[kictanet] (CA unified license is obsolete) Safaricom renews push for digital broadcast licence

Tue Nov 6 13:31:12 EAT 2018

 Diversity of ideas is a good thing so I welcome your opposing perspective!
The issue with monopoly or concentration of power goes beyond abuse and reactive policies.
When the risk to the economy and national security is so high due to lack of diversification, it is imprudent to wait until disaster strikes in order to act.
Strategic risk management has both pre-emptive and reactive elements, which should be balanced in tandem with exposure and severity.
At the moment CA is heavy on reactive polices, which was good when Safaricom was a "start-up". But things have changed and tables have turned. It is now *Government* that needs to protect itself and the public from an increasingly powerful Safaricom.
The risks (as outlined in my earlier msg) are too high to ignore. This is not about Safaricom, the company, its about prudent management of the economy.
One company controls ~6% of the GDP: is the only profitable company in the Telecomms sector; is the top single taxpayer; and has an increasingly tight grip on multiple sectors of the economy... This is a big RED FLAG for anyone conversant with risk management. When stakes are high, you never put all your eggs in one basket.
Current status quo is a sign of market failure and a nonexistent (stifled/crushed) "silicon savannah" ecosystem!
Again the real elephant here is the macro-level risks of *concentration*, the risks of covert abuse of resultant power, and whether the micro-level risks of proactive regulation outweigh the macro-level dangers of reactive regulation.
Brgds,Patrick.

    On Tuesday, November 6, 2018, 12:14:40 PM GMT+3, Ali Hussein <ali at hussein.me.ke> wrote:  

 Patrick
You and I will never see eye to eye on this matter. I completely agree that abuse of 'monopolistic' powers is untenable. What I advocate for is a delicate balance of regulation, carrot and stick engagement.  Take the Microsoft issue. Or the Google one. Yes, at some point the powers were abused. It is now being addressed by the European Union and if my memory serves me correctly the European Union was also at the forefront of clipping Microsoft's wings. The rest the market took care of. 
My take is this. Yours is a lazy (forgive me!) way of letting regulators off the hook. Regulators the world over unfortunately are still living in the age of the Telegram. The CA is probably one of the more progressive ones. Instead of denying Safaricom a license put in place measures that will ensure they play nice. On pain of revoking the license and including punitive fines like the ones the EU slapped on Google.
Let us be circumspect. Look at Zuku. For a long time they had a monopoly on the so called Triple Play space. What did they do with it but screw it up? For Everyone Safaricom, there is a Zuku. Let us create a playing field that is as fair as possible and leave the rest to customers to choose. 
My two cowrie cents.

AliHussein

Principal

AHK & Associates

Tel: +254 713 601113

Twitter: @AliHKassim

Skype: abu-jomo

LinkedIn: http://ke.linkedin.com/in/alihkassim

13th Floor , Delta Towers, Oracle Wing,

Chiromo Road, Westlands,

Nairobi, Kenya.

Any information of a personal nature expressed in this email are purely mine and do not necessarily reflect the official positions of the organizations that I work with.

On Tue, Nov 6, 2018 at 11:54 AM Patrick A. M. Maina <pmaina2000 at yahoo.com> wrote:

 I think the CA Unified Licensing regime is obsolete and out of touch with modern realities (e.g. net neutrality, anti-trust and power concentration concerns) and would urge CA to seriously consider modernizing it.
>From a public interest perspective, granting Safaricom a broadcast license will be a *major strategic blunder* imo as it will potentially create huge headaches later on for Gov, should the need arise to clip Safaricom's powers in public interest. 
Governments elsewhere (e.g. US/Europe) are grappling with similar issues where ICT firms that were once celebrated national prides & darlings have transformed into powerful monopolistic ogres that destroy jobs, stifle innovation and destabilise the country (yet can't be easily towed back to line).
Concentration of power into corporations is a major emerging concern globally (some are literally taking over governments behind the scenes and corrupting democracies for example). 
Closer to home, Safaricom already has several "power pieces" in place that could potentially evolve into a messy regulatory quagmire for GoK.
1. As a dominant communication & data pipe, their uptime/downtime has a crucial impact on public well being and national security.
2. They have an increasingly concentrated grip on kadogo economy thru MPESA. 
3. They want to do "everything" (comms, data pipe, content, health apps, agri apps, edu apps, media, cctv, ewallets etc) and they don't shy away from using their market power and resources to create an uneven playing that stifles startups and innovators. This has, imo, resulted in a choked "silicon savannah" ecosystem that has failed to take off, denying the country billions in FDI, limiting jobs creation and lowering Kenya's status as a viable innovations hub.
Microsoft in the 90s was caught making similar power moves and if they were not regulated via an anti-trust clampdown, tiny briefcase startups like Google would not have had a chance to grow. Clipping Microsoft resulted in a *bigger pie* and led to significantly more revenue for the US government. 
Is it really plausible that one company can have total monopoly on ICT innovations, at scale, in the entire country (or is there a trail of local innovators who are casualties to giant copycat moves)? The argument that regulating and limiting Safaricom will be bad for the economy is *false* imo. It fails to look at the ecosystem gains. The overall pie will grow and everyone, including Safaricom and GoK will gain (as happened with Microsoft & US Gov)!
https://qz.com/1317231/what-the-microsoft-antitrust-case-can-teach-us-about-regulating-big-tech/amp/

3. With GoK heavy reliance on Safaricom as the *only" profitable telecomms company that is a top taxpayer, the exchequer has placed all its eggs in one basket, which is very risky and unwise. 
"Don't put all your eggs in one basket" is an adage that rings true in capitalist markets (because boom bust cycles are *guaranteed* over time, because thats just how capitalism works).

There is no company in this world that is immune to boom-bust cycles, failure or natural/manmade disasters (including sudden catastrophic failure like what happened to former retail superstars Nakumatt & Uchumi - taking down thousands of dependent ecosystem businesses with them and destabilising the entire sector). 
This lack of sector profits / tax diversity is a ticking time bomb for GoK. It is one reason advanced economies value sector diversity and create room for startups to grow into big companies without being stifled by dominant players.
>From a national security perspective, Safaricom's grip on multiple sectors make it a risky *concentrated target* (e.g. for espionage, cyber-attack or terror attacks) with major consequences for the gov, public and economy in general. 
All these make Safaricom a *high-risk single point of failure* IMO with very limited fallback options, which is really *not* strategically ideal if you want a shock-resilient economy. 
A default consequence, at the very least, should be a statutory requirement for high risk dominant firms to demonstrate national-level disaster preparedness and resilience (with independent quarterly audits & certification for continuity and resilience).

Anti trust actions should be considered as well to give "Silicon Savannah" startups a chance. Separate the 'pipe" providers, infrastructure providers and content/app providers to build resilience and create a conducive atmosphere for the overall pie to grow. 
Hopefully this shows how dominance is a real problem, even when it is not abused.
Good day,Patrick.

    On Tuesday, November 6, 2018, 1:25:32 AM GMT+3, Ali Hussein via kictanet <kictanet at lists.kictanet.or.ke> wrote:  

 Listers
What gives? 3 years to get a license? What is going on?
Safaricom says it will seek answers from the telecoms regulator over the three-year delay in issuance of its digital broadcast licence, chief executive Bob Collymore has said.

The telco is seeking to venture into commercial free-to-air television services as part of triple-play offering plan–TV, internet and fixed line telephone services – to homes.

Read on 

I thought Kenya adopted a Unified License Regime way back when... What happened to this? 

Can the regulator please inform Kenyans what exactly is holding up Safaricom's license? I'm not holding brief for Safaricom but I think this is a public interest issue. 

AliHussein

Principal

AHK & Associates

Tel: +254 713 601113

Twitter: @AliHKassim

Skype: abu-jomo

LinkedIn: http://ke.linkedin.com/in/alihkassim

13th Floor , Delta Towers, Oracle Wing,

Chiromo Road, Westlands,

Nairobi, Kenya.

Any information of a personal nature expressed in this email are purely mine and do not necessarily reflect the official positions of the organizations that I work with._______________________________________________
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