~ Archive for SAT3 ~

OPEN ACCESS SAT3

4

I woke up to the fluctuating sound of the power system, the generator of the hotel I was staying in had taken over from the national power grid which is loadshedding on an abitrary basis. This is Banjul, the capital of Gambia which recently hosted the African Union meeting. The day before i drove on a smooth road from the airport for about thirty minutes to my host’s office then to the hotel where i was booked to stay – a really nice place which is expanding.

I wondered for a longtime on my bed about the power problem contrary to the good road on which i drove, later i was told one of the major power units of the country had gone down hence the loadshedding which also made using of the mobile network almost impossible. My mind quickly shifted back to my challenge and the subject with which i went to bed, OPEN ACCESS and SAT3 what do they have in common or are they mutually exclusive. Same as the good road i drove on and the bad power experience, do they have anything in common or are they mutually exclusive.

Road and Power are necessary ingredients for development and they compliment each other and so i started to draw the same similitude and relationship between OPEN ACCESS and SAT3, from my bed to breakfast i carried my able assistant (the new Macbook Pro) and we outlined our thinking and considerations of the subject. Please enjoy.

Since publishing the Open Access EASSy paper @ blogs.law.harvard.edu/eric/2006/10/20/open-access-eassy (you must read it to understand this paper), I have being challenged on the viability of Open Access to SAT3 and questioned on the need to institute the same standrards for both cables though we all know that SAT3 is already established and EASSy is yet to be. In this thesis I make an attempt at upholding the same Open Access structure and principles of EASSy to SAT3 – this is possible because both cables lie in the same realm but the context of their execusion are different. This is ONLY possible because of the window of opportunity presented by the end of exclusivity by the historic operators on SAT3 in April 2007 so I also suggest a process approach.

For the records, SAT3 was established with an exclusivity period to recoup investment by the historic operators and this is due in April 2007 at which the SAT3 country governments can either entrench the exclusivity of the historic operators or consider other mechanisms such as what an proposing. SAT3 stands both as a pillar of hope and despair for the African continent; hope because it was the first cable and there is an opportunity for it to significantly change bandwidth prices based on it’s non-performance, despair because we may decide to keep things the way they are currently and continue with the incumbency and high bandwidth prices.

The reasons for the non-renewal of the exclusivity range from, the historic operators haven recouped their investment in the cable at high cost since the inception of the cable and yet made fiber bandwdith more expensive than satellite capacity. Secondly we know that the loan granted by the WorldBank to the historic operators for their contribution to the SAT3 cable was guaranteed by their respective governments hence the onus lies with the government after supporting the private interest of the historic operators to now consider the public interest of providing cheap and affordable bandwidth for socio-economic development.

If the SAT3 goverrnments and regulators collectively or individually decide to end the exclusivity in April 2007 then the question to me is, what steps should they take towards Open Accessing SAT3? I don’t hold monopoly on the steps and process because national and or regional relationships coupled with on the ground details must be taken into consideration but I would proceed to outline what I see as the larger framework of what is possible in terms of structure, principles and processes – same as for the EASSy cable. Hopefully other cables or subsequent ones would adopt or follow the same strucure, principles and process to have the desired impact.

For the records again, I applaud the work done by the Open Society Initiative for West Africa (OSIWA @ osiwa) and other institutions for not only holding two (2) workshops to discuss the SAT3 issues but bringing a community of engagement, culture of awareness of the issues at stake and channelling internal capacity within the various constituencies ie governments, regulators, private sector, educational institutions and Civil Society to understand whatever decisions they make regarding the cable. My effort in this paper is to compliment such efforts with an adoption that considers some elements and layout a general framework based on the several discussions and engagements.

Declaring SAT3 an “essential facility” would mean that it holds much in the public interest so must be treated with the public good as primary and other consideration as secondary. Private consideration would be first on the secondary ladder because that is important for the running of the public entity. Am not for once suggesting a move from an extreme private position to an extreme public consideration, but rather my suggestion is to use minimal public holding as a temporal measure to move from an exteme private interest to a balance between the private and public consideration. Open Access is about balance and consideration of the various interests.

The governments holding the essential facility in trust after declaring it so is only a temporary measure which must be seeded quickly to a multi-stakeholder institution which would work in the interest of the various constituency and ensure that there is a clear reflection of equity. Regulatory and public policy must recognise the establishment of the essenttial facility which in this case would be “infrastructure provider” – providing infrastructure for the other service providers wthin the value chain.

In some cases the regulatory and public policy environment must create the structural change from a vertical to a horizontal layering communication system and that enables the change process. Whatever the case may be, the first fundamental step is the re-alignment of the communication paradigm where there is a distinction between infrastructure and services. This means a move from the vertical to the horizontal communication system. The essential facility in this case, the SAT3 country segment would constitute the infrastructure provider which DOES NOT provide services on the value chain. Ghana, Nigeria, South Africa and Senegal has hinted that they are going to adopt this approach post April 2007. In the case of Ghana, the government has also contracted the Chinese to finalise the nationwide fiber network which was owned by the Volta River Authority called Voltacom. Voltacom would be merged with the SAT3 country segment to form an “infrastructure provider” which would provider international and national bandwidth infrastructure.

Owership of the infrastructure provider is the next consideration, enjoining a multi-stakeholder ownership model ensures that there is balance of power, money and interest. It is in the interest of the government to ensure that this happens so that they are not labeled as “corrupting” the entity. The mechanism is for the government through an initial private and or public offering to invite the private sector, educational institutions, civil society, investors, PTTs and the consumer to own a part of this entity through a transparent and neutral process. Enlisting the infrastructure provider on the stock exchange would ensure that it is subject to the dictates of that environment ensuring access and commonality on ownership.

SAT3 at this point would have adhered to Open Access in terms of the structural change below;

Within the structural framework, the cable would have differentiated “Infrastructure” from “Services” where Infrastructure is seen more in the “Ownership” realm whiles Service is seen in “Access to capacity”.
The most distinguishing feature of the Open Access approach is that, ownership of the infrastructure DOES NOT GUARANTEE any access (discriminatory or not) to capacity on the value chain for the provision of service to the market. The respective country capacity would be on the money here.

A set of principles would hold for the ownership of the cable and those principles would be different from those for access to capacity.

Infrastructure ownership principles for the SAT3 cable would include;
The ownership of the cable must be in a public private partnership involving Government, PTTs, ISPs, Educational Institutions, Civil Society and Consumers.
A fair distribution of these constituencies from the member countries in an equal sub-regional distribution leading up to the Board of Directors of the enterprise in case a regional approach is adopted like EASSy.
The same set of rules must be established to identifying the various shareholders from the various countries in the different constituencies, again this applies to regional.
For the purposes of this exercise a Special Purpose Vehicle (SPV) or a legal entity with an African wide structure and majority Africa ownership should be considered
The essential facility must have a public interest combined with a private sector approach in it’s business model in order to ensure cheap and affordable bandwidth to the end-user.

Value Chain access to capacity for service delivery principles are;
The essential facility must sell capacity to all entities who meet the legal and regulatory requirements in each country directly and non-discriminatorily.
Service Providers shall be offered Transport Infrastructure Layer access to different capacities depending on their requirements.
End Users shall be free to choose any local Service Provider connected to the National and or Regional Network.
The essential facility shall not compete with Service Providers (its customers) by offering services at the Service Layers directly to End Users.
All countries must create a regulatory structure that recognizes the essential facility.
The essential facility shall be formed, owned and operated in such a way as to facilitate competition and to foster innovation at the Services Layer, and where practical and commercially viable at all levels, with a view to maximizing usage of the network and benefits to the End Users.

Once these are in place the market structure would align such that the infrastructure cost which is almost always duplicated several times by service providers is consolidated. That reduces the barrier to uptake on the service side and makes the service providers focus on services and competition in the market place for innovation and customer service delivery at cheaper or affordable cost. Ultimately the customer benefits and the uptake of ICTs as a sector and cross sectorial enabler would be enhanced.

This sets out the framework for Open Access as it relates to the SAT3 cable but I must admit that this is not the ONLY approach in terms of process but structurally and principles wise, the above is not far from wrong. The devil as they say is always in the details, though.

NB: These principles and structure are drawn from the Open Access study conducted by Anders Comstedt, Eric Osiakwan and Russell Southwood for InfoDEV @ the WorldBank – www.infodev.org/en/Project.80.html

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