Association of Independent Internet Service Providers
Thursday 20 May, 2004
Passage and Proclamation of the Telecommunications Act – Is the Glass Half Empty or Half Full?
Presentation for the Information Technology Professional Society of Trinidad and Tobago May 20, 2004
By: Brian Jahra, MSc.
Director Association of Independent Internet Service Providers (AIISP)
In mid 2001, the Association of Independent Internet Service Providers (AIISP) was formed to promulgate the use of the Internet in Trinidad and Tobago and thereby strengthen the country’s social fabric and propel economic development. Our objectives include representing the interests of individual members and of the membership as a whole in dealings with Government, regulatory bodies and the incumbent or dominant provider with the view to ensuring fair, balanced, effective and transparent competition. We further seek to develop, foster and protect the confidence and trust of consumers in order to stimulate increased utilization of the Internet. I commend our membership, many of whom are present here today, for their continued efforts to collaborate and transcend individual corporate interests in order to make a positive input into the national technology landscape. This effort has been tireless despite the fact that our presentations, documents and participation on various committees seem to have thus far resulted in far too few, if any, tangible policy decisions which actively support the growth and development of a vibrant and competitive Internet sector. In short, many amongst our membership feel that we are batting but making duck. Having established itself during the time of the initial drafting and debate of the Telecommunications Act 2001, the AIISP has closely monitored the Act’s status while eagerly awaiting proclamation. We embraced the notion that Government was moving to proclaim the Act, thus signaling the end of a monopoly era and the dawn of a newly liberalized telecommunications arena. We welcomed Government’s initiative to fast forward. However, it was with dismay that we learned that the Telecommunications Amendment Bill 2004 was laid in Parliament without any prior stakeholder and/or public consultation. Upon securing a copy of the already submitted document and digesting its contents, we were further distraught and could only wonder, “Is the glass half full, or is it really half empty?” We immediately deliberated and concretized several of our concerns for the implications and repercussions that the passing of the Amendment Bill 2004 would have on the telecommunications sector as it relates to fair competition and the pace of liberalization. In particular, modifications of key definitions such as value added services so as to ensure that ISPs and Internet services fell under the rubric of a regulatory regime was in our view a retrograde step. Independent ISPs, some of which are small and medium size entrepreneurial enterprises, are already subject to the same regulatory procedures of registration (bylaws, continuance etc) and taxation (VAT, NIB corporate taxes etc) like any other business operation in Trinidad and Tobago. Additionally, ISPs are subject to consumer rights laws, environmental laws and all of the additional laws which already govern business activity in this country. What the Telecommunications Amendment ACT 2004 has effectively done is to impose a further layer of regulatory requirements on ISPs. Regulation of ISPs and Internet services can only serve to retard the pace of liberalization, curtail competition, diminish the likelihood of Government meeting its own objectives set forth in its Vision 2020 and ancillary NICT plan, and stifle direct investment into technology initiatives such as the planned Wallerfield Technology Park. Governments around the world are now rethinking the legacy of a “command and control” approach to the telecommunications sector in favor of a “market based” approach where customer care, quality of service and price are the hallmarks of successful enterprise and not “armchair capitalism” where those who can successfully lobby in the backrooms of Government win by ensuring they are the only game in town. Empirical evidence in developed markets such as the US, Canada and Europe has demonstrated that a de-regulated Internet sector is the most effective mechanism for promoting rapid growth and penetration of the Internet and the building of true knowledge based and driven societies. Countries which have resisted the temptation to regulate the Internet are those who now boast the highest levels of e-Commerce activity, Internet literacy, IT entrepreneurship, investment in technology start-ups and are always on the positive side of the digital divide. After all, Internet penetration in Trinidad and Tobago is less than 5%, in terms of the number of subscribers, yet now exceeds 60% in North America. We collectively have a ways to go and regulation of the Internet certainly does not put us in the fast lane to get there. The Internet industry in Trinidad and Tobago has already demonstrated its capacity to engender and sustain homegrown entrepreneurship. Instead of attempting to regulate the Internet and subjecting new entrants to bureaucracy, Government should jump start this competitive sector by de-regulating, establishing quotas for new entrants for all Government tenders, and ensuring fair play. In the overriding majority of liberalized markets where telecommunications has reached an advanced stage, regulations are designed primarily to ensure that former monopolies, also known as incumbents, are not permitted to use their market power and control over key telecommunications infrastructure to stifle competition. In economic theory which extends to sectors beyond telecommunications, a regulator steps in to safeguard the public interest only when a market is viewed as inefficient due to the control enjoyed by a monopoly provider. In such instances, the focus of that regulation is on constraining the monopoly provider’s market power so as render the market more efficient or competitive. The focus on regulatory efforts in Trinidad and Tobago should in fact be on urgently ensuring that the unfair competition which has persisted for years due to monopoly power of the incumbent, particularly in the dial-up segment of the Internet arena, be immediately curtailed, prohibited and penalized. Although the AIISP supports sections of the Telecommunications Act, 2001 which address the issues of cross subsidization and discriminatory practices of the dominant provider, there is an immediate need to regulate TSTT in this area now.
Specific examples of unfair trade practices, which have hindered competition, include: 1. Price discrimination against Internet Service Providers 2. No equal access to TSTT facilities on a non-discriminatory basis 3. No timely circuit provision 4. Cross subsidization through use of a toll free number which, if offered to competitive ISPs, is at a price which equates to a 500% premium 5. No collocation of facilities which severely limits a competitive ISPs ability to service the entire country
It is the AIISP view that what was missing from the Amendment Act 2004 was a demonstrated commitment to ensure against the above and additional unfair trade practices which have severely retarded the growth of value added services such as the Internet in Trinidad and Tobago. Moreover, the moratorium granted to TSTT over domestic services should have been reduced from one year to 90 days, given that delays which resulted in the effective extension of time to almost three years for TSTT to prepare for competition and apply for its new concessions and licenses. In the aftermath of the Act’s passage we now call on the Telecommunications Authority and the Government to: 1. Spin off or structurally separate TSTT’s ISP business unit from its primary local loop entity – this will provide the greatest assurance for transparency, equal access and a level playing field amiss cross subsidies 2. Closely evaluate and adopt the successful global models which require no regulation or at most “light touch”, albeit authorization only, type regulation of ISPs and Internet services 3. Free ISM / UNII bands or WI-FI spectrum (both 2.4GHZ and 5.8GHZ) for public and private, commercial and non-commercial, LAN and WAN usage, in accordance with international norms and standards 4. Ensure a licensing regime for additional spectrum is for a long term period (ie 10 years) 5. Provide Independent ISP’s with access to offshore fiber based Internet bandwidth at cost plus a reasonable mark-up in order to propel Government initiatives for greater and rapid Internet adoption 6. Facilitate unbundling of the local loop, particularly as it relates to resale of DSL 7. Concretize reduced timetables for dispute resolution 8. Actively solicit stakeholder and public consultation in regards to the formulation of any and all new regulatory policy regimes Only when these issues have been addressed favorably can we ascertain that indeed the glass is really half full. On behalf of our AIISP membership, CableNett Limited, Carib-Link Limited, Cari Direc, Caribbean Interactive Multimedia Limited, eFREE NET Limited, Illuminat Limited, InterServ Limited, Lisa Communications Limited, Opus Networx Limited, and WOW Net (2001) Limited, I thank you for the opportunity to address this distinguished audience today.
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