme, among others.

3.1.3.4. The two third generation partnership project

The Third Generation Partnership Project (3GPP), created in 1998, seeks to coordinate the standardization bodies in public mobile telecommunications, such as the ITU, European Telecommunications Standards Institute (ETSI) (Europe), ARIB/TTC (Japan), CCSA (China), ATIS (North America) and TTA (South Korea).

It is essential to ensure the highest degree of compatibility between the different radio-based communications systems offered to mobile customers despite the diversity of frequency ranges allocated regionally. The 3GPP ensures that the technical specifications for the mobile standards of public networks are maintained (GSM, GPRS, EDGE, the UMTS and LTE).

A second group, known as 3GPP-2, handles the standards of public, radio-based communications systems in Asian and North American countries, with the assistance of the American standardization group ANSI/TIA/EIA-41.

3.1.3.5. The International Telecommunication Union (ITU)

The ITU is the UN body responsible for telecommunications and information and communications technology (ICT). The ITU brings together network owners and the different operators and manufacturers in these fields. It drafts the technical standards and coordinates the regulations relating to the radiocommunications sector (ITU-R) and to networks and fixed equipment (ITU-T). The ITU’s third sector (ITU-D) encourages the development of networks and services in less developed countries through training and appropriate financial assistance. The ITU has ties to UN/CEFACT and all technical standardization bodies, as well as the major global financial institutions, such as the World Bank, the IMF and GATT (Appendix 6).

The ITU’s Commission on the World Radiocommunications Conference organizes the allocation of the frequency spectrum according to service category every 4 years for all world regions and keeps the relevant radio-based regulations up to date. The ITU allocates radio frequencies and satellite orbits and develops technical standards, which ensure the interconnection of networks and technologies.

3.1.3.6. ITU-T study group 3

ITU-T Study Group 3 (economic and policy issues) is responsible for applying the principles of economic policy and the regulations determined by the different bodies under the umbrella of the UN. As such, it carries out the following activities:

• – establishing the compatibility and tariffs of international telecommunications services (including methods of calculation) for all fixed-line, satellite and mobile connections;
• – establishing accounting regulations on the settlement of accounts;
• – establishing tariffs at the lowest rates possible, which are compatible with an efficient service and take into account the need for the independent financial management of telecommunications to have a solid basis;
• – organizing global forums to improve understanding of the economic and financial issues related to the growth of ICT, the transition to IP protocols and the development of NGNs;
• – coordinating between member States, service providers, member academies and international organizations (including the WTO).

ITU-T SG 3 is made up of several regional groups, which follow the rules formulated by the regional institutions in charge of regulating international services and the major recognized financial organizations [BLA 11].

The specialized working groups are in charge of proposing, after carrying out research, solutions to the various issues presented by the current state of networks, such as:

• – international Internet connectivity;
• – transition from IPv4 to IPv6;
• – international mobile roaming;
• – mobile financial services;
• – economic impact of over-the-top (OTT);
• – governance, etc.

3.2.3.1. The European standardization framework

The European establishment endeavors to develop a consistent standardization and regulation system for telecommunications and ICT for the 28 member States of the Union through documents drawn up by the global technical bodies listed in section 3.1.3. The European Standards Organisation system which, in conjunction with the European Commission, manufacturers and SMEs, works to spread standards and European innovation, is made up of CEN, CENELEC and ETSI.

3.2.3.2. The CEN-CENELEC

The CEN (from the French Comité européen pour la normalisation – European Committee for Standardization), the recognized European standardization authority, deals with domains outside those of CENELEC and the ETSI. It reports to the IEC and is formed of around 30 national standardization bodies from the European Union and associated countries. CEN standards are referred to with the letters ENV.

CENELEC (from the French Comité européen de normalisation électrotechnique – European Committee for Electrotechnical Standardization) is a committee established by European Union countries and whose activities correspond to ISO and IEC activities in the field of electrotechnology to guarantee the security and protection of customer environments. The CEN and CENELEC have a common secretariat, CEN-CENELEC.

3.2.3.3. The ETSI

The ETSI was created in 1988 to achieve the objectives of the European Union. The ETSI, a non-profit organization, is made up of specialized technical committees and handles partner projects. For some decisions, it operates through voting by national delegations. ETSI only deals with standards relating to systems and equipment and does not handle standards related to connections or networks.

Within ICT, the ETSI contributes to standardizing smart cards for mobile telephony (Appendix 7), intelligent transport, connected homes and the Internet of Things (IoT), among others. The ETSI writes European Technical Standards, Technical Basis for Regulation and Common Technical Regulations standards, the mandatory technical foundations.

3.2.3.4. The CEPT

The European Communications Office, the permanent office of CEPT (European Conference of Postal and Telecommunications Administration; acronym from the French Conférence européenne des Postes et Télécommunications), supports the Electronic Communications Committee and liaises with the ETSI and the ITU. The functions of the CEPT, which unites 48 European countries, are carried out through the European Public Telecommunications Network Operators for network operation.

3.4.1.1. Basic principles

The basic tariff principles in international communications were established by the ITU-T at the beginning of the 1930s, and then regularly revised (Appendix 8). The year 1988 saw the adoption of the International Telecommunication Regulations, which determine the use of leased lines, essential elements for transporting data communications and establishing future Internet and TCP/IP connections.

For social and political reasons, the tariffs for some services can be established in such a way that they do not cover all of the above-mentioned charges. In addition, the tariffs applied should not trigger harmful competition between different telecommunications services. Taken as a whole, the surplus revenue of telecommunications services should not greatly exceed the amount necessary for the proper functioning of these services (Rec. D.5).

The ITU recommends that international partner operators freely select one of the three methods of invoicing and financial regulation, according to the volume of traffic between the two countries in question and the choices of these countries:

• – the accounting rate system, with rates being assessed on the basis of costs by the Regional Tariff Groups of Study Group 3 and taken into account during bilateral negotiations;
• – inclusion of all revenue by the initial operator (sender-keep-all) in the case of weak traffic flows;
• – flat rate remuneration on the basis of the real usage of the available means, according to the duration and distance in question.

The Regional Tariff Groups of the ITU-T encourage the use of two methods to determine the costs of communications services, with one method based on the cost price, the so-called analytical method, and a synthetic method.

3.4.1.2. Analytical method

The analytical method requires precise information on the equipment used for routing traffic and on the actual volume of traffic carried along each direction of the connection. Therefore, for each traffic unit and each connection to another network, every operator should be able to assess through cost accounting:

• – the depreciation costs of equipment;
• – the financial charges related to the capital invested;
• – staff costs and operating expenses;
• – consumables required for maintenance;
• – the costs of research and trials;
• – the taxes and charges related to the work carried out by third parties.

The analytical method allows real cost prices to be fixed at a reasonable rate for each traffic unit on each communications axis. These prices are expressed in a designated international currency, the most common being Gold Francs, SDRs or euros. These reasonable and acceptable values are used for a set period. The ITU provides advice for establishing cost prices, as well as depreciation tables for investments in buildings, cables and equipment. It is accepted that related information should be used and comparisons and parallels should be made in cases where the cost prices are unknown (Rec. D Supplement 1, Cost and Tariff Study Method).

Recommendation D.5 also shows how to evaluate cost prices. On the other hand, Recommendation D.150 underlines the distinction to be made between the accounting rate and the collection charge. International accounting procedures are also explained in detail.

Recommendation D, Supplement 2 provides likely examples of applying the analytical method to assist the Regional Tariff Groups. Recommendation D, Supplement 3 is dedicated to establishing costs and tariffs on a national level. It also explains how to determine the cost and profit centers of network elements, as well as their charging methods (direct costs, indirect costs and acquired costs).

3.4.1.3. Synthetic method

The owners and operators concerned focus on the stated average of the accounting rates collected between countries in the region for a relevant service and take on half of this amount, except in cases of transit where the third-party country should receive remuneration for services rendered.

3.4.2.1. Technical parameters

From 1930 until the 1980s, a network only consisted of circuits operated manually or automatically. Long-distance analog or digital connections were established with four wires, two for emitting and two for receiving. In each direction, the voice operation of these telephone lines was carried out less than 45% of the time due to alternating conversation. Circuits were rare and demand high, which explained the high tariffs, at times regulated according to day and time depending on the direction required. The structure of networks based on circuit switching helped to establish basic tariffs through the implementation costs of the services offered.

3.4.2.2. Voice service circuits

The pricing system of international circuits rests on three factors: the distance between callers, the connection time and the time of day. Rented four-wire lines are suggested to companies wishing to have a secure, permanent connection with a guaranteed level of performance. The basic monthly rental tariff is established on the basis of the price, a switched network, the same connection for 5 h per working day, a figure which, gradually, will be reduced to 3 h, and then finally to 1 h and 30 min.

3.4.2.3. Data circuits

Since 1960, price setting has become more complicated due to the availability of modems that, on good quality rented circuits, allowed data transmission at 2.4 then at 9.6 kbps. Taking into account the filtering of analog circuit carriers, data transmission can only be carried out using frequencies of the primary analog group in order to avoid distorting the group’s propagation time. This type of limitation required specific management and therefore involved high costs, which disadvantaged ICT development.

Data transmission at higher speeds, for example at 48 kbps, required a complete primary analog group (12 circuits) to be dedicated to it, an expensive process that drew upon resources related to the era’s significant voice traffic needs.

Finally, around 1985, the availability of more efficient modems and the gradual spread of digital transmission opened up new paths for data transmission at more acceptable pricing conditions, whether for rented specialized lines or for the networks dedicated to these exchanges. In 1988, private owners and operators were authorized to use rented lines to provide data services, facilitating the expansion of carrier networks of TCP/IP protocols and Internet applications.

3.4.3.1. Direct connection

A network operator does not have the option of establishing an international end-to-end connection. It must negotiate with an authorized partner in the country regarding installation of the means required for connection. The necessary technical coordination is related to sharing the revenue from operating traffic carried on the relevant circuits installed.

Accounting rates concern the taxes collected between operators for the services performed in transit operations or for traffic charges on the final initial or receiving parties. Figure 3.3 shows an AB connection between two subscribers using a direct international connection (without transit country) for 1 min. If “a” and “b” represent the usage cost of the communications resources of countries A and B, respectively, if “c” and “d” represent the transit costs of the international centers in countries A and B, respectively, and if “e” is the costs of the circuit between the two centers, the sum of S is:

“S” represents the cost of 1 min of connection between two customers. This sum of “S”, increased by coefficient “K”, determines the rate per minute of a busy hour between the two countries, as settled by the users (S × K = collection charge).

In connections between international bilateral operators, the proportion of the accounting rate to be repaid to country B for services performed in a call directed from A to B is expressed by the following formula: (0.5 e + d + b) multiplied by the margin of “k”. This value, expressed as an international unit of account (for example, in SDR, according to the partners’ choice), represents the call termination charge. This is the transmission cost billed by one operator to another operator for carrying out the transit or termination of the call on its network.

In practice, the values of accounting rates are never made public, not due to deliberate impenetrability on the part of the most significant countries in international traffic, but because, devoid of their context, these values have little actual meaning. In fact, they depend on the means used and accounted for, as well as the traffic that has actually been established.

3.4.3.2. Cases of international transit

In the event that the necessary connection between countries A and B requires transit through third-party country C, the operator in transit country C should be remunerated and the methods listed in section 3.4.1.1 (detailed breakdown by traffic unit or flat-rate remuneration) should be applied. In circuit switching, no country can set up direct connections with all other countries. Furthermore, each operator has its own list of preferential operators with which it negotiates transit conditions in advance.

In general, operators divide the total of the accounting rates on the basis of the simplest formulas possible, according to the 50/50 return for each of the two terminal parties in the case of direct connections and according to 40/20/40 or 30/40/30 returns depending on the size of the task carried out by the transit country operator.

3.6.2.1. Bilateral agreements

In December 1998, the revision of Recommendation D.150, regarding remuneration procedures for international traffic routed to end parties, was approved. The accepted principle is of one rate reflecting the costs in cases of asymmetric traffic for the signatory countries of international agreements on trade liberalization.

3.6.2.2. Internet interconnection

ITU-T Recommendation D.50 recognizes the sovereign right of every state to regulate its telecommunications and to negotiate and conclude bilateral trade agreements. The objective is to establish direct international Internet connections, which take into account the potential need for compensation among organizations, managers or operators, regarding the value of elements such as traffic flow, the number of routing channels, geographic coverage and the cost of international transmission.

Interconnection modalities, and consequently taxation methods, may include the following: P2P links, transit links, hybrid forms (P2P or transit links) and any provisions agreed through common agreements between organizations (or managers or operators), including indirect interconnection, as envisaged within the Global Information Infrastructure (GII – Rec. Y.140).

Respecting the rules of neutrality, traffic exceeding network capacities can cause indiscriminate slowdowns in data transmission, or even a complete freeze. This sometimes occurs when problems with equipment occur on the key transmission routes, for example. Routing regulations then serve to split the traffic load across the nearby networks according to their capacity. At the national and regional levels, the implementation of Internet exchange points (IXP/GIX) and content replication systems (caching) for the most frequently requested pages should be organized.

3.6.3.1. Principles (Rec. D.98 and D.99)

The wholesale and retail roaming tariffs (see section 2.2.1) correspond to the prices charged by the international mobile roaming (IMR) service, for instance:

• – IMR’s wholesale tariffs match the prices that the operator of the network visited has charged the connecting network, so that the customer could access the operator’s network from the network visited;
• – IMR’s retail tariffs correspond to those applied by the operator of the connecting network for subscribers to IMR services. Regulatory bodies can take action on the issue of international mobile roaming tariffs for the benefit of users by encouraging competition;

3.6.3.2. Toward “reasonable roaming”

Due to the high cost of the initial investments required for parts of fixed-line and wireless networks, tariffs have always been high. In the absence of regulations, when operation of voice GSM began, it was decided that callers would be made to pay, with the party being called paying nothing, even though in the previous system (RadioCom 2000) the mobile subscriber being called was charged. On this issue, Europe could imitate North American practices where the mobile device called was charged, as well as the radio party (FCC decision). High tariffs have enabled the rapid development of mobile networks.

Since 2012, the strong growth of mobile networks in numerous countries has put mobile telephone networks in a position that could be described as “dominant” in some markets. With monopolistic attitudes undesirable, the guideline tax for international termination on mobile networks should become closer to that of fixed-line networks. For this reason, the European Parliament and the European Commission have proposed that the roaming charges paid by mobile network operators in their 28 member States be abolished. Mobile users would therefore pay the same price for voice calls, SMS or data transfers, wherever they were in Europe. All additional roaming charges will be banned from June 15 2017.

The abolition of roaming charges has become a timely and justifiable action. On May 1 2016, the tariffs for calling a mobile device from abroad with a national subscription will decrease (€0.05/min, €0.02 for SMS and€0.05/Mbps for data). On June 15, 2017, these charges will be abolished within the limits of a “reasonable” usage yet to be defined. The purpose of the IoT does not yet seem to have been resolved as network managers and operators are invited to share their resources. In this case, with regard to roaming, the IoT has not brought about repayments between operators as the calls in question are indistinguishable from ordinary calls. Official implementation documents should soon be finalized.

The high cost of mobile roaming is a topic that also concerns developing countries. Eastern and African countries have created the “One Network Area”, with its aim being to markedly reduce the costs of roaming services in mobile telephony.

3.6.4.1. Overview

Over half of the traffic routed though Internet access networks in France is delivered by just five independent systems (across the 70,000 networks that make up the Internet), corresponding to service providers, hosts, or technical intermediaries.

As of 2016, modifications to systems or standards require equipment to be renewed every 5 years. Next generation networks are relatively complicated and it would be difficult to accurately add up the different elements used. Furthermore, network operators regularly carry out cost assessments of the global holdings they require for the life of the network, adjusted by fiscal bodies and the pressures exerted by competition.

3.6.4.2. Mobile data

In the case of mobile transmission of data, the caller and recipient each pay a share depending on their tariff plan, but aspects of roaming produce the same results as with voice data (low rates within Europe, high rates outside Europe).

In the IoT, it is even more beneficial to be roaming as the regulations oblige mobile operators to share their networks, allowing complete and continuous coverage at the lowest possible price.

3.6.4.3. On-net and off-net traffic

An “on-net” call is one that terminates on the network of the initial operator. An “off-net” call terminates on the network of an operator other than the initial operator. The tariff differentiation between “on-net” (intranetwork) and “off-net” (internetwork) can be a source of contention between operators. Exchanges of equally important traffic between two partners do not result in payment. If the data feeds exchanged are of different sizes, the compensation required is assessed on the basis of wholesale prices, with the gain (or loss) for each operator arising from the price gap.

A “margin squeeze” occurs when the gap (“economic space”) between the retail price of operator A and its wholesale price is too small for operator B to be able to compete with A in retail. The competitor’s bid is therefore not replicable.

The gap between “on-net” and “off-net” tariffs should not exceed the gap between the associated costs in order to avoid the differentiated offers being seen as an anticompetition tactic. The tariff differentiation can be abused by dominant operators to restrict the volume of off-net calls and make small operators less attractive, leading to a reduction in the level of customer satisfaction. Forbidding tariff discrimination beyond the level justified by cost difference puts an end to this source of market power (Figure 3.5).

Through “asymmetrical call termination” in IP, the operator of the user transmitting the call has the opportunity to increase its profit (sometimes to the detriment of the data rate and the quality of service). It is often possible to terminate a call in a neighboring country with cross-border traffic on the network where the subscriber is located, with the assistance of equipment sold freely on the Internet. While regulators can engage with network operators in the wholesale market, it is difficult for them to do so in the retail market as they have neither all the necessary information nor the means to act in a timely manner.

An inadequate pricing system for call terminations is likely to artificially restrict the capabilities of the operators with the weakest parts of the market to participate competitively. Indeed, operators with the strongest parts of the market can “free themselves” from the cost of terminating a mobile call by creating generous offers limited to single calls to their own customers (generous offers benefiting the network). The operators in the weak part of the market are punished when the mobile termination rate is a fixed at too low a level in relation to the real costs of mobile networks. The regulations regarding the retail price are difficult to apply, as an operator may meet the market’s lowest pricing conditions for its customers while gaining 75% of the market and advancing its EBITDA. The “dominant” position here is simply a reflection of typical business acumen and it does not lead to a “monopolistic” action. The contradiction is a matter of how the regulations are interpreted.

3.6.4.4. P2P

The volume of exchanges between “peer to peer” users is impossible to measure and is therefore not chargeable (see section 2.7.2 and 4.4).

3.6.4.5. OTT

OTT actors (including Facebook and YouTube) enjoy very significant advantages as their traffic is asymmetrical and they do not pay for the large amounts of data sent or received beyond the connecting fiber-optics. It is possible for the user to circumvent high costs by means of OTT applications (with the use of voice over IP (VoIP) on WhatsApp, Viber, Libon and Skype, among others) using Wi-Fi when appropriate.

3.7.2.1. Principles and their application

The practice of exchanging accounts between organizations or operators for international traffic is as old as the networks themselves. Payments are made through a settlement agent in order to take into account the monthly fluctuation in exchange rates and a regional clearing house is responsible for making the annual balance sheets for each operator involved.

Opacity has always prevailed in the relationships between accounting rates and collection charges, mainly due to countries with high traffic and dominant economies. No key stakeholder wants to divulge what it considers to be strategic accounting secrets. This attitude is understandable, although there is evidence of glaring mistakes among the minor open secrets.

In principle, the “account balance” between two operators is calculated according to the results registered by both partners on a monthly or quarterly basis.

The price of call termination plays a key role in the payment systems of mobile operators. It requires thorough accounts management. The accounting revenue division procedure is based on the equal division of accounting rates, a principle defined in the ITU-T Recommendations but one which is not mandatory. The general rule is that, if the international traffic between two operators is balanced, there is no reason to proceed to a financial exchange. On the other hand, a more significant rate of outgoing traffic gives rise to a differential payment.

Offsetting the balances of international telecommunications accounts in a deficit relationship (Rec. D. 196) is carried out with the agreement of the relevant organizations or operators, whether with recourse to a third party country or the balances of international accounts (clearing) in an accounting policy sometimes referred to as relating to “invisible” parties, as its compatibility is not supported by any tangible material (http://www.itu.int/ITU-D/finance/work-costtariffs/publications/economic_study_for_financing_telcom_dev-don_monk.pdf).

3.7.2.2. International switched networks

Generally speaking, the volume of national switched French-language voice traffic in France is close to 95%. This proportion, which was formerly around 3% in duration, is now currently in the region of 5% of traditional telephone networks. Unlike English, the French language does not have the same sized audience internationally. On the one hand, France is a large country and national uses have naturally come to dominate those uses established in international connections. In comparison, small countries (Brunei, Jordan and Luxembourg) have very large volumes of international traffic. Furthermore, for France, the financial impact of international communications tariffs on the entirety of revenue has always been insignificant, regardless of what some commentators, who do not always have all of the accounting information, may have said on the subject.

In reality, considered together with their connections, French international switching centers are falling ever more into deficit as their traffic is split into a large number of connections. Only around 10% of international connections are economically profitable and the sum of these profits does not manage to compensate for the shortfall from other connections, which are most often only maintained for reasons of prestige. Packet technologies and the use of IP routers have completely changed these facts.

3.7.2.3. International switching in packet mode

Needless to say, as far as packet mode on the Internet is concerned, the situation has changed completely. Indeed, the technology puts messages on P2P connections geared toward specialized IXP and the real costs of electronic communication have become very low, so that the settlement of accounts operates on the basis of traffic volume predictions, which are often the same or similar in both directions of transmission. If this is not the case, redirecting traffic to other IXP must be considered to move closer to a balanced situation.

In 2010 and 2012, the European Union stated that the international communications made with mobile devices represented a marginal share of the total (between 1 and 2% of mobile telephony revenue globally and 4% of community traffic).

For its part, China recognizes that if the development of OTT services on NGN has a significant and lasting impact on ICT development, these OTT services will have a negative effect on the revenue of traditional operators of voice and data services. Several countries wish to resolve issues linked to competition from OTT services, in particular those connected to VoIP services by implementing international regulations, which are more favorable to national operators. The mandatory participation of OTT services in national network investments is often mentioned.

It should be noted that there is no universal rule that can be applied to the pricing systems of telecommunications services. There is only a multitude of specific cases that it is impossible to analyze in terms of the network’s years of service, the digital significance of the number of subscribers, their profiles, the economic possibilities and the predominant sociocultural factors.