Final Policy Analysis Report.word

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An analysis of policy conducted by: Lauren Moloney-Egnatios Prepared for: Schools Online Lebanon’s draft law for Service Provider Licensing Regulation (2009) Draft Law passed on February 10, 2010 SIS 645: International Communications and Cultural Policy

description

 

Transcript of Final Policy Analysis Report.word

An analysis of policy conducted by:

Lauren Moloney-Egnatios

Prepared for:

Schools Online

Lebanon’s draft law for Service Provider Licensing Regulation (2009)

Draft Law passed on February 10, 2010

SIS 645: International Communications and Cultural Policy

Table of Contents:

I. Executive Summary

II. Background

III. The Issue (as relevant to Schools Online)

IV. Policy Analysis

A. Description

B. Communications Model Analysis

C. Strengths and Weaknesses

Recommendations for Policy Improvement

VI. Implications for Lebanon

VII. Implications for International Relations

VII.Bibliography

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I. Executive Summary:

This report analyzes the 2009-2010 draft law for Service Provider Licensing Regulation

created by the Telecommunications Regulatory Agency. The analysis will describe the articles

and provisions relevant to Schools Online’s mission, an international NGO combating the

global and regional digital divide in the education sector through the establishment of Internet

Learning Centers. Using global communications models as benchmarks for analysis, the

strengths and weaknesses of this policy will be discussed. This report can be utilized by

Schools Online to better inform the organization’s decision to operate in Lebanon in the

future. Upon conclusion of the report, recommendations will be provided to the Lebanese

Government as to how the policy could be improved to promote a more perfect information

environment with healthy competition in the telecommunications sector, as defined by the

participatory model of communication. Finally, implications of the policy on international

relations and future international communications policy development will be discussed.

II. Introduction:

For the most part, Lebanon has enjoyed a long history of quality education. Most of the

country is literate, often in three or more languages (Arabic, French and English).  However,

computer (and Internet) penetration in schools, particularly public schools, is low.  Public

school curriculum can be outdated and lacks resources necessary to train the next generation of

Lebanese leaders in the latest tools  (Metzger: USAID/BEIRUT 2001, 3).

My chosen client, Schools Online, attempts to combat the national digital divide while

simultaneously, improving nations’ educational sectors by establishing Internet Learning

Centers in developing countries (http://www.schoolsonline.org/). Schools Online is part of the

educational division of Relief International, a humanitarian non-profit agency that provides

emergency relief, rehabilitation, development assistance, and program services to vulnerable

communities worldwide. It is the mission of Schools Online to help students gain access and

use the communication and information resources of the Internet for learning and cross-

cultural dialogue.

Thus far, Schools Online has not been able to establish an Internet Learning Center in

Lebanon. Its mission is very difficult to achieve with slow, costly and inadequate bandwidth

capacities. In the past, Schools Online showed great commitment to potentially investing in

Lebanon’s educational sector. For example, a 2001 USAID report on Beirut reports that Schools

Online donated a significant sum of money to a Lebanese Foundation expanding internet

connectivity in public schools (Metzger, 200, 10). In addition, an informational interview in

2012 revealed that this educational organization is merely waiting for adequate signs of “ICT

infrastructure stability” before investing in the establishment of ILCs throughout the country.

The policy analyzed below in this paper provides recommendations for better informing the

decision of Schools Online about whether ISP licensing and service regulation will, in fact, yield

ICT stability the new business will need to achieve its mission.

III. Background:

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Despite it’s politically complex and sectarian government, Lebanon is one of the more

democratic countries in the Middle East. The country’s business climate is friendly to direct

foreign and domestic investors. It does not distinguish between the two in commercial policies

(Bureau of Economic, Energy and Business Affairs: Department of State 2011 Business Climate

Report, http://www.state.gov/e/eb/rls/othr/ics/2011/index.htm). In this way, Lebanon is different

from some of the neighboring Arab countries in that new ICT development projects in Lebanon

can enjoy the general business climate in the country, where trade is open, taxation is reasonable,

and related commercial policies compare favorably to other countries in the Middle East.

However, historically, the Lebanese Government had a monopoly on the international

and national telecommunications sector. The Ministry of Telecommunications (MOT) solely

owned and/or licensed all fixed, mobile, and wireless networks. OGERO (Organisme de Gestion

et d'Exploitation de l'ex Radio Orient) is a 100% government owned telecommunications

company established in 1972 and supervised by the Ministry of Telecommunications

(http://www.ogero.gov.lb/Published/EN/profile.html). In 1996, through the support of the

Ministry of Telecommunications, Ogero played a pioneering role in introducing internet services

to the first country in the Levant region: Lebanon. Before the attempt to privatize the

telecommunications sector in 2002, Ogero was the only entity in Lebanon responsible for the

operations, maintenance, sales, marketing, billing and management of the fixed telecom network

in the country (Open Net Initiative: Internet Filtering in Lebanon, 2009).

In 2002, MOT issued a new law for the privatization of the ICT sector (United Nations

Report, “National Profile of the Information Society in Lebanon”, 2009). In efforts to transform

Lebanon’s telecommunications market and revitalize the economy that suffered from years of

civil war, the Lebanese Government made it a national imperative to turn the

telecommunications sector into a competitive market through privatization. Tied to this initiative

MOT established an independent regulatory agency, the Telecommunications Regulatory

Authority. Upon appointment of its board members in 2007, the TRA began official operation.

Established by Law 431 (read below), it is legally mandated to liberalize, regulate, and develop

telecommunications in Lebanon. It’s primary duties are to encourage investment, competition

and transparency in the private and public sector and consequently, ICT growth, through the

regulation of licensing and the monitoring of dominant or abusive activity in the market that

inhibit competition (TRA website: http://www.tra.gov.lb/). It is believed that the TRA represents

a significant step signaling the beginning of the liberalization and restructuring process of the

Lebanese telecommunications sector.

The 2002 Telecommunications Law 431 is the current law governing telecommunications

sector and delineating the powers and duties of both the TRA and the Ministry of

Telecommunications. It recognizes the Lebanese Government’s (MOT owned Ogero) monopoly

over international telecommunications and national phone network (Open Net Initiative, 2009),

yet attempts to liberalize the national telecommunications sector by opening it up for private

participation. For example, the law allows telecommunications service providers to set their own

rates and tariffs based on market prices and conditions (Telecommunications Law 431, 2002,

Article 28). Currently, there are 15 licensed ISPs in Lebanon: Cyberia, IDM, Fiberlink Networks,

Sodetel Internet, Terranet, Trinec, Netlink, Farahnet, Virtual ISP, Lebanon OnLine, Moscanet,

Comnet ISP, Pros-services, Broadband Plus, and Keblon. In 2007, the Ministry of

Telecommunications took a major step and began offering ISP services at the same rates as

private sector ISPs. In doing so, it was MOT’s objective to directly intervene in order to

stimulate competition with the private sector (United Nations, 2009).

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IV.Issue:

Before the 2002 law attempting to privatize the national telecommunications market,

Lebanon’s government held a monopoly over international and domestic telecommunications.

The 100% state owned company, Ogero, set premium rates for internet connectivity. As a result,

the internet was a service reserved for the upper socio-economic class who could pay the high

connectivity fees. Due to the centralized and limited bandwidth capacity, internet service was

characterized by poor quality and outdated infrastructure.

The centralized ISP and lack of modern ICT infrastructure led to massive inefficiencies

for individuals and businesses in need of quality internet service. Due to poor development of

ICT infrastructure, there was (and still is) a sizable digital divide between rural and urban

communities in Lebanon. Those who were able to subscribe to internet services experienced

slow speeds due to a lack of broadband capacity that could accommodate multiple users

simultaneously. The centralized system also increased the presence of illegal ISPs whose quality

and service lacked regulation and monitoring by a governing authority. These illegal ISPs

contributed to the problem of internet speed inefficiency by squeezing bandwidth capacities to

their limits, making it increasingly difficult to connect to the internet with more users sharing

constrained broadband width.

Thus, businesses needing a reliable, efficient and affordable internet connection had

limited options. Consequently, Lebanon’s highly educated and creative workforce had limited

job opportunities and many citizens began to seek opportunities elsewhere, causing the economy

to suffer greatly after the political turmoil of 2006. Most businesses chose to invest in other

countries with more ICT development, quality ISPs offering available bandwidth capacities at

affordable prices. This is the case of Schools Online. Its mission to spread Internet Learning

Centers in rural communities of ICT developing countries as education development initiatives is

impossible to achieve with slow, costly and inadequate bandwidth capacities.

With the objective of combatting illegal ISPs, improving internet penetration rates and

the quality of internet services in Lebanon, the TRA created the Service Provider Licensing Draft

Law in 2009. It was approved by the Ministry of Telecommunications and passed by the State

Council in 2010. It attempts to solidify the privatization process of the service provider

telecommunications market. Pertaining to internet services, the draft law outlines the application

process and procedure, as well as the provisions for ISP licensees. On the surface, this draft law

seems to liberalize the ISP market to stimulate much-needed competition in the

telecommunications sector. Given that internet penetration rates were at almost 40% in 2010, an

11% increase since 2009 (International Telecommunications Union: Statistics, 2012), some even

believe that the TRA’s regulatory framework for service providers has contributed to significant

ICT development over the past 5 years.

However, the policy analysis below reveals that if the Lebanese government wants to

truly liberalize the telecommunications sector, it has a long way to go. In fact, the Ministry of

Telecommunications still has a strong hold over key ICT infrastructure making it impossible for

ISPs to operate independently from the government of Lebanon. In addressing the underlying

infrastructure issues of the TRA, its draft law of 2009 and the power of MOT in the

telecommunications sector, this report will reveal how the Lebanese Government can better

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shape their policies to improve internet penetration rates and continue to develop ICT

infrastructure in Lebanon.

Policy Foundation:

A. Description and Objectives:

The main objective of the TRA’s Service Provider Licensing Regulation of 2009 is to increase

competition in the telecommunications service provider market and consequently, lower internet

connectivity prices, improve internet penetration rates and deliver higher quality internet service

in doing so. If the draft law achieved such goals, educational non-profits such as Schools Online

could achieve its mission to improve internet connectivity in public schools. Thus, an analysis of

the draft law is needed to reveal if the policy is meeting its set objectives.

The articles that are pertinent to Schools Online’s mission are as follows: article fifteen,

section one, regarding the application process and procedure for class licenses without radio

frequencies; and article twenty-one, section one (c) outlining provisions for all license grantees.

In short, the two articles relevant to Schools Online have to do with the TRA setting up an

official application process and procedure for licensing ISPs and holding them accountability to

quality standards upon granting them the license. Below is a description of the relevant articles.

First, article 15, section one is significant in that it legitimizes the Lebanese Government’s

imperative to privatize ISP ownership. Section 1a) declares that “anyone wishing to apply for a

Class License without Radio Frequencies” [can do so, if the person submits in writing the

application provided by the TRA] (TRA: Service Provider Licensing Regulation Draft Law,

2009). In creating low entry barriers for private sector applicants, the policy is encouraging both

domestic and foreign ISP companies to invest in Lebanon. The underlying assumption behind

this article is that increased ISP ownership translates into a more competitive internet service

market which would likely decrease prices for internet service consumers. Consequently, with

lower prices, the assumption is that overall net usage in the country would improve.

In creating an open application process for ISPs, the intention behind article fifteen was also

to deter internet users from connecting using illegal ISPs. Privatizing ISPs allows for increased

consumer choice when selecting how (and for how much) consumers will connect to the internet.

Moreover, under perfect market conditions, competition in the sector drives prices down as

companies compete for customers. Before ISP licenses were open to private companies, Lebanon

was notorious for illegal ISPs. Illegal ISPs’ connections were not only unreliable and failed to

protect their users, but the lack of monitoring of quality allowed illegal ISPs to squeeze

bandwidth capacities to their limits, slowing down internet efficiency and discouraging users

from successfully connecting. Article fifteen’s application process attracts domestic and foreign

ISP companies interested in competing to bring high quality service to its customers.

Article twenty-one, section one c, defines the regulation of ISP services quality by the

TRA. The provision states:

“Conditions regarding the protection of Users and Customers, such as the provision of detailed

and accurate information, especially about the quality of services, and the provision of a

procedure for complaints and disputes, publication and adequate notice of any change in access

conditions, including tariffs, quality and availability of service” must be in accordance of the

Telecommunications Law 431 and made available to the TRA (TRA: Draft Law, 2009).

Before the operational establishment of the TRA in 2007, there was no monitoring agency acting

as a “watchdog” and on behalf of citizens’ interests. This section of the policy holds ISPs

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accountable for protecting users’ information and right to dispute or make complaints regarding

the services they receive from the ISP. This section also mandates transparency from ISP license

holders. If quality services are not being delivered by ISPs, the user has the right to make

complaints. Moreover, ISPs cannot change the availability of their services, quality or price,

without making the modifications known to the TRA.

In addition, Article 21 mandates that the TRA has the right to hold ISPs accountable to

conditions defined in accordance to the telecommunications law 431 for delivering quality

service. For instance, the Telecommunications Law holds ISPs responsible for meeting

equipment and quality service standards (article 23) and in the case of monopoly pricing, the

TRA can impose prices and tariff standards for ISPs with significant power in the market. This

article’s objective is to encourage a more liberal service provider market, as well as, attempt to

promote businesses’ and individuals’ subscription to legal ISPs by acting as regulators of ISP

licensees’ quality standards, pricing structure, customer complaints and user protection.

B. Assumptions and Communication Policy Models:

The ISP license regulation policy reflects the government’s attempt to transform from a

Public Service model (in a quasi-development model state) to a Liberal model with a public

interest tradition. Before 2002, the government had a monopoly over the domestic and

international telecommunications sector. Its actions in the telecommunications sector reflected

the Public Service model in many ways. First, in 1996, the government first introduced the

internet in Lebanon out of “public necessity”. This decision reflects the Public Service model in

that the government was the sole provider of the internet and set the rates for such service

(Venturelli, 2012). Using this approach before draft law of 2009, information services were a

“public service” to be provided by the government, not a market commodity.

Recognizing the need to bolster a suffering economy and retain its highly skilled

workforce, the government made a quasi-development communications model decision to

develop Lebanon’s ICT infrastructure and informational services for economic gain. In

collaboration with international governments, NGOs and the private sector, Lebanon’s ICT

policies and infrastructure have significantly improved to better reflect its free market economy.

The ISP license regulation draft law of 2009 was a first step towards liberalizing the

telecommunications market and moving towards a more Liberal model of communication.

However, given that the telecommunications sector is far from free of government

intervention, the policy more accurately reflects the Liberal communications model with a public

interest tradition than it does the free market tradition. First, similar to the Liberal model with a

free market tradition, the policy assumes that privatizing ISP licensing will increase competition

and help develop the market place of ideas. This is reflected in the policies nondiscriminatory

regulations and low entry barriers for allowing anyone to apply for an ISP license, so long as

proper procedure is followed.

Another feature of the policy that greatly reflects the Liberal Model with a public interest

tradition is the fact that the government established an independent regulatory agency to serve as

the “watchdog of public interest”: the Telecommunications Regulatory Authority. The TRA not

only determines who is best financially positioned and equipped to become an ISP, but it also

regulates the quality of internet service each ISP delivers. In this way, the TRA is serving

citizens’ interests in screening the application process for ISPs, and monitoring for potential

abuses of the market that would hinder the ability of citizens’ to access the internet efficiently.

In addition, the TRA regulates the licensing of public airwaves such as radio frequencies.

The Liberal model with a public interest tradition assumes that public airwaves are a public

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resource that requires regulation. In this way, the TRA is serving as a regulatory agency or a

“watchdog by monitoring who is using public airwaves and how they are being utilized.

Furthermore, in outlining the conditions of services for ISP license holders in article twenty-one,

the TRA is also acting as the regulatory agency for protecting users’ personal information and

right to dispute services provided by ISP owners.

Yet another feature of the policy is characteristic of the government’s attempt to

transform the telecommunications sector from reflecting a Public Service model to a Liberal

model with a public interest tradition. The ISP licensing regulation policy assumes the

characteristic notion that the, “marketplace of ideas works most of the time but not always”

(Venturelli, 2012). This assumption is reflected in observing the monopoly over key ICT

infrastructure that the operating arm of the Ministry of Telecommunications, Ogero, has in the

telecommunications sector. It has almost total control over international telecommunications,

buying and selling bandwidth capacity, national telephone fixed line connections, and even an

advantage over DSL services. Since 2007, MOT became an ISP, as well. Therefore, the

government is directly intervening in the market, driving competition with private companies,

and forcing the free market to behave the way that the free market theory says it should.

Lastly, it is clear that the policy reflects the Liberal communications model with a public

interest tradition in that there are clear provisions for protecting the newly privatized market

against monopolies on telecommunications service. Under article twenty-one, section h, the TRA

requires all license holders to “promote competition” and “comply with specific conditions

which may be imposed on Service Providers with Significant Market Power”(Draft Law 2009).

The Significant Market Power law defines “criteria for identifying a significant market power”,

potential abuses of service providers with SMP and regulations to be applied to service providers

with SMP” (Significant Market Power, 2009). Clear regulation and monitoring of internet

service providers market power is a strong indication that preventing monopoly is a major issue

for Lebanon’s ICT policies at this time. Strong anti-trust laws are the only way the Lebanese

Government is able to support the competitive open telecommunications market the government

is striving to achieve.

C. Strengths: Utilizing the participatory model as a benchmark of success in

analyzing policies such as the 2009 ISP Licensing Regulation Draft Law, one is able to better

comprehend this policy’s strengths. The first is that it demands greater transparency of laws

and regulations between the private sector, government and public sector. Article twenty-one,

section one mandates that quality of service is reported to the TRA, as well as requiring ISPs

to provide users with fair and equal opportunity to report complaints and disputes regarding

the services provided. In addition, ISP licensees must report any changes in tariffs, quality or

availability of services, as well as provisions regarding the quality of equipment being utilized

(TRA: Draft Law, 2009).

These provisions for transparency of the private sector have political and social

implications. The public agency, TRA, acts as the watchdog of citizen interests, making sure

the power of private ISPs does not subjugate that of the internet users. The government owned

ISP, OGERO, is also subject to the provisions outlined in the draft law. Therefore, in written

law, the government is technically subject to the same ISP laws as its private competition.

Moreover, the public agency, TRA, is held accountable for timely procedures (timing terms

vary) regarding the granting, revoking or renewal of licenses. Thus, in setting expectations for

a system of checks and balances between the public, government and private sector, this policy

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is attempting to distribute political power evenly among the user, the state and the private

sector.

Another strength of this policy as it relates to the participatory model is that it supports

low structural barriers for new entrants and competitors. Article fifteen, section one, does not

distinguish between foreign and domestic ISP license applicants. So long as proper procedure is

followed for the application process, the policy reflects open and nondiscriminatory regulations

in allowing anyone to apply for an ISP license. Since this policies inception in 2010, fifteen ISPs,

have received licenses and are fully operating in Lebanon.

An additional strength of the policy is that diverse capital sources have been sought by the

TRA and the Lebanese Government to promote local entrepreneurship in information services.

For example, Lebanon’s Government passed the “The Investment Development

Law” in 2001. It authorizes the “Investment Development Authority of Lebanon” (IDAL), to

award licenses and grant special incentives, exemptions and facilities to larger enterprises

making new investments in information services (TRA: Investment Institutions.

http://www.tra.gov.lb/Investment-institutions). In an attempt to attract foreign investments,

IDAL launched in 2003 the "Investors Matching Service" to facilitate the creation of strategic

international-local partnerships through joint venture, equity participation, acquisition, and

others. In the last few years, many factors have encouraged foreign companies to set up offices in

Lebanon. According to statistics from the Lebanese Ministry of Economy and Trade 45 foreign

companies launched offices, representative offices or branches in Lebanon in 2005 (Lebanese

Ministry of Economy: Statistics on Foreign Companies,

http://www.economy.gov.lb/index.php/subCatInfo/2/143/8/3).

Increased competition in the ICT sector is expected as the TRA financial division

incentivizes more domestic and foreign investments. The ICT sector of Lebanon is increasingly

attractive after a World Bank report assessed that a “10% increase in broadband infrastructure

could result in a 1.2-1.5% increase in GDP” (The Business Year: Off the Blocks, 2012). A more

robust ICT infrastructure will attract local and foreign businesses and encourage them to invest

and establish offices in Lebanon.

Lastly, one of the greatest strengths of Lebanon’s communications policy is that there is a

complete absence of censorship and technical filtering by ISPs and government (Open Net

Initiative, 2009). The lack of content regulation on the internet reflects the overall liberal media

scene and free market economy. This strength aligns with Lebanese press laws which do not

restrict freedom of speech (Open Net Initiative, 2009). The country is home to many religions

and sectarian political parties. It is no surprise that the Lebanese Government and

telecommunications sector do not attempt to regulate expression among these diverse voices and

offers a plethora of outlets both on the web and among other media sources for diverse

perspectives and voices to be freely expressed.

D. Weaknesses: Though the Service Provider Licensing Regulation draft law has

strengths, there are many fundamental weak points of the policy. First, while it was the

policy’s objective to improve the quality of internet service provided and increase internet

penetration rates by increasing competition and lowering costs for internet services, the draft

law does not actually take into account the availability of bandwidth capacity for sale to ISPs.

ISPs have the option to buy bandwidth capacity from the government owned company, Ogero,

or private international bandwidth providers. Due to the government’s strong hold on key ICT

16

infrastructure and equipment such as bandwidth capacity, the policy is actually strengthening

ISPs dependency on the government when purchasing bandwidth capacity.

Moreover, the government has the potential to control the market by withholding

bandwidth capacity for sale, causing prices to rise in the private market. As a result of the

government’s power in the market, bandwidth pricing in Lebanon is extremely high relative to

other countries. Because the policy fails to take into account this unequal power structure, ISPs

incur high costs for bandwidth capacity and these costs are passed down from ISPs to the

customer. The high pricing restricts economic growth as businesses invest in more ICT

developed countries with larger bandwidth for cheaper prices. This pricing structure also reduces

net usage so that only upper socio-economic classes can afford to subscribe to internet service.

Thus, the policy is weak in that it does not allow for high levels of internet penetration, fails to

provide access of internet services to all social groups and consequently, only the upper and

middle socio economic class are represented on the internet.

On that same note, the policy does not address that key components of the ICT

infrastructure that favor the government owned company, Ogero. For example, in 2007, the

Ministry of Telecommunications launched DSL service in Lebanon. In order to launch the

service, the Ministry and ISPs signed a memorandum agreeing that Ogero would compete “on

equal footing” with the private sector in bringing DSL services to Lebanon (Abbassi, 2011).

However, given that Ogero maintains ownership over key infrastructure such as landlines, it was

and has been much quicker and easier for Ogero to provide DSL service to customers than for

ISPs. Thus, in failing to address these significant market power inequalities, the policy weakens

the private sector and increases the power of the state who is a merchant both buying and selling

key ICT infrastructure to its competitors.

The last weak point of the policy has to do with a lack of transparency around minimum

services that ISP licensees are required to provide. Though the Service Provider Licensing

Regulation law defines the applications process and mandates that ISPs provide the TRA with

information regarding the quality, availability and price of its services, it does not set a minimum

bandwidth speed that the ISP has to provide its customers. According to surveys by the

regulatory agency, TRA, the average broadband access speed was at less than 1Mbps (TRA:

Broadband Access-Economic Benefit and Challenges, 2009). Resulting, both individual and

business users cannot benefit from broadband during peak net use hours: the more people online,

the slower the internet. In efforts to enhance the Service Provider Licensing policy, the State

Council passed a decree in August 23, 2011 to set a minimum speed to 1 MB per second and

decrease the monthly cost of internet services for ISP subscribers. The decree is expected to

improve the internet penetration rate and challenge the two main issues that have hindered the

ICT sector and economy from developing in the past.

III. Recommendations for policy improvement:

The Service Provider Licensing Regulation of 2010 can be greatly improved. First, the

government should consider some qualitative changes in the policy itself before looking to

increase the overall quantity of service providers in the country. The Lebanese Government

assumed that increasing the quantity of ISPs without releasing its stronghold over key ICT

infrastructure, such as bandwidth capacity, would positively impact the overall internet

penetration in the country. However, it is clear through this analysis report that until the

government releases its stronghold on bandwidth capacity and/or increases total bandwidth

capacity available in Lebanon, non-profits like Schools Online will continue to have issues with

slow internet speeds at high prices. Thus, it is not recommended that Schools Online establish

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offices in Lebanon until the telecommunications sector reflects a truly liberal, free market, free

from government intervention and stronghold over key ICT infrastructure.

Today, the Lebanese Government has already begun to improve the Service Provider

Licensing Regulation of 2010 in issuing the August 23, 2011 decree that sets a minimum

broadband speed to 1 MB/second and lowers the monthly cost of internet service. The more

efficient internet speed will help businesses and individual users alike, improving the quality of

services (in setting a minimum broadband access speed) that ISPs must provide at a regulated

price. The lowered monthly cost will induce populations from lower socio-economic classes to

subscribe to ISPs and consequently, the total net penetration will rise. The Service Provider

Licensing Regulation in conjunction with this new decree should incentivize initiatives such as

Schools Online to establish Internet Learning Centers throughout Lebanon. The two policies will

liberalize ISP ownership, providing a variety of services to choose from and qualitatively

improve ISP services in setting a minimum broadband access speed to 1MB/second.

As a means to incentivizing development in the education sector and ICT infrastructure

of Lebanon, the policy could provide even lower monthly cost for new businesses and non-profits

with missions such as Schools Online that help developing countries bring internet connectivity

to schools and rural communities. With less operational funds from which to develop their

initiative, Schools Online would be more likely to establish and sustain Internet Learning Centers

in Lebanon if the monthly internet subscription costs lowered overall operational costs.

Providing financial incentives to non-profits like Schools Online would aid in the development

of the ICT infrastructure of Lebanon in that there would be a significant increase in multiple

public access points for internet services in more isolated, rural communities. In other words, a

policy that lowers cost for non-profits developing the education or ICT sector would contribute

to the reduction of the national digital divide in Lebanon.

Lastly, and perhaps most importantly, the policy could be enhanced by providing

increased regulation over the market power of the state owned fixed telecommunications

company, Ogero. Ogero is the only merchant in Lebanon that buys and sells bandwidth in the

local market. Due to its dominant position in the telecommunications market over land lines,

DSL services and its ability to supply bandwidth capacities to private ISPs and companies,

Ogero has weakened the private sectors’ ability to compete with the government (Chakrani, Al

Akhbar English, 2012). With a policy that more explicitly regulates the power of Ogero and

defines the terms for bandwidth supply by Ogero, the private sector will be better positioned to

compete freely with the government without having to worry about the state owned company

abusing its market power. More specifically, the policy should ban Ogero from withholding

available bandwidths from sale to competing ISPs, forcing ISPs to buy at higher prices from the

market or, worse, buy from illegal bandwidth supplies. In doing so, the policy would be more

reflective of a liberal, free market model of communication. This approach would ensure that the

ISP market more closely mirrors Lebanon’s free market economy and is protected from any

monopolies over key ICT infrastructure fundamental to the telecommunications sector’s growth.

VI. Implications for Lebanon :

Further government action is needed to transform Lebanon’s telecommunications sector into

a liberal, free market economy. Implementing the aforementioned recommendations would

yield several opportunities for the nation. By helping the private sector compete on equal

footing with the government and increasing available bandwidth capacity in Lebanon, the

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government is creating a truly liberal, free telecommunications market. This thriving market

would provide jobs to thousands of the highly educated and skilled Lebanese workforce in

need of employment opportunities. With the retention of its skilled labor and IT trained

youth, Lebanon could become a regional ICT powerhouse in the future.

VII. Implications for Development of Communications Policies in Other Countries

Analysis of the Service Provider Licensing Regulation of 2009-2010 yields several

implications for international relations and development of communications policies in other

countries. For one, the policy demonstrates to the international public sphere that while many

collaborative efforts have been made to create regulatory framework and policies liberalizing

the telecommunications sector, in practice, the telecommunications sector is still not a truly

free market. So long as the government continues to have a strong hold over key ICT

infrastructure and supply, the private sector will not be able to successfully compete against

the state. Thus, international businesses and government seeking to collaborate with Lebanon

need to be aware of this large discrepancy between the written law and reality.

Many lessons can be gleaned from this policy’s strengths. In viewing the Service

Provider Licensing Regulation, other countries with governments that have historically had a

monopoly over the telecommunications sector and/or whose communications policies reflected

that of the Public Service model can observe ways that they can begin to shift the sector

toward a more liberal model of communications model. First, these countries should begin to

privatize service provider ownership through the removal of structural barriers for new

entrants and competitors as Lebanon’s TRA did in the draft law. Second, by establishing an

independent public agent as the “watchdog” of citizen interests, the government is removing

itself from the regulatory role. A public, independent agency like TRA allows for a balanced

regime of checks and balances in determining non-discriminatory, standard and transparent

policies around who enters the private market and holds a license to compete to provide

services. However, contrary to the case of Lebanon’s TRA, international governments should

make every attempt to allow the regulatory agency to act as independent from national

government influence as possible.

International governments can also learn from the shortcomings of the Service Provider

Regulation policy. For example, the TRA failed to take into account the speed caps that ISPs

often establish in their terms of user service due to limited broadband capacity. Governments

seeking to transform their telecommunications sector into a liberal, free market, while

simultaneously developing their ICT infrastructure, need to explicitly define the minimum

acceptable bandwidth speed to be made available for ISP subscribing customers. International

policy makers must also be aware of who the main suppliers are of key ICT infrastructure and

equipment. If it is the objective of international governments to completely liberalize the

telecommunications market, they must be sure policies and regulatory frameworks privatize all

key ICT infrastructure and give incentive (in the form of reduced prices or easy access to ICT

resources) to private companies entering a market formerly monopolized by the government.

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VII. Bibliography

1. Metzger, Jonathon. “Review of the ICT Sector in Lebanon and ICT Opportunities for USAID/Beirut”. Presented by USAID/BEIRUT in March, 2001, pg.10. http://pdf.usaid.gov/pdf_docs/Pnacu381.pdf.

2. Bureau of Economic, Energy and Business Affairs: Department of State 2011 Business Climate Report, http://www.state.gov/e/eb/rls/othr/ics/2011/index.htm Accessed June 15, 2012).

3. OpenNet Initiative: Internet Filtering in Lebanon, 2009. Accessed June 12, 2012.

4. United Nations Report: National Profile of the Information Society in Lebanon, New York: 2009. (Access via the web: http://isper.escwa.un.org/Portals/0/National%20Profiles/2007/English/Lebanon-07-E.pdf).

5. Telecommunications Regulatory Agency website: http://www.tra.gov.lb/, accessed June 16, 2012

6. Ogero website: http://www.ogero.gov.lb/Published/EN/profile.html. Accessed June 12, 2012.

7. International Telecommunications Union: Statistics: https://www.itu.int/ITU-D/ict/index.html, updated in 2012. Accessed June 14, 2012.

8. Telecommunications Regulatory Authority: Service Provider Licensing Regulation Draft Law, 2009.

9. Telecommunications Regulatory Authority: Investment Institutions. http://www.tra.gov.lb/Investment-institutions. Accessed June 14, 2012.

10. The Business Year: Off the Blocks, 2012. http://www.thebusinessyear.com/publication/article/2/50/lebanon-2012/off-the-blocks. Accessed June 17, 2012.

11. Abbassi Jawed. “Information and Communication Technology in the Middle East: Situation as of 2010 and Prospective Scenarios for 2030”. Center for Social and Economic Research, Case Network No.105. Published October 1, 2011. http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1943455##

12. TRA: Broadband Access: Economic Benefits and Challenges, January 2009. http://www.tra.gov.lb/subpage.aspx?pageid=1292

13. Chakrani, Hassan. Al Akhbar English online publication. “Lebanese Internet: Rotting on the Vine.” Published June 6, 2012

14. Ministry of Telecommunications. “Telecommunications Law No. 43: Ratified by the Lebanese Parliament.” 2002. (http://www.tra.gov.lb/Library/Files/Uploaded%20files/Law431/Law-431-EN.htm)

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