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Concerns over the interpretation of the EASSy Protocol regarding South Africa Telkom and Kenyan Government
by eric
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Brian in the scheme of things, our consensus is that the ownership of the EASSy cable is not going to have a "big" ROI and OWNERSHIP does not guarantee ACCESS. There is going to be ROI but not as "huge" to make pricing the cable beyond affordability - the devil is in the but i think trading the stocks on of the cable on the stock market could provide flexibility and an exit strategy for any investor in the future.

My view on OWNERSHIP is that it must be multi-stakeholder which is a combination of government, private sector, civil society and consumer. Am at Highway Africa and someone just asked me how does Civil Society and Consumers own part of EASSY.

My sugestion is to float a government guaranteed stock on the stock markets in the various countries and raise capital so that the average "joe bloe" on the street can own part of EASSy - i have sent a private memo on this to the E-African Comission to consider how to proceed alone this line though i must admit it is not an "EASY route for EASSY". For private ISPs and other investors my proposal is to lower the equity capital to between 500,000 dollars and a million dollars so more private African indegenous "investors" can put in their money.

Specifically on the issue you raise, i think we should go pass even the debate on whether this is a domination fight between South African and Kenya as well as whether Telkom South Africa would invest or not. We need to rather create a balance that meets the "eye" and that means engaging on the current protocol and reaching a compromise rather taking entrenched positions which is just waiting everyone's time.

Eric here

---------- Original Message ---------------------------------- From: Brian Longwe Reply-To: Discuss@afrispa.org Date: Mon, 11 Sep 2006 08:55:45 +0300

>Funny to hear this after Kenya's strong action. Looks like these >concerns about making profit off the cable (like SAT-3) might be some >of the underlying issues that Kenya was concerned about. It is >interesting hearing. Especially interesting is the way in which >Telkom SA management is linking the EASSY project directly to SAT-3

>"...Telkom has warned its investment in EASSy may be jeopardised if >government interferes in fees it charges for access to another cable, >Sat-3, around the west coast and connecting Africa to Europe. The >communications department has debated forcing down the price Telkom >charges cellular networks and internet service providers."

>We better make sure we don't allow them to force a similar pricing >model (read "investment criteria") on EASSY

>Regards,

>Brian

>TELKOM WARNS IT COULD CANCEL INVESTMENT IN UNDERSEA LINK

>Telkom South Africa might abandon its planned investment in a $300m >undersea telecommunications cable designed to boost Africa's >bandwidth if the return on its spending was insufficient, Telkom CEO >Papi Molotsane said.

>Telkom is one of the main backers of the 9900km East Africa Submarine >System (EASSy) cable. But regulatory issues and governmental pressure >to make the cable's bandwidth affordable may prevent it from making >enough profit to justify an investment, Molotsane said.

>In an interview, he said EASSy was essential to increase the >bandwidth available to 24 countries around eastern Africa, but >Telkom's participation was not guaranteed.

>Telkom would sell its capacity on the cable to smaller companies that >provided voice and data services, including internet service providers.

>"The overriding issue that we have to evaluate is the impact EASSy >will have, the investment it will require, and the return we will >get. If it doesn't make sense for our shareholders we will have no >reservations in pulling out," he said. "If it doesn't meet our >investment criteria and there are no returns, it doesn't make sense >to invest."

>About 30 operators are in the consortium that will finance and own >the cable. As Telkom is one of the largest, its input could be well >above $10m. However, the project is a Nepad initiative, allowing >governments to call the shots on how much the members charge other >operators to access the bandwidth.

>Telkom is negotiating with Nepad officials to work out how much >profit margin it could charge. "We are in discussions right now with >all the players and putting the numbers together, and a decision is >imminent," Molotsane said.

>"We support Nepad, but we have to do things that really make sense >for our shareholders, who expect returns on their investment. We have >indicated to the (communications) minister that if it doesn't make >sense we will not go forward. At this stage it is difficult to say >whether we will stay or pull out."

>As well as concern over the profit margin, Telkom has another worry. >"Some of the partners may be able to sell capacity to our country but >we may have challenges selling capacity to their countries because >their legislation doesn't allow that," said Molotsane.

>Telkom may decide the benefits of more bandwidth for Africa justify >its investment in spite of its reservations, particularly with the >2010 World Cup demanding enormous capacity in and out of SA. "We are >concerned by some of the regulatory issues, but that could be >overcome by the benefits that EASSy will bring to the African >landscape, so we could sacrifice some things to have the increased >bandwidth," he said.

>Telkom has warned its investment in EASSy may be jeopardised if >government interferes in fees it charges for access to another cable, >Sat-3, around the west coast and connecting Africa to Europe. The >communications department has debated forcing down the price Telkom >charges cellular networks and internet service providers.

>The department has not intervened so far, and Molotsane believes the >Sat-3 members will be able to continue setting their own fees even >after their exclusivity to the bandwidth expires next June. >(SOURCE: Business Day)

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Africa in Internet Governance and financing the Information Society
by eric
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Africa in Internet Governance and financing the Information Society

By Eric M.K Osiakwan

Executive Secretary of AfrISPA

eric@afrispa.org

http://www.afrispa.org

 

Africa stands at a very unusual threshold of the Information Society because it is the least developed continent and seeking to use Information Communication Technology (ICTs) to advance its developmental cause but at the same time caught in the web of ideas taking position on not only Internet Governance but financing of the Information Society. As an African I see the dilemma and seek in this final in the series of papers to make some suggestion to our community on how we can sail this storm because it is not an easy one. In my earlier essays namely; “the Net wants to be decentrally governed” and “Open Access and Financing Principles for the Information Society” I laid the foundation for this paper so you are better able to understand my proposals if you read those first. However I would advance this commentary by summing up the critical assumptions, linking them and extrapolating for the benefit of Africa. 

 

The modeling of the Internet as opposed to the old telephone network is such that the former is highly decentralized and the intelligence of the network is at the edges of it whiles the later is a highly centralized network with the intelligence at the core; this is the big deferential between the two platforms. The deferential is not just an engineering error or an inanimate discovery but a deliberate human design that seeks to create a distributed yet extremely collaborative platform for scaling global communication and commerce. In a simple way, the argument can be advanced that your level of governance of the Internet is commensurate to the “amount” of Network and Intelligence we contribute to the global common.

 

We can extrapolate further that it is paramount for Africa to prioritize its few resources on the building of our network and it’s intelligence at the edges of the global platform to contribute to the global collaboration in order to gain critical bargaining power as the Asians did. This is not to say Africa should not be part of the debate because it does not have the critical network needed but rather that we need to prioritize our few resources on where we can gain more weight and not use the scarce resource on elements of the structure which are porous. The suggestion for Africa to concentrate on her infrastructure development is not just rhetoric against our participation in global policy development but rather underscored by the fact that Africa is the most unwired continent in the world, most of its internal communication (voice, data, and video) has to be resolved internationally. This cost the continent a fortune hence the cost of communications is significantly higher in Africa than elsewhere in the world. It has been estimated that for data alone this routing of traffic costs the continent US$400 million a year[1]. A forthcoming report on bandwidth projection for Sub-Saharan Africa predicts 24% overall growth in the three years up to 2008.[2] According to a new report published by Balancing Act recently, the transmission capacity required to carry Africa’s international voice and data traffic increased by 91% in the three years to 5.09 Gbps 2002, will increase by at least 137% to 12.09 Gbps in the three years to 2005, and a further 81% to 21.9 Gbps in the three years to 2008.

 

The demand projections suggest the need for a robust passive infrastructure build-out in and around Africa using fiber optics. There is an urgent need for new approaches to financing and building out information and communication infrastructure to address this large unmet demand for information and communication services. This leads me to my argument that if Africa has to build its network and intelligence then it must of necessity focus on the second and as far as am concerned the most important outcome of the Geneva phase which is “financing the Information Society”.

 

The ban of infrastructure, service and product development on the ICT track in Africa is due largely to the restrictive laws and an untrustworthy regulatory process that thwart the ability of local entrepreneurs and outside investors alike to supply the local markets with these technologies. The elimination of the existing (and emerging) legal and regulatory obstacles to open communications network deployment is a significant boost to private-sector investment.

 

Given that the future of all voice, data, multimedia, and broadcast communications lies with packet-switched, Internet-based networks, the question for Africa is whether we will (a) embrace these open, decentralized, low-cost technologies, or (b) seek, as most have been doing, to prohibit or restrict them, under pressure from our state-owned monopoly telecom operators. In the more stable parts of Africa, the central obstacle to investment in Information Communications Technology deployment (and the spread of low-cost, reliable, up-to-date information and communications services) is foolhardy governmental regulation. Most African governments have imposed heavy-handed, restrictive, backward-looking, monopoly-protecting laws and regulations to the telephony sectors; many have currently moved aggressively to extend them to Internet Service Providers (ISPs) and the ICT sector at large. The result is that most African governments are, in large ways or small, actively discouraging or prohibiting investment in and deployment of ICTs in the areas of infrastructure, service and products. 

 

Most African still have astonishingly low rates of communications penetration. If the populations of those countries had ready, affordable access to high-speed Internet-based wireless voice data communications, the benefits could be tremendous: reduced costs of doing business; increased productivity and efficiency; greater political transparency, and new tools with which to fight corruption.

 

The various issues mentioned above are all connected to each other:  they raise the fundamental question of whether the African governments in question will recognize and embrace the fundamental shift toward Internet-based communications networks. The alternative, which is currently prevailing in nearly all developing countries, is for the government to cling to yesterday’s technology and do everything in its power to prop up the monopoly telecom. What makes the choice difficult is that it is not simply between old-fashioned telephone and new-fangled Internet technologies – it is a choice between two ways of behaving as a government and society. The old ways, fitting the telephone network, were closed, centralized, controlled, and top-down; the new ways, like the Internet itself, are open, decentralized, competitive, and technology-neutral – WAKE UP AFRICA.



[1] Via Africa: Creating local and regional IXPs to save money and bandwidth, Draft discussion paper prepared for IDRC and ITU for the 5th Annual Global Symposium of Regulators, 2004

[2] Balancing Act Voice and Data Bandwidth Forecasts (2005-2008), Paul Hamilton and Russell Southwood, Forthcoming

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Open Access and Financing Principles for the Information Society
by eric
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Open Access and Financing Principles for the Information Society

By Eric M.K Osiakwan

Visiting Fellow and Scholar, DV Program, Stanford University

eric@afrispa.org

http://www.openaccessforafrica.org

 

 

Introduction

The second priority from the Geneva phases of the World Summit on Information Society (WSIS) was the financing of the Information Society but the Internet Governance debate has overshadowed this. Given that I have made a submission on the later I feel obliged to contribute my 50 cents to the former – for me financing the information society should take more precedence over the Internet Governance debate.

 

Financing the information Society is a tall order because there are so many things to be financed and the financing principles, priorities and practice seems a  bigger challenge, may be that’s why we are giving it less priority but in this essay I would try to make an easy attempt focusing on the financing of infrastructure. Infrastructure is at the core of all the services and products we are envisaging to make the information society so priority must be given to the financing of same. This is not to say the financing of the others should be done later because they can be done simultaneously and as a matter of fact some of the principles am going to advance would be better served in a multi-track approach.

 

I think our first consideration should be the need to separate infrastructure from products and services and this distinction is advanced in the global communication paradigm. There is a general consensus to move from the “silos” approach to the communication system to a “horizontal layering” approach. In the silos approach what happened was everyone could do anything once they where licensed to, which meant that companies needed to build capital intensive infrastructure in order to provide services and trade products. This also meant that the end product or service was expensive for the market which meant it was less affordable for the majority.

 

Horizontal Layering

The horizontal layering approach is to distinguish infrastructure from services though there are other logical distinctions between:

  • The physical layer (the actual physical infrastructure);
  • The logical layer (managing the connection between the physical infrastructure and higher layers);
  • The applications layer (which includes things such as the Web browser), and
  • The content layer (voice, data or images conveyed by the network.)

 

Each layer has a set of functional rules that allow it to interface with the other layer and for information to flow over the network. Any player, including new players, can use different elements of the network, or the entire network, to provide services.  The IP-based architecture of the network makes it possible for services to be provided, and innovation to occur, at any point on the network, including, notably, the edges, where the network can be further “grown” as well.

 

Different segments of the market – and different layers of the network -- will naturally have different structures, and will attract players with different business models.  For example, in most countries and regions, it will not be feasible or logical to have more than one or two providers of backbone infrastructure. The key issue in an Open Access model is to ensure that no player in one of the layers can block access to another layer or to the rest of the network through having dominant market power in one or another layer; hence some key principles of Open Access must be advanced at this stage. 

 

Key Principles of the Open Access Model

1. Anyone can play

Particularly because of the potential for locally-provided services and network growth “at the edges” made possible by flexible technology and open network models, Open Access models should assure that any provider willing to play by the rules can “plug and play” in the network.

 

2. Technological neutrality

Regulation should be technology-neutral, taking into account the cost and physical properties of the technologies themselves. No one should be stopped from using a particular technology and indeed a progressive regulator would encourage cost reduction through technology innovation.

 

One needs to recognize that in future a wide range of applications will require higher bandwidth. But there may be no significant (order of magnitude) improvements in the performance of fibre, particularly its installation. However with wireless there will be significant improvements in performance and cost/capacity ratio and therefore wireless solutions will become more attractive in local distribution applications.

 

3.  Fair and non-discriminatory competition at all layers

Competition should be fair and non-discriminatory. There should be no predatory pricing, cross-subsidisation or aggressive cross-ownership. Regulators will need to be capable of dealing with a range of competition issues to ensure a genuine level playing field, and to prevent market strength in one layer from creating unfair competitive advantage at another layer. For all services at a given layer, there ought to be at least two providers and whenever there are not 4-5 providers of a particular service, issues of competitive position would need to be examined.

 

What is true for countries at a national level holds true at a regional and international level. Ideally any country should have a choice of at least two providers to connect to neighbours and the rest of the world. The EU competition policy formulation of “significant market power” provides a useful benchmark against which competitive position might be examined.

 

4. Transparency to ensure fair trading within and between layers

Competitive markets thrive on transparent information about market prices and service. Internal accounting processes in companies need to be sufficiently transparent to enforce fair trading. If there is tradable bandwidth – particularly at an international level – it will allow clear comparisons to be made between different providers. There needs to be greater levels of consumer information to allow comparisons between “offers”, including offers at the interface between layers.

 

The different roles of players need to be transparent. In order to create trust in the market, infrastructure providers need to be clear that they will not enter service markets to compete with their customers. The regulator exists to encourage competition rather than restrict it but to do so in a way that genuinely encourages increased investment and lower access costs to communications technology. Where appropriate, regulation becomes “light-touch” rather than prohibitive or restrictive. Government exists to create the legal framework through which competition issues can be mediated.

 

5. Everyone can connect to everyone else at the layer interface.

In order for a competitive market to function, everyone must be able to connect to everyone else. Service providers would be able to get access to infrastructure from the local to the international level, whether they were small or large entities.

 

There will be inevitable interconnection rate issues where the interests of the infrastructure provider in keeping re-investing in the network need to be weighed against the opportunities that can be created for greater levels of new business.

 

6. Devolved rather than centralised solutions

It is important to ensure that the “intelligence” in the network is to be found at the edges of the infrastructure rather than at its centre. In other words, the infrastructure provider should not be allowed to reserve for itself all of the functions that create value in the market.

 

In practical terms, it should be possible to create a local entity that can operate on the small or medium-scale and can “plug into” the network without needing to cede control over its activities to the infrastructure provider. Local operators need to be able to own and control a significant level of “intelligence” in the system (eg billing, features, etc) to encourage open access.

 

Having advanced the following principles a couple of financing mechanisms are made possible namely;

  • Market funding - support projects that demonstrate market demand and make a return for investors. This can be found through loan, debt and equity and an Open Access approach would be facilitated by access to local funds through SME loan programmes and local and regional stock exchanges.
  • Market “stretch” funding - support the development of projects where market demand will support them in the medium to long term (5-10 years) and where either soft loan repayments are made or capital gains can be made through later sale of shareholding. This would also cover public-private funding partnerships.
  • Social funding - is given because something needs to be supported because it has broader, non-market, development objectives where the returns looked for are social rather than financial. In communications terms, this would cover those parts of a country where service of any kind could not be provided on anything like a market basis, irrespective of future growth.

 

However these funding mechanisms must be implemented within a set of financial principles if public resources are to be used to intervene in the telecommunications sector, what should the criteria for these investments and projects be? Surprisingly, the criteria are not terribly complex, and there are only three. Readers not familiar with the sector and its traditions will be surprised to know that almost any project on the table today, such as SAT3 and EASSy fiber buildout, violate all of the following “principles”.

 

Public money should be used to create resources that are open to all customers, including future customers who may not yet exist. When private capital creates a resource one of the forms of “Return on Investment” can be exclusion of future competitors. Private investors can give a price advantage to “early” customers or they can simply deny “late” customers a chance at all. Either form of exclusion is a fine strategy for private businesses investing private money. On the other hand, public money should be used to create opportunity, not exclude it or reserve it for a select group. To the degree that public money finances telecommunications, the network so created should be open to all customers, for all time, on equal terms. This does not mean early contributors of capital should not be paid a fair rate of interest for making their investment early, when risk is higher. It does mean that customers who come along five or ten years later should have access on terms that are determined by the global and regional economy as a whole. Fiber optic systems like EASSy in particular have very long operating life spans, 20 years or more, so they have the ability to grow their benefits to a region if given a chance; to have such a powerful resource controlled by a monopoly consortium is especially damaging.

 

Resources created with public money should be sold on a cost-recovery basis. Private investors in telecommunications seek a financial return (profit). They must charge the highest price they can get or they will eventually be pushed out by a competitor. Governments should endeavor to insure that private investors in telecommunications enterprises operate in a competitive market; that will hold prices down; but government should not regulate prices or regulate the market in other ways. Only the free market is powerful enough to defend the customer from the natural tendency for private companies to charge the highest price they can. Conversely, when public money is used to create telecommunications networks the situation changes; governments become active participants in the market; but the objective of government participants should not be to charge the highest price they can. The objective of investing public money in telecommunications should be to create the highest benefit to the citizens and economy as a whole. Government needs to satisfy “investors” too, but in different ways. Government needs to deliver results, not profits. Because telecommunications is a high-technology product, the cost of capacity-creation is constantly dropping in real dollars. Certain layers of the telecommunications business involve extremely high levels of technical skill and expertise, so it is never a good idea for government to try and run a telecommunications network. However, parts of modern telecommunications networks, such as fiber optic “backbones,” have all the physical and economic characteristics of roads and waterworks and other “heavy infrastructure.” They are the kinds of resources government can help finance without getting into something too complex for governments to manage. But to achieve maximum benefit these resources need to be made available. That means public money should not seek a financial return, but should buy the delivery of capacity into a fair market at the lowest price possible (which is a price that seeks to recover cost and no more). In fact, public money should not be involved unless the explicit outcome will be a reduction in prices to customers. If public money can’t deliver that, then we have to ask if the free market is not already operating efficiently and if there may be no role or need for public money.

 

Public money should not be invested in markets that are distorted by anti-competitive regulatory regimes. As stewards of public money, governments should not invest resources in an environment where customers and competitors are not treated fairly by law. Unfortunately in every African country today telecommunications regulations are a systematic labyrinth of laws that create unfair advantages for certain companies, drive costs up for many companies, and drive costs up and deny service to almost all customers. Investment of public money into projects which must operate in these distorted “sub-economies” is a mistake; the vast quantity of telecommunications capacity created by a project like SAT3 or EASSy can only be productively sold in a fair and free market. Therefore, a precondition to large scale projects financed by global donor and World Bank money should be that governments clean regulatory house and create a business climate for telecommunications that is open and fair.

 

The last point may be the hardest for Africa. The web of advantages created by the regulators, advantages that accrue to employee unions, government officials, and a handful of selected companies, is so grossly unfair and economically distorted that the backlash will be severe for any government bold enough to try and dismantle this powerful bureaucratic apparatus. It is an indicator of how important telecom is to the economies of Africa that such interests have been created in the first place; and an indicator of how much creative energy might be unlocked when these corrupt and hegemonic structures are finally dismantled. I conclude my pieces tomorrow with a focus on Africa – “Africa in Internet Governance and financing the Information Society” is next.

 

Reference:

This note draws from a study prepared for the WorldBank through InfoDev on “Leveraging New Technologies and Open Access Models: Options for Improving Backbone Access in Developing Countries (with a focus on sub-Saharan Africa”, by a team consisting of Anders Comstedt, Russell Southwood and Eric Osiakwan, under the auspices of the consulting firm Spintrack @ http://www.infodev.org and http://www.spintrack.com

 

It also draws from a paper written by Roland Alden on Public Finance of Telecommunication @ www.ralden.com/C1/EASSy/default.aspx

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The Net wants to be decentrally governed
by eric
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Dear all,
 
From the 16th to the 18th of November, the sun would stand still over Tunis the capital of Tunisia because the global Internet community would gather under the UN lead World Summit on Information Society (WSIS) to determine the future of the Internet and the Information Society in general.
 
The summit would focus on Internet Governance to determine the future of the Internet and how to financing the Information Society for global inclusion. As a member of this community, am going to be sharing with us three articles; the first of which is "The Net wants to be decentrally governed" - sharing another perspective of the Internet Governance debate. Secondly, i would argue the case on "Open Access and Financing Principles for the Information Society" and then thirdly i would narrow my focus on "Africa in Internet Governance and financing the Information Society" - what does Africa bring to the table and what should she take home.
 
Please enjoy the papers and feel free to revert back to me and more importantly am open to conversations around the issues and dont forget to share them. Also feel free to blog them as well leave comments on my blog
 
The Net wants to be decentrally governed

By Eric M.K Osiakwan

eric@afrispa.org

http://afrispa.skybuilders.com/users/Eric/blog.html

 

Given that the key philosophy and ideology behind the framing of the Internet is for it to be decentralize and global, the argument can be made that its form of governance (Internet Governance) must of necessity follow the same protocol. The Internet is by definition a highly decentralize network of computer networks globally communicating with each other using the Internet Protocol and Transmission Control Protocol (IP/TCP) as a standard, this means that the Net wants to be decentrally governed. However I see the World Summit on Information Society (WSIS) in Geneva and now in Tunis trying to either centrally control or govern the Internet – this can be defeatist.

 

The modeling of the Internet as opposed to the old telephone network is such that the former is highly decentralized and the intelligence of the network is at the edges of it whiles the later is a highly centralized network with the intelligence at the core; this is the big deferential between the two platforms. The deferential is not just an engineering error or an inanimate discovery but a deliberate human design that seeks to create a distributed yet extremely collaborative platform for scaling global communication and commerce. The shift was necessary because the historic order which centralized the intelligence at the center of the network and demanded control from same was not scalable in the long term and was actually breakable.

 

Hence in a simple way, the argument can be advanced that your level of governance of the Internet is commensurate to the “amount” of Network and Intelligence you contribute to the global common. The thinking here is a paradigm shift from, the Internet is something somewhere that we must connect to and since we connect to it then we must be part of the governance of it to, the Internet is our network (inter-network) and as we build, we contribute our intelligence and at the same time we advance the governance of same within the globally agreed order of “self policing”.

 

The framing of the Internet to be a highly decentralized networks with the intelligence at the edges reflects a change in the humans relations culture of the 20th century; in which it was clear that we needed not to be centralized to govern but that we could govern better in a “self governance” culture based on some code of conduct (for the machines that is IP/TCP). The decentralization phenomenon has an inherent logic that humans are unique and posse’s specificity and must be allowed to participate in the global culture so that if the intelligence is at the edges of the network then it means everyone has an opportunity to flourish based on his uniqueness and specialization in the intelligence practice. 

 

Further more the democratizing effect of the Internet is a definition of the governance structure where humans have advanced to a point where “self governance” is better practiced taking into consideration the uniqueness, specificity and most importantly the need to innovate and invent. Innovation and invention is at the core of human civilization and so if we can’t create a society where both are advanced freely within an agreed framework then we are actually making an argument against human civilization. We all agree that the Internet is a positive platform for globalization so why are we trying to kill the uniqueness, innovation and inventiveness of same - that is what our current centralized approach to the Internet Governance debate means and I can see a lot of people pushing that front.

 

My proposal is for us to step back a second as we come to Tunis for the final stage of the World Summit on Information Society (WSIS) and consider again not only our “centralized” approach but the quest to centralized the Internet and its governance. The engineering argument is “why fix it when it is not broken?” but I advance the argument that “why break it in an attempt to fix it?”  If you may, let me advance the argument a bit further on the need for the intelligence to be at the edges – that is the best form of democracy.

 

Today, any technology that is working on the Internet is decentralized or what we call thin-client, centralized approaches don’t last too long on the platform because the inherent logic is defeatist. Talk about Yahoo, MSN, Skype, ICQ etc they are all extremely distributed and function better in that environment. Functionality on the Internet is best in a distributed environment.  The Internet is the best practice of “distributed computing” and distributed computing is an exemplification of the human social system that builds on the compound ratio of individual intelligence.

 

The Internet is representative of an epistemic regime that advances social inclusion or what some call “inclusive capitalism” and that’s what the World Summit on Information Society is all about so why are we advancing in such a summit a centralized and or closed approach to the governance of the Internet? Inclusiveness is better advanced in a distributed environment than otherwise or else we would not be advancing an Information Society. Inclusive capitalism is predicated on the co-creative ability inherent is individualistic intelligence so in the school of co-creation, it is fair to meet your personal need if you can contribute (co-create) to the global commons in an agreed framework.   

 

I can hear the Internet wanting to be decentrally governed and this is true of the current structure and order because we all agree that Internet Governance is a broad term and practiced in deferent forms and forums. For example; the Internet Engineering TaskForce (IETF) builds the protocols that run the Internet; Coordination of the unique identifiers is currently being handled in a multi-stakeholder Public / Private Partnership known as ICANN, etc. There are other forms of Internet Governance that are not addressed like issues related to cyber-crime, spam, child pornography, hate-oriented content, the high costs of bandwidth in developing countries etc. Where, when and who would address these issues that are taking an extreme toll on the global common.  

 

Now the question is by centralizing and or controlling the approach to IG do we address those unaddressed issues or we actually create a platform for them to be totally ignored? The later is most possible because it is clear that we have different institutions and forums because not a single institution or forum can address all the issues. The argument can be made that inclusiveness is necessary and can best be served in a distributed environment with an agreed protocol rather than in a centralized one, so let me submit that as we advance the cause in Tunis, let’s be careful not to break the Internet in an attempt to fix it.

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One Response to “Feeling unEASSy about telecom cartels
by eric
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This morning i woke up to a mail from my American friend (Jim) about the above essay on EASSy by Roland asking for my reaction if any. Then in the afternoon i got into skype with my Swedish friend (Anders) and he dropted Ethan's heart in Accra  rangling   Roland's eassy .

My response was “Am compelled to read the essay and Roland, we all know EASSy is a problem - you and Richard (another constructive critic) articulate that very well but i would rather that you focus on how we fix it because it is not GONE yet. I can tell you authoritatively that the funding for EASSy by the WB was approved until suddenly someone highup there heard the noise we have being making especially regarding the failure of SAT3 and why EASSy must not follow that trend then they said lets hold on.”

I cced Roland on that mail and he responded “Eric, your point is well taken. I’m on it.”

Thats was for the morning so after my meetings i just came back to e-mail in the afternoon and found ” Ok, I took you up on your challenge, indirectly. I did not address
specifically the notion of “fixing” EASSy but I have gone a fair distance from throwing stones at “what’s wrong” to addressing the question “what should be done?” Same page -
http://www.ralden.com/C1/EASSy/; just scroll down and this is what you would find;

Public Finance of Telecommunications
by Roland H. Alden

In an earlier essay on EASSy (the East African Submarine Cable System) I sharply criticized the EASSy consortium’s OPEC-like characteristics, and took the position that public money (and government regulation, which is a public resource) should not be used to finance telecommunications monopolies. But while it is easy to find fault with EASSy, and its already-built and dysfunctional sister project in West Africa called SAT3, it is somewhat harder to be clear and precise regarding exactly how these telecommunications projects should be structured.

In the last ten years Africa has seen a flowering of privately financed telecommunications ventures, so we can start with the most basic question: Why should public money be used, at all, to finance telecommunications? Let us admit that the answer may well be “it should not be used.” But we need to consider the facts. First of all, the only “flowering” Africa has really seen has been in the mobile telephone sector and this has been made possible in large part because of tremendous pent-up demand created by the existing “PTT” telecom monopolies (typically one per country) who have done such an abysmal job of meeting the needs of their customers. Anytime a business does a terrible job of serving its customers it creates a window of opportunity for certain competitive ventures. These mobile phone ventures have been fueled by some liberalization in the regulatory regimes in each country; but, this regulatory liberalization has been done badly in most cases; there are many loopholes that protect the PTT from certain kinds of competition, and many mobile operators are in violation of regulations because the economic consequences of obeying the law would be certain bankruptcy. It has been a great 10 years of telecom venturing for the private sector in Africa; but what has happened does not exactly add up to model public policy.

Mobile phones are only one form of telecommunications capacity; many others are needed. In order for Africa to develop and compete in the global economy of goods and culture, it needs high bandwidth networks capable of reaching the Internet, it needs urban and inter-regional and cross-border fiber optic networks, to tie together network islands and countries. It needs Internet exchange points where networks can efficiently exchange data with each other and allow a flow of ideas and transactions to occur across borders. It needs the costs for all these things to be as low as they are elsewhere in the world; so that African students, who do not have schools with many books, or many teachers, or any luxuries, can at the least have all the world’s knowledge at their fingertips. All these things are needed for Africa to aggregate the business and cultural opportunities of its many relatively small countries so that they can interact with the world as larger blocs with some power, and equipped with access to knowledge and information. If Europe needed the Euro then surely Africa needs regional organizations that really exist, function and make things happen. Strong telecommunications networks are a key enabler. Mobile phones everywhere are a first step, but they are not enough; not nearly enough.

Because the job is so large, and capable, wealthy and powerful private sector companies are so rare in sub-Saharan Africa , there is a strong temptation to ask governments and global financial institutions to do the “heavy lifting.” This is understandable, and may be justified. But, we must understand that in telecommunications in particular, there is a long and established tradition of such resources being used to support a single, unproductive, and corrupt monopoly company. It goes by different names in different countries, but it is known generically at the “telephone company.” To this day, the skeletons of these corporations, and the government regulatory bodies that oversee them, do continuous harm to the marketplace for telecommunications in Africa. They block the investment of private capital in order to insure that competition is restrained. EASSy is but one example of these forces at work.

If public resources are to be used to intervene in the telecommunications sector, what should the criteria for these investments and projects be? Surprisingly, the criteria are not terribly complex, and there are only three. Readers not familiar with the sector and its traditions will be surprised to know that almost any project on the table today, such as SAT3 and EASSy, violate all of the following “principles”.

Public money should be used to create resources that are open to all customers, including future customers who may not yet exist. When private capital creates a resource one of the forms of “Return on Investment” can be exclusion of future competitors. Private investors can give a price advantage to “early” customers or they can simply deny “late” customers a chance at all. Either form of exclusion is a fine strategy for private businesses investing private money. On the other hand, public money should be used to create opportunity, not exclude it or reserve it for a select group. To the degree that public money finances telecommunications, the network so created should be open to all customers, for all time, on equal terms. This does not mean early contributors of capital should not be paid a fair rate of interest for making their investment early, when risk is higher. It does mean that customers who come along five or ten years later should have access on terms that are determined by the global and regional economy as a whole. Fiber optic systems like EASSy in particular have very long operating life spans, 20 years or more, so they have the ability to grow their benefits to a region if given a chance; to have such a powerful resource controlled by a monopoly consortium is especially damaging.

Resources created with public money should be sold on a cost-recovery basis. Private investors in telecommunications seek a financial return (profit). They must charge the highest price they can get or they will eventually be pushed out by a competitor. Governments should endeavor to insure that private investors in telecommunications enterprises operate in a competitive market; that will hold prices down; but government should not regulate prices or regulate the market in other ways. Only the free market is powerful enough to defend the customer from the natural tendency for private companies to charge the highest price they can. Conversely, when public money is used to create telecommunications networks the situation changes; governments become active participants in the market; but the objective of government participants should not be to charge the highest price they can. The objective of investing public money in telecommunications should be to create the highest benefit to the citizens and economy as a whole. Government needs to satisfy “investors” too, but in different ways. Government needs to deliver results, not profits. Because telecommunications is a high-technology product, the cost of capacity-creation is constantly dropping in real dollars. Certain layers of the telecommunications business involve extremely high levels of technical skill and expertise, so it is never a good idea for government to try and run a telecommunications network. However, parts of modern telecommunications networks, such as fiber optic “backbones,” have all the physical and economic characteristics of roads and waterworks and other “heavy infrastructure.” They are the kinds of resources government can help finance without getting into something too complex for governments to manage. But to achieve maximum benefit these resources need to be made available. That means public money should not seek a financial return, but should buy the delivery of capacity into a fair market at the lowest price possible (which is a price that seeks to recover cost and no more). In fact, public money should not be involved unless the explicit outcome will be a reduction in prices to customers. If public money can’t deliver that, then we have to ask if the free market is not already operating efficiently and if there may be no role or need for public money. However, Africa is very far from this position today.

Public money should not be invested in markets that are distorted by anti-competitive regulatory regimes. As stewards of public money, governments should not invest resources in an environment where customers and competitors are not treated fairly by law. Unfortunately in every African country today telecommunications regulations are a systematic labyrinth of laws that create unfair advantages for certain companies, drive costs up for many companies, and drive costs up and deny service to almost all customers. Investment of public money into projects which must operate in these distorted “sub-economies” is a mistake; the vast quantity of telecommunications capacity created by a project like SAT3 or EASSy can only be productively sold in a fair and free market. Therefore, a precondition to large scale projects financed by global donor and World Bank money should be that governments clean regulatory house and create a business climate for telecommunications that is open and fair.

The last point may be the hardest for Africa. The web of advantages created by the regulators, advantages that accrue to employee unions, government officials, and a handful of selected companies, is so grossly unfair and economically distorted that the backlash will be severe for any government bold enough to try and dismantle this powerful bureaucratic apparatus. It is an indicator of how important telecom is to the economies of Africa that such interests have been created in the first place; and an indicator of how much creative energy might be unlocked when these corrupt and hegemonic structures are finally dismantled.

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Great News; AfriNIC 5th RIR
by eric
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Dear All,

A few moments ago, the ICANN Board approved a motion officially recognising AfriNIC as the 5th Regional Internet Registry at it 22nd international public meeting and the fourth to be held in Latin America. These meetings constitute an essential part of ICANN's global consensus-development and outreach efforts .

Excellent News! Africa can now stand up and be counted.

Well done Adiel and team and all those who have held the vision passionately for the past 7 years. A special thank you to Dr. Nii Quaynor for staying focused and facilitating smooth handover to us new Board members.

More @ http://www.icann.org/meetings/mardelplata/#ScheduleandAgenda

Below is some text of the rigor;

LET'S MOVE ON NOW TO THE UPDATE ON AFRINIC.
AND I'M GOING TO CALL FIRST ON BARBARA ROSEMAN, AND THEN ON ADIEL AKPLOGAN.
SO, BARBARA, WOULD YOU LIKE TO START.
>>BARBARA ROSEMAN: GOOD AFTERNOON.
I'D LIKE TO GIVE THE AFRINIC STATUS UPDATE FROM IANA.
IN SEPTEMBER 2004, THE ICANN BOARD GAVE PROVISIONAL APPROVAL TO AFRINIC'S APPLICATION AS THE REGIONAL INTERNET REGISTRY FOR THE AFRICA REGION.
IN MARCH OF THIS YEAR, AFRINIC PRESENTED AN UPDATED APPLICATION DEMONSTRATING THAT THE TRANSITION PLAN WAS NEARING COMPLETION.
AND SO WE OPENED A PUBLIC COMMENT FORUM.
AND IT'S BEEN ONE OF OUR MOST SUCCESSFUL PUBLIC COMMENT FORUMS.
WE'VE HAD MORE THAN 20 COMMENTS TO THE FORUM. AND ALL BUT ONE OF THEM HAS BEEN POSITIVE ABOUT AFRINIC'S SUCCESS.
EXCUSE ME.
IN THE IANA REPORT ON AFRINIC, WE FIND THAT AFRINIC HAS MET ALL OF THE CONDITIONS SPECIFIED IN ICP-2, THE DOCUMENT THAT GOVERNS HOW WE RECOGNIZE NEW RIRS.
AFRINIC'S OPERATIONS, POLICIES, AND BOTTOM-UP SELF-GOVERNANCE STRUCTURE COMPLY FULLY WITH THE SPECIFIED GUIDELINES.
AFRINIC'S TECHNICAL OPERATIONS AND EXPERTISE ARE IMPRESSIVE.
THE TRANSITION PLAN HAS BEEN SATISFACTORILY EXECUTED AND IS VIRTUALLY COMPLETE.
AFRINIC'S COOPERATION WITH THE INCUMBENT RIRS HAS BEEN EXEMPLARY, AND THE NRO HAS GIVEN ITS FULL ENDORSEMENT TO APPROVAL AND RECOGNITION OF AFRINIC AS AN INDEPENDENT RIR.
ACCORDINGLY, THE IANA CONCLUDES THAT AFRINIC HAS MET ALL THE NECESSARY REQUIREMENTS FOR APPROVAL AND RECOGNITION.
AND I'D LIKE TO CALL ADIEL UP NOW TO GIVE A BRIEF UPDATE.
>>VINT CERF: THANK YOU, BARBARA.

>>ADIEL AKPLOGAN: THANK YOU, BARBARA.
THANK YOU, MR. CHAIRMAN.
I'M JUST GOING TO COMMENT JUST BRIEFLY AN UPDATE GIVEN BY IANA.
I WOULD LIKE FIRST OF ALL TO THANK THE IANA FOR THIS POSITIVE EVALUATION OF OUR APPLICATION AND HOPE THAT THE BOARD ALSO WILL HAVE A VERY POSITIVE ANALYSIS, TOO.
YES, SINCE JULY LAST YEAR, WE PRESENT OUR TRANSITION PLAN AND ARE WILLING TO BECOME THE FIFTH REGIONAL INTERNET REGISTRY, SERVING AFRICA REGION.
AND SINCE THEN, WE WORKED VERY CLOSELY WITH ALL THE OTHER AREA TO CONDUCT THIS TRANSITION PLAN TO THE END.
THIS BRINGS US SINCE FEBRUARY 1ST TO THE STAGE WHERE WE START OPERATING AS A FULL RIR.
ALL THE DATA AND ALL THE OPERATIONAL ACTIVITY HAS BEEN TRANSFERRED EFFECTIVELY AND POSITIVELY TO AFRINIC.
FOR AFRICA, MOVING TO THIS STAGE OF THE TRANSITION WITH A FINAL ACCREDITATION BY ICANN WILL DEFINITELY REINFORCE OUR WILLINGNESS TO BE PRESENT AND PARTICIPATE INTO THE GLOBAL INTERNET TECHNICAL COORDINATION SYSTEM.
I WOULD LIKE TO USE THIS OPPORTUNITY, TOO, TO THANK ALL THE ORGANIZATION AND GOVERNMENTS IN AFRICA, MAINLY SOUTH AFRICAN GOVERNMENT, EGYPT GOVERNMENT, AND MAURITIUS GOVERNMENT, WHICH SUPPORTED OUR PROCESS TO THE BEGINNING AND BRINGS US TO THE STAGE WHERE WE ARE TODAY.
OUR REAL GRATITUDE ALSO GOES TO THE RIR, THE ALREADY-ESTABLISHED RIR, WHICH THROUGH THE NRO GIVE US THEIR FULL SUPPORT THROUGHOUT THE TRANSITION PROCESS.
AFRICA DEFINITELY WANTS TO BE PART OF THE GLOBAL INTERNET COORDINATION SYSTEM, AND WE WILL CONTINUE TO WORK TO INCREASE OUR PORTION IN THIS SELF-GOVERNANCE PROCESS AND PROCEDURE THROUGH ICANN.
THAT'S ALL I WANT TO SAY TODAY.
THANK YOU.
>>VINT CERF: THANK YOU VERY MUCH.
(APPLAUSE.)
>>VINT CERF: ONE MOMENT, AXEL.
FIRST OF ALL, EVERYONE SHOULD KNOW THAT WE HAVE AN OPPORTUNITY TO CELEBRATE THIS MORE TIMES THIS WEEK.
SO I'M LOOKING FORWARD TO THAT.
AXEL.
>> AXEL PAWLIK: THANK YOU.
MY NAME IS AXEL PAWLIK, I'M THE CHAIRMAN OF THE RIPE NCC AND ALSO OF THE -- I DON'T HAVE THAT MUCH TO ADD TO THE PRESENTATIONS.
WE JUST WANT TO SAY ONCE MORE THAT IT WAS EXTREMELY EXCITING TO WORK WITH OUR FRIENDS AND COLLEAGUES FROM AFRINIC.
IT WAS A VERY EXCITING, LET'S SAY, TWO YEARS OR SO.
NOT MUCH TO ADD TO THAT.
AS VINT HAS INDICATED, WE HOPE THAT THE BOARD WILL MAKE THE RIGHT DECISION ON FRIDAY.
AND IN ANTICIPATION OF THAT, WE HAVE LAID ON A BIT OF A RECEPTION ON THURSDAY NIGHT IN THE HOTEL HERE.
EVERYBODY IS VERY HEARTILY INVITED.
WE HAVE INVITATIONS OUT AT THE FRONT DESK.
SO I HOPE TO SEE YOU ALL THERE.
THURSDAY EVENING.
>>VINT CERF: THANK YOU VERY MUCH, AXEL.

 

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AfriNIC high on ICANN meeting agenda
by eric
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The Internet Corporation for Assigned Name and Numbers (ICANN @ www.icann.org) opened it 22nd international public meeting and the fourth to be held in Latin America. These meetings constitute an essential part of ICANN's global consensus-development and outreach efforts - http://www.icann.org/announcements/announcement-04apr05.htm

High on the agenda for this meeting is the interest of African's to see the Board publicly approve the second and final application submitted to it by the Board and members of the Africa Network Information Centre (AfriNIC @ www.afrinic.net) which is designated to be the fifth Regional Internet Registry (RIR) serving the Africa region.

 AfriNIC submitted to the ICANN Board an updated Application for Recognition, which includes summaries of their prior submissions, and details of their fulfilment of the ICP-2 Criteria for recognition as an RIR @ http://www.icann.org/announcements/announcement-14mar05.htm

The application was submitted for public comments which you can see @ http://forum.icann.org/lists/afrinic-recognition/

The AfriNIC application would be considered at the Board meeting on Friday, 8 April 2005: (8:00 – ) (A3-Dalmacio Velez Sarsfield-Lower Lobby)

These sessions will be webcast @ http://www.icann.org/meetings/mardelplata/#ScheduleandAgenda

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Interesting developments in Tunisia
by eric
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Despite the recnt public outcry against the hosting of the last phase of the World Summit on Information Society in Tunisia (WSIS Tunisia 2005) because it's government is percieved to be repressive when it comes to the media and public speech, I have come across some interesting information about that country that is worth considering.

I run into Mike Lawrie, one of the pioneers of Internet in Africa and he said that Tunisia was the first if not one of the first countries in Africa to pass IP traffic and then i read this piece from Russell Southwood's weekly update - Balancing Act

TUNISIAN RAILWAY COMPANY OFFERS INTERNET ACCESS ON LONG DISTANCE
TRAINS

The Tunisian national railway company (SNCFT) is providing internet access on board its long distance trains, it was announced in Tunis. Passengers can now surf the web at a low cost from the comfort of their train cars. This new service was made possible through a new venture financed of the National Solidarity Bank, a microcredit institution which provides young university graduates with low interest rate loans of up to 33, 000 dinars to help them set up their own business ventures.

The second story connotes entrepreneurial uptake from two national institutions to promote the Intenret - a private sector domnated area. Also the subject of collaboration to deliver this service chances the growth of local SMEs.

These two stories are interesting and present a case for the mileage that the Internet is getting in Tunisia but the question the bothers my mind is with such pervasiveness of the Internet why wont that be the vehicle for "public speech" in a "public space"?

 

 

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