[kictanet] (CA unified license is obsolete) Safaricom renews push for digital broadcast licence

Tue Nov 6 17:34:33 EAT 2018

@Patrick

This is a free self regulating space. None of your proposals have been
held. So please keep going!

Best regards

Githaiga, Grace

On Tuesday, 06-11-2018 at 14:28 Patrick A. M. Maina via kictanet
wrote:

I have proposed several solutions Ali but they are not going
through. 

Hoping the moderator(s) is/are neutral in this discussions...
:-)

   On Tuesday, November 6, 2018, 2:23:12 PM GMT+3, Ali Hussein  wrote:

Patrick

You articulate the problems well. How about you give us some
solutions? 

Here's what I think:-

1.  With a bit of help from regulators who focus not just on
'regulating' but enablement of the sector like CA tries to do (not
enough but let's give me kudos for trying)
2. Punitive response to 'market failure' against those who cause that
failure? (What does that even mean? :-)

Regards

Ali Hussein

Principal

AHK & Associates

Tel: +254 713 601113

Twitter: @AliHKassim

Skype: abu-jomo

LinkedIn: http://ke.linkedin.com/in/alihkassim [1]

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 1:35 PM Patrick A. M. Maina 

 wrote:

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 
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.

Ali Hussein

Principal

AHK & Associates

Tel: +254 713 601113

Twitter: @AliHKassim

Skype: abu-jomo

LinkedIn: http://ke.linkedin.com/in/alihkassim [1]

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 

 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  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  [2]

I thought Kenya adopted a Unified License Regime [3] 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. 

Ali Hussein

Principal

AHK & Associates

Tel: +254 713 601113

Twitter: @AliHKassim

Skype: abu-jomo

LinkedIn: http://ke.linkedin.com/in/alihkassim [1]

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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Links:
------
[1] http://ke.linkedin.com/in/alihkassim
[2]
https://www.businessdailyafrica.com/corporate/companies/Safaricom-renews-push-for-digital-broadcast-licence/4003102-4837176-15nhi1nz/index.html
[3]
https://www.bowmanslaw.com/insights/technology-media-and-telecommunications/telecom-regulation-kenya-introduces-a-unified-licensing-framework/
[4] http://www.eacdirectory.co.ke
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