International Insights – June 2009
An Update on Global Communications Issues
The Global Scene – Chasing Non-Existent Money
The last few weeks have been a very hectic time in international telecommunications. Governments throughout the world continue to wrestle with a very awkward dilemma. They see that economic growth and job creation will come from providing very high speed fiber access for business and consumers wherever they are, but they realize that the global recession means there isn’t enough money to do it as quickly as they would like.
There is no single answer to the challenge. Approaches rang from varying levels of state financing, with Australia creating positive headlines by their approach, to largely private investment partly funded by a telecom tax, such as envisaged in the Digital Britain report.
This report brought mixed reaction outside the UK where some felt it was too little too late, and others accepted it was the best that could be achieved in the circumstances. Lord Carter’s early departure from Government came as a surprise, but next generation access implementation will take much longer than the career of most politicians these days.
INTUG believes that whatever approach is taken, regulation must protect competition not incumbents and must ensure that any investment is efficient. That means opening up the facilities to the maximum number of users and content, and hence to the maximum number of service providers, and not rewriting the competition laws in order to enable national protectionist policies. The European Commission’s second draft of their NGA Recommendation on June 12 unfortunately did the reverse. INTUG stated publicly that it represented an Open Charter for the granting of Regulatory Holidays for incumbents.
International businesses thus face the death of competition in fixed access lines and a major obstacle to their international service providers in building networks for them.
USA
A recent USA campaign entitled nochokepoints.org has raised similar concerns. INTUG continues to be involved in preparing briefing documents for the Obama administration, which is seeking to introduce government mechanisms from trans-sector strategic thinking and implementation. This is a challenge for all governments, reflected in the UK where ICT policy and network design is done largely independently in each major Government department with little consistency, lost opportunities for cost efficiencies and major barriers to seamless networking and information coherence and communications.
INTUG Meeting, Brussels, 19-20 May
The first of INTUG’s 2009 meetings centered on this theme of open access and was entitled “Open Markets in Communications for Tomorrow’s World”. The meeting was hosted by INTUG’s Belgian member BELTUG, and the first day was open to non-members with more than 60 registering and a good attendance.
Presentations were given by Belgacom and BASE on behalf of the competitive operators. The morning concluded with a regulatory panel of speakers including Nick White from INTUG, Levi Nietvelt from BEUC (the EU consumer organization), Ilsa Godlovich from ECTA (the competitive operator association) and Christian Hocepied from the Competition Directorate.
Sam Paltridge (OECD) spoke on global developments, Ernie Newman (New Zealand) gave a fascinating AsiaPac update, Professor Ian Lloyd of Strathclyde University spoke on security, Magnus Madfors from Ericsson presented on mobile futures, and Martin Selmayr, spokesman for Commissioner Viviane Reding gave a very encouraging regulatory update. The slides from the presentations are available in the Archived Meetings section on this web site (members only).
The second day included an INTUG Council meeting where members shared their own methods for running a user group in a recession, generating some interesting ideas. Glenn Powell, CMA’s Chief Executive until recently, had been a Board member of INTUG and a replacement will be nominated and elected at an Extraordinary General meeting.
Sergio Antocicco, INTUG Chairman
As readers will probably know, INTUG was struck by tragedy just days after the Brussels meeting, when INTUG Chairman Sergio Antocicco died suddenly and unexpectedly. He had recorded a welcome message from hospital which was played to open the meeting, and actually phoned Council during the meeting on Day 2 to say he had recovered successfully from his operation the previous day.
Sadly he suffered a relapse just two days later from which he was unable to recover. Condolences and best wishes were sent to his wife, two daughters and wider family. An obituary was posted on the INTUG web site. A new Chairman will be announced soon.
Terminatetherate
INTUG has been actively involved in initiatives to reduce fixed and mobile termination rates and roaming from many years. The UK campaign entitled Terminatetherate (not an attempt to abolish Council Tax) was welcomed in many quarters. The 4 page “wrapper’ for the London Metro free newspaper increased brand awareness if not understanding.
INTUG posted the following comment of support on the blog:
“INTUG welcomes the Terminatetherate campaign and would like to see similar initiatives elsewhere in the world. Business users of telecoms are particularly irritated by the impact of high termination rates. Trade relies on cross-border communications over fixed and mobile networks and is therefore currently hampered by the high cost for termination on fixed and mobile networks, NRAs have failed to successfully address this market failure (given there is no effective substitution option) and this is compounded by Mobile Network Operators (“MNOs”) denying access to competition, eg blocking VoIP/Skype and MVNOs.
Termination rates and years of sky-high cartel pricing on Roaming have delayed the use of mobile communications for improved business processes by years. The current situation is a “tax on trade,” which does not benefit business users or consumers (or, by the way, the dominant mobile operators themselves). There is huge potential for innovative mobile data and text applications which would generate investment and jobs and social welfare if only punitive levels of termination rates (and roaming charges) were dramatically reduced.”
OECD/ICCP/CISP Working Party, Paris June 15-16
This twelve-letter acronym stands for the Organisation for Economic Co-Operation and Development (OECD) Information Computer and Communications Policy (ICCP) Working Party on Communications Infrastructure and Services Policy (CISP). INTUG has recently been recognized as an official expert group and has a seat at the table. The most recent meeting addressed a number of issues of relevance, e.g. geographic segmentation of markets, Next Generation Access and international roaming. Representatives form OECD countries all over the world attend and the meeting is supported by simultaneous translation for presentations, questions and answers and generates highly respected trend statistics. The future work program includes studies on cable broadband and IPv6.
The roaming debate included presentations from Vodafone, 3, and bypass alternatives Devicom and Truphone. Devicom customers insert an MVNO’s local SIM in their handset. Truphone offers a travel card with a call back SIM. Both business models trade on the roaming mark-up with innovative but not entirely user friendly escape mechanisms.
In addition to Vodafone’s own much vaunted “summer holiday” from roaming charges, Zain operate a no roaming charges zone in Africa, Australia has launched a “Roamfair” campaign, and the Arab Council through AREGNET has a group headed by Egypt and comprising Syria, Saudi Arabia, UAE and Algeria has been working for several years to reduce roaming charges in the Middle East dramatically and is close to some agreement.
Looking Ahead
2009 sees the return of the ITU Telecom World event to Geneva. It is hoped the Forum program will find a speaker slot for an INTUG user representative, but there is plenty of competition for this at least. Previously known as the Telecom Olympics, in its heyday it was a “must attend” spectacular for all those in the industry. It has had to reinvent itself, but readers may wish to consider at least a day trip in the week of October 5-9.
This newsletter was coordinated by Nick White, Executive Vice President, INTUG