Re: [gaia] [hrpc] Fibre Feudalism

Henning Schulzrinne <hgs@cs.columbia.edu> Wed, 24 October 2018 13:16 UTC

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References: <CAD_CWO2=WS0E5HSrLmxPaMtESV5CVe+oKWDCDst6K8=7i=UpTA@mail.gmail.com> <b88433a6-873d-2333-ee40-8011d0c7d145@article19.org> <CAD_CWO1aHsQh-Rmq0Pd7J5Hc35Qfs5+A--y9MCy3kHt_Qsz0AA@mail.gmail.com> <2e2991e8-e44b-d90f-5411-9e2c2fadddba@article19.org> <770B9455-BAC5-4131-A871-0678B949F61D@webfoundation.org> <CAD_CWO3tGCg0k9QYHsrDvwTRe=oBGPkZpBBYwfEawYRJB3DKhg@mail.gmail.com> <CAHxHggcEvYNFdbkC-Cw-QTSpj6qR+qPEBEhi8njdxwZNVQr9cQ@mail.gmail.com> <6FE759E5-477D-488A-A7A3-D5241544AFF8@ac.upc.edu> <CAPkwMUcS3BOEHJ87YXqOb+2B2oTuDaJ36mY9r5kEdvzWjrfGuA@mail.gmail.com> <CACyT-3m-kB4n6w1y62h7QeyVG-b_y96XhSvyFmSi+Rgb6+P9qA@mail.gmail.com> <MWHPR04MB03352DC474C670FDB39952CDFFF60@MWHPR04MB0335.namprd04.prod.outlook.com> <a5bf1ae9-56b5-5737-fdb3-eb24a9ac8b03@article19.org> <CAD_CWO15qzLzz9Yu5_ocjCQnTyMeaP0pzoj3XekXL2SpxBRwPw@mail.gmail.com>
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From: Henning Schulzrinne <hgs@cs.columbia.edu>
Date: Wed, 24 Oct 2018 09:15:45 -0400
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To: Steve Song <stevesong@nsrc.org>
Cc: Gaia <gaia@irtf.org>
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Subject: Re: [gaia] [hrpc] Fibre Feudalism
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The FCC CAF II auction is interesting. It was available to non-traditional
carriers such as WISPs and rural electric cooperatives.

https://www.fcc.gov/reports-research/maps/caf2-auction903-results/

The complexity of the auction makes it difficult to replicate elsewhere (it
relies on cost estimates for locations and scores the auction bid based on
relative cost effectiveness), but it offers an interesting approach that
avoids some of the problems discussed, such as incumbent self-dealing.

On Wed, Oct 24, 2018 at 8:55 AM Steve Song <stevesong@nsrc.org> wrote:

> In South Africa, universal service funds are being used to buy
> set-top-boxes to facilitate the switchover to digital terrestrial
> television broadcasting.
>
> https://www.itweb.co.za/content/G98Yd7LxOPj7X2PD
>
> In Mozambique,  universal service funds were used to fund the construction
> of 103 mobile base stations of which 77 are non-functional today.
>
> Regards... Steve
>
>
>
> On Wed, 24 Oct 2018 at 09:23, Mallory Knodel <mallory@article19.org>
> wrote:
>
>> The USF in Kenya hit the front pages when it announced it would
>> (finally) spend its money (heretofore it is not clear if or how the
>> money was ever spent) on a rural connectivity project at $850k. Buried
>> in the text of the article it was noted that $10m would go to a
>> cybersecurity initiative of the President's office.
>>
>>
>> https://www.businessdailyafrica.com/economy/CA-s-Sh85m-plan-to-link-remote-areas-with-mobile-voice/3946234-4319204-gbsfna/index.html
>>
>> It would be really interesting to gather these unfortunate cases, as
>> Carlos suggests, but its a moving target.
>>
>> -Mallory
>>
>> On 24/10/2018 11:17, Arzak Khan wrote:
>> > The utilization of USF funds has been an issue in Pakistan where
>> > Ministry of IT and Telecoms has used the fund for building cricket
>> > stadiums, distributing smartphones to government employees and many
>> > other projects which has not impacted greatly on provisioning of
>> > broadband services in most of rural Pakistan. Building out fiber
>> > networks still remain a challenge and limited to few players only
>> > without promoting any competition.
>> >
>> >
>> > Arzak
>> >
>> > ------------------------------------------------------------------------
>> > *From:* hrpc <hrpc-bounces@irtf.org> on behalf of Kurtis Heimerl
>> > <kheimerl@cs.washington.edu>
>> > *Sent:* Monday, October 22, 2018 6:44 AM
>> > *To:* Carlos Rey-Moreno
>> > *Cc:* gaia; vint=40google.com@dmarc.ietf.org; Steve Song; hrpc@irtf.org
>> ;
>> > Leandro Navarro
>> > *Subject:* Re: [hrpc] [gaia] Fibre Feudalism
>> >
>> > I thought it worth noting that some of my experiences have been
>> > different than Carlos's; for example in an unnamed central asian country
>> > the regulator mentioned that the USF distribution is set in policy and
>> > they must, by law, return the money to the telecoms. Even in those with
>> > the ability to put the money elsewhere, there were occasionally
>> > structures that push the regulator to fund "related" but non-competitive
>> > services like computer or internet literacy. Tricky space with a lot of
>> > moving pieces.
>> >
>> > On Sun, Oct 21, 2018 at 10:58 PM Carlos Rey-Moreno
>> > <carlos.reymoreno@gmail..com <mailto:carlos.reymoreno@gmail.com>>
>> wrote:
>> >
>> >     Hi all, interesting debate indeed, and happy to join a further call
>> >     on this, or even work in a document where we can consolidate these
>> >     discussions.
>> >
>> >     After having engaged with several regulators, and managers/officials
>> >     from universal access agencies in Africa this year, my main take
>> >     away is that they keep on using USO to incentivize incumbents to go
>> >     to rural areas because that's the only way they know. Once they are
>> >     presented with alternative models like the ones mentioned by
>> >     Leandro, they are very open, in principle, to explore them. They are
>> >     the ones who know how ineffective the current models are, but in
>> >     most cases they are, as Steve points out, constrained by frameworks
>> >     that only allow to use the fund to those who contribute to it.
>> >
>> >     I think, at least in Africa, there is a very interesting opportunity
>> >     to work together with USAF managers/officials to discuss an
>> >     potentially implement innovative ways of using them.. Consolidating
>> >     the knowledge in this discussion and others in a working document,
>> >     with the different advocates in the region speaking proposing the
>> >     same thing, could contribute a lot in this direction.
>> >
>> >     best,
>> >
>> >     carlos
>> >
>> >     On Sun, 21 Oct 2018 at 19:29, Leandro Navarro <leandro@ac.upc.edu
>> >     <mailto:leandro@ac.upc.edu>> wrote:
>> >
>> >         Agreed, but the sad thing is that practice (country policy) goes
>> >         in the opposite way in the few cases I know where USO is a form
>> >         of subsidy or tax deduction to benefit the incumbent only,
>> >         before a legal monopoly. The typical government argument is that
>> >         USO is paid by industry, that reflects this privilege or new
>> >         form of monopoly/subsidy in favour of the incumbent only
>> >         (everyone pays the king operator in the feudal metaphor). In
>> >         consequence, the incumbent does the minimum required to justify
>> >         receiving the funds to preserve the pool of unconnected as a
>> >         source of future USO income (the serfs of the feudal system).
>> >
>> >         For example, one fibre community network but can be any
>> >         alternative operator to the incumbent, fears the effect of
>> >         that: https://www.ispreview.co.
>> .uk/index.php/2017/11/b4rn-fear-10mbps-uk-broadband-uso-may-hamper-rural-ftth-rollout.html
>> >         <
>> https://www.ispreview.co.uk/index.php/2017/11/b4rn-fear-10mbps-uk-broadband-uso-may-hamper-rural-ftth-rollout.html
>> >
>> >
>> >         That’s why USO as implemented can be counter effective.
>> >         Alternative models of distribution, radically different, are
>> >         needed, where all the funds are not given to a single operator
>> >         (and deter investment by others), but to every citizen that
>> >         qualifies (to free the serfs). Bottom-up (people centred)
>> >         instead of top-down (incumbent centred). Something along those
>> >         lines may contribute to increase alternatives and not just be
>> >         used to mainly reinforce the de-facto monopoly of largest
>> >         operators (for example: https://b4rn.org.uk/b4rn-service/gbvs/
>>  )
>> >         Otherwise USO policies are mainly a form of public subsidy, a
>> >         form of monopoly, to reinforce the incumbent, with the excuse of
>> >         the underserved and unconnected.
>> >
>> >         Leandro.
>> >
>> >>         On 21 Oct 2018, at 18:15, Vint Cerf
>> >>         <vint=40google.com@dmarc.ietf.org
>> >>         <mailto:vint=40google.com@dmarc.ietf.org>> wrote:
>> >>
>> >>         Steve is spot on.
>> >>         V
>> >>
>> >>         On Sun, Oct 21, 2018, 09:53 Steve Song <stevesong@nsrc.org
>> >>         <mailto:stevesong@nsrc.org>> wrote:
>> >>
>> >>             Hi Amelia, Sonia,
>> >>
>> >>             I agree this is a very interesting and timely debate and I
>> >>             would be happy to participate in a discussion on this.
>> >>
>> >>             Universal service funds that involve (or in many cases are
>> >>             legally restricted to) giving money back to the incumbents
>> >>             to build out infrastructure has proven (over and over and
>> >>             over again) to be a terrible idea.  I hope we can agree
>> >>             that we should stop doing that.  For me the issue is about
>> >>             power and control and the way it is used to impede
>> >>             competition.  The cost of technology has plummeted in both
>> >>             fibre and wireless technologies.  In theory that should
>> >>             have been a boon for competition but high spectrum auction
>> >>             fees and licenses along with exclusive control of fibre
>> >>             backbones has created an almost impenetrable barrier to
>> >>             market entry.  Any government intervention in universal
>> >>             service should obliged to address the issue of market
>> >>             permeability as well as ownership of and access to core
>> >>             networks.
>> >>
>> >>             Cheers... Steve
>> >>
>> >>             On Sat, 20 Oct 2018 at 07:07, Sonia Jorge
>> >>             <sonia.jorge@webfoundation.org
>> >>             <mailto:sonia.jorge@webfoundation.org>> wrote:
>> >>
>> >>                 Hi All,
>> >>
>> >>                 Interesting discussion here. One that might warrant a
>> >>                 webinar/conference call among interested people?
>> >>                 Steve, what do you think? I would be happy to join a
>> >>                 stimulating discussion on the topic, starting with
>> >>                 your blog and the Access Model.
>> >>
>> >>                 Amelia, can you point me to some evidence or a paper
>> >>                 (anything you may have) that shows that relationship
>> >>                 between USO and quality of infrastructure? I find that
>> >>                 very difficult to believe but open to be proven wrong.
>> >>
>> >>                 Something important to keep in mind is that countries
>> >>                 where USO have been more instrumental are also
>> >>                 countries that have traditionally been poorer and
>> >>                 behind in terms of infrastructure development; this is
>> >>                 certainly the case in some Southern European countries
>> >>                 and maybe Eastern European ones as well. So the level
>> >>                 of economic development overall is a key variable.
>> >>
>> >>                 As for Africa and/or infrastructure investments, I
>> >>                 could share a lot here, but for now let me call your
>> >>                 attention to some reports we produced and that can add
>> >>                 to the discussion.
>> >>                 - A4AI’s annual Affordability
>> >>                 Report:
>> https://a4ai.org/affordability-report/report/2017/.
>> >>                 Note that the 2018 report will be launched and
>> >>                 published on Tuesday and addresses key questions
>> >>                 relevant to this discussion, specially on costs
>> >>                 associated with infrastructure investment
>> >>                 - a recent blog on infrastructure costs and
>> >>                 challenges: https://a4ai.
>> .org/affordable-internet-access-the-cost-challenge/
>> >>                 <
>> https://a4ai.org/affordable-internet-access-the-cost-challenge/>
>> >>                 - For those interested in USFs in Africa,
>> >>                 see
>> https://a4ai.org/universal-service-and-access-funds-an-untapped-resource-to-close-the-gender-digital-divide/
>> >>
>> >>                 Best,
>> >>                 Sonia Jorge
>> >>                 Executive Director, A4AI
>> >>                 Head of Digital Inclusion, Web Foundation
>> >>                 1-617-905-7819
>> >>
>> >>                 On Oct 20, 2018, at 05:33, Amelia Andersdotter
>> >>                 <amelia@article19..org <mailto:amelia@article19.org>>
>> >>                 wrote:
>> >>
>> >>>                 Hi all,
>> >>>
>> >>>                 It might be helpful to know that EU countries where
>> >>>                 Universal Service
>> >>>                 Obligations have been extensively used and applied,
>> >>>                 also typically have
>> >>>                 worse infrastructure than EU countries where USO
>> >>>                 wasn't well applied.
>> >>>                 Applying USO means you put the government in a
>> >>>                 position where it faces
>> >>>                 off with the service provider under USO in a
>> >>>                 negotiation. The service
>> >>>                 provider has information advantage and typically a
>> >>>                 better relationship
>> >>>                 to its consumers than the government has to its
>> >>>                 citizens (so a
>> >>>                 communications advantage too). I lack experience of
>> >>>                 the African markets
>> >>>                 and their regulators, but in broad strokes those are
>> >>>                 the issues faced in
>> >>>                 various European jurisdictions with USO and I'm
>> >>>                 assuming similar
>> >>>                 difficulties would arise in the African setting. This
>> >>>                 is a bit
>> >>>                 theoretical, and I'm just curious how to avoid these
>> >>>                 information
>> >>>                 asymmetries?
>> >>>
>> >>>                 As it is described by Steven, the current feudalism
>> >>>                 (operators A, B and
>> >>>                 C all collaborate as soon as they own physical fibre
>> >>>                 networks) also
>> >>>                 incentivises many actors to get into the
>> >>>                 infrastructure market. That's
>> >>>                 fundamentally a good thing: it means not all the
>> >>>                 last-mile is owned by a
>> >>>                 few big actors who need to be regulated by a
>> >>>                 regulator who is
>> >>>                 fundamentally at a disadvantage compared to the big
>> >>>                 actors. It's the
>> >>>                 main criticism targetting the Local Loop Unbundling
>> >>>                 reform of 1999 in
>> >>>                 the EU as well - challengers don't invest enough in
>> >>>                 last-mile
>> >>>                 infrastructure (except in those EU markets where many
>> >>>                 different actors
>> >>>                 have had regulatory incentives to build their own
>> >>>                 networks, or where
>> >>>                 there has been purposeful public investment in
>> >>>                 last-mile). Or am I
>> >>>                 misunderstanding something?
>> >>>
>> >>>                 best regards,
>> >>>
>> >>>                 Amelia
>> >>>
>> >>>
>> >>>
>> >>>                 On 2018-10-04 20:52, Steve Song wrote:
>> >>>>                 Hi Mallory,
>> >>>>
>> >>>>                 Thanks for that!  I think you are on exactly the
>> >>>>                 right track in terms
>> >>>>                 of thinking about economic models.  Thanks to Erick
>> >>>>                 Huerta of
>> >>>>                 Rhizomatica, I am very taken with the thinking of
>> >>>>                 French economic
>> >>>>                 historian, Fernand Braudel..  Braudel argues that
>> >>>>                 the world has three
>> >>>>                 economies not one.  A global economy which is the
>> >>>>                 well-known
>> >>>>                 capitalist economic model where monopoly is the
>> >>>>                 perfect end-game in
>> >>>>                 theory for every player.  Google, Colgate,
>> >>>>                 Coca-Cola, all the usual
>> >>>>                 suspects form part of this economy.  The second
>> >>>>                 economy is the Local
>> >>>>                 Economy where services are specific to the
>> >>>>                 city/community where you
>> >>>>                 live.  This might be your local butcher, baker,
>> >>>>                 plumbers or even
>> >>>>                 larger service provider which offers services that
>> >>>>                 grow out of local
>> >>>>                 demand and which serve local needs in more unique
>> >>>>                 ways than the Global
>> >>>>                 Economy.  The third economy is the Subsistence
>> >>>>                 economy where market
>> >>>>                 forces may not operate because there is not
>> >>>>                 sufficient traditional
>> >>>>                 capital to make it work.  This is the world of the
>> >>>>                 informal economy
>> >>>>                 with barters, cooperatives, community initiatives
>> >>>>                 that directly
>> >>>>                 contribute to the overall economy but are largely
>> >>>>                 unmeasured by
>> >>>>                 traditional statistics.  And woven among these are
>> >>>>                 both commercial and
>> >>>>                 commons models, which can operate with varying
>> >>>>                 success at the
>> >>>>                 different levels.
>> >>>>
>> >>>>                 When viewed through this lens, it is easy to see how
>> >>>>                 regulation has
>> >>>>                 only enabled the global economy in telecommunication
>> >>>>                 and that there is
>> >>>>                 a need for enabling regulations to nurture telecom
>> >>>>                 initiatives in the
>> >>>>                 Local and Subsistence economies.
>> >>>>
>> >>>>                 For me this also highlights a key flaw in models
>> >>>>                 like the World Bank's
>> >>>>                 Access Gap model
>> >>>>                 <
>> http://blogs.worldbank.org/ic4d/the-gaps-model-and-universal-access>gt;. It
>> >>>>                 is not so much that the model is wrong, it is just
>> >>>>                 one-dimensional;
>> >>>>                 assuming that successful global capitalism is the
>> >>>>                 best of all possible
>> >>>>                 outcomes.
>> >>>>
>> >>>>                 Writing more about this shortly.
>> >>>>
>> >>>>                 Cheers... Steve
>> >>>>
>> >>>>
>> >>>>                 On Thu, 4 Oct 2018 at 10:57, Mallory Knodel
>> >>>>                 <mallory@article19.org <mailto:mallory@article19.org
>> >
>> >>>>                 <mailto:mallory@article19.org>> wrote:
>> >>>>
>> >>>>                    Hi Steve,
>> >>>>
>> >>>>                    Thanks for sharing. I read it last night and I
>> >>>>                 really enjoyed it.. I
>> >>>>                    think the metaphor is solid economically. And
>> >>>>                 politically, well, that
>> >>>>                    could be another post in and of itself..
>> >>>>
>> >>>>                    The agrarian commons would of course be ideal,
>> >>>>                 but what we have is a
>> >>>>                    sort of old-world economic structure that
>> >>>>                 politically controls and
>> >>>>                    profits from (what should be) the commons. This
>> >>>>                 sets you up nicely to
>> >>>>                    call for modern economic models ranging from
>> >>>>                 squarely capitalist to
>> >>>>                    socialist, and even (back to) the commons!
>> >>>>
>> >>>>                    I'm CCing HRPC because it might be of interest to
>> >>>>                 those who have
>> >>>>                    raised
>> >>>>                    issues of centralisation on the list in the past.
>> >>>>
>> >>>>                    -Mallory
>> >>>>
>> >>>>                    On 04/10/2018 15:30, Steve Song wrote:
>> >>>>>                 Hi all,
>> >>>>>
>> >>>>>                 This is a reflection on the current state of
>> >>>>>                 terrestrial fibre
>> >>>>>                 infrastructure in Sub-Saharan Africa (but I think
>> >>>>>                 applies just about
>> >>>>>                 everywhere).
>> >>>>>
>> >>>>>
>> https://manypossibilities.net/2018/10/fibre-feudalism/
>> >>>>>
>> >>>>>                 Curious to know how apt you feel the metaphor is or
>> >>>>>                 any other
>> >>>>                    reactions
>> >>>>>                 you may have.
>> >>>>>
>> >>>>>                 Thanks..... Steve Song
>> >>>>>
>> >>>>>
>> >>>>>                 _______________________________________________
>> >>>>>                 gaia mailing list
>> >>>>>                 gaia@irtf.org <mailto:gaia@irtf.org>
>> >>>>>                 <mailto:gaia@irtf.org>
>> >>>>>                 https://www.irtf.org/mailman/listinfo/gaia
>> >>>>>
>> >>>>
>> >>>>
>> >>>>                    --
>> >>>>                    Mallory Knodel
>> >>>>                    Head of Digital :: article19.org
>> >>>>                 <http://article19.org/> <http://article19.org
>> >>>>                 <http://article19.org/>>
>> >>>>                    gpg fingerprint :: E3EB 63E0 65A3 B240 BCD9  B071
>> >>>>                 0C32 A271 BD3C C780
>> >>>>
>> >>>>                    _______________________________________________
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>> >>>>
>> >>>>
>> >>>>
>> >>>>                 --
>> >>>>                 +1 902 529 0046
>> >>>>                 stevesong@nsrc.org <mailto:stevesong@nsrc.org>
>> >>>>                 <mailto:stevesong@nsrc.org>
>> >>>>                 http://nsrc..org <http://nsrc..org/>
>> >>>>                 <http://nsrc.org <http://nsrc.org/>>
>> >>>>
>> >>>>
>> >>>>                 _______________________________________________
>> >>>>                 hrpc mailing list
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>> >>>
>> >>>
>> >>>                 --
>> >>>                 Amelia Andersdotter
>> >>>                 Technical Consultant, Digital Programme
>> >>>
>> >>>                 ARTICLE19
>> >>>                 www.article19.org <http://www.article19.org/>
>> >>>
>> >>>                 PGP: 3D5D B6CA B852 B988 055A 6A6F FEF1 C294 B4E8 0B55
>> >>>
>> >>>
>> >>>                 _______________________________________________
>> >>>                 gaia mailing list
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>> >>>                 https://www.irtf.org/mailman/listinfo/gaia
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>> >>                 https://www.irtf.org/mailman/listinfo/gaia
>> >>
>> >>
>> >>
>> >>             --
>> >>             +1 902 529 0046
>> >>             stevesong@nsrc.org <mailto:stevesong@nsrc.org>
>> >>             http://nsrc..org <http://nsrc.org/>
>> >>
>> >>             _______________________________________________
>> >>             gaia mailing list
>> >>             gaia@irtf.org <mailto:gaia@irtf.org>
>> >>             https://www.irtf.org/mailman/listinfo/gaia
>> >>
>> >>         _______________________________________________
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>> >>         https://www.irtf..org/mailman/listinfo/gaia
>> >
>> >         --
>> >         Leandro Navarro
>> >         http://people.ac.upc.edu/leandro http://dsg..ac.upc.edu
>> >         <http://dsg.ac.upc.edu>
>> >
>> >         _______________________________________________
>> >         gaia mailing list
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>> >         https://www.irtf.org/mailman/listinfo/gaia
>> >
>> >
>> >
>> >     --
>> >     Carlos Rey-Moreno, PhD
>> >     "Community and Local Access Networks" Project Coordinator
>> >     Association for Progressive Communications
>> >
>> https://www.apc.org/en/project/local-access-networks-can-unconnected-connect-themselves
>> >     <https://www.apc.
>> .org/en/project/local-access-networks-can-unconnected-connect-themselves>
>> >     Cel: +27 (0) 76 986 3633
>> >     Skype: carlos.reymoreno Twitter: Creym
>> >     _______________________________________________
>> >     gaia mailing list
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>> >     https://www.irtf.org/mailman/listinfo/gaia
>> >
>> >
>> >
>> > --
>> > Public Key: https://flowcrypt.com/pub/kheimerl@cs.washington.edu
>> >
>> > _______________________________________________
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>> > gaia@irtf.org
>> > https://www.irtf.org/mailman/listinfo/gaia
>> >
>>
>>
>> --
>> Mallory Knodel
>> Head of Digital :: article19.org
>> gpg fingerprint :: E3EB 63E0 65A3 B240 BCD9  B071 0C32 A271 BD3C C780
>>
>> _______________________________________________
>> gaia mailing list
>> gaia@irtf.org
>> https://www.irtf.org/mailman/listinfo/gaia
>>
>
>
> --
> +1 902 529 0046
> stevesong@nsrc.org
> http://nsrc..org <http://nsrc.org>
>
> _______________________________________________
> gaia mailing list
> gaia@irtf.org
> https://www.irtf.org/mailman/listinfo/gaia
>