We never delete comments.

The issue is not ADSL development; it is broadband development. Let’s not get hung up on a specific technology. As Chanuka pointed out, the theoretical maximum number of ADSL lines would be in the range of 800k, This can never be reached, because wireline connections include many government connections, pensioners, etc. who may not want broadband. We need to think bigger than that.

I have no problems with LLU. I have said that it is theoretically optimal but difficult to implement under the inferior regulatory conditions that exist in countries like Sri Lanka.

There is no reason to think of these solutions as mutually exclusive.

I believe removing the restrictions on anyone other than SLT laying copper wire should be removed. I’ll continue to advocate this.

Mr KKG and you believe that LLU is needed. You should advocate for that. All strength to your efforts. No conflict with what I propose.

More people will be connected through broadband wireless than wireline. We need to remove the barriers standing in the way of wireless broadband. We’ll advocate for that too. Again, no conflict with your preferred course of action.

We’ll publish benchmark data on broadband quality and price, irrespective of technology. Should be wind for the sails of all the ships.

I am a young engineer fortunate enough to be benefitted by your vast amount of knowledge of telecommunication engineering knowledge you have been so generous to share with us at the IEE sessions.

Sir, why you do no more take part in IEE activities? Please sir we wait for you to provide us guidence in our work sir.

Even you recognise the importance of unbundling in your own research.

[quote]

One major policy stumbling block in the growth of broadband services is the issue of Local Loop Unbundling (LLU). TRAI had suggested, in April 2004, non-discriminatory LLU so that the access networks of the basic service operators (BSOs) could be shared with internet service providers and other competing operators in order to improve broadband penetration.

However, BSNL and MTNL view LLU as infringements on their property rights and have hence prevented the government from implementing LLU. TRAI, in its letter6 to the Department of Telecommunication (DoT), pointed out that:

While recommending for Broadband Policy, TRAI had made many significant recommendations, a few critical ones which were not accepted which are mentioned below:

a) Recommendations pertaining to Local Loop Unbundling
b) Other Fiscal measures like tax concessions for

Broadband equipments & services

While framing the recommendation for Local Loop Unbundling, TRAI had detailed discussions with the incumbents (BSNL & MTNL) as well as other service providers and considered the best international practices. It was suggested in the recommendations that Local Loop owners should be given an opportunity to decide the areas where they would make their own investments for providing the broadband services and also to decide on the type of unbundling, depending on their commercial objectives. Also the local loops which were installed 5 years back only were recommended to be unbundled and those installed in last 5 years were left to be utilized by the owner themselves.

It was also suggested that, in case the broadband target is not achieved in the first year, review of above specified arrangement should be conducted. It can be observed from the current trend that the incumbents (BSNL & MTNL) are not able to make full utilization of their infrastructure themselves and neither through franchisee option provided to them through Broadband policy. Because of this, the existing local loops could not be utilized by incumbents as well as by the private operators.

Although the success rate of LLU in other countries is still under debate, in a competitive basic service market, LLU as a regulatory intervention is an instrument to discipline market power, reduce monopolistic bottlenecks and potentially to provide the way for innovative service offerings such as broadband connectivity. Most of the current broadband connections are in large cities, where private BSOs and cable operators also provide service through their own local loop. However, penetration is poor in smaller cities and outside urban areas where only government operators are providing service.

This is where LLU will have a positive impact. TRAI recommended LLU only for lines installed five years or older. LLU will not be successful if competing operators can share only older lines with longer loop lengths and poor line conditions, as these are not suitable for broadband connectivity. Pricing of unbundled local loops as set by the regulator is crucial. If the price is set too high, loop-sharing may not be attractive for competing operators. If it is too low, investment incentives are destroyed. Ideally, prices should reflect their long‐run incremental cost plus a mark‐up, to ensure that costs which are common to the line and other services of the incumbent carrier can be recovered.

LLU gives BSOs, especially BSNL, the opportunity to leverage on its infrastructure of 50 million copper cables. However, it can be successful only if the incumbents do not view it as a threat and competing operators sense opportunity for broadband services. In India besides BSNL/MTNL, GAIL, Rail Telecom & Information Technology & PGCL provide the broadband, optical fibre –based transmission infrastructure which may be leased by service providers at competitive prices. Licensed service providers may put up their national and international gateways and connect them with every other network.

Issues of infrastructure sharing do not lend themselves to any cookie-cutter solutions and the regulator indeed has to tread carefully in these matters. Many trade offs are involved and the final solution has to preserve the incentive structure that the regulations will produce. Our view is that it all depends on the details and on the presence of alternative infrastructures (such as cable, for example). In the US, mandatory unbundling (UNEP) did not work as the regulators did “too much”, so entrants could just sit on the incumbent’s network. The European perspective is that some unbundling is necessary to create competition; however, at some stage, entrants must have their own facilities. This is sometimes referred to as the “ladder of investments”, so unbundling can help new entrants move up the ladder. Unbundling is one of several tools in the policy makers arsenal of pro-entry policies that should finally result in facilities-based infrastructure competition (on either a wholesale or vertically-integrated basis). Once this demand is realised and facilities-based competition exists, in that case, mandatory asymmetrical unbundling should, in theory, no longer prove necessary. Precautions should be taken that unbundling should not be used to create a static incumbent-centric perpetual resale model, where everybody purchases their primary input from a single monopoly provider.

Unbundling can be viewed as a two-stage process. In the first stage, unbundling should be used to stimulate new alternative non-incumbent demand. In the second stage, new facilities-based entry should be encouraged to serve this consolidated demand. Unbundling in the Indian context requires to be seen in the light of its implications on last mile connectivity sharing and opening to the many Internet service providers.

http://www.lirneasia.net/wp-content/uploads/2007/04/malik-2007-6cmcs-india.pdf

[unquote]

If it is good for India, why unbundling bad for Sri Lanka?

Mr. K. K. Gunawardana has always maintained his consistency on this issue. I wish TRC will listen to him and process unbundling in Sri Lanka. Otherwise we can never bring the ADSL prices down in Sri Lanka.

Do you think SLT will ever reduce prices unless there is unbundling?

Please don’t delete this post.

Dhathika Sirimanne
dpsirimanne@gmail.com

In case you have forgotten what the topic of this thread is please see above. We still wait for someone to give a constructive feedback on our ‘AshokaTissa’ broadband benchmarking methodology.

I do not know how common the name Gunawardana in Sri Lanka, but if this is the same Gunawardana who was the key consultant in a WB funded telecom reform project in Bangladesh few years ago with N. H.Choudhury, one of the well known retired corrupted public servant as its project manager, his comments are really funny.

Because we found what Choudhury and Gunawardana did was just a pure waste of WB money without any benefit to Bangladesh at all. These two were not too different to Wolfowitz.

I would be grateful if Gunawardana can answer what this project did to telecom reforms in Bangladesh? (If it is the same individual. Otherwise please accept my apologies)

Was n’t achievements of this project was limited to providing computer facilities to BTRC and also PCs to some unknown individuals who reconginsied them as consumer organisation representatives? What happened to those PCs? Were they handed over to WB after the project period? Gunawardana can also elaborate on the size of this project and why such a large amount was needed just to lay a computer LAN and to buy some PCs.

I understand Gunawardana and other consultants like Dr Eun-Ju-Kim, Raimondo Giuliani and R.K. Bhatnagar were paid for conducting workshops (Gunawardana can tell the amounts) I will be glad to know what he taught at these workshops and for whom and what was the outcome? Did these workshops train even a single staff member of BTRC? I am glad to know the answer from Gunawardana.

Finally I would like to know from Gunawardana whether he ever did anything he suggests doing in Sri Lanka, in Bangladesh? If he did not do that when given enough opportunity why not?

To unbundle or not how many local loops we have in Sri Lanka? Not more than 700k or even less. The number of ‘fixed phones’ might be about 2 mil but that include a large number of CDMA and before that WLL phones. SLT is no more bothered providing Cu loops to homes.

So are we really taking about ‘unbundling’ these 700k loops? What difference it can make? Mind you, about 80% of these lines might be in Colombo.

For example a village like Mahavilachchiya still there is not a single Cu loop to a home. So what competition can we make by ‘unbundling’ ?

I agree in ‘wired’ countries like Japan, Korea or UK the case is different.

I have seen in a Sunday newspaper article Dr. Gihan Dias advising if you do not already have a Cu loop (ie a fixed phone line) to go for WiMax to get broadband. I agree. Why worry about ADSL when there are so many more options?

But on the other hand, unbundling mere 700k loops too can be a lucrative consultation assignment for somebody.

If you do not know learn now. Do you know when Japan started offering BB and what was the price then. Even around 2001, a monthly DSL package cost about $ 4,000 and that was for 3 Mbps. It was with the massive expansion that now Japan can offer 100 Mbps BB at such low prices. It is no surprise. Any country with such a high volume can offer low prices. Number of BB subscribers in Japan is more than the population in Sri Lanka. Are you still comparing such a large market with Sri Lanka? Man, you know neither about Japan nor Sri Lanka.

We are happy that they selected our blog to carry out the debate, but unfortunately broken gramophones make only noise, not music.

There are also few lessons Mr. K. K. Gunawardana can learn from Mr. Gaminitilake.

Mr. Donald Gaminitilake was always open about his agenda. All he wanted was ICTA to give him some money to ‘correct’ the mistake. Mr. K. K. Gunawardana is not so honest and only passing hints to TRC. So it is left for readers to decide. Anyway, Mr. Gunawardana need not be shy. We all work for money.

Mr. Donald Gaminitilake was also more disciplined. He never deviated from the topic and always avoided personal affronts. Sadly we do not see such discipline from Mr. K. K. Gunawardana. Apart from verbal diarrhea, there is little information in his response. Pity. I thought with the experience he claims to have, we could learn something from him. I was mistaken.

Both me and Divakar have raised questions about the possible effect of (or lack of) LLU on the broadband prices in the Sri Lankan context but sadly Mr. K. K. Gunawardana conveniently evade them, leaving us nothing to respond.

We like to engage in a public debate on all issues preventing quality broadband services in Sri Lanka (not just LLU) but that will be of public interest only if confined to the topic. General public would not attend a seminar to see ‘experts’ slinging mud at each other.

Finally Mr. Gunawardana seems to have mistake that all those who respond here work for LIRNEasia. No, certainly not. This is an open blog and anybody is free to comment.

1. Comments Of Lirneasia and its stakeholders published at its website

This refers to my email dated 25/03/2008 on the subject and the comments of Lirneasia thereto published at its blog. Most of these comments except in a few instances are of flippant nature and not pertinent to the Broadband debacle (BBD) that is inflicting harshly the sector efficiency. These comments pertinent to the issue endeavor to confuse the public and conceal the adverse impact of the EGO licence, and the stalling of the LLU that is yet thriving unabated This is also self evident from obstacles encountered by Airtel, the recently licensed operator that was also affirmed by the TRC

To dispel any confusion and doubts that may arise from these comments the root cause of the BBD, its adverse outcome, benefits deprived to the market, the revenue losses to the SLT and the Government and solutions thereto are dealt with at paragraphs 2 to 6. Also given at paragraphs 2.4 of the attachment is the subtle linkage of the EGO licence with the BBD that is not readily revealing and has been and is exploited to confuse decision makers . For details of the causes and solutions in particular the interconnection problem, LLU the long overdue national directory and number portability you may also kindly study the proposal given to the TRC’s emissary dispatched to the International Telecommunications Union (ITU) following the failure of the dismal EGO licence forewarned of by the ITU

2. The Adverse Impact of Weakened Broadband Connectivity on the Goals of e Sri Lanka and the Mahinda Chintana

It is rather baffling to note that baring facts to alert the Telecom Sector’s vision confused and dimmed ( by misleading expertise who have made telecom acts their heaven of employment ) to focus on the most vital few crucial to boost its enfeebled market competitiveness, has perturbed the Lirneasia. As stated in my email to Dr Samarajiva (DrS) the broadband debacle is inhibiting migration to NGN technology that is of immense importance for realizing the goals of e Sri Lanka and the Mahinda Chintana .The NGN technology could on the overall cut down cost of information services dramatically and also offer a wide range of feature abound applications.

2.1. Telecommuting services To Improve National Productivity and Easing the Strained Transport Sector

One of such important feature abound application is telecommuting. It has the capability to immensely improve the national productivity, in particular that of the strained transport sector: telecommuting could help to spread out the diurnal peak hour passenger loads uniformly over the day thereby improving utilization of the available off peak idling capacity , improve commuting time and workforce productivity, cut down significantly diurnal migratory work force involved in information processing commuting to cities, reduce the escalating transport sector fuel cost ; mitigate considerably the harmful impact of the strained transport sector on the economy and the environment etc. and thereby help to curb the rising cost of living

2.2. Interconnection of Disparate Networks on Demand

Another application of the NGN technology is its capability to readily connect on demand disparate networks of any operator current or new entrant. To satisfy this requirement it is vital to comply with the latent public good character of interconnection as practiced by the other sectors of the economy cited in my previous email.

2.3. ADSL Monopoly squelching sector regulation and competition

One may argue that it is far more important to privatize quickly; one can deal with the issues of competition and regulation later. But the danger here is that once a vested interest has been created, it has an incentive, and the money, to maintain its monopoly portion. squelching regulation and competition and distorting the political process along the way. Following the consultancies of 2002 engaged by an entity called the Public Interest Program Unit (PIPU) it is precisely the current status of Sri Lanka’s Telecom sector This is self evident from the dismal failure of the External Gateway Licence (EGO) that barred new entrants from operations , the resulting high international call tariffs as compared with that of the global market; the emergence of international call smuggling ; the avalanching of the broadband debacle, the obstacles encountered by the recently licensed Airtel and several other critical issues such as the high domestic tariffs that PIPU failed to address in 2002, not withstanding the trend of near zero tariff predicted by the World bank as far back in 1995 .

2.4. The unavailing of Sri Lanka’s Proven Lead Role n the Telecomm sector Digitalization Liberalization in the Region & The Subtle Linkage to the Broad Band Debacle

Had these consultancies of 2002 not been engaged and TRC’s efforts reported at 4.1 not been foiled then apart from saving the exorbitant consultancy fees, just as much Sri Lanka, in the Region, was the first to digitalize the national network and also the first to liberalize/privatize the telecom sector it could have also led in the region the Local Loop Un-bundling . These consultancies engaged by the PIPU not only inveigled the then Government to enforce the recommendation of these consultancies that stalled the entry of new operators (nearly 25 ) to the market and, the LLU, it also stifled the growth of the IP based backbone capacity these operators would have invested to provide low cost VoIP international telephone services. The diurnally varying idling capacities of these backbones could have been easily availed of to carry data traffic appropriately mixed with voice at near zero marginal cost Likewise it also blocked growth of users’ access to broadband services This in turn deprived colossal revenues
to the SLT and the Government of Sri Lanka. The revenue would have surged with upfront cash flow and annual revenues arising from activation of the idling latent bandwidth of the copper loop and the resulting rapid growth of broadband access services. In other words had the PIPU not inveighed the Government to enforce the recommendations of these consultancies the broad band debacle would have completely averted and also international call charges would have significantly dropped

2.5. The Lirneasia’ s Narrow Perspective Squelching the Goals the White Paper on Sector Reform

Alerting the Sector’s vision dimmed by the misleading expertise to focus on the vital few essential to solve the Broadband debacle seemed to have been viewed narrowly by the Lirneasia as an infringement of and a threat to the interest of its stake holders. On the contrary these facts are bared to address the squelched precautionary measures essential to protect interest of the nation and the general public spelled out in the White Paper that started the telecom sector reform process The co authors of this white paper were Professor K.KY.W Perera Dr Mohan Munasinge and Professor J.A Gunawardana Were it not for their unswerving and dedicated efforts SLT also would have ended up like the CEB The asymmetries created by the numerous consultancies engaged in 2002 have squelched these precautionary measures endangering the interest of the public. The EGO licence is just but one of these numerous costly and unproductive consultancies

3. The driver of the Broad Debacle – The Harshly Asymmetric Interconnection Conditions imposed in the EGO licence

Transparency and market competitiveness are cardinal perquisites for effective regulation of a liberalized market and accountability It is for this reason that Dr Samarajiva (Dr S) was requested to provide his invaluable observations in respect of these asymmetric Interconnection conditions of the EGO licence and the recommendation to block LLU that triggered the broadband debacle As he has neither published the attachment to my email nor made his observations on the said licence, quoted below is an excerpt of these conditions for the information of the public

The ferocity of these conditions extremely hostile to new entrants was compounded by the recommendation made by the same consultant to stall unbundling the local loop. Its aim was not only to block competition in the wired broadband access services but also to block access to cheap international calls available on the internet Its subtle purpose was to strengthen the international telephone service oligopoly created by the EGO licence The aforementioned subtle linkage of these asymmetries with the current broadband debacle, squelching regulation , competition and distorting the political process explained previously is unlikely to be readily revealing to many let alone even some professionals on the subject

3.1. QoS Bench Marking a Prescription to Prolong the Agony of the Broadband Debacle

Had the new entrants been able to operate and, LLU was not stalled not only the international call charges would have dropped significantly there would been as aforementioned abundance of backbone capacity on IP availed of for voice services and as well as broad band access at the end users premises The efficiency of the backbone would have improved through the use of optimal mix of real and non real-time applications thereby further aiding to not only improve the QOS but also helping to bring down the cost to the user It may be now clear that QoS bench marking as justified by Lirneasia is not reflective of limiting factors of the network and hence is not a remedy but a prescription to prolong the agony of the debacle

4. The Lirneasia’s Vacillating Views on LLU

What is intriguing is that the Lirneasia’s stance on LLU is same that of consultant engaged by the PIPU but modulated in time by varying convoluted views devoid of understanding the basics : on one instance Dr S says that problem is in the Telecom Act but fails point out the specifics thereof; on another instance to the press he comments “ The most cost-effective broadband technology for ordinary people and small businesses is ADSL. .only one service provider in the industry is permitted to lay copper….. This should be stopped and a level playing field created for the industry…”. At yet another he says the “Concepts that work in developed-market settings cannot be imported wholesale to countries that do not have the necessary conditions. …that these conditions do not exist in Sri Lanka, and most recently he cited that India has abandoned the LLU implying that Sri should follow like wise

4.1. The TRC’s Efforts Foiled by the PIPU

The TRC officials at the time deserve a special commendation for referring the EGO license’s asymmetries to the ITU the UN’s specialized agency in telecommunications, for its opinion. As mentioned previously The TRC was promptly forewarned of the imminent failure of EGO licence , advised not to proceed with it and offered expertise free of charge to redo the EGO license. The ITU also offered assistance free of charge to address the more important issues such as price caps and unbundling The TRC said that the PIPU has turned down the offer on the grounds it has awarded the consultancy on the approval of the PM

Subsequent to the dismal failure of the EGO licence TRC sent an emissary to the ITU The emissary was apprised of the solution and thereafter followed up with all the documentation of the solution It is understood that solution proposed to the emissary sent to the TRC have also been squelched by the same vested interests

5. The Threats of the Lirneasia’s Defense Force A Reminisce of Dr Stiglitz’s Publication on Globalization and Its Discontent

To the defense force of Lirneasia its General HS, the very familiar apple orange nursery story teller , the cowardly engineer of non disclosed identity purporting to be a member of the IESL, its stake holders and others on its payroll alike whose comments though not pertinent to the issue, I apologize if I have infringed on your interest commercial or any other. I reaffirm my concerns are in respect of Public Interest unaddressed by the Lirneasia My colleagues in this context say that Lirneasia’s ADSL blog was scathingly criticized by several including expatriate Sri Lankans and academics accusing it to be far worse than the notorious “ Great Impostor” and its activities far worse than that of Wolfervitz the ousted president of the World Bank But at the time the Lirneasia’s defense force has been passive and silent Their comments reminisce of the threats received by those who dare to challenge doers of the globalization’s ugly business reported in the “ Globalization and Discontents ” by Dr Stglitz’s the Nobel laureate and at one time the Chief Economist of the World Bank

6. TRC, IEE IESL forum to address the Broadband Debacle

I do not wish to engage in any more unproductive squabbles with Lirneasia . The solutions to these pending problems have been provided as far back in 2003.In 2005 another report at the request of Hon Mr T Witarana was submitted to the ICTA advisory committee of the Ministry of Science and Technology. It is best that in order to help TRC to solve the long overdue Broadband debacle that TRC IESL and IET jointly convene a forum of the expertise on the subject to identify the cause of and the speedy solution for the broadband access debacle to quash its exploitation of the end user and inflicting immense harm to the national economy

Kind Regards

K.K.Gunawardana

In this context, I think a useful lesson is offered by the Singapore regulator, IDA (see, for instance, http://www.ida.gov.sg/Policies and Regulation/20060425150155.aspx). The Singapore approach might be summarised as follows:

– report just a small number of variables (availability, international latency, national latency and complaints), but do so regularly (monthly) so that performance problems can be quickly recognised;

– distinguish clearly between international and national bandwidth as this relates to issues that can can can’t be controlled;

– include the number of complaints as a consumer-oriented measure to supplement technical measure;

– be flexible about measures, dropping those that become less useful over time.

I hope this contribution to the debate proves useful.

The above is the traditional view. Things have changed significantly since 2001. Local loop is not as significant a bottle-neck as it used to be with the availability of new wireless technologies.

For example, it is precisely because of WLL that new entrants in Sri Lanka have been able to compete with the incumbent. Lower cost per line of CDMA versus copper lines has lowered barriers to entry. I doubt if SLT invests in copper lines anymore. Fixed-mobile substitution has also resulted in consumers giving up their fixed lines in large numbers in the USA as in India.

So fixed lines aren’t what they used to be in recent past. Furthermore, in developing countries such as Sri lanka, LLU was meaningless when penetration was in the single digits. What lines are you gonna unbundle? From policy perspective, it may make more sense to promote facilities based competition when large parts of the country didn’t have any communication infrastructure to speak off.

Coming to broadband and LLU. With wireless technologies like WiFi, Wimax, HSPA, LTE it is not only possible to bypass the local loop of the incumbent but also to provide broadband services on the move to consumers. The convenience of mobility is huge and fixed lines are at a great disadvantage. In this context, if someone still insists on LLU I would think that person is stuck in the past. The competitive landscape has changed considerably and policy prescriptions must also change.

divakar

Not only BB prices, but even phone charges are very low in Japan. It is logical. Japan has an enormous market potential for telecom services and companies have made huge investments in information infrastructure knowing the returns. So they can offer speeds up to not 8 Mbps but even 100 Mbps at low rates. When the volumes are high, production cost of services too will come down and quality improves.

Given the minute market size in Sri Lanka for BB (What is our PC penetration any way?) who will make such investments? Forget the volatility of the market and inflation.

Gunawardene, compare apples with apples, not with oranges.