Dear Listers, We are now concluding the report on the above previously held Online discussion. Plse go through the summarised comments and we welcome any corrections, modifications or additions before end of day Wed 20th June 2007. Below Week 2&3 Summaries. Theme-Hierarchy of Providers Joseph Mucheru felt that the Internet Market Structure had not been sufficiently regulated to ensure the players (ISP & IGO) kept to the terms and conditions of their licence. He pointed out that whereas the current licensing regime stipulates that IGO do not do direct retail to consumers, this was not the case in practice. ISPs were also not expected to build their infrastructure since they were expected to lease capacity from the PDNOs but this was not the case in practise. Mucheru said that the industry had deteriorated to a level where all players are doing everything and anything to for profit gain and it was costing the country in terms of failure to leverage on the economies of scale had the licensing terms and conditions been adopted. Basically, Trust between IGOs, PDNO & ISP has been lost, making it very difficult to build economically efficient Internet Networks. Eric Osiakwan agreed by adding that the duplication of effort by the players results in enormous costs that are eventually dropped onto the Consumers. Theme- Statistics on Affordability Mucheru said that the main obstacles towards affordable internet services included the costs of the equipment, namely Modems, Satellite dishes, the PC and Installation Costs. However, given more users, these costs are likely to come down. Kai Wulff felt that the key thing to bringing down internet costs lay in developing local content- thus reducing the need to rely on international (external) content which in turn implied buying international bandwidth. Joan Walumbe said that awareness of Internet benefits particularly for the rural communities was necessary to create demand. Fatma Bashir agreed with Joans observation and added that there was a need to build information centers in the rural sector that could informally train users on the Internet. She commended KDNs initiative to link secondary schools to the Internet, saying that it would create a virtuous cycle where parents, their children and entrepreneurs can simultaneously benefit from the Internet. However, James Rege cautioned that Fiber alone could not address the Access component and other technologies will need to adopted for the last mile, such as WiMax, Wifi, Satellite amongst others. Florence Etta said that last mile solutions had a complex web of actors, services and possibilities and should be well planned and provisioned preferably with support from cheap sources of funding such as the African Development Bank (AfDB) Njenga MP said that considering most rural families lacked significant disposable incomes, it would be better to serve them using the Universal Service Fund which would subsidise their communication costs. But Wainaina Mungai argued that the rural community is actually not so financially indisposed particularly if their uptake for mobile telephony was anything to go by. He said that given the right access that focused on value-adding activities for their rural lifestyles, their Internet uptake will easily exceed expectations - along the same lines as their uptake for mobile telephony has. Dr. Bitange Ndemo felt that one way of making services available was by government providing the infrastructure on Open Access basis. He cited the case of the domestic link between the two Cities of Nairobi and Mombasa saying that the cost of bandwidth on this route was exorbitant despite the existing competition. Kai Wulff argued that the cost of the service was a function of usage and prices would essentially go down once usage picks up. But Brian Longwe interjected by saying usage was also a function of price, thus presenting what Eric Osiakwan referred to as the classic chicken and egg problem. In such a case, Eric said, it is always better for the Private Sector to take the business risk of adopting what Dr. Ndemo referred to as the concept of low prices high volume business models. Michael Joseph reminded members that it was worth noting that pricing was not the only key factor but service delivery, reliability, availability need to be considered. In general, industry standard Service Level Agreements (SLAs) that would encourage Operators to lease more bandwidth capacity from the upstream providers were critical. As Operators, he said, they will be needing more and more transmission capacity both within and outside the country and were therefore looking seriously at all the various proposals that are evolving. In particular, he said, they were looking forward to reviewing the detailed plans for the Regional FiberOptic network, including dates or termination points, pricing etc so as make their plan accordingly. Theme Statistics on Dispersion. Kai felt that the recent push by Government with the World Bank assistance in building internet infrastructure was presenting unfair competition to the private sector. He gave the example of the obvious failure by Government in providing fixed line services to the citizens through their public utility company Telkom Kenya. He argued that using the same approach in building domestic optical fiber infrastructure may lead to similar experiences, namely, little or no access, expensive and unreliable services. He strongly felt that Government should let the Private sector drive the build-up of the domestic fiber and furthermore, he expected that Government should be the largest consumer of the Private Sector build infrastructure. Becky Wanjiku, wondered if the Government could work in partnership with the Private Sector, by way of having MOUs that enabled Government to fund the communications projects while the private sector implemented and operated them. But Wanaina Mungai preferred that World-Bank type of Funding would be best accorded to Community Based Organisations (CBOs) but if given to Private Sector, then there would be need to ensure that the Profit motive is moderated. Lucy Kimani felt that both Government and Private Sector had a role in developing infrastructure. She said that both may however have different but justifiable reasons for getting involved. Private Sector may be keen in focusing in the urban (quicker return) areas whereas the Government had an obligation to ensure communication services reached all areas including more often than not, the non-economic, rural areas. Fatma said that the Government should however take on the key role of building capacity by way of providing roaming-digital-kiosks that would enlighten the users and stimulate demand for the Internet Services. Alice Munyua said that there was nothing wrong in the Government taking the lead in providing or building domestic fiber backbones. She cited the case of the Malaysian Government which built the Malaysian Super Corridor (MSC) which is a national information superhighway at cost of USD40 Billion. She added that Private sector would still have a role to play, particularly at the content, application and tech-skill levels. Eric Osiakwan said that it would be wrong to outrightly discourage Government intervention in Infrastructure development because it has had different results in different countries. He cited Turkey where he said that the Government intervention through the Turkish public utility company lead to massive expansion of Internet Services, but acknowledged that the same could not be said in the case for Kenya. Dr. Bitange Ndemo said that the purpose of the World Bank Loan was to stimulate demand a head of cheap bandwidth from the fibre cable. Areas that needed this type of stimulation include Rural ICT Centres, the Government, Universities and Colleges and BPOs. He added that the procurement of subsidized bandwidth will be done openly where all operators would have a chance. This does not in anyway compromise any Private sector initiatives because they would be paid the market rate of bandwidth. He explained that the participation of Government in construction of Terrestrial fibre networks and the undersea cable was to fast track availability of cheap bandwidth that would in turn help the economy to grow faster. Secondly, he said that Kenya needed an Open Access model that would help SMEs in the country to compete with the big Operators, like Jamii Telecom, KDN and the rest.. He added that the Private sector had failed to provide the necessary infrastructure for economic development and no Private Operator had shown interest in rural Kenya until the Government made the business case for rural ICTs. He however assured the Private Sector that Government had no interest in competing with them. Government role was to facilitate development. Infrastructure in the ICT Sector had lagged behind and what the Government was doing was simply to facilitate its development and leave the Private Sector to compete in an Open Access platform. He reiterated that Government had the obligation to enable every Kenyan citizen to play a role in economic development especially the SMEs that constitute 95% of businesses in the country. He concluded by saying that there was absolutely nothing wrong with borrowing from the WB to stimulate demand for the investment Government was making in the ICT sector. Some of the funds would be used to develop capacity to utilize ICTs and development of local content. Essentially, Government was simply stimulating demand that would become consumers of Private Sector products. Alex Gakuru gave a general reaction that touched on both Affordability and Dispersion Issues. On local content, he suggested that all government departments should now be having web content while KENIC should be encouraged to bring down their domain registrations fees. On the demand issue, he urged Operators to think outside their traditional markets and start enlisting new communities such as Church Ministries amongst others. On Education, he said there maybe need to seek for trust funds to continuously educate Users while on Infrastructure, he commended the Government on their move to facilitate a national reach for communications. Harry Hare added that ICT Infrastructure development should actually be elevated to the same level as National Road or Power Infrastructure. Infact, he suggested, that all the three, ICT, Road and Power Infrastructure should be planned in sync to avoid duplication of effort where the ICT people are often seen digging up through roads that were constructed with little or no provision for Data-ducts. Theme - Impact of the Recommendations Alex Gakuru supported most of the recommendations but cautioned against any Government takeover of the KIXP. Eric wondered why the Regulator would be building the Infrastructure but Professor Meoli Kashorda corrected the misconception by saying that it was the Government that had been tasked with that exercise. He further elaborated what was meant by a National Information Infrastructure (NII). He said that a NII was actually an ICT strategy that was aligned to the national strategic economic plans (ref Singapore, Mauritius, China NII ). That is, NII aligns the national economic/development strategy with the national ICT strategy (rather than just policy). He added that, that was the only way to translate infrastructure to traffic and therefore revenue for the operators. Brain Longwe also supported most of the recommendations with cautions on a few. In particular, on the issue of dissolving the separation between ISPs and IGOs, he was of the idea that it would be better to start a fresh licensing regime subsequent to a stakeholders meeting that discussed what the future internet market would look like. The new licensing regime should then aim at structuring the critical areas within such a vision while being fairly open with the non-crtical areas On SLAs, he felt that it was easier to stipulate the Internet standard but it maybe quite a challenge to monitor the same for enforcement. ====Ends==== walu. ____________________________________________________________________________________ Luggage? GPS? Comic books? Check out fitting gifts for grads at Yahoo! Search http://search.yahoo.com/search?fr=oni_on_mail&p=graduation+gifts&cs=bz