[kictanet] Telkom Kenya cries foul over social media’s free ride on its - Corporate News

Wed Sep 14 10:44:50 EAT 2016

Interesting paper Mwende,

What would the internet be without OTT and content? Back to basics.

Regards

On 9/14/16, Mwende Njiraini via kictanet <kictanet at lists.kictanet.or.ke> wrote:
> Good morning
>
> The network neutrality debate has landed on the shores of Africa.
>
> Here is an excerpt of an academic paper i had written some time back.
>
> *The net neutrality debate can be viewed as the next battle between the
> netheads and the bellheads; providers of broadband access on one side and
> Internet content and application providers on the other side. Frieden
> (cited Orlowski 2006) states that the Bellheads are investing heavily in
> fiber capability which will solve a problem that the “Netheads” have proved
> themselves unable or unwilling to tackle, that of high quality video over
> IP.*
>
>
>
> *Given that US government is keen to facilitate the rollout of universal
> and affordable broadband[1] <#_ftn1>.  It can be argued that the aggressive
> fiber rollouts could suffer if network operator shares continue to lose
> value making it difficult to blame the companies if they did slow down roll
> out. The companies, after all, have a duty to shareholders to pursue
> maximum profits not necessarily to fulfill the goals of Internet advocates
> (Drucker, 2006).   However one has to be careful in analysing the market as
> forces in telecommunications can be misleading. Telephone companies, for
> example, get billions of dollars in federal and state subsidies for rural
> service.   Access charges are designed to compensate network providers for
> the use of their facilities and the compensation scheme is in part funds
> universal service.  Additionally, these companies may be claiming more in
> the depreciation and the value of their assets.  *
>
>
>
> *Regulators may therefore seek to eliminate access charges by allowing
> rates to rise to cover network cost if not service providers should pay
> access charges.  This is however difficult to implement politically on the
> basis of public interest.  Additionally, it is equally difficult to expect
> new entrants to pay access since the avoidance of access is, at least in
> part, the source of their perceived competitive advantage.  *
>
>
>
> *Historically, the FCC has not regulated the Internet or the services
> provided over it. However following the 9/11 terror attacks in the US,
> security is a key government priority.  Consequently, open access to the
> Internet articulated in the FCC “Four Network Freedoms”, is subject to
> legality of content and needs of law enforcement (Frieden, 2006)    The FCC
> is thus constantly reviewing mechanisms[2] <#_ftn2> to implement important
> social objectives, such as public safety, law enforcement access, consumer
> protection and disability access, as communications migrate to
> Internet-enabled services.*
>
>
>
> *On Wednesday, 28th June 2006 the Senate commerce panel voted against
> amending the telecommunications bill by attaching the net neutrality
> provisions that would prevent operators from blocking, degrading or
> prioritising service on their networks (Orlowski, 2006).  The defeat of the
> amendment could herald the return of the vertically integrated incumbent
> firm providing services along the whole value chain.  Despite the fact that
> the access network has been considered a natural monopoly area as a single
> firm could presumably construct and provide local services at a lower
> average cost than two or more firms (Spulber, 2002)[3] <#_ftn3>, Sir Tim
> Berners-Lee, the creator of the web, views the defeat of the net neutrality
> legislation as the entering a “dark period” for the Internet, if access
> suppliers were allowed to choose which traffic to prioritise (BBC, 2006).
> *
>
>
>
> *The higher costs of a “tiered Internet” levied content providers will
> simply be passed on to consumers, directly or indirectly. As there is no
> “free ride” on the network, and consumers will bear the costs of network
> development through higher access charges and higher prices for online
> goods and services[4] <#_ftn4>. Moreover, a “tiered Internet” will further
> concentrate the market power of the cable modem and DSL duopoly,
> eliminating competition in the conduits and leaving consumers with no
> escape from content discrimination.*
>
>
>
> *The potential return of the two tiered Internet may further widen the
> digital divide between developed and developing countries.  It may be
> argued that successful internet organizations should contribute to the cost
> of internet infrastructure either through Internet settlement agreements or
> contribution to universal access funds.  This argument is based on the fact
> that these companies are providing functional equivalent services, thus
> there is a need for operators to maintain network integrity and for
> governments to guarantee national security, and I concur.*
>
> ------------------------------
>
> [1] <#_ftnref1> FCC defines "high speed" as 200 kilobits in at least one
> direction.
>
> [2] <#_ftnref2> On February 12, 2004, the FCC ruled that an entirely
> Internet-based VoIP service would be an unregulated information service in
> USA.  However the FCC released an order requiring VoIP providers to deliver
> enhanced 911 emergency services to its customers.   *Source:
> http://www.fcc.gov/cgb/consumerfacts/emergencies.html
> <http://www.fcc.gov/cgb/consumerfacts/emergencies.html>*
>
> [3] <#_ftnref3> This theory is based on the assumption that firms will seek
> to leverage on economies of scale to achieve production efficiencies,
> pricing services above cost and not precluding competition
>
> [4] <#_ftnref4> Scott (2006) predicts that companies like Google and Yahoo
> that support their free services through advertising revenue will raise
> their advertising rates, resulting in higher consumer prices on all the
> goods that advertise on these sites.  While Amazon and eBay will raise
> their rates to account for the extra charges and I-Tunes and other
> pay-per-download content sites will charge higher rates as well, to cover
> access charges by AT&T and Verizon.
>
> Disclaimer: Views expressed except those referenced are the author's own.
> The full paper is available on request.
>
> On Wed, Sep 14, 2016 at 7:16 AM, Ali Hussein via kictanet <
> kictanet at lists.kictanet.or.ke> wrote:
>
>> Listers
>>
>> This is getting abit tiring..Telcos complaining social media platforms
>> are
>> getting a free ride on their infrastructure.
>>
>> http://www.businessdailyafrica.com/Corporate-News/Telkom-Kenya-
>> cries-foul-over-social-media/539550-3379938-9liqm4/
>>
>> What are your thoughts? Should Telcos charge companies like Google and
>> Facebook for access to their networks?
>>
>> What would be next? A small fee for every website?
>>
>> #NetNeutrality
>>
>> *Ali Hussein*
>> *Principal*
>> *Hussein & Associates*
>> +254 0713 601113
>>
>> Twitter: @AliHKassim
>>
>> Skype: abu-jomo
>>
>> LinkedIn: http://ke.linkedin.com/in/alihkassim
>>
>>
>> "Discovery consists in seeing what everyone else has seen and thinking
>> what no one else has thought".  ~ Albert Szent-Györgyi
>>
>> Sent from my iPad
>>
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>

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