Conducted by:

Lauren Moloney-Egnatios

A POLICY ANALYSIS PRESENTATION FOR:SCHOOLS ONLINE

OBJECTIVES• Overview of the Issue

• Policy for analysis

• Strengths and Weaknesses

• Recommendations

• Implications

OVERVIEW OF THE ISSUE IN LEBANON’S TELECOMMUNICATIONS SECTOR

Prior to 2002-2007 privatization efforts:• Lebanese Government, Ministry of Telecommunications (MOT) held a monopoly over

domestic and international telecommuncations.

• The state owned company, Ogero, was responsible for purchasing, sale and supply of all key ICT infrastructure, including internet services.

Outcome:• Extremely inefficient internet service at high prices (due to centralized system).

• Low bandwidth capacities and availability.

• Low internet penetration in the country.

• Increased presence of illegal ISPs squeezing bandwidth capacity.

OVERVIEW OF THE ISSUE IN LEBANON’S TELECOMMUNICATIONS SECTOR

• 2007 Ministry of Telecommunications establishes the Telecommunications Regulatory Authority (TRA),an “independent” public agency to liberalize, develop and regulate the telecommunications sector.

Among other functions, the TRA:

• “d) organizes concessions, issues [service provider] Licenses, ensures compliance with License terms and conditions, monitors, amends, suspends and withdraws Licenses in accordance with the provisions of the present Law and its implementing decrees” (Telecommunications Law 431, 2002).

THE TRA WAS ESTABLISHED AS A “WATCHDOG” AGENCY…..

…..But for whom?

2009 DRAFT LAW: SERVICE PROVIDER LICENSING REGULATION

Article 15, Section 1: Application for Class Licenses without Radio Frequency

“Any person wishing to apply for a class license without radio frequency must do so in writing by submitting the information specified in Schedule D of this regulation” [To be processed by the Telecommunications Regulatory Authority].

Article Objective:

• To establish formal application process and procedures for Internet Service Providers (ISPs) to enter the telecommunications market with ease

• To encourage competition in the internet service provider industry

• To improve overall internet penetration by offering more ISPs.

2009 DRAFT LAW: SERVICE PROVIDER LICENSING REGULATION

Article 21, Section 1: Conditions in Licenses

“Service Provider Licenses may be granted subject to conditions. Any condition must be in accordance with the Telecommunications Law, especially with regard

to promotion of competition, protection of Customers and the general public.”

Section 1c: Provisions in all licenses

[Conditions about the protection of users, quality of service, procedure for complaints and disputes, publication of changes in access, tariffs, quality and

availability of services must be reported to TRA.]

Low Government Intervention:

• Allows service providers to set their own rates and tariffs based on market prices and conditions (article 28)

• Gives TRA the power to impose prices and tariffs on Service Providers in the case of monopoly pricing (article 28)

• Sets the standard of quality for ISPs’ technical equipment (article 23)

High Government Intervention:

• Council of Ministers (with proposal from MOT) determines TRA’s administrative and financial organization and appoints its Chairman and Members (article 4).

• MOT approves all decisions taken by TRA (article 3).

• Permits the TRA to collect revenue from licensing applications and annual fees (article 11)

TELECOMMUNICATIONS LAW 431CURRENT LAW GOVERNING TELECOMMUNICATIONS SECTOR (2002):

Public Service Model Liberal Model with Public Interest Tradition

2009 DRAFT LAW: SERVICE PROVIDER LICENSING REGULATION

Article 21, Section 1: Conditions for all licenses

Objective:

• To promote transparency between ISPs and TRA

• To improve accountability for quality and available internet services

• To establish the TRA as a “watchdog” of citizens interests

• To increase internet penetration rates in supplying quality service to users.

• Private companies are forced to compete with the government owned company, Ogero, who has an unfair advantage over key ICT infrastructure and equipment.

• Policy does not take into account bandwidth capacity available for sale to ISPs.

• Fails to set minimum bandwidth speed that must be offered to customers.

• Low entry barriers for ISP licensing allows for private ISPs to enter the market with ease.

• Improves transparency and accountability between the government, public and private sector.

• Increases competition in the service provider industry.

• Absence of censorship and technical filtering.

2009 DRAFT LAW: SERVICE PROVIDER LICENSING REGULATION

Strengths Weaknesses

Schools Online

Until bandwidth capacities increase…

And competition between the government and private sector is on equal footing….

• It is not recommended for Schools Online to establish offices and Internet Learning Centers in Lebanon.

Lebanon’s Government:• Ban Ogero from withholding bandwidth

capacity from the market.

• Provide private ISPs with same access to key ICT infrastructure (such as DSL, cable, fixed telephone telephone lines) that the government has to promote fair competition.

• Enforce minimum bandwidth speed that ISPs must provide users.

• Incentivize (with lower monthly internet costs) new educational businesses and non-profit initiatives, like Schools Online, that seek to increase internet connectivity in LB.

RECOMMENDATIONS

LebanonConsequence:

1. Less foreign investment interest; including educational non-profits seeking to improve internet connectivity in public schools.

2. Telecommunications sector will never be truly a liberal market until bandwidth capacities are increased and privatized, and private ISPs have equal access to key ICT infrastructure.

3. Persistence of digital divide between rural and urban population.

Opportunity:

• Truly liberalizing the telecommunications sector would provide jobs to the thousands of highly educated and skilled Lebanese workforce in need of employment.

• Lebanon could be a regional ICT powerhouse in the future!

International Relations:Consequence:

• International governments are aware of large discrepancy between written law and reality in Lebanon.

• While foreign investments enjoy the same commercial liberties as domestic investments, operational costs will be higher for international businesses requiring efficient internet services.

Opportunity:

• High incentives from TRA for foreign entrepreneurs in information services to form international-local partnerships.

IMPLICATIONS

If you have additional questions, please see the full policy analysis report at the following address:

http://lebanoncommunicationspolicy.wordpress.com/summary/

THANK YOU!