We reproduce fully below, Carlos A. Afonso’s post to a thread on Computer Professionals for Social Responsibility responding to discussions at the IGF workshop “Expanding broadband access for a global Internet economy: development dimensions”, in which Rohan Samarajiva, Chair/CEO LIRNEasia was the keynote speaker. We retain the original title.
As neither we nor most of our readers do not have access to the thread it was posted, we like to continue the discussion here.
I come from one of the ten largest economies in the world, with nearly 200 million people, 8.5 million km2, and 5.564 municipalities, where 94% of the people do *not* have access to any form of broadband – the “B” in the famous BRIC acronym.
I am just coming out of the IGF workshop “Expanding broadband access for a global Internet economy: development dimensions”. I left the workshop a bit shocked with the concepts expressed, not by the AT&T representative (who not surprisingly said AT&T subdsidiaries countries other than the USA should be considered local companies because they employ local people), who as usual is just doing his job in defending the so-called “market”, but by other speeches which seemed to completely ignore that, in most of our contries, there is a de facto monopoly or cartel situation regarding the telco infrastructure, and that public policy ought to centrally take this into account if the aim is to universalize broadband access with quality to all families.
One of the speakers (from LIRNEasia) said that “lower prices require lower costs” and therefore one should just “phase out universal access levies and rationalize taxes”. I retorted that pricing per Mb/s of ADSL broadband in São Paulo might be 65 times higher than the same price charged by the same company in London — and therefore no amount of levies or taxes would justify such scandalous pricing difference, not to speak of the much lower QoS.
I suggested that, instead of eliminating the universal service funds (whose levies are a very small portion of price composition of broadband), we should insist on reforming policy regarding the use of these funds. The reply I heard was that it makes no sense to keep funds that are not used or are squandered (!!). Impact of the fund’s levy in Brazil is just 1% of the price of the fixed line telephone connection — its impact in the price of broadband (a separate bill even if the service is not unbundled) is zero.
There was also a recommendation that we should be “gentle on QoS” to facilitate things regarding universalization of access — fascinating. Again, examples abound in which telcos guarantee only 10% of the nominal contracted rate, and in practice this might be even less. Should we just agree with absurds like this in the name of “it is better to have something than nothing”???
And then there is the crucial question of unbundling, central to the policy debate in the developed countries as it directly impacts universalization through an effective reduction of prices for the final user. It is a major challenge for broadband public policy in developing countries, where regulators are usually in the hands of the telco cartels. The word was not mentioned (not a single time) by anyone in the panel, as if irrelevant to the development dimensions of broadband.
The speaker also mentioned that the “need” to reduce costs for the big telcos would require reduction of international bandwidth costs. One of the two big carriers in Brazil, a Brazilian conglomerate, owns redundant fiber running from Brazil to Miami in rings passing through countries in the Caribbean and Central America. They own their own international link, in summary. So do the other carrier in the de facto duopoly — a major operator from Europe. This does not make any difference in pricing for the final user, although it does contribute to their profits in Brazil being far higher than in Europe for example.
Finally, the fascination with mobile. Of course the AT&T speaker started his talk by waving a fancy iPhone to the audience — mostly natural for a commercial wireless giant. But the infoDev representative and others mentioned mobile as a “solution” for the poor, and not even bothered to separate the discussion in the two main topics here: first, the mobile phone as a connectivity device to enable the user to fully use the Internet through a friendly human-machine interface, be it a common PC or special equipment for people with disabilities; second, the phone itself as *the* alternative to the full user experience that a PC or similar might provide. It seems the agency bureaucrats are satisfied with having two castes of users: a small minority of the ones who can fully use the Internet as it evolves requiring more and more multimedia capabilities on both sides (server and client), and the ones relegated to a small device on which it is barely possible to type small messages.
In the first regional LA&C preparatory meeting for the IGF, in 2008, a representative of a major telco said we should not worry about bringing the next billion to the Internet — they have cell phones, so they are connected already, problem solved. I wonder if this executive would take the place of a carpenter looking for a job, who has to compose and send by email his CV together with images of letters of recommendation to his would-be employer, and had nothing but a cell phone (smart or not) to do it. Not to speak of comparing the executive’s thin-fingered hands of a pianist with the big callous hands of the carpenter.
To add my two cents, Carlos is correct when he points a difference in value for money between BB in Developed countries vs BB in developing world, but the ratio cannot be as high as 1:65. At least not in South Asia. Our latest round compares the value for money in widely used BB packages in India, Sri Lanka and Bangladesh compared with USA and Canada. (Pl see QoSE for Oct 2009 in http://lirneasia.net/projects/2008-2010/indicators-continued/benchmarks) Of course, we are behind but catching up. We explore many other ways than USFs to improve this with moderate success.
One key reason for this difference, as I read in Economist some time back, is the massive infrastructure developments in the west during dot com boom. The investments on infrastructure were exceptionally high – anticipating much bigger opportunities that didn’t happen. This gave all these countries enough unused fiber. As for us, there was no dot com boom. So we are still in square one developing the infrastructure the hard way.
This also explains why local loop unbundling (LLU) does not work in any of these countries as Carlos thinks. LLU works in (developed) countries where they already have the infrastructure (fiber) in place. We don’t. For example if you have LLU in Sri Lanka maximum 500,000 users (less than 5%) benefit.
We use very different models here. People will see when you come to LIRNEasia @5. We provide internet on a pure mobile broadband solution. The reason is even at the heart of the city it is easy for us to get wireless than a fiber link.
Finally, the carpenters. I know no carpenters who send their CVs to prospective employers from mobiles, but I do know at least one guy, a son of a carpenter who runs his face book account by mobile phone. It is all he can afford. (pays 0.3 CAD for BB usage per day. Even one hour of Internet use in a cyber café is 0.6 CAD)
I was hoping there would be additional comments that I could respond to, since I will be repeating myself in responding only to Mr Afonso.
At the session, Mr Afonso asked me about the applicability of my policy recommendations to Brazil. I answered him in detail, saying that the entire basis of the presentation was what one should do when the Budget Telecom Network Model (BTNM) was operational, and that in my presentation I had actually pointed out that Brazil was the “anti-poster child” of the BTNM.
In the presentation I also pointed out the essential condition for the BTNM: competition. What is the requirement for competition? Additional entry. What is the recommendation for Brazil? Additional entry. The other recommendations will flow from that: spectrum, rights of way, access to fat pipes and so on.
But he appears not have heard these things. He always can read the paper that is on the web in multiple places, or even look at the slides.
Then there is the question of the universal service fund. Four billion dollars unspent in Brazil and in India. How many years has this gone on? In India, people are being connected by the mobile operators; they are paying extraordinarily low prices. It is wrong that they should pay universal service contributions that are in any case kept unspent.
Let me reiterate, in countries where the BTNM is operational, the universal service fund is absolutely wrong. In countries that have prevented the BTNM from emerging, this is not the highest priority.
But in any country, if you’re taxing people saying it’s for a certain purpose and not using the money for that purpose, it is unusual to defend that practice. I am sure Mr Afonso is not the first or only person to have declaimed that the fund in Brazil should be run efficiently and the money disbursed. The fact that no improvement has happened should be cause for thought, at least. It was Einstein who said that “The definition of insanity is doing the same thing over and over again and expecting different results.”
Try something different. I say this not as an outsider, but as one who has actually designed universal funds.
I have been criticized for my position that regulators should “go gentle” on broadband QoSE: “There was also a recommendation that we should be “gentle on QoS” to facilitate things regarding universalization of access — fascinating. Again, examples abound in which telcos guarantee only 10% of the nominal contracted rate, and in practice this might be even less.”
What we mean by gentle is seen at: http://lirneasia.net/2009/11/how-broad-is-you-broadband/. A regulatory expert who attended the South Asian Telecom Regulators Council meetings that happened to be held when the ad ran said that we must be very brave, to publicly criticize the regulator and the service providers like this. We do not consider this bravery. But it does take a little more imagination and initiative than carping on closed discussion lists read by like-minded people.
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