[kictanet] the long fibre lie...Regulatory Action limited.

Tue Aug 18 17:07:01 EAT 2009

Hi,

Assuming all things remain equal, here's a line from this year's budget
speech that suggests, at the least, ISPs should be bringing down prices
as well as offering bigger bundles:

******************************
First, Mr. Speaker, The East African Marine System Ltd (Teams) and
Seacom Kenya Ltd

have invested heavily in under sea fibre optic cables, whose completion
and full deployment is

expected to reduce significantly the cost of communication in our
country. In addition to other

measures which the Government has so far taken to encourage such
investment and to further

encourage the uptake of this facility by the internet service providers
and other intermediaries, I

propose:

(i) To allow the internet service providers to offset against their
taxable income the cost

incurred in acquiring the right to use the fibre optic cable over a
period of twenty years;

(ii) To increase wear and tear on telecommunication equipment including
the fibre optic cable

from 12.5% to 20%;

(iii) To provide tax deduction of 5% on computer software.

*********************************

May be we need to look at things from a different angle ...

Tom Maliti
Correspondent
East Africa Bureau

Direct line: +254 20 285 9109
Office line: +254 20 285 9000
                   +254 734 555 252
Fax: +254 20 2724726
Mobile +254 733 641 984 

________________________________

From: kictanet-bounces+tmaliti=ap.org at lists.kictanet.or.ke
[mailto:kictanet-bounces+tmaliti=ap.org at lists.kictanet.or.ke] On Behalf
Of Florence Etta
Sent: 18 August 2009 14:24
To: Maliti, Tom
Cc: KICTAnet ICT Policy Discussions
Subject: Re: [kictanet] the long fibre lie...Regulatory Action limited.

If the WASC experience is anythng to go by falling prices are not
guaranteed simply by the presence of increased bandwidth!

Cheers,
FE

(Still alive, kicking and yes lurking!)

Florence Etta PhD 
Telephone:
Nairobi  Mobile: +254-733-621-851
New York Rez: +1-917-639-3691
Canada Rez: +1-613-232-2729

Alternative Email:florence.etta at gmail.com

________________________________

From: warigia bowman <warigia at gmail.com>
To: feanywhere at yahoo.co.uk
Cc: KICTAnet ICT Policy Discussions <kictanet at lists.kictanet.or.ke>
Sent: Tuesday, 18 August, 2009 7:02:56
Subject: Re: [kictanet] the long fibre lie...Regulatory Action limited.

Dear Alex 

I share your frustration about the high prices and low bandwidth. My
bamba is still slow.  I too believe consumers are not getting a fair
deal. 

That being said, in Ndemo's defense, he is one of the most honest and
hardworking PSes I have met in my research so far in this beautiful
country of ours, across many different sectors. In terms of roles, the
PS is the implementer, whereas the Minister is the policy "maker."
Although lets be honest, Ndemo often does most of his bosses work, while
not getting the credit, or the paycheck . . . 

I think your ire, while very justified, should be directed at the
Ministers, and at the companies, particularly Safaricom and Zain.  

Yours, Warigia

On Tue, Aug 18, 2009 at 1:45 PM, Gakuru Alex
<alexgakuru.lists at gmail.com> wrote:

	Warigia,

	Below message to consumers and skunkworks lists sparked the
heated discussions.

	On Fri, Aug 14, 2009 at 7:11 AM, Alex Gakuru<gakuru at gmail.com>
wrote:
	> What a long optics fibre lie the whole thing was...
	>
	> ---Business Daily---
	>
	> "we do not anticipate that [Internet] prices will drop as
drastically
	> as initially indicated or within a short time-frame"
	>
	>
<http://www.businessdailyafrica.com/Company%20Industry/-/539550/639386/-
/u8ardrz/-/index.html>
	>
	> "..it was planning to implement an immediate 24 per cent
discount on
	> its internet charges and promised higher discounts once
connections to
	> international fibre optic links went live by the end of next
month.."
	>
	>
<http://www.businessdailyafrica.com/Company%20Industry/-/539550/638808/-
/u8bcyoz/-/index.html>
	>
	> ---summary---
	> in short, consumers are going to continue being ripped-off
while a
	> just too comfortable "hands-off" government sits back
pretentiously
	> expecting "market-forces" to push prices down -
	>
	> The way I see it? we have several options a) to demand
government
	> officers( Ndemo & Co.) who promised cheap internet to resign,
b)
	> demand regulator to wake up and proactively set the prices c)
continue
	> living in a denial and that,hopefully, one day we will have
	> "affordable" internet in Kenya.
	>
	> Where is Bitange Ndemo and and why did he lie to us and raised
	> Kenyans' hopes for cheap internet? we shall have serious
problems to
	> believe anything he promises henceforth. He should resign if
internet
	> prices do not go down as he promised.
	>
	> And who runs this country anyway? telecommunication companies
or the
	> government and the regulator?
	>
	> Alex
	> _______________________________________________
	> ke-internetusers mailing list
	> ke-internetusers at bdix.net
	> http://www.bdix.net/mailman/listinfo/ke-internetusers
	>

	Waundo,

	Kenya current problem not that old one, its different and it is
	"failed telecommunications market liberarisation."

	"  3.4.    Most rural areas still do not have Internet access
despite
	the fact that there
	         are many licensed ISPs. Additionally, the quality of
service has not
	         improved. Isn't there a need to make provisions to
enable
	rural access and
	         enforce Service Level Agreements (SLAs) to guarantee
quality
	of service?
	The licensed operators present said that the major factors
hindering
	their rollout to the
	rural areas are:
	           o High cost of connectivity offered by carriers.
	Competition has been used,
	                as a means to lower prices however there seems
to be
	no correlation
	                between the cost and the number of players in
the
	market. The licensing
	                of more players in the IG&BO and PDNO licence
has not
	translated to
	                lower access costs.
	           o Competition may also be used as a means to
improving
	quality of service
	                delivery and encourage the use of Service Level
	Agreements (SLA). This
	                however has not been evident in the Kenyan
market.
	           o Finally, competition should result in increased
access
	and availability to
	                telecommunication service and infrastructure.
	However, since rural areas
	                are not economically viable, most operators
	concentrate operations in
	                urban centres."

	<http://www.cck.go.ke/isp_stakeholders.pdf>

	The question begs... What are the Ministry of Information and
	Communications and the Regulator actually doing to ensure that
	consumers benefit?

	For further erodes hopes, if not adds insult to consumers
injuries, to
	read on today's Business Daily "BUYOUT CCK says local ownership
rule
	waived to allow foreign investor own more than 80 p.c"

	Could some people in government actually responsible and/or
prefer the
	statu-quo to remain? Now is the time to ask some of these hard
	questions- "academics" aside!

	Alex

	On Tue, Aug 18, 2009 at 12:28 PM, waudo
siganga<emailsignet at mailcan.com> wrote:
	> Hi Warigia - First sorry for missing ur big day due to some
other commitment
	> I had. I do not believe governments or governmental agencies
should set
	> consumer prices on anything. That is the work of market forces
through
	> competition. What governments need to do is ensure an
environment that
	> fosters competition. The example of ATT is from the old days
when ATT was a
	> monopoly operator. It reminds me of the 1998 Kenya
Communications Act that
	> gave monopoly status to Telkom Kenya in provision of some
services such as
	> landlines in Nairobi and international telephony. The mistaken
rationale was
	> that Telkom would rake in some "super profits" which would in
turn be
	> utilised in universal access provision. Needless to say those
objectives
	> were never attained. All along we prodded the Government to
free the market
	> through competition and private sector investment. When this
happend as in
	> the case of the mobile telephony sector the results in terms
of better and
	> more afrordable services were quick to manifest. Our argument
in the case of
	> universal access was that it was better for the Government to
allow freedom
	> in the market and then use fiscal instruments to raise funds
from the
	> IMPROVED, EXPANDED and CHEAPER  services. This is being done
today through a
	> 10% excise tax on airtime and, believe me, most users do not
even notice it.
	>
	> With the marine fibre I noticed what looked like
cross-ownership and
	> cross-interest in the different ventures and maybe that can
have an effect
	> on the competitive environment necessary to bring prices down
significantly.
	>
	> Kind Regards,
	> Waudo
	>
	>
	> On Tue, 18 Aug 2009 11:21 +0300, "warigia bowman"
<warigia at gmail.com> wrote:
	>
	> Dear Brian
	>
	> Do you believe that ISPs in Kenya are sufficiently competitive
to keep
	> prices fair? I am just asking. I really do not know.
	>
	> What about the concern people have expressed that KDN has
dropped prices
	> dramatically to ISPs, but consumers are not seeing the
benefit.
	>
	> By the way, it is WONDERFUL to hear from you!
	>
	> Rigia
	>
	> On Tue, Aug 18, 2009 at 11:18 AM, Brian Munyao Longwe
<blongwe at gmail.com>
	> wrote:
	>
	> Good point Warigia and the same applies here - CCK can and
have exercised
	> their authority to regulate voice pricing - this is especially
true when
	> there is either a monopoly or an operator with significant
market share.
	>
	> The same does not apply to market sectors like Internet
services because
	> there is full competition and never any player with
significant market
	> share. In the USA - FCC have never regulated Internet or
bandwidth pricing
	> as market forces generally accomplish this.
	>
	> Best regards,
	>
	> Brian
	>
	>
	> On Tue, Aug 18, 2009 at 11:11 AM, warigia bowman
<warigia at gmail.com> wrote:
	>
	>
	>
	> Dear colleagues
	>
	> Rates of operators can and have been regulated, In fact, in
the United
	> States we had something called rate of return regulation when
ATT was a
	> monopoly. They were allowed to charge a high rate, but in
exchange, they had
	> to ensure every tiny village of even 200 had phone service.
Why can't our
	> operators do that?
	>
	> Sincerely, Warigia
	>
	> On Mon, Aug 17, 2009 at 8:40 AM, Walubengo J <jwalu at yahoo.com>
wrote:
	>
	>
	>
	> Alex,
	>
	> Your have rightly qaulified your solution - as simple.  Indeed
it is. Infact
	> too simplistic to fly.  The idea that the Regulator can reign
in Operators
	> who charge "high" internet rates cannot and will not work.
Think about the
	> in-famous SAT3 fiber link on the west coast of africa.  Ask
yourself why the
	> Regulators in Nigeria, Ghana, Cameroon, Angola, S-Africa etc
have never
	>  stepped in and revoked licensces of operators over the last
15yrs of high
	> internet costs offered on the fiber...
	>
	> The answers are very complex...I will actually be discussing
these
	> limitations and available interventions in some upcoming ICT
conference at
	> Strath University in Sept 09 and I dont want to pre-empt
;-)....
	>
	> walu.
	>
	>
	> --- On Fri, 8/14/09, Gakuru Alex <alexgakuru.lists at gmail.com>
wrote:
	>
	>> From: Gakuru Alex <alexgakuru.lists at gmail.com>
	>> Subject: Re: [Skunkworks] Fwd: the long fibre lie... Ndemo
should resign
	>> if internet prices do not drop as he promised!!
	>> To: "Skunkworks forum" <skunkworks at lists.my.co.ke>
	>> Date: Friday, August 14, 2009, 8:44 PM
	>> On Fri, Aug 14, 2009 at 7:38 PM,
	>> David Kiania | Asentric Consulting
	>> Ltd<kianiadee at gmail.com>
	>> wrote:
	>> >
	>> > Set the precedence what's your  solution? Am sure if
	>> you did we'd have
	>> > heard it by now. This thread is a knee jerk reaction
	>> to a bad internet
	>> > day, we all have one.
	>> >
	>>
	>> Simple, the entity under Ndemo's docket that grants these
	>> cowboy
	>> operators licenses puts it's foot down and warn that I may
	>> revoke
	>> licenses for operators that charge waaaay up in the sky not
	>> just above
	>> cost but ABOVE acceptable international pricing benchmarks.
	>> They've
	>> all the data they need. Imagine, for example, Safaricom on
	>> the verge
	>> of losing their license, price drops, drops, drops, drops,
	>> drops, and
	>> drops..... across board.
	>>
	>> Would this be acceptable to you?
	>> _______________________________________________
	>> Skunkworks mailing list
	>> Skunkworks at lists.my.co.ke
	>> http://lists.my.co.ke/cgi-bin/mailman/listinfo/skunkworks
	>> Other services @ http://my.co.ke
	>> Other lists
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http://lists.my.co.ke/cgi-bin/mailman/listinfo/science
	>> kazi:
http://lists.my.co.ke/cgi-bin/mailman/admin/kazi/general
	>>
	>

-- 
Dr. Warigia Bowman
Assistant Professor 
The Department of Public Policy Leadership
The University of Mississippi
107 Odom Hall
University, MS 38677

URL: http://www.olemiss.edu/depts/leadership/index.html
PHONE: 662-915-1904
EMAIL: mwbowman at olemiss.edu

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