[kictanet] Week 1 Online Discussion Summaries- CCK Internet Report

Wed May 2 23:20:10 EAT 2007

Walu,

I think in my view the Internet study clearly showed that the market
structure promoted by CCK has not worked! Why are many ISPs building their
own infrastructure through either PDNOs or IBGOs? The study clearly showed
that there is no TRUST!! In the Internet market. What do I mean?

The Market structure is clear ISPs do not build infrastructure, they buy
from licensed infrastructure providers. This would eliminate the need for
building multiple networks and ensure we are more dispersed in the
country. This is not been the case, we now have about  8 IBGO's in Nairobi
and and two operating out of Nairobi why? Trust me if all ISPs were buying
capacity through two providers the price would be significantly lower. But
since there are all these competing gateway operators the country does not
get the necessary economies of scale. That is on the international part
...

The local loop, we have approximately 7 operating PDNOs in Nairobi and
they too are competing for the same clients in the same space instead of
utilising the economies of scale!! Where are they in the rural areas ...

My view is the regulator did not do enough to ensure the market structure
was fully followed and therefore some people took advantage today there is
NO TRUST! in the internet market and most ISPs have opted to build their
own networks.

I personally believe with a good competition framework and regulation we
could begin to see some TRUST between operators and service providers and
we could solve this Internet problem once and for all.

Further to this, the consumers and the service providers too are going to
be the next fighters if the lack of a competitive framework continues.
TRUST!!! Again will be lost (if not already).

We lost an opportunity and I think and know the problem is TRUST!! How do
we build the trust? Is it already too late to do so?

--
Joseph Mucheru
mucheru at wananchi.com

> From: John Walubengo <jwalu at yahoo.com>
> Reply-To: Kenya ICT Action Network - KICTANet <kictanet at kictanet.or.ke>
> Date: Tue, 1 May 2007 23:26:27 -0700 (PDT)
> To: <mucheru at wananchi.com>
> Subject: [kictanet] Week 1 Online Discussion Summaries- CCK Internet Report
>
> Hi all,
>
> I went off-air for a while - actually I travelled upcountry
> to my parents home in Bungoma -its a remote town from
> NRB(450Km away) but the 2nd largest town in Western
> Province and yes, Internet access in those parts of the
> world is quite a challenge.  But that's a story for another
> day...
>
> Today, I thought it would be nice to reflect on last weeks
> contributions before we move into the this final week's
> discussion.  Tomorrow we start on the theme 'The Statistics
> on Affordability', but below I have put together what I
> think was last weeks summary contribution and hope you can
> go through it and raise  final (if any) comments on last
> weeks themes.  These were International Bandwidth,
> Heirarchy of Providers(ISP/IGO) and the Statistics on
> Infrastructure.
>
> ---Last weeks summary begin-----
> Week 1 Summary.
>
> Day 1:Background Concepts/Overview
>
> Mr. J. Walubengo gave an overview of the Internet Study
> report saying that it aimed to establish the status of
> Internet Infrastructure, Internet Affordability and
> Internet Use & Dispersion in Kenya.  He reported that the
> study had various recommendations aimed at improving on the
> above internet indicators.  This included amongst others;
> getting the government intervention in extending the
> domestic internet infrastructure, introducing further
> competition both within the Fixed Line and Mobile
> subsectors, utilizing the Universal access fund to extend
> Internet reach, promoting creation and use of local content
> as well as supporting Consumer Awareness initiatives.
>
> Mr. A. Gakuru lauded the study as well as its
> recommendations but noted that a similar study would be
> required that focused on the demand-side rather than the
> Supply-side of the internet market.  He was glad that the
> Regulator was finally making deliberate efforts to support
> consumer awareness initiatives.  He wondered if naming and
> shaming those ISPs that failed to route traffic through the
> local internet exchange point (KIXP) would help in
> enhancing the use of KIXP.
>
> Day 2: International & Domestic Bandwidth Usage
>
> In his opening remarks, Mr. Walubengo said that the report
> indicated that the International Internet Traffic was
> skewed (90%) towards external  sources (content).  Kenya
> was a net importer of Internet content and was therefore a
> consumer rather than a creator of Internet content. Value
> (economic or otherwise) goes to the creators of Internet
> Content and Kenya should aim to be a generator rather than
> just consumers of Internet Content.
>
> Mr. M. Michuki observed that most Kenyans visited external
> sources due to lack of local content. He suggested that
> ISPs should come up with pricing smodels that encouraged
> the creation of and access to local content. For example,
> geo-specific tariffs could be designed that would
> deliberately make it cheaper to access local (.KE) conent
> i.e. users could be charged less if and when they accessed
> or used local  services(local websites, emails, etc) as
> opposed to foreign services. In addition, ISPs could come
> up with time-based tariffs that took advantage of the
> traffic models registered on the KIXP i.e. provide even
> lower rates for local content during evenings and
> weekends.He however conceded that Online Government
> Services, eHealth, eBanking, eLearning, etc would have to
> be in place in order to make such pricing models
> successful. Mr. J. Ngunjiri added that training or capacity
> building initiatives must also be supported to further
> gaurantee the success of the initiative.
>
> Day 3:  Hierarchy of Internet Service Providers (IGO,ISP)
>
> The Internet Study Report recommended that the seperation
> between Internet Gateway Operators (IGO) and Internet
> Service Providers be dissolved with expected results being
> cheaper and higher quality services.  In his opening
> remarks, Mr. Walubengo asked members to react to this
> recommendation.
>
> Lucy Kimani wondered if IGO would be able to cope with the
> technical and administrative overheads experienced by ISPs
> such as a larger number of customer accounts, increased
> need for support services, etc.  She added that the cost of
> services may not come necessarily  come down as expected
> due to the need to cover such overheads.  Mr. Walubengo
> cited the case of TKL (Telkom Kenya) who are currently
> operating at both the Gateway and the ISP level without
> significant cost reductions in their Internet Service.
>
> Mr. S. Buruchara felt that historically, ISPs have had a
> rough time in trying to set up their own Internet Gateway
> Operations - having been forced by regulation to route
> their traffic through expensive and monopolistic Internet
> Gateways.  He argued that if the upstream providers (IGO)
> were expensive, it was only natural that these costs would
> be passed downstream to the consumers.  In addition, he
> noted that even todate the Licensing requirements were
> still prohibitive (expensive) for ISPs to move into the IGO
> level and if they did, they may need to recoup their
> (Licensing & other) investments at the expense of offering
> cheaper Internet Access rates.  Mr. Kai Wulff commented
> that giving ISPs the IGO facilities may not necessarily
> reduce prices, citing case of Uganda where internet costs
> are still high despite many ISPs having IGO facilities.
>
> Day 4: Statistics on Infrastructure
>
> The report indicated that ISPs (internet services) were
> only operating in 30% of the districts in Kenya. The leased
> line services were mainly concentrated in urban centers
> (NRB & MSA) meaning that Internet Infrastructure was
> clearly challenged and the Report urges Government to
> intervene by leading the build-up of Internet/Network
> infrastructure accross the country.
>
> In her reaction, Alice Munyua, said that a comprehensive,
> multi-pronged approach must be made to avoid having
> infrastructure that would eventually serve no purpose.
> Aggressive infrastructure build up without content would be
> an exercise in futility since the internet pipes would be
> idle and underutilised most of the time.  She added that
> additional initiatives such as Construction and Supply of
> Electrical Power, Literacy Initiatives, Local Content and
> 'Demand-side' Internet Requirements must move side by side
> with the infrastructure roll-out.
>
> Day 5- Statistics on Affordability will be on tomorrow
> (thrs 3rd May) morning. Today is open for final comments on
> the Day 1, 2, 3 & 4 Themes.
>
> walu.
>
>
>
>
>
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