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Kenya Needs IoT-specific Laws to Protect Consumers

October 18, 2018 Leave a comment

IoTThe rapid growth of the Internet brings with it new technology and applications. Of these, the most significant is the Internet of Things (IoT) which is bound to transform the Internet and move it from a virtual platform into the real world. The IoT will interconnect many devices to each other via the Internet and in the process, collect, process, store and transfer a large volume of information collected via these devices sensors. This data includes personal data which if misused can lead to personal harm or financial loss. To prevent this from happening, the IoT device end user might need to be protected by use of legislation from unwarranted misuse of their private data. If the current state of Kenyas data protection is anything to go by, the IoT will dig us deeper into the privacy issues that arise due to the sheer amount of data collected.  There is need to have laws in place that will protect the IoT end user’s private data from misuse. Upon my analysis of existing laws, the level of preparedness of the national regulator towards the privacy issues arising from the IoT use and adoption is wanting. Also,  end users and would-be end users are not aware of the privacy concerns surrounding the IoT adoption.

The IoT stands to benefit Kenyas in many ways, the connection of previously unconnected items such as furniture, cars, manufacturing plants and many more will have a huge positive impact on the quality of life for many. An example closer to home of what connecting previously unconnected physical things has on our lives is the advent taxi hailing apps such as Uber and Taxify. A cab on any of these platforms is essentially a car that is connected to the internet (not to be confused with a car that has Internet). The connecting of cars to the Internet has led to the lowering of travel costs for many and increased convenience because of improved economies of scale and efficiencies introduced. Now imagine this at a grand scale where everything we use in our daily lives is connected. The benefits will be immense. Take for example in the health sector, IoT sensors connected to patients will collect vital patient statistics in realtime and share with medical personnel immediately a threshold is reached to enable them take action and save a life.

In January 2018, The Communication Authority of Kenya (CA) said that Kenya’s Internet penetration stood at 112.7%[1] meaning that there are more Internet connected devices in Kenya than there are people. In other words, people own more than one device that is connected to the Internet. Between 2009 and 2010, the number of Internet connected devices in the world outnumbered the world’s human population (Ammar and Samer, 2016). Kenya is therefore a late entrant to the list of countries whose number of internet connected devices outnumbers the human population.

At the moment, most of these are personal computing and communication devices such as mobile tablets, mobile phones and personal computers. However, there is an increasing number of sensors and everyday objects that were previously unconnected that are now connected to the Internet. It is these new entrants into the connected space that will be the focus of this article. The IoT is what we get when we connect Things which are not operated by humans to the Internet (Waher, 2015). These things will not be general purpose devices such as smartphones and Personal Computers but dedicated-function objects such as furniture, vending machines, jet engines, connected cars and a myriad of other devices (Hung, 2017). The International Telecommunications Union defines IoT as “A global infrastructure for the information society, enabling advanced services by interconnecting (physical and virtual) things based on existing and evolving interoperable information and communication”[2]. According to Gartner[3], there is estimated that there will be over 30 billion connected devices by 2020; this is projected to rise to 75 billion devices by 2025. These devices will initially be adopted in commercial and industrial settings before eventual adoption for personal use. One characteristic of the IoT devices is the presence of sensors that can electronically detect the environment and generate data. According to Kenny (2015), the data collected by sensors will exceed 1.6 Zettabytes by 2020. This data will include data of a personal nature that will have been collected with or without consent of the IoT direct users or bystanders.  Six in ten IoT devices don’t properly tell end user how their personal information is being used or even when it is being collected. This leaves the end user in the dark as far as what happens to this data. The privacy risk posed to the end users whose personal data has been collected by IoT sensors. According to Renaud and Aleisa (2015), the percentage level of concerns identified by most scholars on IOT privacy is as below:

  • Location and tracking, this is the threat of determining and recording a person’s location through time and space at 31.5%
  • Identification threats that happen when sharing of un-anonymised data where a person’s identifier such as a pseudonym or an address is user to identify and locate the person in real life at 25.9%
  • Analysis of individuals data by use of data mining techniques for the purposed of profiling them at 21.3%
  • Inventory attacks, where the IoT device is hit by a Denial of Service attack to render it incapable of normal function at 8.3%
  • Interaction and presentation threats which occur when a user’s private data is transmitted through a public medium such as the internet and in the process disclosing it to unintended audiences at 6.5%
  • Life cycle transitions, where an end-of-life IoT device is discarded with it still holding private data at 3.7%
  • Linkage where previously autonomous systems are interconnected such as the combination of data sources creates new information that would have been impossible to create before. This threat is at 3%

It is emerging that users do not have the power to control what data is collected about them and how this data can be used or stored, privacy concerns have been on the rise in recent times.

The government and the Communication Authority need to empower users through primary and secondary legislation to enable them control quantity and types of data collected about them. A starting point would be putting in place IoT device manufacturing best practices to give control to the individual about that data is collected and how it is stored or transmitted. Devices that do not meet this criteria shouldn’t be imported into the country.  The empowered user should be in a position to:

  • Know when and what type of data about them is recorded and transmitted by an IoT device before purchasing or using it
  • Be adequately informed about how the IoT device protects any collected data on the device and also during transmission of this data.
  • Carry out the configuration and customization of privacy preferences on IoT devices to their level of comfort as concerns their security.

There is a push in the industry that manufacturers of IoT devices that collect personal data should be able to self-regulate and not wait for external and forced compliance to the above-mentioned privacy best practices. However, history lends that self-regulation has rarely worked. A good example was the need to have all mobile phone handsets charge using a common micro USB charger; it had to take the European parliament to pass laws that forced all European handset manufacturers to have their devices charge through a micro USB port for this to happen. Several countries are proposing regulations around IoT privacy and security. Australia and the United States of America are working towards laws to regulate the IoT devices so that at the minimum all the IoT devices:

  • Have non-default passwords on all manufactured IoT devices. This is because many devices today usually contain a default password to enable initial login in for device configuration purposes
  • All IoT device software must be patchable for discovered vulnerabilities and should be based on standardized protocols
  • Well laid down vulnerability handling and disclosure policies by manufacturers to ensure transparency and proper threat assessment of possible privacy and security weaknesses

One of the key roles of Communication Authority of Kenya is the safeguarding and protection of consumer interests in relation to the provision of ICT services (CA, 2015). This is achieved through the use of various regulatory instruments that are guided by laws. The current consumer protection regulations are as below:

  • The Kenya Information and Communications (Consumer Protection) Regulations, 2010
  • The Kenya Information and Communications (Dispute Resolution) Regulations, 2010
  • The Kenya Information and Communications (Registration of subscribers of Telecommunication services) Regulations, 2012

None of the above regulations addresses the privacy concerns the IoT users have when using the IoT. It is worth noting that the Kenya Information and Communications (Registration of subscribers of Telecommunication services) Regulations were passed in 2012. This was after the fact that it was realized the lack of mandatory legislation-backed mobile subscriber registration hampered the fight against mobile phone-based fraud. Criminals had laid their hands on subscriber details from M-pesa outlet booklets and have been using them to carry out fraud and identity theft.

The lack of a legal and regulatory framework for the protection of consumer right to privacy on the IoT can lead to negative consequences such as those witnessed on the mobile telephony space where criminals perform fraud and identify theft.

 

[1] Communication Authority of Kenya First quarter (July-September 2017) sector statistics report for the financial year 2017/2018
[2] https://www.itu.int/en/ITU-D/Regional-Presence/AsiaPacific/SiteAssets/Pages/Events/2016/Dec-2016-IoT/IoTtraining/IoT%20Intro-Zennaro.pdf
[3] https://www.gartner.com/doc/3659018/iot-global-forecast-analysis-
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The Dominance Debate Should Be About The Consumer’s Welfare, Not Operators

September 5, 2018 Leave a comment

Communication TowerDuring the last Safaricom AGM, the dominance debate came up and all contributors to the discussion at the meeting seemed to agree on one  thing: That the regulator is punishing Safaricom for being successful and that it was not their fault that their competitors have refused to invest and innovate. The recent calls by their competitors to the regulator to have them declared dominant and abusing their dominance are based on a market study report released last year by a consultant. This report found Safaricom to be dominant in both the mobile communication and mobile money markets. The report went further to suggest remedies that include infrastructure sharing, retail tariff controls and the splitting of the company into several independently run companies for mobile money and mobile communications.

In July this year, the parliamentary committee on ICT’s met sector players on the issue of dominance and what came out was other operators still strongly feel that they cannot be able to compete with Safaricom on equal footing. On the other hand the committee members felt that the operators are not doing enough to pry off Safaricom’s grip on the sector. Recent reports also indicate that the regulator is also under pressure to declare Safaricom dominant and in abuse of its dominance. By going ahead and doing so, the operator will not have a free hand in the determination and introduction of new products and services in the market without the regulators direct approval. Another recommendation that is being pushed is the sharing of both active and passive infrastructure by Safaricom with its direct competitors.

A point to note on the above is in all this discussion, no one is looking at the possible effects the implementation of these recommendations will have on the most important person in this debate; the consumer. The focus is mostly on the operators commercial welfare. Also, should the regulator decide to go ahead and implement the recommendations, what laws or framework will be applied? Are the laws also relevant to the current technological and market realities?

The Kenya Communication Act of 1998 and its subsequent amendments (Kenya Information and Communication amendment act of 2013) specify that the regulator shall from time to time develop and publish, in the Kenya Gazette, guidelines to be followed when determining whether a licensee in a dominant market position in a specific communications market. The Act also specifies that for the regulator to determine if a player is dominant, it shall prepare a dominant market power report to determine whether a licensee is dominant in a service or geographic communications markets. This is the report that was released in February this year. Based on the reports findings, the Act specifies that the regulator can declare a licensee dominant by considering the gazetted criteria, One of the critical criteria is if the operator possesses Significant Market Power (SMP).

Upon declaring an operator as dominant, the regulator will also need to show that the dominance is being abused to edge out competition from the market or to generate more profits or even offer inferior quality of service with no consequences. The criteria that can be used to check if there is abuse of dominance are as below. It’s worth noting that Safaricom meets none of the criteria below for abuse of dominance.

  1. Refusal to deal with competitors on the essential facilities doctrine: essential facility is facility supplied on a monopoly basis but is required by competitors but they cannot be reasonable duplicated by competitors for either economic or technical reasons. With new approaches or alternatives to essential facilities sharing such as VNOs and national roaming, and the fact that all mobile networks now have  a packet switched core as opposed to circuit switched, this doctrine cannot be used as a measure of dominance abuse because already Safaricom is sharing and leasing out unbundled services.
  2. Cross subsidization: This is where the dominant firm uses revenues from a market in which it is dominant to cross-subsidize the price of a service or product it provides in other markets. For example, there would be suspicion of cross-subsidization if Safaricom, when recently entering the home internet market (which Zuku was the de-facto player), offered much lower pricing than them by subsidizing home internet user pricing with revenues from their voice business. Entry prices for most markets Safaricom ventures into are often higher than competitors.
  3. Predatory pricing: This is where the dominant operator charges prices below a normal cost standard. At the moment, Safaricom prices are not the cheapest in the market so this also does not apply too. This debate would have made more sense if Safaricom was dominant through the offering of prices well below their competitors price points.
  4. Bundling of services: This is where the operator sells a product at a fairer price on condition that you also buy other services from them. For example, a user who simply wants airtime should be able to buy only airtime and not be forced to buy airtime and data though an offer despite them not having an immediate or future need for the data. If anything, its Safaricom’s competitors who are bundling services leading to wasteful accumulation of unnecessary services such as hundreds of unused SMS’s and talk time minutes that accumulate as subscribers purchase bundled data for internet access.

Innovation and Operations

There is this notion that the mobile sector is vendor driven, that the telecom equipment vendors often dictate the pace of innovation in the market. This is partly true and therefore also means that competitors in the sector have access to similar technology because the vendors in the sector supply all operators. Nokia, Huawei, Cisco, Ericsson all supply to the operators the same products. The difference however comes in on how these products are monetized. The dominance report recommends that Safaricom, upon being declared dominant should not sell services that are not replicable by the competition. This is to say, they cannot come up with a product that their competition, using their resources and infrastructure cannot come up with easily. The Kenyan ICT talent pool is very large and any operator worth their license can afford to hire the best brains in the country. The fact that all operators have equal access to technology and talent means that its not hard to replicate competitors products. But why then isn’t this happening? The answer lies in company culture. Safaricom cannot be punished for cultivating a culture of innovation as their competitors sit and wait for the regulator to give them a piece of the innovation pie. All operators have the necessary ingredients to succeed.

One business model that has been adopted by Safaricom’s competitors is outsourcing of functions. Ideally, firms are supposed to outsource their non-core functions so as to enable them focus on their core function. If its a hospital for example, it can outsource its transportation, cleaning, etc but isn’t expected to outsource core functions like diagnostics and patient care. However, many firms that adopt the outsourcing path end up over outsourcing even core functions. The reason is purely to make the financial statements look better because most of the costs will be classified as variable and not fixed costs. When a firm outsources both core and non-core functions to third parties, it loses control over quality of service and also fails to clearly see any inefficiencies in the operations.  The result is outsourcing will make the books look good but affect customer experience through inefficient service delivery.

What are the alternatives?

With telecommunication services now permeating all sectors of our lives, it has become a critical catalyst for socioeconomic development. drastic actions such as declaration of dominance and splitting up Safaricom will have far reaching effects on the Kenyan economy all in the name of giving it’s competitors an equal footing. So far, several regulatory actions aimed at leveling the playing field have not yielded much. First it was Mobile Number Portability (MNP) which according to analysts didn’t work well because subscribers were afraid to change operators due to M-pesa. For MNP to work, many felt that Mobile Money Interoperability (MMI) had to be in place. The regulator managed to bring all operators on the table and effect mobile money interoperability. So far since implementation, there has been no effect on the market dynamics. There are also a raft of measures put in place by the regulator to create a level playing field. Many of these measures have actually helped Safaricom’s competitors make slight gains in their market share. I believe these gains could have been more if these operators improved their operational efficiencies first.  Splitting Safaricom when the competitors operations are inefficient as they are will only do more harm to the sector as the supposed benefits will not be realized at that level of efficiency. The regulator in addition to playing its current role, should also demand accountability from operators on actions it takes to enable them gain market share but the operators fail to take up these opportunities. A good example is there was a very big push to effect mobile money interoperability, but when it was done, there was very little in terms of marketing this development bu those who were asking for it. At the very least there should have been a major marketing campaign that coupled MNP and MMI.

Another approach would be to offer tax breaks to Safaricom’s competitors on investment in network and services. This would lower their CAPEX on network roll out and services. Tax breaks can also be applied as a motivating factor when these operators reach certain predetermined targets. For example, if an operators revenues or market share hits a target, the government gives them a tax break. This will push them to be innovative in revenue generation and market share gaining activities.

The consumer

All the discussion around dominance has been mostly about operators gaining market share. There seems to be very little concern on the most important stakeholder: the consumer. At the end of the day the consumer should be able to make the decision on which provider to subscribe to based on the value they get. There is a general assumption that the consumer is always price driven. That all his decisions are based on price. This assumption is what has led to the many price wars we have witnessed in the market which have yielded little in terms of market share gains. Consumers buy convenience and experiences. operators who want to be successful must start looking at the consumer experience and convenience when they are on their network.

The focus of this debate should be the improvement of consumer welfare. All actions by the regulator should take into consideration the consumer, consumer welfare is the regulators biggest mandate. The best approach would be for the regulator to look at how best citizens will be served telecom services. The recommendation for Safaricom to share its infrastructure with competition can be shelved in favor of the Universal Service Fund. The USF can be used to lower the cost of rolling out services by operators in under served areas. This approach has worked very well in Latin America.

According to an analysis by the Institute of Economic Affairs (IEA), should the regulator implement the dominance report  recommendations, consumer prices for services would actually rise and not fall. This will hurt the consumer despite the fact that the leveling of the playing field for all operators is supposed to lead to lower prices. The declaration will serve the operators but not the consumer. So in the interest of the consumer, I believe other approaches listed above can be implemented, splitting Safaricom is not one of them.

My Thoughts on the Proposed Retail Tariff Controls in Kenya

February 28, 2018 1 comment

telecoms-13The Communication Authority of Kenya is mulling on introducing retail tariff controls in the Kenyan mobile telephony sector. As you would imagine, this has elicited mixed reactions depending on who you ask. This move it is said is part of a raft of recommendations by the recently released report that studied the Kenyan telecommunication competitive landscape. The introduction, according to the regulator is aimed at correcting market failures that are as a result of one operator being dominant over the rest. The proposed retail price controls aim at limiting Safaricom’s freehand in determination of loyalty schemes and promotions, prohibition of on-net discounts, mobile money fees charged to unregistered and cross-platform money transfers. Tariff  control is a regulatory mechanism that can be employed to correct market failures in a market. The main motivation for price control is to protect consumers’ rights and interests in circumstances where market forces alone have been unable to do so.

The competitive landscape report implies that Safaricom’s price differentiation between on-net and off-net calls leads to tariff-mediated network effects. By this I mean that subscribers on a network find it cheaper to call others who are on the same network than calling people on a different network, the effect of this the emergence of the ‘club’ effect where subscribers decide which network to join based on which network the people they call mostly are on. If most of my family and friends subscribe to a network X, I am more likely to subscribe to network X because by being on network X and not on network Y, my overall calling costs will be lower due to cheaper on-net pricing. This it is argued is abuse of its dominance. But this is only true if the interconnection rates are high between Y and X meaning it will cost me more if I chose network Y where none of my relatives and friends subscribe to. As we speak, interconnection rates are already regulated by CA. This fact alone means that the regulator found and enforced an interconnection rate that was cost based and reflected the market realities. The Safaricom on-net call rates are above the regulator-set interconnection rates  and are similar to the rates its competition provides its customers to call into the Safaricom network, in short, Safaricom’s subscribers pay the same rate as competitors subscribers when both call another Safaricom subscriber. CA would be justified in imposing tariff controls if indeed Safaricom’s subscribers paid less to call their counterpart than when competition subscriber calls. The fact that the report found that each operator was dominant on its own network also means that the club effect can easily be replicated by competition through aggressive marketing and innovation.

Individually tailored tariffs

Another proposal by the regulator is the prohibition of individually tailored loyalty schemes and promotions. The CA 2010 Tariff regulations specify that all promotions or loyalty schemes must be approved by the regulator prior to commencement. Any promotion, offer or scheme currently in operation has the direct approval of the regulator, the details of each promotion or loyalty scheme structure were available to CA before approval and these include individually tailored schemes and promotions. When an operators behaviour due to regulation causes it to become successful, it cannot be punished for successes it encountered while operating within the laid down regulatory framework. If there is any discriminatory behaviour, then CA failed in detecting and stopping this even with the existence of regulations. When that happens, it is clear that regulation is not the solution to the perceived market failures and the only remedy is let competitive forces determine customer choice.

What would happen if call tariffs are regulated?

Most people assume tariff regulation leads to the lowering of retail rates. This would only be true if CA had a way of accurately measuring the costs involved to provide service to additional customers on their network. At the moment, due to the fact that Safaricom has invested more in network infrastructures geographical and population reach, it costs them less to bring in a new customer and provide service to them than its competitors. The proposal to use Long Run Incremental Costs (LRIC) method would mean that because of the massive economies of scale enjoyed by Safaricom owning a large network and technology convergence, the cost of offering an extra minute of termination on the network is virtually zero in the short-term and LRIC is applied to give a realistic cost over the long term. How long is ‘long term’ will determine the price point.
A regulated tariff price should imitate the prices that would have arisen in a market with effective competition, both because this provides incentives to produce the requested service at the lowest possible cost and because the operators requesting the service have the incentive to optimize their own investment decisions. In this way price controls can contribute to efficient utilization of social resources. The problem however is that LRIC works very well in legacy circuit switched networks where it was easy to link network utilization with the provision of a service (if a switched circuit is in use, it is providing a directly attributable service), in a converged environment, the relationship between network resource utilization and provision of services is not that straightforward and an LRIC model applied to it would fail to efficiently allocate costs. As networks evolve into Next Generation Networks (NGNs), LRIC approach to service cost allocation becomes inefficient and LRIC starts to resemble the Full Allocated Costing (FAC) model. The result? higher prices to the consumer.

Replicable retail tariffs

One of the recommendations by the study is that Safaricom’s Tariff must pass the ‘replicability test’.  In order for a product or service to be considered replicable, it must be commercially and technically capable of being replicated by Safaricom’s competitors. By this we mean that any new tariffs that Safaricom comes up with should take into consideration the capability or state of competitors infrastructure and services especially at the wholesale level. If for example, Safaricom comes up with a tariff that takes advantage of a new innovation they developed, then competition should have similar innovations on their networks or should be allowed by Safaricom to access this new innovation at wholesales prices to enable them offer similar tariffs. In order for competitors to be able to compete with Safaricom in retail markets, it is necessary for them to have access, either via their own networks or through access to Safaricom’s network, to the wholesale components that enable those retail prices to be offered. This as you can imagine will slow down the pace of innovation by Safaricom or change the main focus of innovation from the customer to competition, anytime Safaricom wants to innovate, they will think of ways through which competition will not benefit much from it as opposed to spending their time and knowledge on how the innovation will first benefit the customer.

Tower sharing

The report found that Safaricom is dominant in the tower market owning about 65% of telecommunication towers in Kenya and recommends that it shares it towers with competition. To do this effectively, Safaricom has to let a 3rd party manage the towers on its behalf. Safaricom owns its towers while competition has a mix of owned and outsourced/leased towers. With rapid advancement in technology, there is a saying in the industry that it is always cheaper to build a network tomorrow. Any new entrant or existing operator rolling out new retail services and infrastructure such as towers will do it cheaper today than those who did it in the past. See how easy it was for Finserve Africa (Equitel) to get market reach by the flick of a switch riding on an MVNO license? Older operators didn’t get to enjoy these benefits and had to put in sweat and blood to get where they are.
In the Safaricom 2017 sustainability report, the operator spent close to 10 million litres of fuel and about KES 48,000 per month per tower location on energy costs. The report also shows that fuel and power costs are coming down and that Safaricom has also embraced green energy initiatives to power the active components at the tower stations, it is becoming cheaper by the day to setup and manage tower locations but the increase in the number of towers makes the management of the same a challenge.  Outsourcing of tower management is used by some operators to shift a large element of their fixed costs to the variable costs column of their financial books, in doing so the operators financial health improves. Tower outsourcing has little to do with improved efficiency in actual operations and management of these towers but more to do with improving the books. Due to this, the global trend in the telecom sector is the outsourcing of tower management to independent 3rd parties, something Safaricom should consider for its own benefit and not due to regulatory requirement. Safaricom should then decide to lease its towers to competition on a purely commercial basis.

Conclusion

Although well meaning, the CA needs to explore non-tariff based remedies to the perceived dominance of Safaricom. Tariff control is a very intrusive approach to handling abuse of dominance whether real or perceived. As markets evolve to become competitive, ex ante regulation should reduce as the regulator forebears regulation in favour of competitive forces. The challenge however is that customer inertia can mask the existence of competition in the market leading to the regulator applying regulatory tools to correct this perceived market failure. Market forces should be let to dictate the market tariffs.
The tariff control ocean floor is littered with shipwrecks of tariff control attempts by various countries that  tried to correct market failures by  employing it. One of these countries is Mexico who in 2012 introduced tariff controls by baring America Movil from charging interconnection fees to its competitors. Movil controls 70% of Mexico mobile market. As of 2015, mobile call charges had dropped by about 17% but investment in the sector dropped 30% during the same period, for a developing country like Kenya, a drop in ICT investments will have far reaching effects across multiple sectors of the economy. Whereas the intended outcome of tariff control is to  protect the consumer from a dominant operators actions, the question that remains is whether tariff control is the only viable market correction tool available.

 

Building Owners Impeding Telecom Services Roll-out Due To Lack Of Laws

January 21, 2018 4 comments

strctured-cabling-system-1There is this new building in Nairobi that is now inviting new tenants to occupy it after being recently completed and opened with much fanfare. As usual, new tenants were expected to fit suitable furniture and fittings into their new premises. But there was one problem: The building; in all its glory, lacked suitable telecommunication raiser ducts and conduits and occupants could neither pull cable to create Local Area Networks nor could they easily connect any floor to the basement where a local ISP had placed its fiber optic switch. The building owners also asked the tenants to bear any costs related to the modification of the building to enable the setting up of telecommunication infrastructure.

I searched the Kenya building code of 2009 and the National Construction Authority Regulations of 2014 to see if any of them compel building designers to incorporate telecommunication ducts as part of a buildings services in a similar manner it specifies requirements for  plumbing, electrical cabling, ventilation and heating/cooling. Sadly both do not make it mandatory for designers to incorporate into their designs paths, risers, ducts, trays or any other cable containment mechanisms that will enable the easy pulling, organizing and routing of telecommunication cables to any part of the building.

For buildings that have incorporated telecommunication cabling space and paths in their design and construction, the MDF or telecommunication room is usually small, poorly ventilated, poorly supplied with power and mostly located on the basement of most buildings which can sometimes be a long distance to the top floor depending on the building height. Building owners are also charging telecommunication companies hosting charges to host their switches and other equipment in the MDF room. These charges vary from a low of KES 3,000 to a high of KES 25,000 a month with or without electric supply. In the same breath, utility companies providing water and electricity are not charged rent for their equipment and fixtures such as electricity meters by the building owners to avail their products and services to the same tenants. In fact, its the building owners who pay the utility companies for them to bring in services to them.

With nearly every office needing internet connectivity for normal operations just like they need electricity, water and drainage, why do building owners create barriers for telecommunication companies by not making their buildings  cable ready and if they do,  go ahead and levy monthly rent for the cabinet hosting the equipment? Some building owners have also gone ahead and signed exclusivity agreements with one provider to host their equipment and avail internet connectivity in the whole building, locking out competitors. I know of operators who have been denied building entry to avail services to potential customers because competition locked them out with an exclusivity agreement between them and the building owner.

Outside buildings, telecom operators also have to apply and pay for wayleaves and permits from county governments and the Kenya National Highways Authority (KeNHA) to trench, lay cable, and do back-filling. It takes an average of three weeks to obtain a permit from any of these bodies and at a significant cost too. Permits to cross major highways by way of micro-tunneling can take several months to obtain.

The above challenges exist because there is no clear legal framework in which the telecom operators can work in to avail their services which can now be considered as utility services similar to electricity and water supply. There is need to do the following so as to make it easier for the operators and consumers of their services:

  • Amend the Kenyan building regulations to ensure that all commercial an multi-dwelling residential units such as apartments have suitable and standardized telecommunication cable pathways and containment fixtures. MDF room location should also take into consideration the transmission distance limitations of some technologies such as electrical/copper based cable maximum transmit distances.
  • Make it illegal for building owners to sign exclusivity agreements with a single or a select number of providers and baring the rest from building entry. Every operator should be given equal and reasonable access to their potential customers in any building. The proposed Kenya infrastructure sharing act can incorporate a section that outlaws exclusivity agreements as they also effectively bar infrastructure sharing.
  • The Kenya wayleave act cap 292 should be amended and modernized to reflect the current realities. The act assumes that the government is the sole provider of utility services and does also not incorporate the provision of utilities by private enterprises.
  • All road designs where necessary and possible, should incorporate buried ducts and manholes along the entire stretch of the road and suitable micro-tunnel crossings to carry any operators fiber-optic and coaxial cables at a small monthly fee payable to the road owner (KeNHA or county government). This will avoid instances where each operator has to trench and bury their own cable. This is sometimes done on the same side and section of the road and often leads to accidental cutting of a competitors cable as an operator trenches to lay their own cable. In the last 3 months, I’ve heard of about 4 instances of this happening in Kenya. Other than this, frequent trenching of roads inconveniences other road users and pedestrians. This is especially true in cities and towns.
  • County governments should be compelled by law to not charge telecom operators for permits to lay cable, this can be done by amending the Kenya Information and Communication act section 85 and 86 to explicitly state that no fees should be levied by local authorities and also specify timelines within which permits should be granted. The overall economic effect of letting the operators lay cable without many barriers such as fees and delays in approvals far outweigh the financial gain from permit fees by the county governments.
  • Physical planning departments in both national and county governments should incorporate telecommunication infrastructure real estate current and future needs when designing cities and towns.
  • The Kenya Information and Communication act should specify harsher punishment to telecom infrastructure vandalism acts such as fiber optic cable cutting or destruction of a mobile/wireless base station. In the same breath, it should also compel operators to conduct awareness campaigns to citizens living near telecommunication infrastructure on the dangers of tampering with the infrastructure.

Recent research shows that access to telecommunication services such as the Internet and telephony has a great impact on the socioeconomic well being of citizens especially in developing countries such as Kenya. It is therefore important that operators get all the support from the government in their quest to roll out services to the citizens because in dong so, they help the government in meeting its socioeconomic objectives.

 

Harmonic Convergence? FM Interference to 700 MHz LTE Service

March 10, 2014 Leave a comment
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