<div dir="ltr"><div><div>Good morning<br><br>The network neutrality debate has landed on the shores of Africa.<br><br></div>Here is an excerpt of an academic paper i had written some time back.<br><br>
<p style="text-align:justify;line-height:150%" class="MsoNormal"><i>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.</i></p><i>
</i><p style="text-align:justify;line-height:150%" class="MsoNormal"><i> </i></p><i>
</i><p style="text-align:justify;line-height:150%" class="MsoNormal"><i>Given that US government
is keen to facilitate the rollout of universal and affordable broadband<a title="" name="_ftnref1" href="#_ftn1"><span class="gmail-MsoFootnoteReference"><span><span class="gmail-MsoFootnoteReference"><span style="font-size:12pt;font-family:"times new roman","serif"">[1]</span></span></span></span></a>.<span> </span>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). <span> </span>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. <span> </span>Access charges are
designed to compensate network providers for the use of their facilities and
the compensation scheme is in part funds universal service.<span> </span>Additionally, these companies may be claiming
more in the depreciation and the value of their assets.<span> </span></i></p><i>
</i><p style="text-align:justify;line-height:150%" class="MsoNormal"><i> </i></p><i>
</i><p style="text-align:justify;line-height:150%" class="MsoNormal"><i>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.<span> </span>This is however difficult to implement
politically on the basis of public interest.<span>
</span>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.<span> </span></i></p><i>
</i><p style="text-align:justify;line-height:150%" class="MsoNormal"><i> </i></p><i>
</i><p style="text-align:justify;line-height:150%" class="MsoNormal"><i>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.<span> </span>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)<span> </span><span> </span>The FCC
is thus constantly reviewing mechanisms<a title="" name="_ftnref2" href="#_ftn2"><span class="gmail-MsoFootnoteReference"><span><span class="gmail-MsoFootnoteReference"><span style="font-size:12pt;font-family:"times new roman","serif"">[2]</span></span></span></span></a> to
implement important social objectives, such as public safety, law enforcement
access, consumer protection and disability access, as communications migrate to
Internet-enabled services.</i></p><i>
</i><p style="text-align:justify;line-height:150%" class="MsoNormal"><i> </i></p><i>
</i><p style="text-align:justify;line-height:150%" class="MsoNormal"><i>On Wednesday, 28<sup>th</sup>
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).<span> </span>The defeat of the amendment could herald the
return of the vertically integrated incumbent firm providing services along the
whole value chain.<span> </span>Despite the fact that<span> <span lang="EN-GB">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)<a title="" name="_ftnref3" href="#_ftn3"><span class="gmail-MsoFootnoteReference"><span><span class="gmail-MsoFootnoteReference"><span style="font-size:12pt;font-family:"times new roman","serif"" lang="EN-GB">[3]</span></span></span></span></a>, 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).<span> </span></span></span></i></p><i>
</i><p style="text-align:justify;line-height:150%" class="MsoNormal"><i><span lang="EN-GB"> </span></i></p><i>
</i><p style="text-align:justify;line-height:150%" class="MsoNormal"><i>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<a title="" name="_ftnref4" href="#_ftn4"><span class="gmail-MsoFootnoteReference"><span><span class="gmail-MsoFootnoteReference"><span style="font-size:12pt;font-family:"times new roman","serif"">[4]</span></span></span></span></a>.
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.</i></p><i>
</i><p style="text-align:justify;line-height:150%" class="MsoNormal"><i> </i></p><i>
</i><p style="text-align:justify;line-height:150%" class="MsoNormal"><span lang="EN-GB"><i>The potential return of the two tiered Internet may
further widen the digital divide between developed and developing countries.<span> It may be</span> argued that successful internet
organizations should contribute to the cost of internet infrastructure either
through Internet settlement agreements or contribution to universal access
funds.<span> This</span> 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.</i><span style="color:red"></span></span></p>
<div><br clear="all">
<hr align="left" size="1" width="33%">
<div id="gmail-ftn1">
<p style="text-align:justify" class="gmail-MsoFootnoteText"><a title="" name="_ftn1" href="#_ftnref1"><span class="gmail-MsoFootnoteReference"><span><span class="gmail-MsoFootnoteReference"><span style="font-size:10pt;font-family:"times new roman","serif"">[1]</span></span></span></span></a> FCC
defines "high speed" as 200 kilobits in at least one direction.</p>
</div>
<div id="gmail-ftn2">
<p style="text-align:justify" class="gmail-MsoFootnoteText"><a title="" name="_ftn2" href="#_ftnref2"><span class="gmail-MsoFootnoteReference"><span><span class="gmail-MsoFootnoteReference"><span style="font-size:10pt;font-family:"times new roman","serif"">[2]</span></span></span></span></a> On
February 12, 2004, the FCC ruled that an entirely Internet-based VoIP service
would be an unregulated information service in USA.<span> </span>However the FCC released an order requiring
VoIP providers to deliver enhanced 911 emergency services to its
customers.<span> </span><i>Source: <a href="http://www.fcc.gov/cgb/consumerfacts/emergencies.html">http://www.fcc.gov/cgb/consumerfacts/emergencies.html</a></i></p></div>
<div id="gmail-ftn3">
<p style="text-align:justify" class="gmail-MsoFootnoteText"><a title="" name="_ftn3" href="#_ftnref3"><span class="gmail-MsoFootnoteReference"><span><span class="gmail-MsoFootnoteReference"><span style="font-size:10pt;font-family:"times new roman","serif"">[3]</span></span></span></span></a> 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</p>
</div>
<div id="gmail-ftn4">
<p style="text-align:justify" class="gmail-MsoFootnoteText"><a title="" name="_ftn4" href="#_ftnref4"><span class="gmail-MsoFootnoteReference"><span><span class="gmail-MsoFootnoteReference"><span style="font-size:10pt;font-family:"times new roman","serif"">[4]</span></span></span></span></a> 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.<span> </span>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. </p>
</div>
</div>
<br></div>Disclaimer: Views expressed except those referenced are the author's own. The full paper is available on request.<br></div><div class="gmail_extra"><br><div class="gmail_quote">On Wed, Sep 14, 2016 at 7:16 AM, Ali Hussein via kictanet <span dir="ltr"><<a href="mailto:kictanet@lists.kictanet.or.ke" target="_blank">kictanet@lists.kictanet.or.ke</a>></span> wrote:<br><blockquote class="gmail_quote" style="margin:0 0 0 .8ex;border-left:1px #ccc solid;padding-left:1ex"><div dir="auto"><div>Listers</div><div><br></div><div>This is getting abit tiring..Telcos complaining social media platforms are getting a free ride on their infrastructure.</div><div><br></div><div><a href="http://www.businessdailyafrica.com/Corporate-News/Telkom-Kenya-cries-foul-over-social-media/539550-3379938-9liqm4/" target="_blank">http://www.<wbr>businessdailyafrica.com/<wbr>Corporate-News/Telkom-Kenya-<wbr>cries-foul-over-social-media/<wbr>539550-3379938-9liqm4/</a></div><div><br></div><div>What are your thoughts? Should Telcos charge companies like Google and Facebook for access to their networks? </div><div><br></div><div>What would be next? A small fee for every website? </div><div><br></div><div>#NetNeutrality<br><br><div><span><b>Ali Hussein</b></span></div><div><span><b>Principal</b></span></div><div><b style="background-color:rgba(255,255,255,0)">Hussein & Associates</b></div><div style="font-family:Helvetica;font-size:medium">+254 0713 601113 </div><div style="font-family:Helvetica;font-size:medium"><br></div><div><p style="margin:0in 0in 0pt"><span style="background-color:rgba(255,255,255,0)">Twitter: @AliHKassim</span></p><span style="background-color:rgba(255,255,255,0)"><font></font></span><p style="margin:0in 0in 0pt"><span style="background-color:rgba(255,255,255,0)">Skype: abu-jomo</span></p><p style="margin:0in 0in 0pt"><span style="background-color:rgba(255,255,255,0)">LinkedIn: <a href="http://ke.linkedin.com/in/alihkassim" target="_blank">http://ke.linkedin.<wbr>com/in/alihkassim</a></span></p><font><br></font></div><div><span><br></span></div><div>"Discovery consists in seeing what everyone else has seen and thinking what no one else has thought". ~ Albert Szent-Györgyi</div><div><span><br></span></div>Sent from my iPad</div></div><br>______________________________<wbr>_________________<br>
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