This section features background information about the World Dialogue on Regulation and its partners, news about their activities, and information on conditions of use of the site.
| WDR e-Brief, Vol. 2, # 7 |
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| Monday, 17 November 2003 | |
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· Q&A: Demand and rural network development · WDR 2003 Expert Forum sharpens investment issues · New WDR research papers available · Telecom reform in Latin America course discusses WDR issues · Governance for a communication economy · Southern African telecom sector performance review workshop at Link Centre · WDR @ WSIS · LIRNE.NET courses highlight WDR issues · CTI annual conference: Copyright and software patents: Open vs. proprietary paths · Radio, the Internet and rural development in Latin America · Subscribing and unsubscribing ___________________________________________________ Welcome to another issue of the WDR e-Brief. The e-Brief is an occasional electronic bulletin from the World Dialogue on Regulation for Network Economies (WDR). The e-Brief keeps you informed of new documents and ongoing discussions on our website and features information and comment of interest to the regulatory community. Please forward it to interested colleagues and let them know they can subscribe for free from the WDR website at http://www.regulateonline.org/. There are now 1,314 subscribers. ___________________________________________________ ___________________________________________________ Q&A: The role of demand in stimulating rural network development In each WDR e-Brief we feature a question or comment posted to the Online Dialogue at http://www.regulateonline.org/dialogue/ and ask our research teams to comment. The featured question in this e-Brief deals comes from D.C Bustillo and asks about the potential of demand for stimulating network development in rural and underserved areas. The answer comes from WDR director, William Melody. Question: The WDR Background Paper (WDR 0301) argues that investment in network development can be stimulated if telecom regulators take steps to promote demand. Yet in most countries, and especially developing countries, the unserved rural areas and poor people cannot afford the service. Thus their demand can only be attracted by prices that are lower than the cost of extending the network to serve them. This won’t stimulate investment in network development to serve these areas or people? Can you give an example where promoting demand in unserved areas or from poor people has stimulated network development? Answer: The questioner describes very well the conventional wisdom on the network development problem. This usually has been the case when incumbent telecom monopolies were asked why their networks were not extended to serve more people and regions. However, experience from all around the world has shown that when other providers (often local interests) are given an opportunity to participate in network development, networks can be extended to include many more people and regions on a profitable basis. These other providers use different technologies, organisational structures, service definitions and pricing structures that are more adapted to the characteristics of the unserved areas and people. In the vast majority of cases the actual demand for service that develops from people and organisations in rural and outlying areas, once served, vastly exceeds initial forecasts, often by a factor of 10 or more. This has been demonstrated in countries in all regions of the world in recent years with the introduction of mobile services. Chile, Morocco, Bangladesh and Alaska are perhaps the most widely cited examples. These developments reflect the opening up of the telecom market to participation by new suppliers of service who extend the network profitably. This is the principle of allowing participation and experimentation on the supply side of the market. The background paper argues that a similar attention by regulators to the demand side of the market can have similar results. This includes allowing intermediaries (e.g. telecenters) and users to experiment with service characteristics (including quality and price) so they are adapted to users’ real needs. We have already seen this with respect to the explosion in prepaid mobile. This service was not designed for poor people. It is more expensive than contract service. But the customer participation barriers are less. Credit checks, contracts, up front payments and uncertain bills are all avoided. Control over the use and expenditure of the service has been transferred to the customer. Demonstrating very impressive ingenuity, poor people have figured out how to make prepaid mobile work for them. These users extended the network coverage when given the opportunity to adapt the service to their needs. It is profitable business for the mobile operators. Recently this principle has been extended further in the Philippines. With a special chip in a mobile phone costing about US$20, prepaid mobile users can transfer minutes of air time to other phones in very small increments (as small as 30 pesos, or 55 US cents). The operator, Smart Communications, pays a commission for air time sold by its customers who have become intermediaries in extending network access to those who can’t afford to invest in a minimum price phonecard. More than 700,000 new customers were brought on to the network in two months. Profits increased. Once again the ingenuity of unexpected customers and intermediaries has overcome the barriers to access by some of the very poor. And for Internet access by the very poor, there are successful examples where broadcast radio has been the intermediary providing at least some form of access to Internet information. (see Bruce Girard’s book The One to Watch: Radio, new ICTs and interactivity, published by FAO and available online at http://comunica.org/1-2-watch/). These are only some illustrations of what is being done, and what could be done to facilitate expanded access to the network by allowing and encouraging maximum participation and experimentation on the demand side of network development. In most cases it doesn’t require an extension of network facilities in the first instance, as it opens opportunities for excluded users and uses to become included in the market being served over the existing facility network. The new demand then generates sufficient service volumes to require investment to expand network capacity. Unfortunately the barriers to participation, in unbundled access to intermediary activities, in flexible service provisions, and in experimentation by intermediaries and users remain higher than the barriers to entry on the supply side. Developments to date have been made possible by chance, and by innovative actions that have found a way around the regulations inherited from the monopoly era. These initiatives have been seldom supported and frequently opposed by both incumbent operators and national regulators. If they supported and encouraged the expansion of demand side participation in extending access, a large portion of unserved and unprofitable regions and people would be drawn into the market as served and profitable. The WDR Background Paper highlights the demand side issues as a neglected area that is fundamentally important to extending access via the market significantly beyond the existing limits. It is time the demand side issues were fully included within the planning horizons and actions of regulators. William Melody November 2003 Post your comments on the WDR Dialogue http://regulateonline.org/dialogue/. This question appears under the discussion of the 2003 dialogue theme at http://www.comunica.org/w-agora/view.php?site=wdr&bn=wdr_theme2003&key=1069060396&first=1069061965&last=1044204547 ___________________________________________________ ___________________________________________________ WDR Expert Forum sharpens investment issues The annual WDR Expert Forum took place in Koege, Denmark on 5 November in association with two LIRNE.NET training courses on telecom reform. The theme for the Forum was whether regulation can be a factor to reduce rather than increase investment risk in network development. The views of the participants differed significantly. The final session discussed possible WDR Dialogue Themes for 2004. No single theme claimed priority from the forum but a number of options received support, including: 1. The Multi-dimensions of Access and Participation – to whom and for what? 2. Reducing Licensing and Other Entry Barriers – eg., Unified Licenses 3. Identify Specific Areas for Regulatory Forbearance and Regulatory Attention 4. Regulatory Performance Indicators 5. Applying Ex-ante Competition Standards in Regulation 6. Appropriate Rules and Standards for Regulation in relation to Dynamic New Technologies such as IP Telephony, WIFI, Wireless (the Spectrum), Optical Networks, etc. These will be discussed in the next e-Brief and the WDR Online Dialogue. See the full report of the Expert Forum at http://regulateonline.org/forum2003/expertforum.htm ___________________________________________________ ___________________________________________________ New WDR research papers online Drafts of some WDR research papers on this year’s Dialogue Theme have begun to come in. Although most reflect work in progress we are posting them and inviting critical comment from interested readers. Comments should be directed to the authors, but where the comments have broader implications for this year’s WDR Dialogue Theme, participants may wish to post them for general discussion as well at http://www.regulateonline.org/dialogue/. Currently there are papers with case studies from Denmark, Ghana, India and Somaliland. Another paper, by Morten Falch, examines cost based interconnection charges as a way to induce competition. More papers will be added shortly and announced in the next e-Brief. See the complete list of draft papers at http://regulateonline.org/2003/dp/draftpapers.htm ___________________________________________________ ___________________________________________________ Telecom Reform in Latin America: Regulatory Issues & Implications WDR issues discussed at Regulatel course La Antigua, Guatemala was the site for a LIRNE.NET course in September, Telecom Reform in Latin America: Regulatory Issues and Implications. The course was co-sponsored by the Latin American regulators’ association, Regulatel, and by Europe’s Independent Regulatory Group (IRG). The themes covered by WDR, including the possible role of the regulator in stimulating investment, feature high on the course agenda. The course report is available online at: http://www.lirne.net/training/recent/antigua2003/ ___________________________________________________ ___________________________________________________ Governance for a new communication economy William Melody delivered the second annual Vodacom Foundation lecture, The Next Generation Internet and Its Governance: Foundations for a New Communication Economy, at the LINK Centre, Wits University, 12 November, where he is the Vodacom Foundation Visiting Professor. Melody noted that, just as telecom deregulation has been essential to permit expanded participation in the sector, now that the Internet economy has begun to develop, it will be necessary to establish a governance structure that fosters expanded participation in the new economy. The forthcoming WSIS in Geneva, 10 –12 December, should provide the beginnings of a policy discussion at the highest levels, although most observers are sceptical. The paper will be available soon for download from http://link.wits.ac.za. ___________________________________________________ ___________________________________________________ Southern Africa telecom sector performance review The LINK Centre, Wits University, is holding a Workshop on Telecom Sector Performance for telecom regulators from members of the TRASA and COMESA regional associations, 19-21 November in Johannesburg. The workshop is being led by Alison Gillwald and William Melody and sponsored by IDRC. The WDR theme, Stimulating Investment in Network Development: Roles for Regulators will be examined within the severe constraints of most African countries. A critical review of existing performance indicators will be undertaken, and the groundwork prepared for establishing a specific set of performance indicators for application in the African telecom and ICT environment. For more information, see http://link.wits.ac.za, or contact Alison Gillwald, This e-mail address is being protected from spam bots, you need JavaScript enabled to view it ___________________________________________________ ___________________________________________________ WDR @ WSIS A number of WDR staff and researchers will be at the World Summit on the Information Society in Geneva from 10-12 December. On December 11 from 13:30 to 15:30 William Melody, director of WDR and LIRNE.NET and Alison Gillwald, Research Director of the LINK Centre, will be speaking at an IDRC sponsored workshop "Whose Information Society is it Anyway? Telecom Reform for Development”. Both Melody and Gillwald will also speak at session on “Innovative ICT Policies for Africa” from 10:00 to 11:30 on December 10. In addition, two books edited by WDR researchers will be launched at the WSIS. “Communicating in the Information Society”, edited by WDR researcher Bruce Girard and Seán Ó Siochrú, looks at some of the neglected aspects of the information society, "from the philosophical underpinnings of the role of information in society, to the context and manner in which the concept has recently emerged into global consciousness, to how it can be deployed in practice to maximize benefits to society." The second book, edited by Amy Mahan, senior researcher at LIRNE.NET, and Yuri Misnikov, UNDP’s ICT for Development Regional Programme Coordinator for Europe, is a collection of knowledge-based best practices accumulated by UNDP in Europe and the Community of Independent States. ___________________________________________________ ___________________________________________________ LIRNE courses highlight WDR issues The LIRNE.NET training courses on the Transition to Next Generation Regulation: Strategies for Stimulating Investment and Competition, Koege, Denmark, 2-7 November highlighted this year’s WDR Dialogue Theme, and benefited by being able to participate in this year’s WDR Expert Forum. This also ensured greater participation from developing countries and a greater diversity of countries participating in the WDR. It strengthened both the courses and the Expert Forum. Participants in the courses came from 14 countries and all continents. Lecturers included leaders in the field from regulatory agencies, the ICT industries, international agencies, user groups and the academic community. Discussions in the courses highlighted the importance of well-informed strategies to achieving the common fundamental objectives of all regulators, as the best strategies will vary across countries and change within the same country over time. The competition analysis focused on the new EU competitive framework for EU NRAs, and exposed the complexity, difficulties and uncertainties of the new approach. Clearly the work for regulators will not be reduced under the new framework. Programs for the courses can be seen at www.lirne.net/training. ___________________________________________________ ___________________________________________________ CTI’s 8th Annual conference: Copyright and software patents: Open vs. proprietary paths The Center for Tele-Information (CTI), Technical University of Denmark, will hold its 8th annual international conference on December 4 and 5, 2003. The overall topic of the conference concerns open vs. proprietary development paths with respect to content and software production. Issues such the challenges posed by P2P Internet and new business models that are being developed alongside open software solutions. The conference will be held at the Technical University of Denmark. The best papers for the conference will be published in the international journal Telematics and Informatics in spring 2004 and the entire conference will be available online in real-time. More information at http://conference.cti.dtu.dk/. ___________________________________________________ ___________________________________________________ Radio, the Internet and rural development in Latin America New ICTs have irrevocably altered the world we live in – accelerating the pace and volume of innovation and fundamentally changing the way we transmit, receive, adapt and use knowledge and information and contributing to changes in markets, production methods, governance, and social relations. However, the “information revolution” has not spread to the world's one billion rural poor and for people in rural Latin America, it is an older ICT – broadcast radio – that connects them to their community and to the world. Radio is the most pervasive, accessible and flexible communication medium. Local radio stations are close to their communities, trusted and have intimate knowledge of their communities’ problems and capacities. When provided with access to the Internet and with the knowledge to make effective use of that access, these radio stations can be extraordinary “intermediaries”, bringing global knowledge to the most remote communities. The Onda Rural: Radio, new ICTs and rural development is an FAO sponsored conference that will take place in Quito, Ecuador in April 2003. For more information, visit http://onda-rural.net/. ___________________________________________________ ___________________________________________________ Questions and support If you have questions about WDR, send them to This e-mail address is being protected from spam bots, you need JavaScript enabled to view it For technical matters, contact us at This e-mail address is being protected from spam bots, you need JavaScript enabled to view it or see the Frequently Asked Questions section in the Online Dialogue. http://www.regulateonline.org/dialogue/ ___________________________________________________ ___________________________________________________ Subscribing and Unsubscribing The WDR e-Brief is a monthly bulletin from the World Dialogue on Regulation for Network Economies - http://www.regulateonline.org. 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Archives: http://www.comunica.org/w-agora/index.php?bn=wdr_ebrief ___________________________________________________ ___________________________________________________ The purpose of the World Dialogue on Regulation is to critically examine ideas and evidence. Unless otherwise indicated, the views expressed in content appearing on the WDR website, the Online Dialogue and the WDR e-Brief are the personal views of the individuals submitting them. Content does not necessarily reflect the views of LIRNE.NET, infoDev, the World Bank, the International Telecommunication Union, the International Development Research Centre or any other organisation associated with the World Dialogue on Regulation. ___________________________________________________ ___________________________________________________ World Dialogue on Regulation c/o LIRNE.NET Technical University of Denmark Center for Tele-Information, Building 371 2800 Kgs. 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