Use Universal Service Funds to Pay for Civil Society Participation in Telecom Regulation

By Steve Song, on June 14th, 2010 Print This Post Email This Post
Image courtesy of sp3ccylad on Flickr

Not quite a level playing field.

Telecommunications markets are notoriously difficult to regulate effectively.  Telecom operators wield a great deal of power thanks to their wealth and the effectively hold they have on their markets whether through landlines or spectrum licenses and they don’t hesitate to use all means at their disposal to ensure that regulator doesn’t do anything to interfere with their market.

One way that they achieve this is by taking advantage of the regulator’s function of public consultation to provide extensively-researched legal and economic arguments that defend their interests.  On the face of it this is a perfectly reasonable proposition.  Telecom operators should have no less a voice than anyone else and obviously they have a responsibility to their shareholders.  The problem is that very often nobody is representing the public interest in these consultations.

Governments and regulators have attempted to level the playing field in various ways.  Most notable perhaps is the introduction of universal service obligations for operators to ensure a baseline of access for all citizens.  I will shock no one when I say that, on this continent, most universal service initiatives have not effectively realised their goal of balancing the affordable access playing field. Of all the mechanisms used to promote affordable access, Universal Service Funds have probably been the least effective.

Until a couple of days ago, if someone had asked my advice as to what to do with the manager of South Africa’s universal service fund, the Universal Service and Access Agency of South Africa (USAASA), I would have suggested simply disbanding it, as I think the problem with universal service funds is as much one of design as anything else.

But thanks to a chance conversation with Michael Geist, well-known Canadian champion of telecommunications and copyright law reform, I was reminded that in Canadian telecom regulation consultations, the costs of any intervener is paid for as long as they are:

(a) …representative of a group or class of subscribers that has, an interest in the outcome of the proceeding of such a nature that the intervener or group or class of subscribers will receive a benefit or suffer a detriment as a result of the order or decision resulting from the proceeding;

(b) has participated in a responsible way; and

(c) has contributed to a better understanding of the issues by the [regulator].

These costs are born by the incumbent telecom operators and it means that NGOs, civil society organisations, consumer interest groups can afford the cost of research and legal advice to make well-informed submissions to the regulator. Here’s a link to the Rules of Procedure of the Canadian Radio and Telecommunications Commission (CRTC) which contain the relevant details.

I believe that introducing this kind of support for civil society participation in telecommunications regulation here in South Africa would lead to better outcomes.  It would open the door for research groups like ResearchICTAfrica, civil society groups like SANGONeT and the Association for Progressive Communications (APC), and consumer groups like the National Consumer Forum to effectively represent stakeholders that are currently rarely heard.  This would be a much more direct and effective use of universal service funds as opposed to say subsidising the cost of millions of television set top boxes.

June 14th, 2010 | Tags: , , , , , , | Category: Telecom Policy | One comment

Open Access, Africa, and Yochai Benkler

By Steve Song, on June 6th, 2010 Print This Post Email This Post

Since the announcement of the EASSy undersea cable in 2005, Open Access has been a term of significant debate in the development of undersea cable initiatives and in the general strategic development of communication infrastructure in Africa.  Yet, it is a term that is variously understood and often abused especially by the marketing departments of undersea cable initiatives.  There is not an African undersea cable initiative that doesn’t claim to be Open Access but all operate on different ownership and pricing models.

Put simply, Open Access embodies the principle of enabling competition at every layer and every point of the communications infrastructure.  Communications infrastructure depends on a chain of access and if even one link in the chain is controlled by a single entity, then the entire network is vulnerable to monopolistic rent-seeking behaviour.  Thus to have Open Access, there must be competition in the provision international fibre access, national backhaul solutions, and last mile services, whether fixed, mobile, or nomadic.  Not to mention competition in the provision of services over that network whether content or transaction related.  The opposite of Open Access are vertical markets controlled by single entity or a small cartel of entities.  A good example of this was as recently as 2007 when Telkom South Africa controlled access to the then only undersea cable, SAT3, and also controlled the fixed-line local loop.  Now we have two and soon three undersea cables and a form of local-loop unbundling for Internet service provision.

On Wednesday morning, I shall have the good fortune to engage Yochai Benkler in a discussion on the topic of Open Access infrastructure in Africa and inspired by the range and thoughtfulness of the feedback that Erik Hersmann obtained recently when he asked “What would you say to Nokia Africa?“, I thought this might be another opportunity crowdsource some perspectives on Open Access in Africa.  For the record, I am not referring to the Open Access initiative for academic publishing.  That is an excellent initiative but unrelated to Open Access infrastructure policies.

Yochai Benkler, author of the Wealth of Networks, was also the Principal Investigator for a comparative study of broadband initiatives carried out by the Berkman Center and commissioned by the U.S. Federal Communications Commission.  Entitled “Next Generation Connectivity: A review of broadband Internet transitions and policy from around the world“, it reviewed efforts, mostly in OECD countries, to strategically develop pervasive, affordable, high-speed access infrastructure.  A key finding of the study was that countries that have successfully implemented Open Access policies tended to have better and more affordable access.

That brings to Wednesday.  Yochai’s experience is more in the rich world.  My goal is to provide an overview of attempts, successes, failures to implement Open Access policies in Africa.  I know some of these stories but it would make the conversation that much more interesting to have other stories to draw on.  In exchange, I promise to post back what I’ve learned from our conversation.

Help me out, please?

June 6th, 2010 | Tags: , , , | Category: All Things Open | 5 comments

Facebook Zero Helps Ideas Multiply at the Bottom of the Pyramid

By Steve Song, on May 21st, 2010 Print This Post Email This Post

I am still frankly gobstopped by Facebook’s announcement.  I vaguely caught the news of Facebook Zero but assumed it was just another mobile interface to Facebook.  It was only when I read Erik Hersman’s post about it that I got the whole story.  Not only have they launched a very lightweight mobile interface to Facebook but they have done something only a company the size of Facebook could… they’ve made it free.

They’ve negotiated deals with over 50 mobile operators around the world to make access for Facebook Zero free. Even as we speak MTN have announced that they plans to expand Facebook Zero from the eight countries they have launched in to all of the territories they operate in. This is huge.  As Erik says… this is game changing.

Why is that?  Why is this so amazing?  Because access to communication is not just about increased efficiencies, better access to market information, etc; it’s about innovation.  But innovation only happens when the cost of failure is so low that people keep trying things even though they fail.  And that’s what Facebook Zero is… a zero-pain failure environment for the bottom of the pyramid.

And why is that important?  Because connectedness has transformed the world into a place of serious unpredictability. And the best plan by the brightest minds in the world is doomed to failure because the world is so unpredictable.  Nicholas Taleb, author of The Black Swan, argues that trial and error is the only way to cope with an uncertain world.  He says “we are a lot better at doing outside the box than thinking outside the box”. He goes even further than that saying:

This is my mission for the rest of my life: figure out how to build a society in which people can make mistakes that are inconsequential. Want to encourage small mistakes, a discovery; an option.

But don’t just Taleb’s word for it.  Here’s what Yochai Benkler, author of The Wealth of Networks has to say:

[The] basic driver of what makes the net so innovative, creative, and fast-moving is the low cost of effective action: experimentation, adaptation, failure–very cheap. [The] model of innovation is not the long-term R&D lab in three organizations that are the major players and which one of them wins, but rather tens of thousands, millions, of experiments that are very cheap to try out and cheap to prototype and then implement and then fail and try again.

Not to mention Clay Shirky (apologies for recycling this quotation, it’s just too good not to):

You need a very low cost of experimentation, right? If things are expensive to try people will hold back from trying them and they’ll spend all their time trying not to fail. If the cost of experimentation falls though, and I mean falls precipitously, then people will spend a lot of time experimenting, and instead of not failing, the goal becomes to fail informatively to learn something from the things you tried.

and finally Matt Ridley, author of the recently published “The Rational Optimist: How Prosperity Evolves, who comes up with the beautiful meme of innovation being like “ideas having sex”.  He says:

Evidence suggests that cultural evolution depends on exchange and trade to bring together ideas in much the same way that genetic evolution depends on sex to spread genetic mutations, or in the case of bacteria, on horizontal gene transfer. When starved of access to a large “collective brain” by isolation from trade and exchange, people may experience not just less innovation, but even regress. The capacity for ideas to have sex on the Internet is likely to accelerate cultural evolution still further.

If you can share ideas with friends on Facebook Zero, form groups, propagate memes, then you have an innovation medium that has been custom designed for the bottom of the pyramid.

The irony is that I despise Facebook.  I hate the way they’ve been eroding the privacy settings on my account and I fear what they are doing with my personal information.  But hey, I hate rapacious mobile operators too but they were/are game-changers too.  Facebook is problematic, no question, but the opportunity that they are creating for people who can’t generally afford access trumps those issues hands down.

Erik points out in his post that the mobile operators are laughing all the way to the bank on this deal.  That may be true but I predict they won’t be laughing for very long.  How long will a company like Facebook put up with the costs they are being charged before they decide to do something about.  This is a trojan horse inside the walled garden of the mobile operators.

Finally, what rankles with me is that Google, who have been in Africa for over two years, and in spite of being told (gratuitous “I told you so” available here), have missed the boat on the whole cost of access issue.  Usage of their innovative SMS project in Uganda plummeted as soon as the operators started charging for the SMSes.  To paraphrase Bill Clinton, “It’s the cost of access, stupid!” and Facebook have figured this out.  All is not lost though. There is still a chance for Google to do this for voice in Africa.  Operators are standing by.

May 21st, 2010 | Category: Telecom Policy | 7 comments
 
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