Open Access: Enabling Broadband

Connectivity in Kenya

Mwende NjirainiDissertation presentation

Masters in Communications Management

University of Strathclyde, 2006Disclaimer: Views expressed here (except those quoted or referenced) are the author’s own

Project motivation

• Information society commitments for broadband connectivity

• Increased use of VoIP• East African Submarine Cable• Purpose of research:

– Highlight the key aspects of the open access concept in the telecommunications industry

– Analyse the application of open access through an examination of various case studies

– Test the applicability of the open access concept in the Kenyan context

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Options for Delivering Broadband

1st Option• Facilities

based competition

2nd Option• Service based

competition – Local Loop unbundling

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3rd Option: Open Access

• Multiple competitors use a common shared infrastructure/platform - under equivalent terms and conditions

• Customers can elect services from alternative providers

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Contextual Understanding

• United States– Open access to information and content – Access to cable networks by non-affiliated ISPs– Access to municipality networks

• Europe– Regulatory framework - open network provision– Open access is a criteria for state aid to

telecommunication infrastructure

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OAN Characteristics

• Broadband capacity - operated and maintained by an operator who is not a service provider

• Serve a geographic location - local community town or city

• ‘A public utility for the information society’ – providing free choice of service providers and unfettered access to users

• Operated on an open access basis - owned and controlled independently of any service or content which runs over it.

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OAN Drivers

• Perception of social and economic development of broadband infrastructure

• Private operators inability to deliver ubiquitous access to affordable services

• Introduction of IP networks

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OAN Benefits

• Demand side– Freedom to choose from numerous resources and

services – Freedom to create and avail relevant content as well

as introduce new services without economic justification

• Supply side– Facilitates new entrants access to existing

infrastructure• Reducing barriers to entry• Improved efficiency to capital allocation

– Reduces monopoly risks - exploiting the advantages of vertical integration

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Freedom of choice to customers

ISP 1

Tele 1

TV 1

TV

PC

TV

PC

TV

PC

TV

PC

LAN

OAN ISP 2

Tele 2

TV 2

Services fromLocal & Regional

Authority

Source: www.stokab.se

OAN Benefits

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OAN Principles

• Any one can play

• Technological Neutrality

• Fair and non-discriminatory competition at all layers

• Transparency to ensure fair trading within and between layers

• Devolved rather than centralized solutions

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Typical Wired OAN

‘Layer 0’ Duct

‘Layer 1’ Dark Fibre

‘Layer 2’ Band width

‘Layer 3’ Services

Customers

Source: www.stokab.se

Information providers

Telecom operators

Telecom operators

Municipality/community

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Fibre OAN

www.stokab.se 12

Typical Wireless OAN

Source:http://commerce.senate.gov/pdf/berryman-021406.pdf 13

OAN: Regulatory Framework

• Traditional vertical orientated regulatory structure – interconnection distortions, – universal service concerns, – disincentive for the investment

• Converged, Technology neutral, layered regulation– functionally similar services –

regulated in the same way

• Licences categories:– service– service infrastructure– transport infrastructure

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Case studies• Nepal Wireless Networking Project:

– Technology: open access architecture, open source software, licence-exempt wireless technologies

– Community driven• Stokab

– Competition-neutral – Public utility provided on commercial terms– Politically driven: ‘an information society for all’

• Knysna Municipality network– Public private partnership with UniNet – wireless ISP – Licence exempt wireless technologies– Politically driven: Anchor tenant

• Utah Telecommunication Open Infrastructure Agency (UTOPIA)– Collaboration of 18 municipalities – FTTH open publicly-owned network

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Case studies

• Two broad categories of OAN– Community/cooperative networks

• end-user-equipment-centric networking models• emergence of cheap wireless technologies

– Municipal networks• economic development and improving the quality of life of citizens• operators were unwillingness to invest

• Operating models– Non profit model– Cooperative model– Public-private partnership model– Municipal model– Government loan-grant model

» Source FTC, 2006

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Kenyan Market

• Infrastructure improvements – pursued through sector reform – Delivery of broadband minimal

• Evolution of the market structure– Network Facilities Provider – Applications Service Provider – Contents Services Provider

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Testing Applicability of OAN in Kenya

• Access infrastructure – circuit switched, new IP networks

• Regulatory environment – licence exempt frequency, structural separation and layered licensing

• Operating environment – Incumbent and licensed operators

• Choice of technology – Wired and wireless depending on demography and topology

• Appropriate operating model – PPP and cooperative

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East African Submarine System (EASSy)

• Run from Port Sudan to Durban:8,840km

• Capacity: 16 or 32 wavelength at 10Gb/s, total capacity of 320 or 640 Gb/s

• Originally structured to operate as a consortia

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Open Access on EASSY

• Special purpose vehicle: Single entity public private partnership ownership structure– equal ownership and participation opportunities by

new entrants– Direct access to additional operators without paying

high entry charges

• Challenges: – harmonisation of regulatory frameworks– Participants have an objective of profit-making rather

than providing a public service

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Lessons

• Absence of specific policy and regulatory frameworks.

• Community driven with non-profit motive

• Infrastructure provided as public utility

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Analysis and Recommendations

• OAN run counter to sector reform objectives– From Competition to Single network provision– From private sector provision to government provision

• Recommendations– Government incentives– Demand analysis– Regulatory intervention– Access to public infrastructure – Content development– National broadband policy– Spectrum policy

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Conclusion

• Conventional strategies not sufficient to deliver broadband infrastructure

• OAN deployed by government and communities due to market failure

• OAN allow competitive entry at different layers encouraging innovative, low-cost service delivery to users

• Kenya has an ‘open access friendly’ regulatory environment

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Personal Reflection

• Selection and structuring of the project in the initial stages critical

• Emerging topics may not have the sufficient literature

• Keeping a positive attitude is critical– Do not panic– ‘Rome was built in one day’– Ambitions should be informed

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