[Kictanet] Re: [AfrISPA.Discuss] Notes from Kenyan ICT Conference

Tue Feb 28 18:16:39 EAT 2006

Brian,

The EASSy consortium as a matter of necessity must adhere to the principles of Open Access as enshrined below so that KENET and the UbuntuNet alliance who have money to invest in the project should NOT be asked to present an international gateway license in order to be allowed. It is like i have money to invest in a good business and you say i need a license to invest; i dont know if this is a new rule in the VC world?

Primarily, the rules for owership and investment in the cable should be as open to all as the rules of access to the use of the cable for provision of service by all the players along the value chain. 

If the argument is to do country specific arrangements then the investors from those countries must have an equal say in how the landing station is structured and managed without any favours towards incumbency. In which case it is the interest of public policy that they give equal time and opportunity to the non-incumbent operators and services projects to get on baord. 

Eric here

NB: Send the ppt but more so i would like to know what the EASSy guys say to this?

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. Technological innovation helps make these new approaches possible and more flexible approaches to financing, service delivery and regulation will make them effective and sustainable. One approach (or set of approaches) gaining increased visibility and credibility is increasingly referred to as the “Open Access Model”.  

The urgency, and the viability, of these new models are driven in part by the growing (and inevitable) move toward Internet Protocol (IP)-based communication networks.  This in turn implies the move toward a “layered” model of these networks, where there is a logical distinction 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 assure 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.  

Key Principles
This suggests a number of key principles of Open Access networks.

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.

 NB: 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

---------- Original Message ----------------------------------
From: Brian Longwe <brian at pure-id.com>
Reply-To: Discuss at afrispa.org
Date: Tue, 28 Feb 2006 16:01:42 +0300

>Hi all,
>
>Here are my notes from a presentation that has just been given by Eme  
>Essien of the World Bank/IFC
>
>i will forward the powerpoint presentation as soon as I can get hold  
>of it...
>
>-----------------------------------------
>
>EASSY Presentation from World Bank
>
>Eme Essien, Senior Investment Officer, IFC/World Bank
>
>Shared Objectives:
>- provide more affordaclbe ICT access
>- meet demand for high speed boradbankd connectivity in the region
>- spur followon ICT investment in region
>- provide cheaper alternative to satellite
>- encourage greater connectivity and integration within region
>- ALL CAPITALS AND MAJOR CITIES IN E & SA SHOULD BE LINKED TO GLOBAL  
>NETWORK
>
>10 Landing points
>- Sudan
>- Djibouti
>- Somalia
>- Kenya
>- Tanzania
>- Mdagascar
>- Mozambique
>- South Africa
>
>Eastern Loop
>Northern Loop
>Southern Loop
>
>World Bank Group Role
>- assist parties deliver on shared objectives
>- facilitate reduction of risks (policy/regulatory) to increase  
>private sector participation
>- Conditionalities
>- liberalisation of international segment - Open Access
>- non-discriminatory access to regional infrastructure to all operators
>- identify funding gaps
>- build capacity in relevant regional organisation
>
>Conditions for Success
>OPEN ACCES
>- maximises project's development impact
>- clised club deal SAT3 structures have had limited impact on  
>traffic, pricing, development
>- capacity should be accessible to all parties, fixed line operators  
>etc....
>
>Challenges
>- 30-ish members
>- Telcos, parastatals, regulators, private operators, incumbents
>- countries with differing progress on reform agenda
>- differing levels of economic development, infrastructure, ICT needs  
>etc
>- no single champion to establish common interests
>
>
>East Africa Backhaul System
>- overland backhauls to EASSY project
>- majority of traffic will be routed overland
>- various stages of deployment
>- MSA-KLA
>
>
>IFC Advisory services role
>
>WB workign closely with members of East Loop
>
>Jan 2006  Mandate has been signed with EASSY
>- produce transaction structuring report
>- conduct technical feasibility study
>- among others....
>
>Foreseen East African Backhaul Route
>
>My Question: Is the World Bank applying an Open Access approach on  
>other telecoms infrastructure projects in Africa or only on EASSY
>
>Anwer: James Morley<sic>, IFC
>- YES
>- Open Access approach is being applied across the board - over all  
>projects
>- initially the EABS - WB is pushing for Open Access; pushing for  
>smaller parties to take part
>- Open Access is a principle underlying WB engagements
>
>Kirui<sic>
>- Open Access has (finally) been embraced by EASSY
>- last hardliner has last week finally given in and agreed to accept  
>Open Access based on a Special Purpose Vehicle approach
>
>
>
>
>
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