Open Access for
By
Eric M.K Osiakwan
Reuters Digital Vision Fellowship
Program
Presentation on Open Access for Africa
@ CTO Conference
Introduction
Given that
Africa is the most unwired continent in the world, most of its internal
communication (voice, data, and video) has to be resolved internationally. This
cost the continent a fortune hence the cost of communications is significantly
higher in Africa than elsewhere in the world. It has been estimated that for
data alone this routing of traffic costs the continent US$400 million a year[1]. According to a new report
published by Balancing Act, the transmission capacity required to carry
Africa’s international voice and data traffic increased by 91% in the three
years to 5.09 Gbps 2002, will increase by at least 137% to 12.09 Gbps in the
three years to 2005, and a further 81% to 21.9 Gbps in the three years to 2008. The report also predicts that
bandwidth projection for Sub-Saharan Africa would be around 24% overall growth
in the three years up to 2008.[2]
Problem
The demand projections suggest the need for a
robust passive infrastructure build-out in and around Africa. There is an urgent need
for new approaches to financing and building out information and communication
infrastructure to address this large unmet demand for information and
communication services. Technological innovation helps make these new
approaches possible and more flexible approaches to financing, service delivery
and regulation will make them effective and sustainable. One approach (or set
of approaches) gaining increased visibility and credibility is increasingly
referred to as Open Access Model.
Layering
The urgency, and the viability, of these new models are driven in
part by the growing (and inevitable) move toward Internet Protocol (IP)-based
communication networks This in turn
implies the move toward a layered model of these networks, where there is a
logical distinction between:
Each layer has a set of functional rules that allow it to
interface with the other layer and for information to flow over the
network. Any player, including new
players, can use different elements of the network, or the entire network, to
provide services. The IP-based
architecture of the network makes it possible for services to be provided, and
innovation to occur, at any point on the network, including, notably, the
edges, where the network can be further grown as well.
Different segments of the market – and different layers of the
network -- will naturally have different structures, and will attract players
with different business models. For
example, in most countries and regions, it will not be feasible or logical to
have more than one or two providers of backbone infrastructure. The key issue in an Open Access model is to
assure that no player in one of the layers can block access to another layer or
to the rest of the network through having dominant market power in one or
another layer.
This suggests a number of key principles of Open Access networks.
1.
Anyone can play
Particularly
because of the potential for locally-provided services and network growth at
the edges made possible by flexible technology and open network models, Open
Access models should assure that any provider willing to play by the rules can
plug and play in the network.
Regulation
should be technology-neutral, taking into account the cost and physical
properties of the technologies themselves. No one should be stopped from using
a particular technology and indeed a progressive regulator would encourage cost
reduction through technology innovation.
One needs
to recognize that in future a wide range of applications will require higher
bandwidth. But there may be no significant (order of magnitude) improvements in
the performance of fiber, particularly its installation. However with wireless
there will be significant improvements in performance and cost/capacity ratio
and therefore wireless solutions will become more attractive in local
distribution applications.
Competition should be
fair and non-discriminatory. There should be no predatory pricing,
cross-subsidisation or aggressive cross-ownership. Regulators will need to be
capable of dealing with a range of competition issues to ensure a genuine level
playing field, and to prevent market strength in one layer from creating unfair
competitive advantage at another layer. For all services at a given layer,
there ought to be at least two providers and whenever there are not 4-5
providers of a particular service, issues of competitive position would need to
be examined.
What is true for
countries at a national level holds true at a regional and international level.
Ideally any country should have a choice of at least two providers to connect
to neighbours and the rest of the world. The EU competition policy formulation
of significant market power provides a useful benchmark against which competitive
position might be examined.
Competitive
markets thrive on transparent information about market prices and service.
Internal accounting processes in companies need to be sufficiently transparent
to enforce fair trading. If there is tradable bandwidth – particularly at an
international level – it will allow clear comparisons to be made between
different providers. There needs to be greater levels of consumer information
to allow comparisons between offers, including offers at the interface between
layers.
The
different roles of players need to be transparent. In order to create trust in
the market, infrastructure providers need to be clear that they will not enter
service markets to compete with their customers. The regulator exists to
encourage competition rather than restrict it but to do so in a way that
genuinely encourages increased investment and lower access costs to
communications technology. Where appropriate, regulation becomes light-touch
rather than prohibitive or restrictive. Government exists to create the legal
framework through which competition issues can be mediated.
In order
for a competitive market to function, everyone must be able to connect to
everyone else. Service providers would be able to get access to infrastructure
from the local to the international level, whether they were small or large
entities.
There will
be inevitable interconnection rate issues where the interests of the
infrastructure provider in keeping re-investing in the network need to be
weighed against the opportunities that can be created for greater levels of new
business.
It is important
to ensure that the intelligence in the network is to be found at the edges of
the infrastructure rather than at its centre. In other words, the
infrastructure provider should not be allowed to reserve for itself all of the
functions that create value in the market.
In
practical terms, it should be possible to create a local entity that can
operate on the small or medium-scale and can plug into the network without
needing to cede control over its activities to the infrastructure provider.
Local operators need to be able to own and control a significant level of
intelligence in the system (eg billing, features, etc) to encourage open
access.
Implementation
As a member
of an InfoDev consulting team working for the WorldBank on this, am going to leverage
our work via my fellowship programme and pioneer the implementation of such by
NB: This note draws from a study being prepared for the WorldBank through
InfoDev on “Leveraging New Technologies and Open Access Models: Options for
Improving Backbone Access in Developing Countries (with a focus on sub-Saharan
Africa”, by a team consisting of Anders Comstedt, Russell Southwood and Eric
Osiakwan, under the auspices of the consulting firm Spintrack