Archive for August, 2009

FCC investigating trans-sector opportunities of FttH

Monday, August 31st, 2009

Earlier this year I led a group of international colleagues (Big Think Strategies) in the presentation of a range of Big Think Reports to the Obama Transition Team – all in relation to the future of telecoms in the USA.

The trans-sector concept means that an investment in infrastructure should be based on the economic and social multiplier effect of that investment in other sectors such as healthcare, education, entertainment, energy and communications. This demands a high-level of leadership from above the silo structure of the individual sectors.

One of the key reports presented was on Open Networks, utilising some of the open network wholesale principles as they had been developed by the Digital Economy Industry Working Group in Australia.

The Big Think team was very pleased when the Obama Administration at the White House took the lead and included a request for ‘open networks’ in its Broadband Stimulus Package and its Smart Grid Stimulus Package.

At that stage the FCC was still working under the policy structure of the previous government, which had greatly favoured the incumbents – and as a result competition had been shrinking under its regime. New appointments to the FCC would be needed to bring the telecoms policies more into line with those supported by President Obama and his team, who understood the trans-sector benefits of a national broadband network.

However, such a regulatory transition takes time and some people in the USA became disappointed with the rather small changes that were taking place in the wake of the Broadband Stimulus.

I always saw this Stimulus as a policy-setter rather than an end goal – let’s be honest, $7.2 billion is a very small figure when applied to the American telecoms industry, which is worth more than a trillion dollars. It has always been my understanding that this was a one-off policy decision and I was confident that the Administration would make sure that the new FCC, under its leadership, would have to take over broadband policy-making.

However, very importantly, the direction was set by the original Obama Transition team, key members of the group who said ‘Yes We Can’. And so the Big Think group presented the Obama Team (as well as the governments of Australia, New Zealand and the Netherlands) with a report on the trans-sector concept.

The feedback that we have received has always been very positive; for instance, the White House publicly indicated its interest in the Australian NBN model and the way it was applied on a trans-sectoral basis.

Australia has embarked on a National Broadband Plan that will see a US$36 billion FttH infrastructure investment linked to a trans-sector strategy that will use this investment for e-health, smart grids, smart infrastructure and e-government services as well as for entertainment and high-speed Internet access.

As a sign that the new FCC is getting on top of the issue it has now asked for submissions to its FttH Research Project with the following stated purpose:

To explain the policy rationale for embracing a national goal for the accelerated deployment of FTTH over the next decade because the economic and social benefits of such accelerated deployment far outweighs the costs.

While the term trans-sectoral isn’t used, the FCC specifically asks for submissions to address issues in relation to the FttH and applications in the areas of:

  • Energy independence through efficiency
  • CO2 reduction through reduced travel
  • Medical cost reduction
  • Improved medical care
  • Improved homeland security
  • Improved education.

It is also looking at developments in Japan, Korea, Australia, New Zealand, and U.K.

There will no doubt be a strong lobby from the incumbent telcos, arguing that the market should be left as it is and that they will look after these issues, as long as they are receiving the right regulatory protection (eg, a monopoly). However there is a rapidly growing groundswell of people who are using this new opportunity to argue for significant changes that would speed up the deployment of a national open FttH network based on its trans-sectoral benefits.

The incumbents argue that open networks constitute state interference, which would be unconstitutional. The only conclusion that can be reached, however, is that government policies from the past are now interfering with this ‘open’ development – negative factors such as the monopolistic models needed for scarce resources, which were developed in a different era and have now outlived their usefulness.

An open network policy would be a way of cancelling out past state interference that has produced a state of affairs that is no longer acceptable in a modern open society.

This will no doubt be a very interesting discussion but in my view the outcome will have to be an open network that will be able to deliver nationwide first-class broadband-based services to its citizens,

Americans shouldn’t ask for anything less.

Paul Budde

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Telecoms in the international affairs of the day

Monday, August 31st, 2009

Openness and tolerance makes economic sense

It is interesting to analyse some of the global developments in the context of our own (tele)communication issues.

One significant trend is that more and more countries are creating increasingly open and tolerant societies, where their citizens are obtaining far more power than ever before. States are realising that they are there for the people and not the other way round.

One of the first areas in which this shift is noticeable is the communications sector. When governments make transactions from state power to people power they struggle with communications issues, and in particular with elements of it such as satellite TV and the Internet.

However the reality is that once they have embarked on this course the development is unstoppable; the process is more like two steps forwards, one step back.

The trans-sector power of communications to deliver significant economic and social benefits to many other sectors will eventually overtake the heavily controlled communications systems. The economic benefits of the trans-sector approach are beginning to outweigh the (political power) benefits of controlled communications.

Communications key to happiness and wellbeing

We see more countries embarking on the path of people power to increase prosperity, and in the process they are gaining greater political and economic power. At the same time this leads to greater tolerance, less violence (both internally and towards other nations), and fewer revolts. The BRIC countries are showing great leadership here, and other countries who don’t want to take their lead from the west cannot ignore the results of the developments in these BRIC countries. It is therefore more likely that over time more and more countries will move along the path towards empowering the people.

It therefore becomes more important to look at these developments and look for ways to use prosperity as a weapon to move towards a better world, one that will be good for everybody.

More and better strategies will be needed to direct and guide these processes, and more scientific and political research should be carried out on this. Organisations such as the UN and the Worldbank, to name just two, should put far more resources into this as the benefits are enormous.

BuddeComm believes that telecoms can play a key role in this process. Recent developments in countries such as China and Iran are good examples. But also the economic benefits of the mobile phone in countries such as Bangladesh are well documented, as is the development of e-banking in countries such as Kenya.

We can build on this and develop better ways to use these new communications systems to allow other people to build more prosperous societies.

Open networks

If communications are important in these global developments then obviously open societies require open networks. Far more attention should be given to the power telecoms has beyond the telephone and the Internet. Its multiplier effect to deliver economic and social benefits to other sectors should receive far more political attention.

Countries should also be asking – and this applies in particular to the USA – why they don’t have open networks. The only conclusion that can be reached is that other elements from the past are now intervening with this ‘open’ development – negative factors such as the monopolistic models, which were developed in a different era and have now outlived their usefulness.

So open networks do not constitute state interference; they are a way of cancelling out past state interference that has produced a state of affairs that is no longer acceptable in a modern open society.

It is hard to believe that Americans would argue that their current telecoms environment is based on the premise that this is what the people of that country want.

Paul Budde

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Yahoo! makes a big move in the Middle East – buys Maktoob

Monday, August 31st, 2009

In a major expansion move in the region, Yahoo! has signed an agreement to buy Jordanian Internet company Maktoob. Whilst Google launched an Arabic version of its search engine in 2006 and has since launched local versions of its other services, including Gmail, the Google Toolbar, Google Earth and Adsense, Arabic versions of Yahoo! services are not yet available. This move by Yahoo! shows a commitment to development in the growth market of the Middle East with more tailor-made content. Services will be co-branded as ‘Yahoo! Maktoob’ and Arabic versions of Yahoo! Messenger and Yahoo! Mail will be available early in 2010.

Maktoob Group comprises a network of online companies and websites. It was founded in 2000 as the first Arabic and English web-based email service. It claims to be the most-visited audited website in the Arab world. Maktoob is headquartered in Amman, with offices in Dubai, Saudi Arabia, Egypt and Kuwait.

In addition to the Arab portal, Maktoob.com, the Maktoob Group network includes electronic payment solution cashU and auctions and marketplace Souq.com, plus Bentelhalal, the largest Arabic matrimonial site, ArabSport, an Arab online sports community, and AdabWaFan, an online store for Arabic books and music. Maktoob’s Araby.com was launched in September 2006, claiming to be the first search engine with advanced Arabic language capabilities. Araby.com can detect different grammatical forms of Arabic, rather than simply searching for an exact word match. The engine also recognises stop words, prefixes and other features unique to Arabic. Maktoob extended into online gaming in late-2008, claiming to be the first to bring Arabic-language online gaming to a mass Arab audience with the launch of ‘Khan Wars’, a free, strategy-based online game.

On completion of the deal, these other group companies will operate under a new identity, the Jabbar Internet Group, managed by one of the founders of Maktoob.

Although levels of Internet use in the UAE or Qatar are nearing those in Europe or the USA, Internet use generally in the region is low as yet with penetration rates averaging around 25%. However, the population in the region is young with great potential and Internet and broadband subscribers and users are growing strongly across the region. With Internet use limited, a large proportion of users are English speakers and a recent survey found that 70-80% of Internet users in Jordan use international providers for their email accounts. Lack of Internet content in Arabic has been one reason for the low Internet and Broadband penetration in the region but content would grow with more users.

Whilst the Middle East advertising market as a whole is small and, in addition, online advertising is not popular with local companies, constituting less than 1% of what companies spend off-line, it is showing significant growth even in the difficult environment of the financial crisis.

For more information see: Jordan – Telecoms, Mobile & Broadband.

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National broadband – key to the success of e-health

Monday, August 31st, 2009

Patients will have a central role

Government are recognising that healthcare is one of the last paper-based sectors of the economy. It has been estimated that, quite apart from the costs involved, this leads to then of thousands of deaths each year.

There is no doubt that a fully integrated computerised e-health system will bring with it its own challenges, and will undoubtedly on occasions also deliver its share of problems. But, as has been the case with all other sectors of society and the economy, integrated computerisation in this sector will improve the situation. While many healthcare sectors have their own computerised systems they are mostly not integrated with other systems operating in the sector. This leads to a mainly paper-based system operating between these incompatible structures. Furthermore, the real power of the existing computerised systems is not maximised as they are unable to provide a whole-of-patient service.

Inefficiencies and errors occur due to the lack of information, lack of sharing, lack of standard processes and lack of decision support – elements that other knowledge-based industries thrive on.

New national broadband networks not only supplies the infrastructure for national e-health systems – it can also be a catalyst for the standardisation and integration of the various widely dispersed computerised systems that are currently used within the sector.

However, an equally important element of e-health is that it will give the patient/client a central role in the health system. At present the patient is simply a subject, with little or no power in the process. The government has already indicated that the control of e-health information ultimately rests with the patient.

This will completely transform the industry, with patients taking far greater control of their own healthcare. Many healthcare issues will no longer be an abstract concept; linking them with patient data will personalise healthcare and enable personal healthcare management. Caregivers can be integrated into the healthcare system to assist the patients in the process.

Once the broad e-health policy is in place a modular implementation will be required. It will be impossible to apply all these different e-health applications at the same time. When the ground rules are in place the implementation should be paced and prioritised.

Intelligent personalised e-health

Internet-based services such as those from US-based www.pkc.com show what can be done once all the information is seamlessly linked and patients and their care professionals are allowed to work with that information. Their ‘couplers’ service connects (couples) a range of healthcare-related information and uses the knowledge available in the industry to assist in providing solutions, directions and choices.

The current healthcare system is extremely inefficient and, mainly due to a lack of intelligent personalised information, does not provide the patients with any opportunity to take a leading role in their own healthcare process. This is perhaps one of the reasons that as much as 25% of Internet-related information is directly or indirectly connected with healthcare. People want to be more in control and in desperation they go the Internet. While there is plenty of good information available there it is also well-known that it is easy to sell desperate people solutions that most likely don’t work.

This is why it is so important that the national healthcare system and not the Internet becomes the place where people find direction and interaction with their healthcare providers.

Accountability and transparency

Furthermore, very few people argue about the enormous cost-saving elements of e-health. Per country, these can amount to tens of billions of dollars, and in the larger countries to hundreds of billions.

The main impediment to the introduction of e-health has been the powerful vested interests within the industry. For whatever reasons, they have persistently rejected any development in integrated patient-related e-health services.

In the USA medical accountability is becoming more and more of an issue, and only an e-health system can provide the level of transparency required of the healthcare process. The current largely manual and paper-based but also the computerised processes have no standards and it is simply impossible to use all the information in any coherent way.

Imagine if other sectors – finance or transport, for example – were managed in this way. We would have financial collapse and transport chaos.

With e-health now becoming a serious government policy issue there will be no turning back; over the next decade the system will be changed beyond recognition – and for the better.

National broadband key to national e-health

Some people have argued against the need for an FttH-based NBN, saying the capacity provided might not immediately be needed. But a very important additional element of an FttH NBN is its security and reliability. If countries are moving in the direction of e-health they will need an infrastructure that is more reliable than the current Internet, and an FttH-based NBN can deliver this better than copper-based technologies.

If we look at the trans-sector and systems integration opportunities that national broadband networks have to offer it makes sense to have it as the key infrastructure for the delivery of e-health. And this would also strengthen the business case for the building of such a national infrastructure – if something like 25% of a national broadband is going to be used for healthcare that would indeed also put that broader infrastructure investment on a sound economic footing.

With more people in healthcare and telecoms beginning to understand the importance of the other’s sector it is no wonder that they are looking at each other more closely. Both sectors can profit enormously from the introduction of e-health.

Telcos in particular are becoming seriously interested in understanding and in working with the healthcare sector to start building a better business case for future telecoms investments. As a matter of fact, companies such as Telstra in Australia and KPN in the Netherlands are seeing this as a critical development.

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The fixed voice market in Latin America

Monday, August 31st, 2009

Latin America’s largest fixed-line operator in terms of lines in service is Telmex, founded and controlled by Mexican billionaire Carlos Slim. In terms of revenue, Brazil’s Telesp, owned by Telefónica, is in the lead. The second place, both in terms of fixed lines and revenue, is occupied by Brazilian Oi (Telemar).

The main international companies operating in Latin America are Telefónica and Telmex. Telefónica dominates the fixed-line market in several countries, while Telmex is the market leader only in Mexico but has operations throughout the region. Telmex’s sister company América Móvil also competes with Telefónica in most of Latin America’s mobile markets, and sometimes also in the fixed-line sector.

BuddeComm published a new report titled: Latin American Fixed Voice Market. The countries covered include: Argentina, Belize, Bolivia, Brazil, Chile, Colombia, Costa Rica, Cuba, the Dominican Republic, Ecuador, El Salvador, Guatemala, Guyana, Haiti, Honduras, Jamaica, Mexico, Nicaragua, Panama, Paraguay, Peru, Puerto Rico, Suriname, Uruguay, Venezuela, and the small Caribbean island nations. For more information see: Latin American Fixed Voice Market

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