OPEN ACCESS EASSy

In late 2004, I was admitted to the Digital Vision Program @ Stanford University and around the same time invited by the WorldBank through its Information for Development Programme (infoDev @ www.infodev.org) to join other colleagues to conduct a study “Leveraging New Technologies and Open Access Models: Options for Improving Backbone Access in Developing Countries (with a Focus on Sub-Saharan Africa)” . The study was done under the auspices of Spintrack AB @ http://www.infodev.org/en/Document.10.as….

Recent experiences in a number of countries with “open access” models for the financing and ownership of backbone telecommunications infrastructure offer interesting insights into how new technologies, including the migration to Internet Protocol (IP) based networks, make possible new technical and business models for financing this infrastructure buildout. Africa can learn from these experiences and adapt. In this paper, I look at Open Access in relation to the East African Submarine System, known by the acronymn EASSy (see http:// www.eassy.org). In the wake of the fallout in moving this project forward, I build grounds for commonality, charting the path for re-engagement by the various constituencies.

Open Access in the context of communication (Open Communication) means that anyone, on equal conditions with a transparent relation between cost and pricing, can get access to and share communication resources on one level to provide value added services on another level in a layered communication system architecture.

The concept of Open Access to communication resources is central in the ongoing transformation of the communication market from a “vertically integrated” market with a few operators owning and operating everything between the physical medium and the end-user, to an “open horizontal market” with an abundance of actors operating on different levels and providing value added services on top of each other. Put plainly, anyone can connect to anyone in a technology-neutral framework that encourages innovative, low-cost delivery to users. It encourages market entry from smaller, local companies and seeks to ensure that no one entity can take a position of dominant market power. It requires transparency to ensure fair-trading within and between the layers based on clear, comparative information on market prices and services. It seeks to build on the characteristics of the IP network to allow devolved local solutions rather than centralized ones.

Open Access is also about broad approach to policy and regulatory issues that starts from the question: what do we want to bring about outside of purely industry sector concerns? It places an emphasis on: empowering citizens; encouraging local innovation; spurring economic growth and investment; and getting the best from public and private sector contributions. It is not simply about making micro-adjustments to the technical rules of the policy and regulatory framework but seeking to produce fundamental changes in the outcomes that can be delivered through it.

The study published in August 2005, came at an opportune time, in that it helped to inform and shape the international debate and planning for the EASSy project now in the final planning stages. infoDev then provided follow-up support for this dialogue and planning process both by supporting the coordinating role of the NEPAD e-Africa Commission relative to the EASSy project, and by supporting dialogue and joint planning among civil society groups, and other key stakeholders, seeking to promote open access approaches within Africa.

This ensured acceptance of open access by the government, incumbent PTTs, Operators, ISPs, educational institutions, private investors and more generally by civil society. However at the signing of the EASSy protocol, which is the political framework for the build-out, there has been a division among the various constituencies on how Open Access is enshrined in the protocol.

EASSy in adhering to Open Access must align with the structure and principles below;

Within the structural framework, the cable must differentiate “Infrastructure” from “Services” where Infrastructure is seen more in the “Ownership” realm whiles Service is seen in “Access to capacity”.
A set of principle would hold for the ownership of the cable and those principles would be different from those for 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.

Infrastructure ownership principles for the cable include;
The ownership of the EASSy cable must be in a public private partnership involving Governments, 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.
One set of rules must be established to identify the various shareholders from the various countries in the different constituencies
For the purposes of this exercise a Special Purpose Vehicle (SPV) must be a legal entity with an African wide structure, which must must be majority African owned in order to trade in the various countries.
The SPV must have a public interest combined with a private sector approach in it’s business model in order to ensure a “regulated return on investment” to ensure cheap and affordable bandwidth to the end-user.

Value Chain access to capacity for Service delivery principles for the cable are;
The SPV must sell capacity to all entities who meet the legal and regulatory requirements in each country directly and without discrimination.
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 Regional Network.
The SPV shall not compete with Service Providers (its customers) by offering services at the Services Layer directly to End Users.
All countries must create a regulatory structure that recognizes the SPV.
The SPV 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.

This sets out a framework for Open Access as it applies to the EASSy cable. .

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

5 Comments

  1. William Foster, PhD

    October 29, 2006 @ 8:59 pm

    1

    Eric:

    You are to be commended for your intellectual leadership in developing a funding mechansims and ownership regime for EASSy. I am still not clear on how tariffs will be established for EASSy transit and by who.

    We do want investors to make a fair return, but do they bear the risk of loosing money.

    Also, it seems that you do not want ownership of the cable to guarantee ability to sell capacity to end users (retail).

    I look forward to your development of your “open access” model as it applies both to EASSy and to national backbones and how you find a way of mediating between investors need for barriers to entry so as to invest and the publics need for low cost communications.

    Best wishes,
    Will

  2. Eric Osiakwan

    November 5, 2006 @ 8:00 am

    2

    Will, our proposition actually minimises the risk of loosing money in terms of the multi-skaeholder approach with government guaranteed bonds being traded on the Stock markets, except i dont understand what you mean by “the risk of loosing money” or the stock market disciple. This approach is similar to Level3 as pointed out to me by Stuart Gannes of the DV Program.

    The expereince with SAT3 indicates that corruption, discriminate purchasing, favorutism and nepotism lies in “ownership of the cable guaranting ability to sell capacity to service providers and end users (retail)”.

    My latest piece on the subject where i apply the same Open Access structure, principles and process to SAT3 would be public this week and in that i cite Ghana as an example. More on national engagements later but my next effort would look either at the regulatory policy issues raised by Open Access as it applies to the two cable and then i would like to something on pricing and or cost of the cables in terms of cheaper bandwdith. Am sure these 2 would conclude the ground rules then we can look at the national mechanism which am sure would be more murky waters.

    My proposal is we dont need to create ANY Barriers for investors, we rather need to trade the stocks of the cables on the exchange and allow the discipline of the stock market to work it out like anywhere else. This helps to balance the public interest of low cost access which would guarantee volumes and ensure that though we cover the bottom of the pyramid we are able to get some fortune there as expressly indicated by C.K Prahalad.

  3. Africa CAN » OPEN ACCESS SAT3

    November 7, 2006 @ 8:10 am

    3

    […] Since publishing the Open Access EASSy paper @ blogs.law.harvard.edu (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. […]

  4. Steve Ntwiga Mugiri » Archives » feed the addiction: East African fiber and telecoms, The case for contamination, “Line Rider” and more . . .

    November 23, 2006 @ 1:08 am

    4

    […]  + Balancing Act is carrying a story on an initiative by the Kenyan Government to get another link to the internet backbone. The big news in this is that the project will be open to public subscriptions which is a very good thing as it implies that it will not leave the government saddled with a huge debt. […]

  5. gennick

    December 6, 2007 @ 3:40 pm

    5

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