In the aftermath of the 2004-2005 hurricane season, when eight named storms caused a total of $15.5 million in customer losses from power outages, Florida embarked on a comprehensive reform preparing electric utilities for hurricanes. This effort included coordinated research through PURC on electric infrastructure and storm damage.

This research – funded by Florida’s utilities and done in collaboration with them – included an in-depth look at the economics of hardening the state’s electric system. A computer model developed for that purpose helps analyze the costs and benefits of undergrounding and other forms of hardening at a micro level. The research also included the deployment of an extensive network of weather monitoring devices to gather storm data and a companion software system for mapping the weather data to infrastructure damage.

What is interesting is that the trigger for getting the USD 80 solar generator in the story below was the phone:

For Sara Ruto, the desperate yearning for electricity began last year with the purchase of her first cellphone, a lifeline for receiving small money transfers, contacting relatives in the city or checking chicken prices at the nearest market.

Charging the phone was no simple matter in this farming village far from Kenya’s electric grid.

Every week, Ms. Ruto walked two miles to hire a motorcycle taxi for the three-hour ride to Mogotio, the nearest town with electricity. There, she dropped off her cellphone at a store that recharges phones for 30 cents. Yet the service was in such demand that she had to leave it behind for three full days before returning.

That wearying routine ended in February when the family sold some animals to buy a small Chinese-made solar power system for about $80. Now balanced precariously atop their tin roof, a lone solar panel provides enough electricity to charge the phone and run four bright overhead lights with switches.

Interestingly, while in India, a telecom operator has to contribute 5 per cent of its annual revenue to the USO Funds, Pakistan charges much less at 1.5 per cent. In India, the funds go to the national budget and the Department of Telecommunications has to make projects to source them, in Pakistan a separate company has been created to utilise the funds.

The journalist also points to a new twist whereby renewable energy has been made mandatory for all base stations supported by the Fund.

In a bold move, the Pakistan Telecom Authority, the telecom Regulator has made it mandatory that all bases stations being set up with support from the USF should be ‘Green Sites’ or renewable energy powered, especially solar and wind as the case may be. The reason being that there is currently, a huge shortage of electricity in rural Pakistan.

One hopes India will take what is good from the experience of others, even Pakistan.

The colloquium began by Nalaka explaining the big picture; Climate change and energy use.  Global warming is not new but the rate of global warming is. There is a multiplicity of gases causing global warming and their sources.

Looking at the Green House Gas (GHG) mix, Carbon Dioxide is dominant. Made source is fossil fuel use. The ‘F’ gases such as CFC are the man made – now getting phased out.  There is an expansion in the volume of Green house gases.

Nalaka explaied that all GHG are not equal. Methene is much worse than Carbon Dioxide, but Carbon di Oxide has a much worse reputation

Looking at the sources of GHG, there is a variation depend on the organiation which the data is obtained from. A question was raised about the impact of forestry on GHG emmisions, Nalaka explained that deforestation is the main contributor. Electricity and heat or energy supply are the biggest source with forestry a close second.

Nalaka then went on to talk about the Stern Report (UK govt, 2006) which said  ’Climate change is the greatest market failure the world has ever seen…’ He higlighted the lack of referece to ICT in the report. The only direct reference was to household appliances. Green ICTs have received more attention since then. The Stern report has never been challenged on its premise or analysis as far as Nalaka was aware.  ICT and Aviation has roughly the same level of emmision, however aviation gets much more flack. ICT sector directly contribute 2.5% of total GHG emisions according to the Mckinsey report to the UN in 2007.

The adaptability of the IT and Telecom sector to consumer demands, as such the sector should be able to respond better to the problem of GHG emmision than other industries.

Next, Nalaka moved on to how the ICT sector ‘green’ itself beyond simple CSR/PR gestures? An ITU report elaborated on why the GHG from the ICT industry has been rising. Among the reasons  were Proliferation of user devicesUsers owning more devices, Devices today consume more energy and More processing needs more cooling. Nalaka then explained thaat some of the new technology such as sHD televisions draw more power than the traditional units. The stand by power or vampire enrgy too contributes significantly to energy consumption. standby power cost 8% of entire British domestic power consumption (UK Energy Rev, 2006)

Some of the suggestions given by Bill Melody were Improving sector’s own carbon footprint, ICT applications improving efficiency of other sectors, esp. infrastructure.Third order implications from widespread applications of green ICT that change institutions & behaviour patterns.

In taking the first point, with IT and telecom sectors, we can look at both Macro/industry level savings and then micro/consumer level savings.

In taking the Telecom sector, the opportunity lies in telecom migrating to Next Gen Networks (NGN) as Less switching centres needed, More tolerant climatic range specs (less need for air conditioning) and New standards (VDSL2) allow 3 power modes: full, low, sleep

Are savings being offset? Some of the questions are how energy-conscious are services & applications riding on NGNs? Rapid growth of web-based services driving up power demand & CO2 emissions

Rising power use by server farms supporting PC and mobile web use: Hidden green costs of Google apps? Does a web search kill a tree?

The ETNO report highlights the need for Srategic approach and also the need for scaling. The plan to reduce GHG will only work if the operators and players make a commitment.

What are the cost benefit ratios? What is the effect of ITC on the Transport? The other is the concept is cloud computing. Finding from 3rd annual survey by Rackspace, Pub Sep 2009 (150 IT managers worldwide) http://tiny.cc/GreenCloud says that there is no tangible drop.

What are the other low hanging fruits? Also which of the technology that can be passed without bing stuck in political bickering and policy paralysis? An example is the Copenhagen summit. In copenhegen no one wanted to be the first to make changes.

The other level is where ICTs and Telecom help other sectors go green? One OCED analysis says that creative use of ICTs can reduce electricity consupltion/GHG emmisions by 15%. THere is also the process (experimetal) of carbon capture. Norway is at the moment building carbon traps.

What are the cost benefit ratios? What is the effect of ITC on the Transport? The other is the concept is cloud computing. Finding from 3rd annual survey by Rackspace, Pub Sep 2009 (150 IT managers worldwide) http://tiny.cc/GreenCloud says that there is no tangible drop.

The Transmission and distribution loss is about 18% in Sri Lanka,  Delhi can be as high as 40%. A certain level is unavoidable. US is abut 7%, theoretically SL can go lower as the systemis much more compact. Most of the loss is that the generation and end use is not prperly coordinated. This is the Smart rid arguemtn. We also have to be awre of the re-bound. The relationaship is not linear. There is a need for better measuremnent.

Big Challenges: Growing human numbers, Rising middle classes through globalization and Global warming.

What is to be done? Look for a ‘handle’ on Climate/ET/IT, Ignore corporate spin, media hype, Search for strategic ‘entry points’, Study trends & patterns, Demystify industry data, find policy implications, Look for improvements that are: significant, affordable & less politically contentious Measurable & scalable

We also will require regular tracking, simple industry wide chnges and find Ways to crowd-source for monitoring and innovation.

ICTs have the ability to make under the radar changes unlike the avation industry.

Finally; “Telcos are punching below their weight in the climate change arena – they can be part of the solution than part of the problem. They will find it hard to avoid being victims of climate change, but they can reduce their role as villains; and they might even turn out to be heroes.” –  Stephen Young, Ovum Consulting http://www.ovum.com/go/content/c,67759 and “We need both IT and ET, flat and green, working together. Because only then can everyone and everything be both distributed and connected. If we can get that, the world will have a new operating system!” – K R Sridhar, CEO, Bloom Energy

Sujata Gamage: A starting point maybe to start with Melody’s levels and form a picture with the sectors metioned at te begining.

Rohan SAmarajiva: A clear starting poitn is the improvement of the individual sectors’ carbon foot print.

Healni Galpaya: Carbon trading seems to be failing, but there is an economic incentive(s) to switch to more green technology in the telecom sectors in developing countries that adopt the budget telecom model.

Nalaka: The cost of nergy sources such as solar power are falling.

Helani, Rohan: There is no taxes etc involved in the installation on solar panels. There is a need to work wtih the industry to learn more about this.

Rohan: Transport/ICT trade off? Improvements in Efficiency does not mean green solutions.

Shazna: Maybe we can look at the Telecom sector in terms of research:

Nalaka: That maybe a sarting point. No multi country studies have been done.

The proliferation of personal computers, iPods, cellphones, game consoles and all the rest amounts to the fastest-growing source of power demand in the world. Americans now have about 25 consumer electronic products in every household, compared with just three in 1980.

Worldwide, consumer electronics now represent 15 percent of household power demand, and that is expected to triple over the next two decades, according to the International Energy Agency, making it more difficult to tackle the greenhouse gas emissions responsible for global warming.

To satisfy the demand from gadgets will require building the equivalent of 560 coal-fired power plants, or 230 nuclear plants, according to the agency.

Full story in the NYT.

As attention shifts to services trade (for example, the most important element of the proposed Comprehensive Economic Partnership Agreement between India and Sri Lanka, is the services chapter), there is of necessity a need to start looking at regulatory restrictions on services trade. Tariffs do not apply to services, so the only barriers are opaque, arbitrary and discriminatory regulatory provisions. This has been well recognized in telecom, with the reference paper on regulation being one of the key contributions to liberalization made by the GATS. The issue being raised at the UNCTAD meeting was whether there was value in exploring the regulatory aspects of trade in other infrastructure services. With electricity being traded across borders in pools and otherwise (Bhutan and Nepal have been trading electricity with India for a long time; if the proposed undersea cable goes through there will be trade between India and Sri Lanka as well), it is becoming clear that trade in infrastructure services is rising on the agenda.

In my concluding contribution I suggested that the focus that has already been there within the regulatory field on reducing regulatory risk and the international trade focus on removing barriers to Mode 3 (investment-based) trade in services suggests a good area for work by UNCTAD.

One reason I accepted the invitation was that UNCTAD had originally contacted four LIRNEasia researchers: Helani Galpaya, Malathy Knight, Payal Malik, and myself. That four people from LIRNEasia have been picked up on the UNCTAD radar screen, especially when we had no connections with that organization, speaks well for the reputation we have built for our researchers in the past four years.

The $825 billion stimulus plan presented this month by House Democrats called for $37 billion in spending in three high-tech areas: $20 billion to computerize medical records, $11 billion to create smarter electrical grids and $6 billion to expand high-speed Internet access in rural and underserved communities.

A study published this month, which was prepared for the Obama transition team, concluded that putting $30 billion into those three fields could produce more than 900,000 jobs in the first year. The mix of proposed spending is different in the House plan, but the results would be similar, said Robert D. Atkinson, president of the Information Technology and Innovation Foundation, which did the study.

The full report is here.

The further you travel from Colombo, the more you wonder whether Sri Lanka too had been an ex-communist state. The roads get narrower and mucky – sometimes even 20 kmph is high speed – and mobiles work intermittently – only when you reach within a cell town. Still you have electricity – almost anywhere. Even at Pitakumbura Navodya School, where we are told some students bring an extra set of clothes to school, during the rainy season – they have to swim across a stream daily.

What about broadband? Yes, it is available, but only in pockets.

WiMax is available in both Bibile (13 km from Pitakumbura) and Ampara (65 km). ADSL is available only in Ampara. Pitakumbura in the middle, is covered by neither.

The solution? Build a 25 meter tower to host a micro-wave antenna at a cost of US$ 2,000 (right, above). This is not something an individual can afford – most of them are farmers. Fortunately for the student of Pitakumbura Navodya School, the monthly bill is currently being footed by the Ministry of Education under an ADB funded project. The day project funds run out, the school will be delinked. The students then might have to travel 13 km to Bibile for an entry point to the web.

This example illustrates Sri Lanka’s efforts of ‘taking ICTs to rural areas’. Broadband is available only in selected towns with some demand. Outside this, a handful of point to point links caters to a limited group of users – with a donor paying the bill. Such mechanism will survive temporarily, but may not withstand the financial pressures of a global recession.

The ideal long term solution will be broadband everywhere – at an affordable cost – just like electricity. It is in Colombo and may be in few other provincial towns, but under present circumstances it will only be a long dream for rural folk.

Here are the summarised results from the telecenter operator survey done by LIRNEasia at the weCan workshop in October 2008. Sample was not representative, but large enough to get a general idea about the telecenter operations in Sri Lanka.

Out of a total of 147 operators surveyed, the bulk, 101 were from Nenasalas, the 500 odd telecenter network created under the World Bank funded e-Sri Lanka programme. 10 were from Sarvodaya multi-purpose telecenters and 6 from others (eg. public libraries) 30 have not specified the type of the telecenter.

Do telecenters in Sri Lanka make money? Yes. They report an average monthly income of Rs. 22,119. (=USD 201) This is associated with a relatively large standard deviation of Rs. 21,714 (= USD 197) indicating a variation within a wide range. Not a surprise since some telecenters are running at a loss (presumably temporarily) and few reporting a monthly income of over Rs. 100,000 (= USD 900).

However, providing Internet services ranked only third among telecenter income components (16%). The key sources of income are education and training (43%) and providing fax, photocopy and printing series (21%). They also make money from VoIP (4.5%), bill payments (2.5%) telephone calls (2.5%) selling other goods (2%) and VCD/DVD rentals (1%).

Asked for the preferred income profile, the results were not too different. They still want 33% income from training, 21% from fax photocopy and print services and 17% from Internet services. Is this an indication of being more realistic or less ambitious? You decide.

Average monthly expenditure of a telecenter is Rs. 15,837. (USD 144) This may not reflect the real costs as the Internet charges for Nenasalas are borne by ICT Agency from the money comes from e-Sri Lanka programme. Salaries is the highest cost component (39%). Then comes electricity (25%). About 10% each for telephone and rent.

On average basis a telecenter has 5 PCs and employs four staff members – two permanent, two temporary. Correlation between the income and the permanent staff strength was 0.56; the income and the number of PCs, 0.62.

Do telecenters make a profit? Yes, but perhaps may not in real terms. They record a monthly average profit of Rs. 6,735 (=USD 61) with a large standard deviation of Rs. 9,504 (=USD 86). This indicates the loss incurred by some of them. This is again without considering the cost of the communication link. (The monthly average cost of a 2 Mbps business broadband connection is USD 46 in Colombo. This might be slightly high in rural areas.)

Telecenters operators are rewarded in different ways. Only 33% are salaried. 22% receive a share of profits. 13% receive an allowanced based on performance. 32% receive no personal income. How they prefer to be rewarded? 51% wants a monthly salary; 26% a share of profits and 18% a performance based allowance. Doesn’t sound too entrepreneurial but in Sri Lanka culture job security plays an important role.

The following letter by a reader to USA Today highlights similar concerns – may be in another context.

WHY SHOULD BROADBAND BE FREE?

James Lakely – Chicago

Federal Communications Commission Chairman Kevin Martin’s reference to the phone industry exposes the weakness of his argument to provide free broadband access in the USA.

Yes, copper phone lines were, for decades, “the main means of communication for millions of Americans.” But the government didn’t invent that technology, nor give it away for free. The market provided, and Americans paid for it via private transactions. Even if one views broadband as a public utility, why should it be free while Americans pay for basics such as water, garbage and, yes, phone service?

The FCC’s proper role is to regulate as lightly as possible so the market can develop innovative technologies while competition keeps prices affordable. Just as there is no free lunch, there is no “free” broadband.

(Open to comment)

Responding to Rohan Samarajiva’s views on newly implemented Environmental levy in Lankadeepa last week, Central Environmental Authority Chairman Udaya Gammanpila calls it essential and the ‘first progressive tax’ in Sri Lanka. Assuring it does not burden public, he says any tax can be initially unpopular but the impact should be seen in long term. (Lankadeepa, August 19, 2008)

These are his points in brief:

1. If not for the Environmental levy, the government has to find money to address environmental issues by increasing either VAT or customs charges. That will raise prices in general. It is unfair. Why should villagers who have never seen a mobile phone contribute for its removal whenever they buy flour to make rotis? Instead we have introduced a tax only on pollutants. So only the culprits pay for remedial measures.

2. Mobile phone usage has drastically increased during the last few years. Now there are about 8 million mobile phones in Sri Lanka. (sic) The cost of a mobile phone was reduced from Rs. 75,000 in 1994 to Rs. 3,500. These have made the lifetime of a mobile phone shorter and more mobile phones are being released to the environment. (sic) Our intention is to build a recycling plant for e-waste. Such plants can be seen in India and Singapore.

3. Why we tax mobile usage? Because it is one commodity the prices have fallen during the last 15 years. In 1994 an incoming call was charged at Rs. 20 and outgoing at Rs. 30 per minute. Today incoming is free while outgoing is Rs. 4-5 per minute. How can one allege us insensitive to Cost of Living?

4. Before complaining about these taxes one should note their actual impact. 90% of Sri Lankan mobile subscribers are pre-paid. The average revenue per unit of a prepaid account is Rs. 360. Let us assume it to be Rs. 500. Two percent of that is Rs. 10 per month. That is all we ask to protect environment. Is this adequate even for a cup of tea?

5. Atmospheric pollution in Sri Lanka is too high. The tax on motor vehicles is meant to control this. Vehicles are taxed only if they pollute. If they run on electricity or water (sic) no levy is applicable. The levy is proportionate to the level of pollution. Vehicles such as buses, lorries and three-wheelers are exempted on Cost of Living considerations.

6. CFL bulbs solve one environmental problem, but their release to environment causes another. So we need to collect the used CFL batteries for recycling. A Denmark company has agreed to setup a recycling plant if we ensure enough input. We believe taxing 3% on non-CFL bulbs will make CFL bulbs more popular.

7. Tower tax is meant to encourage telecom operators to share towers. That has no effect on Cost of Living.

8. The money collected will be credited to a special environmental fund. Ministers of Finance and Environment have to annually report on this to the parliament. This ensures tax money will be used solely for environmental protection purposes.

(We open the discussion to our readers.)

Lara Alawattegama (LA): Monopoly means ‘a market with a single supplier’

Why a monopoly happens:
1. No close substitutes
2. Legal barriers to entry
3. Resource barriers
4. Unfair competition -predatory pricing

Rohan Samarajiva (RS) : Lack of competition leads to monopolies. Microsoft Windows is an example where none of the above characteristics applied

Chanuka Wattegam (CW): Is LIRNEasia a monopoly?

RS: What is LIRNEasia’s market?

No technical barriers for anyone to entry to the LIRNEasia market. So the answer is no.

LA: Natural Monopoly is what you get when the market is too small for a competitor to offer a lower priced product. (dis-economies of scale ) So a new firm may have to sell at a higher cost and will not be successful unless that adds value (i.e. improved technology). A natural monopoly may not continue forever.

Example of a natural monopoly? The distribution of piped water.

Why the distribution of electricity, water and telecom are different?

RS: To produce electricity in Laxapana and transmit to Colombo is cheaper. Doing same with water is not.

RS: Alfred Kahn realised air travel between San Fransisco and LA was cheaper due to lack of regulation. No substantial entry costs so the business flourised. However airports were a source of monopoly in terms of gates etc. The other issue was customers see airlines more as a network. So offering the shuttle services is possible for smaller players, but long haul flights was not.

Natural monopolies are time bound. They fall with changing environment by introduction of new technologies etc.

LA: Some once believed telecom market is a natural monopoly due to high cost and large economies of scale. Not anymore. Average costs fall with advanced technology.

Harsha De Silva (HD): There is a difference between Long run and short run average costs. What matters is marginal cost and not average cost.

RS: New technologies may increase the costs for incumbent. So incumbent has an incentive not to use new technology unless forced by the competition. (eg AT&T not using transistor till others started though they invented it).

Market will continue to grow if Marginal revenue (MR) is greater than MC.

LA: Because of the interconnection obligations large operators have an advantage over the smaller operators. Economies of Scale in one market may lead to cross subsiding and vertical integration.

RS: Cross subsidizing happens everywhere but hardly anyone complains. It becomes a issue only in regulated markets. (eg. SLT cross subsidizing their operations through the IDD facilities from 1997-2002.)

Telecom operators can increase prices but not necessarily because of existing competition. Cost of telecom companies have little to do with the existing inflation rate in Sri Lanka.

Joseph Shumpeter declared monopolies are not necessarily bad.

RS: There are arguments where a monopoly creates lazy organization but not always true. Innovations happen. Contestability or threat of entry by others force organisations behave as if there is competition. (eg SLTs behaviour in mid 1990s before the entry of Suntel and LankaBell).

To appreciate that potential, look at how much is being done with just car batteries, backup diesel generators and India’s creaky rural electricity grid. I traveled to a cluster of villages with a team from the Byrraju Foundation — a truly impressive nonprofit set up by B. Ramalinga Raju and his family. Raju and his brother Rama are co-founders of one of India’s leading outsourcing companies, Satyam Computer Services. The Hyderabad-based brothers wanted to give back to their country, but they wanted it to be a hand up, not a hand out.

So besides funding health clinics and computer-filled primary schools in villages in their home state of Andhra Pradesh, they tried something new: outsourcing their outsourcing to villages.

Here in Ethakota, amid the banana and palm groves, 120 college-educated villagers, trained in computers and English by Satyam and connected to the world by wireless networks, are processing data for a British publisher and selling services for an Indian phone company. They run two eight-hour shifts, but could run three — if only the electricity didn’t go off for six hours a day!

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Investment is being invited from the private sector for the establishment of public access centers in villages and power source is being sought either from battery or solar energy to operate the internet in some remote villages in short of electricity as an alternative, the Association added.

According to the MPT, the number of internet users in Myanmar has reached nearly 300,000, up from merely 12 in four years ago.

The authorities have projected to introduce 400 public internet service centers in 324 townships in the country within three years to facilitate communication links.

To attract foreign investment in the aspects, Myanmar has offered to grant both foreign and local entrepreneurs to be engaged in ICT business in the cyber city project and separate plots will be allotted for foreign and local companies with equal rights to be offered to develop the silicon mountain town, according to the CEA.

Myanmar has been launching an ICT development master plan under the Initiative for ASEAN Integration (IAI) and detailed programs to link international networks are also being carried out in accordance with the master plan drafted by the Myanmar Computer Federation.

(Xinhua)

–>

Have the Bangladesh mobile operators solved the problems of providing reliable and cost-effective Internet connections over GSM networks?

Internet Extends Reach Of Bangladeshi Villagers – washingtonpost.com

Villages in one of the world’s poorest countries, long isolated by distance and deprivation, are getting their first Internet access, all connected over cellphones. And in the process, millions of people who have no land-line telephones, and often lack electricity and running water, in recent months have gained access to services considered basic in richer countries: weather reports, e-mail, even a doctor’s second opinion.Cellphones have become a new bridge across the digital divide between the world’s rich and poor, as innovators use the explosive growth of cellphone networks to connect people to the Internet.

Bangladesh now has about 16 million cellphone subscribers — and 2 million new users each month — compared with just 1 million land-line phones to serve a population of nearly 150 million people.

Since February, Internet centers have opened in well over 100 Bangladeshi villages, and a total of 500 are scheduled to be open by the end of the year. All of them are in places where there are no land lines and the connections will be made exclusively over cellphone networks.

Before February, analysts said, only 370,000 Bangladeshis had access to the Internet. But now millions of villagers have access to information and services that had been available only by walking or taking long and expensive bus rides, or were beyond their reach altogether.

People now download job applications and music, see school exam results, check news and crop prices, make inexpensive Internet phone calls or use Web cameras to see relatives. Students from villages with few books now have access to online dictionaries and encyclopedias.