Raqueeb Hassan
2008-05-31 12:34:43 UTC
1. Country $B!H(BA$B!I(B plans to provide end to end Internet connectivity to
its residents at affordable cost. Though, it is as small as New York
State, but the estimated population is almost 150 million. Country $B!H(BA$B!I(B
is concerned that the Internet penetration rate is as low as 0.4
percent till date. The country is connected to only one submarine
Internet backbone, installed at a cost about 94 million U.S. dollars
back in 2006, but almost 90% of its capacity has remained un-utilized,
due mostly to its initial high tariff rates, lack of proper nationwide
telecommunications backbone infrastructure and its pricing model which
failed to promise the ability to reach it$B!G(Bs prospective subscribers in
under-privileged areas. As usual, the state owned incumbent phone/
Internet company could not reach those unconnected as expected and
they long ago amortized the cost of their fewer copper network, as
they hardly added new connections over the years, and spent barely
anything on expanding it. The e-commerce could not start, as you have
guessed it right - where is the connectivity?
2. Let$B!G(Bs get to some of the basic facts which will determine the
Internet business cases viable for this country. The country is very
flat, I would say, it is the radio propagation heaven. The population
is heavily dense, which means you get to meet more than 2700 people in
a square mile. This will bring the thought in your mind that
investment on infrastructure will have its return over night. That$B!G(Bs
why the local subsidiary of foreign cell phone companies is earning
their fortune here. The single radio BTS don$B!G(Bt even need to reach out
to cover cell planning area, because it gets filled up way before half
of its expected coverage.
3. The per capita GDP is close to US$ 470 (as estimated in 2007) which
will depict the baseline of affordability of the common people. I
would say, the lowest Internet connectivity tariff may start at 4 USD,
because that *really* can be termed as affordable for this country. I
understand Maintaining QoS of Internet at this price can be
challenging, but the existing broadband policy sets 128 kpbs as a
minimum for time being. Here most of the existing (mostly unlicensed)
ISP$B!G(Bs don$B!G(Bt care about the contention ratio for the home users,
because with the existing higher bandwidth pricing, it is nearly
impossible to provide good contention ration like 1:20 or 1:30 with
8-9 USD. The taxation on CPE (modems) is also arbitrarily high to get
the cost down.
4. Say, right now, the policy makers of this country really want to
connect all the unconnected like providing universal access services
obligation. Let$B!G(Bs set the initial connection speed to 64 kpbs for some
time to get the initial cost down. While there is very less
infrastructure on copper or fiber (FTTH and ADSL relies heavily on
infrastructure) in this country, Broadband Wireless Access (BWA)
technologies can be life saver for reaching everyone. The population
density, the vibrant private sector with state support for ICT should
be able to deliver when it comes to connecting those unconnected. Here
technologies like WiMAX/Wi-Fi and HSPA can be good contenders for
connecting everyone wirelessly. For most countries, these BWA services
are complementary to those offered by ADSL/cable and FTTH, but here
the scenario is different now. For reaching everyone, it (BWA) has to
be the primary stop gap solution before the real infrastructure comes
up. We have to give it a time. With regard to spectrum costs and
charges, telecommunication experts sometimes opine that charges paid
for radio spectrum exceeding the costs for administrative spectrum
management $B!>(B either caused by auctions or set in beauty contest$B!G(Bs
spectrum fees $B!>(B should be avoided as far as possible and in any case
should flow back into the telecommunications sector for the benefit of
the information society of a country. The attribution processes should
be judged on merits how the country is benefited, and not to consider
this as an opportunity for governments to withdraw additional money
from this sector in order to reduce their budget deficit. For future
expansions, experts generally support the principle of $B!H(Btechnology
neutrality$B!I(B as proposed by other regulatory authorities for the
optimum delivery of BWA services.
5. Now, let$B!G(Bs say, we have devised BWA services to be the best
methodology to bridge the digital divide quickly. Before opening up
these BWA operations to private sector, the country needs to figure
out what is best way to reach its goal. That is why the authorization
of Telecommunications Services to the companies and right to use radio
spectrum and licensing rural and universal access services should be
dealt differently. Other countries which has ADSL and FTTH up and
running might have the luxury to earn extra cash by auctioning, but we
have be little careful about that. Let me put something from ICT
regulatory toolkit document $B!D(B.
$B!H(BThere are significant differences in the authorization practices in
force in different countries. At one end of the spectrum are wide-open
authorization regimes, where no form of governmental approval is
required to start a telecommunications service business or to operate
network facilities. At the other end are individual licensing regimes
with lengthy licence documents customized to the circumstances of a
specific service provider. In between are many forms of general
authorization or $B!H(Bclass licences$B!I(B that authorize and provide generally
applicable regulatory conditions for classes of telecommunications
service providers.$B!I(B
6. We hear loads of good thing about spectrum auctioning but it does
not work when it comes to using it for universal access services. But,
it is true that as per the Telecommunication Regulatory Handbook, in
least-cost subsidy auctions, a selection is made based on which
qualified applicant requires the lowest subsidy to provide a non-
economic service. The services authorized using a least-cost subsidy
auction is generally subsidized as part of a country$B!G(Bs universal
access program. This country $B!H(BA$B!I(B is yet to work on that kind of
program right at this moment. Others would say, prices for mobile
communications services in the United States continue to drop despite
the billions of dollars paid for licenses in FCC auctions. Those who
claim that bid prices will be passed through to consumers have yet to
provide a sound economic argument or to show any empirical evidence
that this has occurred anywhere in the world. It$B!G(Bs confusing, it is!
7. On the contrary, beauty contest seems to the most adequate method
to allocate the spectrum licenses because the regulatory authority is
in a position to design the comparable criteria around the country$B!G(Bs
need. It (merit based comparative evaluation approach) has its
downside for not being that transparent like auction. Most of the
comparative evaluations require the applicants to make the best use of
the limited resources associated with the license to serve the public.
That saves the hidden cost passed on to the subscribers. It also
relies in part on quantitative measures, such as the time it might
take to cover the whole area (coverage obligation), the number of
years of operational experience. Others rely on more qualitative (and
thus subjective) criteria, such as the management skill. But, it
brings out the applicants technical competence, experience, and cost
efficiency. Some regulators might even put specific criteria like the
lowest tariff for Internet connectivity to the home users. This
requires the applicants to review their business case to offer the
lowest tariff based on its ROI. This exercise makes the prospective
service provider to open up its business case to the evaluator. The
evaluation committee might have to get down calculating the cost per
Hz per population, which seems a great idea to minimize the cost as
this will be passed on to the subscribers. But, its success largely
depends on building a smart merit based comparative evaluation metrics
(criteria) with some pre-set list of selection criteria with the
distribution of weight-age. Those can be listed under some broad head
like, Business Plan, Telecommunications Sector Experience and
Financial Strength and Stability and Network roll-out obligation.
8. Here$B!G(Bs how I thought of building one from some of the regulatory
consultation papers $B!D(B
Merit Based Evaluation on Defined Performance Metrics
1. Past Performance (should the country consider licensing from
existing operators).
a) Service Roll-out and Coverage
aa) Coverage Provided (a. Number of transmitters, b. Number of base
station sites and their demographic distribution, c. Percentage of
Land mass and Population receiving coverage from Applicant$B!G(Bs network,
d. throughput)
bb) Spectrum Efficiency (a. Earlngs per MHz of spectrum allocated, b.
Quality of Service based of allocated spectrum, spectrum reuse
schemes)
b) Delivered Telephony Penetration
aa) Number of subscribers served, Subscriber Growth, Subscribers per
MHz of spectrum.
bb) Urban Penetration (Contribution to penetration over 5 Year
period, Spectral efficiency in terms of cell planning in dense area)
cc) Rural Penetration (Contribution to penetration over 5 year period,
aggressive pricing scheme to reach the under privileged area)
c) Investment
aa) Financial Standing (Audited financial statements for the past 3
years to assess operational track record)
bb) Investment Record (Annual investments on network and non network
capital assets over the last 5 years)
d) Regulatory Compliance
aa) Compliance Confirmation (Minor and major violations if any, show
causes also to be considered)
e) Technology Development
aa) New Services (Number of new services introduced over last 5 years)
bb) New Technologies (Pioneering technologies introduced over the last
5 years)
cc) Local R&D (Locally developed products and the contents)
dd) Technology (development contribution to ICT sector partnerships
established to promote/assist local ICT sector)
f) Quality of Service
aa) Network Performance, Fault Incidence and Repair, Customer service
complain handling, throughput as promised
bb) Ability to provide broadband service with the expected contention
ratio
9. Now, when inviting new players it to this BWA regime, we need to
evaluate their business case to evaluate their capability to roll-out
throughout the country.
a. The Business Plan
1) Pricing of services, the introduction of services and distribution
plans.
2) Local employment, skills transfer and training.
3) The involvement of local businesses either as shareholders,
partners or as suppliers of goods and services leading to reinvestment
in the Country $B!H(BA$B!I(Bs economy, and minimizing the exportation of
economic benefits.
4) Geographical coverage and coverage in terms of population, of
network and services, and rate of roll out. (Number of transmitters
and roll out plan, number of base station sites and their demographic
distribution along with implementation time-line, i.e. service launch
time-line of pilot service, full commercial service, network
deployment plan etc.)
5) Promotion of applications and content services development,
6) Promotion of Human Resource Development such as job creation,
knowledge development etc.
7) Range and quality in the BWA services provided by the Applicant.
8) Evidence of primary and secondary market research supporting
forecasts and financial plans.
9) Financial aspects related to the planned BWA network, particularly
evidence of the necessary funding and commitment to funding the
business.
10) Experience and track record under comparable conditions, and
proven ability and capability to deliver commitments made in
competitive markets.
11) The overall soundness and quality of the business plan.
b. Miscellaneous Obligations
a) Country $B!H(BA$B!I(B would love to have proposals from the applicant to
provide free basic 256 kbps wireless broadband services to all the
public schools for the first year. This enables all the schools to be
connected to Internet. It makes a CSR (corporate social
responsibility) case for them.
b) Valued users to be provided the enhanced mobility services
including voice-over-IP, video conferencing, online gaming, location-
based services etc.
c) Right to share its own infrastructure and should not invest on
newer infrastructure when competitors have that already.
9. Some experts says that new operator should not be barred from
providing some services like voice when home broadband phone can never
take away Cell Phone$B!G(Bs position, at least for next 10 years here in
this country $B!H(BA$B!I(B. Voice is still a prime service here in this country.
This can be done in order to allow new operators to join the market
simply without constraints until a SMP state is reached. In this later
case, some constrains might be imposed to guarantee that the free
competition is in conformity with the free competition regulatory
framework. Also, required modification in regulations to make spectrum
available and harmonize use of spectrum across international
boundaries can only pave its way to connect the unconnected.
10. Please provide me some feedback on making a great Merit Based
Evaluation form on defined performance metrics. What more should I
include to make it somehow full proof to get the widest coverage of
Internet with the lowest tariff?
[Consultation papers from NTRA, OFCOM, TRCSL, Maravedis, TRA
(Bahrain), CSK, OECD, OFTA, Industry Canada, MCA, ECC, GSA, HTLL, IDA,
ETNO, IEEE 802 LMSC, MPT and NTA were really helpful to make these
metrics]
Sincerely Yours,
Raqueeb Hassan
Saturday, May 31, 2008
http://wideangle.googlepages.com/
its residents at affordable cost. Though, it is as small as New York
State, but the estimated population is almost 150 million. Country $B!H(BA$B!I(B
is concerned that the Internet penetration rate is as low as 0.4
percent till date. The country is connected to only one submarine
Internet backbone, installed at a cost about 94 million U.S. dollars
back in 2006, but almost 90% of its capacity has remained un-utilized,
due mostly to its initial high tariff rates, lack of proper nationwide
telecommunications backbone infrastructure and its pricing model which
failed to promise the ability to reach it$B!G(Bs prospective subscribers in
under-privileged areas. As usual, the state owned incumbent phone/
Internet company could not reach those unconnected as expected and
they long ago amortized the cost of their fewer copper network, as
they hardly added new connections over the years, and spent barely
anything on expanding it. The e-commerce could not start, as you have
guessed it right - where is the connectivity?
2. Let$B!G(Bs get to some of the basic facts which will determine the
Internet business cases viable for this country. The country is very
flat, I would say, it is the radio propagation heaven. The population
is heavily dense, which means you get to meet more than 2700 people in
a square mile. This will bring the thought in your mind that
investment on infrastructure will have its return over night. That$B!G(Bs
why the local subsidiary of foreign cell phone companies is earning
their fortune here. The single radio BTS don$B!G(Bt even need to reach out
to cover cell planning area, because it gets filled up way before half
of its expected coverage.
3. The per capita GDP is close to US$ 470 (as estimated in 2007) which
will depict the baseline of affordability of the common people. I
would say, the lowest Internet connectivity tariff may start at 4 USD,
because that *really* can be termed as affordable for this country. I
understand Maintaining QoS of Internet at this price can be
challenging, but the existing broadband policy sets 128 kpbs as a
minimum for time being. Here most of the existing (mostly unlicensed)
ISP$B!G(Bs don$B!G(Bt care about the contention ratio for the home users,
because with the existing higher bandwidth pricing, it is nearly
impossible to provide good contention ration like 1:20 or 1:30 with
8-9 USD. The taxation on CPE (modems) is also arbitrarily high to get
the cost down.
4. Say, right now, the policy makers of this country really want to
connect all the unconnected like providing universal access services
obligation. Let$B!G(Bs set the initial connection speed to 64 kpbs for some
time to get the initial cost down. While there is very less
infrastructure on copper or fiber (FTTH and ADSL relies heavily on
infrastructure) in this country, Broadband Wireless Access (BWA)
technologies can be life saver for reaching everyone. The population
density, the vibrant private sector with state support for ICT should
be able to deliver when it comes to connecting those unconnected. Here
technologies like WiMAX/Wi-Fi and HSPA can be good contenders for
connecting everyone wirelessly. For most countries, these BWA services
are complementary to those offered by ADSL/cable and FTTH, but here
the scenario is different now. For reaching everyone, it (BWA) has to
be the primary stop gap solution before the real infrastructure comes
up. We have to give it a time. With regard to spectrum costs and
charges, telecommunication experts sometimes opine that charges paid
for radio spectrum exceeding the costs for administrative spectrum
management $B!>(B either caused by auctions or set in beauty contest$B!G(Bs
spectrum fees $B!>(B should be avoided as far as possible and in any case
should flow back into the telecommunications sector for the benefit of
the information society of a country. The attribution processes should
be judged on merits how the country is benefited, and not to consider
this as an opportunity for governments to withdraw additional money
from this sector in order to reduce their budget deficit. For future
expansions, experts generally support the principle of $B!H(Btechnology
neutrality$B!I(B as proposed by other regulatory authorities for the
optimum delivery of BWA services.
5. Now, let$B!G(Bs say, we have devised BWA services to be the best
methodology to bridge the digital divide quickly. Before opening up
these BWA operations to private sector, the country needs to figure
out what is best way to reach its goal. That is why the authorization
of Telecommunications Services to the companies and right to use radio
spectrum and licensing rural and universal access services should be
dealt differently. Other countries which has ADSL and FTTH up and
running might have the luxury to earn extra cash by auctioning, but we
have be little careful about that. Let me put something from ICT
regulatory toolkit document $B!D(B.
$B!H(BThere are significant differences in the authorization practices in
force in different countries. At one end of the spectrum are wide-open
authorization regimes, where no form of governmental approval is
required to start a telecommunications service business or to operate
network facilities. At the other end are individual licensing regimes
with lengthy licence documents customized to the circumstances of a
specific service provider. In between are many forms of general
authorization or $B!H(Bclass licences$B!I(B that authorize and provide generally
applicable regulatory conditions for classes of telecommunications
service providers.$B!I(B
6. We hear loads of good thing about spectrum auctioning but it does
not work when it comes to using it for universal access services. But,
it is true that as per the Telecommunication Regulatory Handbook, in
least-cost subsidy auctions, a selection is made based on which
qualified applicant requires the lowest subsidy to provide a non-
economic service. The services authorized using a least-cost subsidy
auction is generally subsidized as part of a country$B!G(Bs universal
access program. This country $B!H(BA$B!I(B is yet to work on that kind of
program right at this moment. Others would say, prices for mobile
communications services in the United States continue to drop despite
the billions of dollars paid for licenses in FCC auctions. Those who
claim that bid prices will be passed through to consumers have yet to
provide a sound economic argument or to show any empirical evidence
that this has occurred anywhere in the world. It$B!G(Bs confusing, it is!
7. On the contrary, beauty contest seems to the most adequate method
to allocate the spectrum licenses because the regulatory authority is
in a position to design the comparable criteria around the country$B!G(Bs
need. It (merit based comparative evaluation approach) has its
downside for not being that transparent like auction. Most of the
comparative evaluations require the applicants to make the best use of
the limited resources associated with the license to serve the public.
That saves the hidden cost passed on to the subscribers. It also
relies in part on quantitative measures, such as the time it might
take to cover the whole area (coverage obligation), the number of
years of operational experience. Others rely on more qualitative (and
thus subjective) criteria, such as the management skill. But, it
brings out the applicants technical competence, experience, and cost
efficiency. Some regulators might even put specific criteria like the
lowest tariff for Internet connectivity to the home users. This
requires the applicants to review their business case to offer the
lowest tariff based on its ROI. This exercise makes the prospective
service provider to open up its business case to the evaluator. The
evaluation committee might have to get down calculating the cost per
Hz per population, which seems a great idea to minimize the cost as
this will be passed on to the subscribers. But, its success largely
depends on building a smart merit based comparative evaluation metrics
(criteria) with some pre-set list of selection criteria with the
distribution of weight-age. Those can be listed under some broad head
like, Business Plan, Telecommunications Sector Experience and
Financial Strength and Stability and Network roll-out obligation.
8. Here$B!G(Bs how I thought of building one from some of the regulatory
consultation papers $B!D(B
Merit Based Evaluation on Defined Performance Metrics
1. Past Performance (should the country consider licensing from
existing operators).
a) Service Roll-out and Coverage
aa) Coverage Provided (a. Number of transmitters, b. Number of base
station sites and their demographic distribution, c. Percentage of
Land mass and Population receiving coverage from Applicant$B!G(Bs network,
d. throughput)
bb) Spectrum Efficiency (a. Earlngs per MHz of spectrum allocated, b.
Quality of Service based of allocated spectrum, spectrum reuse
schemes)
b) Delivered Telephony Penetration
aa) Number of subscribers served, Subscriber Growth, Subscribers per
MHz of spectrum.
bb) Urban Penetration (Contribution to penetration over 5 Year
period, Spectral efficiency in terms of cell planning in dense area)
cc) Rural Penetration (Contribution to penetration over 5 year period,
aggressive pricing scheme to reach the under privileged area)
c) Investment
aa) Financial Standing (Audited financial statements for the past 3
years to assess operational track record)
bb) Investment Record (Annual investments on network and non network
capital assets over the last 5 years)
d) Regulatory Compliance
aa) Compliance Confirmation (Minor and major violations if any, show
causes also to be considered)
e) Technology Development
aa) New Services (Number of new services introduced over last 5 years)
bb) New Technologies (Pioneering technologies introduced over the last
5 years)
cc) Local R&D (Locally developed products and the contents)
dd) Technology (development contribution to ICT sector partnerships
established to promote/assist local ICT sector)
f) Quality of Service
aa) Network Performance, Fault Incidence and Repair, Customer service
complain handling, throughput as promised
bb) Ability to provide broadband service with the expected contention
ratio
9. Now, when inviting new players it to this BWA regime, we need to
evaluate their business case to evaluate their capability to roll-out
throughout the country.
a. The Business Plan
1) Pricing of services, the introduction of services and distribution
plans.
2) Local employment, skills transfer and training.
3) The involvement of local businesses either as shareholders,
partners or as suppliers of goods and services leading to reinvestment
in the Country $B!H(BA$B!I(Bs economy, and minimizing the exportation of
economic benefits.
4) Geographical coverage and coverage in terms of population, of
network and services, and rate of roll out. (Number of transmitters
and roll out plan, number of base station sites and their demographic
distribution along with implementation time-line, i.e. service launch
time-line of pilot service, full commercial service, network
deployment plan etc.)
5) Promotion of applications and content services development,
6) Promotion of Human Resource Development such as job creation,
knowledge development etc.
7) Range and quality in the BWA services provided by the Applicant.
8) Evidence of primary and secondary market research supporting
forecasts and financial plans.
9) Financial aspects related to the planned BWA network, particularly
evidence of the necessary funding and commitment to funding the
business.
10) Experience and track record under comparable conditions, and
proven ability and capability to deliver commitments made in
competitive markets.
11) The overall soundness and quality of the business plan.
b. Miscellaneous Obligations
a) Country $B!H(BA$B!I(B would love to have proposals from the applicant to
provide free basic 256 kbps wireless broadband services to all the
public schools for the first year. This enables all the schools to be
connected to Internet. It makes a CSR (corporate social
responsibility) case for them.
b) Valued users to be provided the enhanced mobility services
including voice-over-IP, video conferencing, online gaming, location-
based services etc.
c) Right to share its own infrastructure and should not invest on
newer infrastructure when competitors have that already.
9. Some experts says that new operator should not be barred from
providing some services like voice when home broadband phone can never
take away Cell Phone$B!G(Bs position, at least for next 10 years here in
this country $B!H(BA$B!I(B. Voice is still a prime service here in this country.
This can be done in order to allow new operators to join the market
simply without constraints until a SMP state is reached. In this later
case, some constrains might be imposed to guarantee that the free
competition is in conformity with the free competition regulatory
framework. Also, required modification in regulations to make spectrum
available and harmonize use of spectrum across international
boundaries can only pave its way to connect the unconnected.
10. Please provide me some feedback on making a great Merit Based
Evaluation form on defined performance metrics. What more should I
include to make it somehow full proof to get the widest coverage of
Internet with the lowest tariff?
[Consultation papers from NTRA, OFCOM, TRCSL, Maravedis, TRA
(Bahrain), CSK, OECD, OFTA, Industry Canada, MCA, ECC, GSA, HTLL, IDA,
ETNO, IEEE 802 LMSC, MPT and NTA were really helpful to make these
metrics]
Sincerely Yours,
Raqueeb Hassan
Saturday, May 31, 2008
http://wideangle.googlepages.com/