Category Archives: Activism

Telkom – lessons from an unregulated monopoly

A free market in telecoms is near impossible. But many young tech enthusiasts are blissfully ignorant to this fact. South Africa is no different. Often one hears the mantra, by the ZAdigirati: If only there was competition in South Africa, then the outrageous internet and telecoms costs would come down.


Telkom Hellkom Djouma
Originally uploaded by Deon Louw Botha.
How does this idea explain this story then?

Mhambi read via Wired Gecko about report on Engadget that the Indian Government aims to supply each citizen with a 2Mbps internet connection by 2009. Wow, amazing.

“…now the real hotness is in connecting up an entire nation. According to IndiaTimes, the government is proposing that all citizens of India receive complimentary 2Mbps internet by 2009, and the service would be provided by the state-owned BSNL and MTNL. Officials backing the plan are hoping that giving all residents access to high-speed internet would “boost economic activity””

The government intervening to supply cheap telecoms dumbfounds most of the tech ideologues. Even when it worked before in places like South Korea.

Ideologues?

Yip, you heard me. In the West the prevailing orthodoxy is such – there must be competition in telecoms provision, because the free market must prevail, service will spread and it will drive down prices. A British academic, Richard Barbrook, hit the nail on head when he coined this pervasive ideology the Californian ideology. It’s worth a read.

A brief look at the history of telecoms should indicate that things are not that simple. Telecoms tend to be natural monopolies. The economic value of the network rises exponentially with the connections or users added, and considering the costs of constructing the network, especially the last mile, it’s economically inefficient to have two separate networks. If left alone the larger network will swallow the smaller.

In practise Western governments accepted this fact. The USA realised that for the US to get a large network they should allow AT&T to develop unhindered, but to regulate the prices and the the roll-out to sub economic parts of the country (called universal service). Although nominally a private company Ma Bel (AT&T) under these conditions grew fast and provided all Americans with cheap phone calls. The government regulated its prices but the economy of scale it achieved made it still possible for AT&T to be hugely profitable.

In the 80’s with the rise of Thatcherism and Ronald Reagan, right wing ideologues launched an assault on this old idea of a public telephone monopoly under government control. Competition was forced into all markets and also this market. But this particular one was no free market. To create competition a web of legislation, regulation and monitoring had to be spun, else the incumbents would just swallow up the new comers.

After more than a decade of a dearth of true competition, the UK started showing some of its benefits in 2003. Broadband prices started to fall, and true competitors entered the market. By this time however countries like South Korea enjoyed much higher bandwidth at lower prices for a number of years. That is broadband provided by monopoly state owned companies.

Why had competition taken so long to take hold in the UK? BT, the UK incumbent, had tried every trick in the book to forestall competition in the last mile. (The so-called local loop.) Competitors had to be allowed to connect to BT’s local exchanges, because it would not have been economical for them to replicate this infrastructure. It was even claimed that BT had engineered its technical protocalls to interface less effeciently with that of its rivals. But with the vast amount of resources thrown at the problem of opening up BT (including regulatory splitting it into two seperate parts, one of which only business is to allow acces to the local loop), eventually it paid dividends.

In the US they did not try to solve the real problem at all. Instead of opening the local loop they split AT&T into a number of geographically defined telcos. They kept them separate via regulation. Each was a monopoly in his own back yard. Prices predictably went up. Today with regulation lifted somewhat, the telcos are swallowing each other once again.

What can South Africa learn from the US, UK and Korean experience?

It is possible to create a competitive market of sorts in telecoms, but it takes years, and complex legal and technical regulation, constant vigilance and strong willed enforcement. The simpler route to the information super highway, is to ditch the copious amounts of regulation and have one national monopoly, with no or little profit motive.

Currently, with Telkom, South Africa has the worst of both worlds. A private company that’s not properly regulated. That coupled with tech stake holders barking up the wrong ideological trees is a recipe for disaster. No wonder predatory elites can use this state of affairs to milk South African internet users dry.

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How many $100 laptops could Oprah Winfrey buy South Africa?

You may know Oprah Winfrey has opened a $40 million school for girls, south of Johannesburg. Apparently this is a greater sum than the US government spent on development in the whole of Africa last year.

ZuluZulu says many thanks Tannie Oprah. But Mhambi would wonders how many of Nicolas Negroponte’s $100 laptops she could have bought with $40 million and if it would not have been money better spent?

A quick bit of maths brings me to believe that Oprah’s money could have bought 400,000 laptops. Which is quite allot. Who would she give it to? I would suggest the poorest children in Gauteng.

The South African government has divided all school pupils into 5 categories according to how poor they are. In Gauteng, the smallest but most developed province there are 383,674 pupils in the poorest and largest category. This province would be ideal, relatively densely populated and with good roads, the wireless mesh technology built into the laptops could cast a wireless blanket.

Oprah could have given all of these poorest pupils $100 laptops, and probably could have covered of the next poorest category with what she will need to maintain the school and pay its staff. Just imagine 400,000 plus laptops creating their own wireless mesh all over the province and giving access to the poor to the Internet.

I’m no pedagogue but he reckons that if you give children the opportunity they will learn to use these instruments themselves, without too much hassle, as if by magic. (Many South African teachers have no clue how to use a computer). Imagine the creativity it could unleash?

Now if only the South African government could deal with the predatory monopoly that is Telcom and bring down internet access costs.

And if Joe Modise’s estate could repay the £500,000 and $10 million bribes for British Hawks and German subs, we would be looking at another 110,000 plus laptops, and if Shaik and Zuma…

Can tech save the earth?

There was a time when a UK academic, Dr. Richard Barbrook, accused the digirati of California of believing in a misleading ideology, the “Californian Ideology“.

According to him Net heavy weights like Kevin Kelly, Esther Dyson and Steve Jobs were beholden to this Californian ideology. A weird hybrid ideology that married ideas associated with the right – free market economics – and those that came from the left, counter-culture libertarianism.

Barbrook said:

“On the West Coast, skilled workers and entrepreneurs in the hypermedia industries form the ‘virtual class’. Like the ‘labour aristocracy’ of the last century, core personnel in the media, computing and telecoms experience both the insecurities and rewards of the marketplace. The Californian Ideology reflects this ambiguity by simultaneously advocating the New Left utopia of the electronic agora and the New Right’s vision of the electronic marketplace.

However both left- and right-wing anarchists ignore the key role of taxpayers’ dollars in the creation of the PC and the Net. The exclusion of public institutions from the construction of cyberspace can only increase the fragmentation of American society into antagonistic, racially-determined classes.”

But today one of the cyber gurus that Barbrook accuses, Nicolas Negroponte, made an announcement that both disproves and supports Barkrook’s contention.

Negroponte, head of the Massachusets Institute of Technology’s (MIT) Media Lab announced the wonderful news that the first batch of computers built for the One Laptop Per Child project could reach users by July this year.

The One Laptop Per Child Project aims to deliver the children’s laptop — a potent learning tool created expressly for the world’s poorest children living in its most remote environments.


Originally uploaded by ozymiles.

The laptops will run a bespoke form of Unix operating system where they are encouraged to work on an electronic journal, a log of everything the user has done on the laptop. Because says Negroponte:

“…one of the saddest but most common conditions in elementary school computer labs (when they exist in the developing world), is the children are being trained to use Word, Excel and PowerPoint,” Mr Negroponte said.

“I consider that criminal, because children should be making things, communicating, exploring, sharing, not running office automation tools.”

The proposed $100 machine will also have a dual-mode display—both a full-color, transmissive DVD mode, and a second display option that is black and white reflective and sunlight-readable at 3× the resolution.

The laptop will have a 500MHz processor and 128MB of DRAM, with 500MB of Flash memory; it will not have a hard disk, but it will have four USB ports. The laptops will have wireless broadband that, among other things, allows them to work as a peer-to-peer mesh network; each laptop will be able to talk to its nearest neighbors, creating an ad hoc, local area network. The laptops will use innovative power (including wind-up) and will be able to do most everything except store huge amounts of data.

Why do children in developing nations need laptops? Why not a desktop computer, or—even better—a recycled desktop machine? Negroponte answers:

Desktops are cheaper, but mobility is important, especially with regard to taking the computer home at night. Kids in the developing world need the newest technology, especially really rugged hardware and innovative software. Recent work with schools in Maine has shown the huge value of using a laptop across all of one’s studies, as well as for play. Bringing the laptop home engages the family. In one Cambodian village where we have been working, there is no electricity, thus the laptop is, among other things, the brightest light source in the home.

Why is it important for each child to have a computer? What’s wrong with community-access centers?

One does not think of community pencils—kids have their own. They are tools to think with, sufficiently inexpensive to be used for work and play, drawing, writing, and mathematics. A computer can be the same, but far more powerful. Furthermore, there are many reasons it is important for a child to own something—like a football, doll, or book—not the least of which being that these belongings will be well-maintained through love and care.

What about connectivity? Aren’t telecommunications services expensive in the developing world?

When these machines pop out of the box, they will make a mesh network of their own, peer-to-peer. This is something initially developed at MIT and the Media Lab. We are also exploring ways to connect them to the backbone of the Internet at very low cost….We are working with the local governments and the private sector regarding how to reduce the cost of Internet access.

This includes connectivity to the Internet from the mesh through gateways at the schools. And how will these be marketed?

The laptops will be sold to governments and issued to children by schools on a basis of one laptop per child. Initial discussions have been held with China, India, Brazil, Argentina, Egypt, Nigeria, and Thailand. An additional, modest allocation of machines will be used to seed developer communities in a number of other countries. A commercial version of the machine will be explored in parallel.

How will this initiative be structured?

The $100 laptop is being developed by One Laptop per Child (OLPC), a Delaware-based, non-profit organization created by faculty members from the MIT Media Lab to design, manufacture, and distribute laptops that are sufficiently inexpensive to provide every child in the world access to knowledge and modern forms of education. OLPC is based on constructionist theories of learning pioneered by Seymour Papert and later Alan Kay, as well as the principles expressed in Nicholas Negroponte’s book Being Digital. The founding corporate members are Advanced Micro Devices (AMD), Brightstar, Google, Marvell, News Corporation, Nortel, and Red Hat.

To keep the cost down we will market the laptops in very large numbers (millions), directly to ministries of education, which can distribute them like textbooks.

So there you have it. Barbrook was right. Negroponte can not deviler his digital utopia and save the world without the help of not-for-profits, academia and government.

But he was wrong because Negroponte is well on his way to actually have an almost unimaginably positive impact on the lives of poor people in the developing world.