License to Bill

[This week’s Communications column for the Vanuatu Independent.]

The next phase of the government’s telecommunications strategy is under way.

A little over a week ago, the Ministry of Infrastructure and Public Utilities began a public consultation process designed to gather feedback on the next set of telecommunications licenses, which should be available in the coming months.

Copies of the draft licensing policy are available at the Ministry offices, or you can get them courtesy of the Vanuatu IT Users Society at

This kind of thing is tedious, detailed and boring for virtually everyone concerned. It’s also a critical step in Vanuatu’s development. Hidden inside the legalese are important questions concerning Internet access in the islands and the need to ensure that the fundamental rights of freedom of speech and access to information are protected.

It’s encouraging, therefore, to see that the Ministry continues to pursue its telecommunications policy in an open and transparent manner. Individually and collectively, the people involved in this process have been assiduous and determined every step of the way. The fact that most of those involved have been given a renewed mandate by voters bodes well for the process.

Fundamentally, the approach taken by the Ministry toward new licenses is quite enlightened. The idea is to create as level a playing field as possible, then to allow competition to determine who thrives and who doesn’t.

Allowing people to vote with their wallets has been proven to work. If one operator offers poor customer service or sets their prices too high, people can simply take their business to the competition. This does a great deal to reduce the regulatory burden and lowers the cost of maintaining the system. In this scenario, the regulator’s main role is simply to ensure that everyone is playing fair. As long as we don’t see any evidence of illegal collusion or obstruction, we can leave the competitors to duke it out for our business.

There’s every reason to be optimistic about this. Even when there are only two competitors present, they tend to do the right thing. When asked whether we should expect cartel-like behaviour between Digicel and TVL, one expert gave a categorical ‘no’. He went on to state that he’s watched how they work in numerous other countries and has never seen a shred of evidence of collusion. “That’s not their style,” he said. “Digicel plays to win, not to place.”

The mobile market won’t be expanded in this next round, but there are numerous areas of interest, not only to our incumbents but to numerous others. Internet services are the most discussed. Their appeal is obvious. While the quality of Internet service is markedly better here than in most other Pacific nations, prices remain dauntingly high.

Incipient demand is immense. It’s extremely hard to quantify, but if my experience and that of my colleagues in the field is any indicator, everyone who can afford Internet access will get it.

And that, dear reader, is the key. We have funding mechanisms in place to ensure access to communications in un-serviced areas, but it’s not yet clear whether Internet access will be considered of equal importance to basic GSM services, or whether it will be considered a luxury. If economies of scale and Network Effects are allowed to flourish in an open market setting, we can reasonably expect prices to reach a fraction of their current levels.

The level of service in rural areas might not be what the average Sydney-sider is accustomed to, but it could be enough to ensure the rapid dissemination of all kinds of information that won’t readily fit into an SMS message.

It’s difficult to overstate the effect this could have on Vanuatu society. Populist Independent MP Ralph Regenvanu cited a well-informed and well-educated constituency as the critical factor in his record-setting plurality. Imagine these same effects stretching from the Torres Islands right down to Aneityum.

Mobile telephones have demonstrably augmented the one-to-one social interactions that make up much of Vanuatu society. But only public online forums, mailing lists and other social networking services can supplement the village nasara, allowing ni-Vanuatu nationwide to speak and act in a truly national context.

As things stand right now, the draft telecom licensing policy seems to lean somewhat on the assumption that Internet is a relatively expensive luxury service, requiring large investment, and therefore viable only in population centres like Vila and Santo. In fairness, there’s no explicit mention of this, but a few of the conditions seem predicated on that assumption.

The first thing that catches one’s attention when reading the proposed policy is the lack of clarity surrounding the exact status of Internet Service Providers. There’s an unequivocal statement that all Telecommunications Service Providers – a technical definition drawn from the 1989 Telecommunications Act that refers to anyone operating a public access network – must be licensed.

It will be necessary to clarify this definition. As of now, it covers services that remain unlicensed in most other democratic nations. Small-scale commercial ISPs are an obvious example, but there are many, many more.

If all telecommunications service providers must be licensed, the government retains control over how these services are used. This level of control is neither desirable nor necessary.

It’s not necessary for explicit limits on free speech to exist before government abuse becomes possible. Simply put, the ‘chilling effect’ of knowing that you might have your license revoked or redefined if some types of information cross your network would be enough to establish de facto censorship.

Given the behaviour of past governments with regard to ‘inconvenient truths’, the potential for abuse of this power is significant. The most recent example of this is the censorship of a paid political announcement by one of the candidates in the most recent election. TBV was pressured into excising the names of certain rival politicians by an outgoing minister of state. This in spite of the fact that the candidate was simply repeating the contents of an Ombudsman’s report.

In an effort to create a level playing field, it’s been proposed that all license holders must remit 6.25% of their revenues in license fees and Universal Access Fund payments. That’s a commendable sentiment, but the proposed licensing and fee remittance processes assume a high degree of understanding of western business concepts, including high-level language skills, numeracy and record management capability.

It also seems to assume that telecommunications services will be provided only on a for-profit basis. Numerous small-scale projects already underway could find themselves burdened with additional administrative costs.

In the current Telecommunications Act, a clear distinction exists between carriers (i.e. those who provide basic bandwidth) and those who re-sell basic services with value-added elements. The value added network exclusion allows companies like CNS to operate Internet cafes and wireless hotspot services. If the act is changed, however, removing the value added network exemption might impact on such activities as well.

Discussion on the VIGNET mailing list has been extensive. But more needs to be done. The government has been good enough to ask for our opinion. Let’s do our part.

The decisions we make today will live with us for years to come. We need to ensure that this license policy is inclusive of all Vanuatu residents and responsive to everyone’s needs.