[kictanet] FW: Day 3 of 10: Day 3 - Hierarchy of IGO & ISPs

Fri Apr 27 18:20:19 EAT 2007

Begin forwarded message:

From: Sammy Buruchara <HYPERLINK
"mailto:buruchara at mac.com"buruchara at mac.com>

Date: April 27, 2007 5:18:27 PM GMT+03:00

To: Kenya ICT Action Network - KICTANet <HYPERLINK
"mailto:kictanet at kictanet.or.ke"kictanet at kictanet.or.ke>

Subject: Re: [kictanet] Day 3 of 10: Day 3 - Hierarchy of IGO & ISPs

Dear all,

I find the conclusion of this report about the IGO and ISP quite ignorant of
historical facts:

            - The government from the onset of the Internet Industry was
reluctant to license ISPs because of TKL.

            At the time only TKL had International Gateway License.

Even 5 years after giving them ISP license, ISPs were still not allowed to
setup IG operations. CCK used to visit ISPs premises routinely to check if
they have illegal VSAT. State security was usually the excuse.

International bandwidth from TKL was then US$8000 per 64kbs half circuit.
Naturally this was somehow passed on to the client.

            - ISPs got the license 5 years later (2000) JamboNet was set up
but still ISPs (even GSM operators) had to go through TKL for all
International bandwidth whether through JamboNet or dedicated circuit.
Dedicated circuit was made prohibitively higher to force ISPs to use
Jambonet.

            - It took Tespok campaigning and even harassment by CCK of
Tespok leadership before CCK could concede to actually open up the Telecoms
Market in 2004.

Tespok went to the Tribunal and won a case with CCK forcing them to allow
operators setup International gateways. ISPs paid for this court case which
cost millions.

Unfortunately the authorities had other ways of permanently preventing ISPs
from ever getting an International Gateway facility: Licensing fees. To
setup an International gateway license the license fees was and still is Ksh
16 million. Naturally most ISPs could not afford this. In Uganda, it is a
paltry US$1000.

The beneficiaries of the liberalization victories were therefore not ISP but
other investors who previously were not anywhere near the industry play. So
came up KDN, Jamii, and all other BOGs. In fact only UUNET recently joined
the group after much lobbying.

The market may judge what they may about the ISP, but it is good to know
that from the beginning, the govt used unusually great energy to make sure
they do not succeed because they happened to threaten their favorate baby,
TKL.

Now if the ISPs do not add value and only increase cost, the reason? Your
guess is as good as mine.

The rest is history.

regards

Sammy Buruchara

CEO - NairobiNet Online

On Apr 25, 2007, at 8:36 AM, John Walubengo wrote:

Thanx Alex for your comments on Day 1, for a moment I was

bracing myself for a 10 day Online monologue :-(! as

opposed to the planned Online dialogue. Incidentally,

belated Comments on previous days themes shall remain

welcome - just click on the correct subject line and make

your appropriate contributions...

Anyway back to today's theme- The Question of Internet

Gateway Operators (IGO, the Wholesalers of Internet

Bandwidth) vs Internet Service Providers (ISPs, the

Retailers of Internet Bandwidth).

The report recommends that seperation b/w IGO and ISPs be

dissolved.  This is because the current structure

Internet-> IGO -> ISP -> Consumers is considered

unnecessarily too long.  Apparently the ISP as we know them

today are not adding significant value - instead they are

adding cost to the service and probably degraging the

quality of the Internet eventually delivered to the

Customers.

Cutting down the middle-man (ISPs) may offset the costs and

while increasing the quality of the internet eventually

delivered to the Consumer.  Is this assumption true? Does

allowing IGO to directly deal with Consumer result in

cheaper Internet Services while improving on the quality of

the internet?

1 day on this theme, at the least, I do hope to get some

reactions at from any IGOs and ISPs.

walu.

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