Two years ago the New York Times reported that global internet traffic has been increasingly avoiding the United States. It means the US intelligence establishments were increasingly losing control over the other countries’ cyber data. That was the twilight of George Bush 2.0 era.

Now the US and 39 or more countries are secretly negotiating a new global agreement called Anti-Counterfeiting Trade Agreement (ACTA).

The objective of ACTA is suspected of exporting the flawed US Digital Millennium Copyright Act worldwide. ACTA fanatically favor only the copyright holders more. It legally forces the Internet Service Providers (ISPs) to act as de facto “copyright cops” and be made responsible for “disabling access” to web sites deemed by various unelected and unaccountable vested interests to be carrying counterfeit or pirated content. Digital right adviocates and Technology companies have criticised this secretive move.

Rob Pegoraro wrote in the Washington Post, “This proposed agreement is what I thought it was: an intellectual-property land grab that would cement some of the uglier aspects of American law, export those provisions to other countries, possibly import even worse provisions back into the U.S. and, in the bargain, spawn a new and largely redundant international bureaucracy.”

“And you thought the notion of ‘world government’ was just a figment of the imagination of brain-fevered right-wing Republicans? Seems not,” explained Martyn Warwick in Telecom TV.

Let’s see how the public policy stalwarts fight it back.

Alison is the featured dinner speaker at CPRsouth4 in Negombo, Sri Lanka, on December 7th. I am sure she will speak to this court case and the challenges facing policy intellectuals in environments like ours. The relevant excerpt of the judgment is given below.

Three principal grounds for the alleged perception of bias are relied upon. First, the Link Centre received funding from some of the complainants in the SAVA complaint. This is disposed of quite easily. The Link Centre is a research and training body in the field of information and communications technology, policy, regulation and management. It is the only major organization in South Africa that focuses on these matters. It has published internationally and presented papers at conferences. While it is correct that the some of the complainants funded the Centre, the Link Centre also received funding from the government and from Vodacom, a company in which Telkom had a 50 percent shareholding. Its largest funding during the time of the investigation was from Vodacom. Telkom was approached for funding as well but declined to contribute. The donations from industry participants were less than a fifth of local donor contributions and a fraction of the multimillion Rand foreign donor contribution from the Canadian Independent Development Research Centre. The second ground is that, the advisory board of the Link Centre included various people who were closely involved with the complainants at the relevant time, in particular, the co-president of SAVA and the co-president of ISPA. Thirdly, the authors of the Link Centre report made statements and pronouncements that were highly critical of Telkom prior to being employed to prepare the report. These statements are to the effect that Telkom’s profits were outrageous; that ICASA’s decisions were regularly overturned because of Telkom’s influence; and that Telkom by using its monopoly power sought to retard growth of the value-added network and internet sectors and so interfered with the effectiveness of South African business. For example, Ms Gillwald, one of the authors of the Report, stated that ‘a consequence of Telkom’s unchecked dominance has also had a chilling effect on the partially-liberalised value-added services segment of the telecommunications market, which includes the internet service providers.’ None of the statements or publications ascribed to the authors of the report was denied: however, all claims of bias were rejected, and Ms Gillwald deposed that the views of the authors of the report were founded on research.

Barack Obama, self-confessed BlackBerry addict, will undoubtedly be the most tech-savvy president in history. But being tech-savvy isn’t the same as being tech-smart.

The combination of Obama in the White House and new leaders of key tech-related committees in Congress should send warning flags up for all who cherish the freedom and vitality of the Internet.

Rep. Henry Waxman (D-CA) is the incoming chairman of the House Energy and Commerce Committee, which has jurisdiction over the technology sector. Waxman-like Sen. Jay Rockefeller (D-WV), who chairs the Senate Commerce Committee-is a strong proponent of so-called “net neutrality.” Despite its innocent-sounding moniker, net neutrality is hardly neutral.

A federal law mandating net neutrality would strip Internet service providers (ISPs) of the ability to control how they manage Web traffic over the broadband infrastructure they developed, built, own, and market to the public.

Read the full article by James G. Lakely in News Blaze here.

In a decision that defies all logic, the federal agency told the coalition of 55 ISP’s that Bell Canada’s decision to discriminate against particular applications and types of content was “not discriminatory” because Bell throttled both wholesale and retail customers in an equal fashion.

“Based on the evidence before us, we found that the measures employed by Bell Canada to manage its network were not discriminatory. Bell Canada applied the same traffic-shaping practices to wholesale customers as it did to its own retail customers,” said Konrad von Finckenstein, Q.C., Chairman of the CRTC.

CAIP and advocates of Net Neutrality argued that, if Bell and other internet service providers can’t keep up with subscriber demands and must throttle traffic, then they should implement neutral measures for dealing with internet congestion rather than arbitrarily picking on one type of application and content.

Read the full story in Digital Home Canada here.

O3b, by contrast, intends to offer bandwidth on a wholesale basis to internet-service providers, and transmission services to telecom operators, to link remote base stations to their core networks. Furthermore, O3b’s service will be available only in a ribbon around the equator, covering most developing countries. It can start offering this service with just five satellites (it will eventually have 16) circling 8,000km above the equator. These should be in orbit by late 2010.

More on this here.

Internet service providers (ISPs) in UK have just a few weeks to sign up to a voluntary code on the promotion of broadband speeds or the industry will face mandatory regulation, the communications watchdog has warned.

Attempts to set up a voluntary system providing consumers with accurate information were failing, Ofcom’s chief executive Ed Richards told a parliamentary select committee. “This is a near-term issue that needs to be dealt with now and we would like to be able to get the industry to sign up within the next few weeks,” he said.

BT, the UK’s largest broadband provider, said it backed the plan. “We believe the most important thing is transparency when a customer orders a broadband service,” said a spokesman. “BT Retail always tells the customer what speed of service they will receive before they place the order and we believe that other companies should do the same.”

Read the full story in ‘The Independent’ here.

The commission on January 24 will kick off a four-to-six week lab test of equipment that will allow ISPs to access this spectrum, known as “white spaces.” That will be followed by an additional six-week field test period, the FCC said.

At issue is the transition from analog to digital TV signals. In an effort to free up spectrum for public safety use, Congress has ordered TV broadcasters to shift their signals from analog to digital by February 2009. When this happens, there will be open, unregulated spectrum between the digital channels, or white spaces, that companies like Google and Microsoft want to use for wireless broadband service.

Broadcasters insist that use of these white spaces for broadband service will result in reduced-quality digital TV viewing. Internet companies, meanwhile, view the use of the spectrum as a low-cost way of getting broadband service to underserved areas.

Read the full story in ‘PC Mag’ here.

If I were managing an incumbent telco, claiming dominance in various markets and providing poor broadband service, the NZ decision will give me nightmares; but more than that, it will cause me to seriously consider BT type voluntary reorganizations.

AFP: New Zealand orders Telecom split

Telecom, long accused of using its dominant position to stifle competition, will have to break up into wholesale, retail and network operations.It will have to give competitors access to its network linking New Zealand’s 4.1 million people at the same price it will charge its own retail arm. The government said the split should be completed by the end of March 2008.

“It will underpin increased competition and efficient investment for the long-term benefit of all New Zealanders,” Communications Minister David Cunliffe said.

Incentives for Telecom to develop its network should increase Internet speed and capacity, he said.

The government first signalled it wanted a split last year after it expressed frustration at the slow take-up and expensive charges for broadband Internet.

Competing Internet service providers (ISPs) have complained that Telecom’s monopoly position in the network has hindered the introduction of faster and cheaper Internet services.

The government had already ordered Telecom to open up access to its network to competitors and the operational separation is intended to make its network operations more transparent.

The restructuring is similar to the split carried out by BT Group (British Telecom) last year and the New Zealand company’s incoming chief executive Paul Reynolds is a British Telecom veteran.

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Leased Line Tariffs to be Regulated

Bisnis Indonesia, September 27, 2006
JAKARTA: The Indonesian Telecommunication Regulatory Body (BRTI) will regulate the tariffs for leased lines through a ministerial decree, which is expected to be signed end of this year. The regulator most likely will force network operators to lower leased line tariffs by more than 50 percent to push internet penetration in Indonesia.

BRTI said this in a public meeting with Mastel, internet service providers, and network operators yesterday. Heru Sutadi, a member of BRTI, expected a decline of more than 50% in the tariffs will increase ICT usage, internet interconnection, telephone penetration and increase the number of internet users in Indonesia.

“The regulator expects the decline in leased line tariffs will be followed by the acceleration of local internet content, so that bandwidth doesn’t get used outside the country and internet tariffs can drop significantly,” he said yesterday. Leased line is the network that connects internet service provider with retail customers, also called E1.

BRTI said investment estimate during the network construction 10 to 15 years ago had to include depreciation. Fifteen years ago, the price for each kilometer of E1 was about 90 million rupiah, which has drastically declined to about 3 million rupiah at present.

According to the post and telecommunication directorate general (DG POSTEL), Telkom, Indosat and Excelcomindo are the major operators in the sector.

Mastel estimated that the leased line tariffs in Indonesia is 48 times more expensive than India. Internet service operators have said that the high tariffs made internet costs for customers. The Association of Indonesian Internet Service Providers expects the decline in leased line tariffs will push for a healthy competition in providing internet to retail customers.

Heru said the decline in leased line tariffs will be followed by the plan to build domestic optic fiber network (Palapa ring), while the line to outside the country is currently being tendered. “The number of internet users will rise significantly considering that retail tariffs will surely fall,” he said.

According to data from the internet association, there are between 16 million and 20 million internet users in Indonesia, or about 8 percent of the population. Sarwoto Atmosumarno, head of long distance division at PT Telkom, said that the company basically approves of BRTI plan, especially in the era of multi-operators, when the prices for telecommunication services should be competitive.

“The regulator must see whether leased line service is a monopoly or not that needs to be regulated,” he said
to Bisnis yesterday. Sarwoto also said that regulator in determining the tariffs should not violate the law, which stipulates that BRTI has the right to establish the formula, and not the tariffs itself. Thus far, the regulator has not applied this rule, for example in the fixed telephone tariffs, he said.

Backhaul capacity in this context refers to the networks within a country or within a contiguous region. Backhaul is distinct from the under the ocean submarine cables which currently have excess, unused capacity thanks to the dot-com bubble driven investments into this high capacity links that connect continents.
A number of technologies are proposed for the backhaul links that are suited for specific regions based on what kind of infrastructure already exists. A number of new players are getting into the backhaul business, including Cable TV companies who are able to use the excess capacity in their networks.
“The study identifies six technology options for cellular backhaul: T1 over copper (dominant in the Americas), microwave and other radio technologies (dominant in Western Europe), Ethernet over copper, Ethernet over fiber, WiMAX, and cable.

“There is general agreement within the industry that Ethernet over fiber will be the long-term solution of choice,” says Arden, “but much of that fiber will have to be laid, incurring upfront capital costs. ‘How long is long-term?’ remains an open question.”

The government violated the law by allowing the state-run telecoms monopoly to own and operate the country’s only submarine cable network. Bangladesh Telegraph and Telephone Board (BTTB) built the SEA-ME-WE4 submarine cable and its associated infrastructure from the earnings of its other telecoms ventures and the law explicitly prohibits such practices of subsidisation.

Subsection C of Section 49 of the telecoms law says, “If an operator provides more than one service, but there exists competition in the market in providing one of such services and no competition in case of another service provided by him, then subsidy from the earnings of the service which is subject to competition shall not be allowed for the other service which is not subject to competition.”

BTTB built the cable’s landing station in Cox’s Bazar and from there it deployed an optical fibre link up to Chittagong from the earnings of its fixed telephony, Internet and data connectivity services. This is what the law explicitly prohibits because the private sector is also offering all these three categories of services through competition.

Therefore, the government cannot build the submarine cable from the earnings of the services ‘which are subject to competition’ and it must take away the submarine cable’s control from BTTB’s grip as soon as possible to comply with the legal provision and create a level playing field to foster the growth of telecoms and ICT sectors, sources said.

Otherwise, the government remains vulnerable to legal actions for such a gross non-compliance with the law, which might even temporarily stall the cable’s commercial operations causing a great deal of trouble for the undersea cable users of Bangladesh.

BTTB’s undisputed control over the SEA-ME-WE4 provides free bandwidth to its state-owned Internet service. It allows BTTB to maintain an artificially lower tariff for its Internet services while private Internet service providers (ISPs) have to buy the same bandwidth, which compels them to impose higher tariff on their services, putting them in disadvantage in competition with BTTB.

By Divakar Goswami & Onno Purbo, March 2006
LIRNEasia’s latest research paper is available for comment. The paper looks at the deployment of Wi-Fi in Indonesia, under the 2005 WDR theme, ‘Diversifying Participation in Network Development.’

Download paper: indonesia wi-fi study 2.0 [PDF]

Please post your comments below.

Executive Summary
With their low-cost and quick deployment time, wireless Internet technologies like Wi-Fi offer last-mile access network solutions to developing countries with limited network infrastructure. Among developing countries, Indonesia is unique for the extent of Wi-Fi that has been deployed by Internet Service Providers (ISPs) and private entrepreneurs in more than 40 towns and cities across the archipelagic nation. However, the findings from the current study finds that Wi-Fi “innovations” in Indonesia are not a result of enlightened policy designed to extend communication infrastructure to unserved areas but rather a workaround solution to hostile market and regulatory conditions.

The research objectives were to determine the conditions that gave rise to Wi-Fi becoming an access technology of choice for Indonesian ISPs; the lessons that can be abstracted from Indonesian Wi-Fi innovations; and the steps that must be taken for the next stage of Internet growth in Indonesia. Despite having two regulatory bodies, DG Postel and BRTI, the Indonesian telecommunication sector lacks credible, independent regulation. DG Postel is embedded within the Ministry of Communication & IT and BRTI is nominally independent being understaffed, lacking teeth and being chaired by a DG POSTEL representative. A poor regulatory environment is compounded by a non-competitive telecommunication sector dominated by PT Telkom and Indosat who were given exclusive licenses by the Indonesian government for fixed telephony and international gateways, respectively. In the absence of regulatory requirement to unbundle the local loop, PT Telkom’s monopoly over the last mile facilities that are critical to all local telecommunications services especially Internet service means that Internet Service Providers (ISPs) needed to build their own last mile infrastructure to reach customers. However, license conditions for Network Service Providers, the category that ISPs fall into, forbid them from building their own infrastructure—last mile or backbone. The ISPs used Wi-Fi in the access network as a workaround solution for their inability to build or buy last-mile infrastructure. Until recently (January 2005), the unlicensed use of 2.4 Ghz for Wi-Fi was illegal and the use of 5.8 Ghz continues to be. However, that has not prevented ISPs from using those parts of the frequency because Wi-Fi is cheaper and easier to deploy compared to wired infrastructure and has lower sunk costs at risk if caught by the authorities.

As is well documented in the literature of economics, monopolists do not invest the full amounts required for economic efficiency when they are provided with monopoly returns on their investments. This is the case in Indonesia with backbone infrastructure that is scarce outside the islands of Java and Sumatra and unevenly deployed even in those two islands. The inadequate supply of backbone and lease line infrastructure and the high monopoly prices for leased lines that exceed benchmark prices in other countries by as much as 48 times, has forced ISPs to use Wi-Fi as low-capacity backhaul networks to carry Internet traffic. These cost saving strategies by ISPs have not been able to keep retail Internet prices from being three or four times the price in benchmarked countries. This has resulted in a multi-tiered retailing of Internet service, where large customers like schools act like ISPs using Wi-Fi to connect to neighbourhood networks, other schools and businesses to recover high Internet costs that can be as much as US$4000 per month for a 2Mb link. It is evident from the research findings that ISPs in Indonesia have used Wi-Fi “innovations” to circumvent market & regulatory barriers. Until credible regulatory reform is carried and the telecom market is liberalized, the gains in the telecom sector generally and Internet specifically will be limited and unsustainable. For quickest results for high Internet growth in Indonesia, the regulator must reduce leased line prices as a number of studies in different countries have shown.

The silver lining for Indonesia is the inherently lower costs of Wi-Fi compared to wired last-mile access technologies, providing the country with potentially explosive Internet growth if conducive regulatory and market conditions are created.

Wi-Fi “Innovation” in Indonesia – Final Report Version 2.0

Wi-Fi “Innovation” in Indonesia – Draft Report Version 1.2