By Andre Griffith
The primary business pursuit of Internet Cafés is facilitating international voice calling, in order to do which the cafés utilise Internet connections from a number of providers who provide international connectivity. The fees for these calls are somewhere in the order of 3 to 5 US cents per minute, that is, about 6 to 10 Guyana dollars per minute.
A quick check with the rates published in a 2008 telephone directory revealed that I could expect to pay 90 – 100 Guyana dollars per minute to call the United States, up to 134 dollars per minute to call Canada and up to 136 dollars per minute to call to the United Kingdom. The degree of disparity in the respective sets of rates helps to illustrate the so-called seismic shift that has taken place in the global telecommunications industry. Seismic shifts in industries are occasioned by a number of factors, among the more common of which are de-regulation and changes in technology.
One of the effects of deregulation is that entities previously barred from participating in an industry are able to participate, fundamentally altering the industry structure from monopolistic or oligarchic one to a more competitive environment. Examples of these are to be found in the airline industry where flag carriers were exposed to competition on long-haul international routes, the financial industry where investment banking, insurance and other financial services companies were allowed to offer traditional banking services, and telecommunications where monopolies were dismantled and, subsequently, providers such as cable television operators were allowed to enter the business of telecommunications, proper. The ‘uglier’ side of de-regulation involves reduction of standards required of businesses and reduction of regulatory oversight which is almost inevitably attended by abuses by businesses.
While de-regulation (or indeed making of new regulations) is the result of deliberate government action, technology change is mostly a result of innovation within industries themselves, and when the seismic changes hit, there are, invariably, spectacular winners and equally spectacular losers.
As far as the situation in the local Internet Café industry is concerned, what is playing out is reflective of a fundamental technology change th
at is now reaching our local telecommunications landscape, that is, penetration of Internet access and the phenomenon commonly referred to as convergence. This transformation is so powerful that the Economist magazine of September 17-23 2005 proclaimed the demise of telephony with the sensational cover headline “How the internet killed the phone business” which has been “borrowed” for this piece.
Convergence is driven by advances in digitisation technology. When we speak of convergence we refer to the fact that today we can turn almost any information into computer data. In other words, all information streams converge to data. We can take still images (such as photographs), moving images (video), and most importantly from the point of view of GT&T we can turn voice into data. We can store the data on digital media and, again most importantly, that data can be transported over data networks like any other computer traffic.
The Internet gives us a low-cost, public data network with virtually ubiquitous presence globally, while convergence gives us the ability to convert any information into data. Taken together what you have is the potential for the complete destruction of the traditional business and pricing models for telecommunications carriers, and as the fore-mentioned article from the economist showed, the reactions from telecommunications carrier the world over are varied. Predictably some operators are blocking access to services such as Skype, while others are attempting to structure contracts with their subscribers to prohibit the use of these services. It is notable that our provider does both of these things. On the other hand, other companies attempt to embrace voip and to be innovative in offering other services recognising that revenues from voice-only offerings will inevitably disappear.
Most readers would probably see nothing new or revolutionary about Internet access since already, it would seem that most of us cannot remember a life without it. A slight retrospective however should put this in perspective. Less than a decade ago, “broadband” Internet service was not available from our licensed provider. Ten years ago, there were no alternative service providers. Twenty years ago, our telephone company was a state-owned monopoly, and even upon privatisation in 1991, the “Web” – which was the “killer app” that drove Internet adoption the world over – did not exist.
The purpose of this digression is to reinforce the point that with Internet access as with convergence, technologies as they exist and are used today were unforeseen close to two decades ago when the Government of Guyana signed an agreement with Atlantic Tele Network, GT&T’s parent company. In this regard, my particular concern is with the blocking of voice over IP (voip) calls over networks where the customer has already paid for a service that is data. With respect to this, I venture the opinion that data is data is data, and that if I have paid for a data service, I have a right to send whatever data I choose, and my voice ceases to be voice after it goes through the conversion process.
At the heart of the argument is the interpretation on the “exclusive right” to provide “all national and international voice and data transmission” that was granted to GT&T by the agreement of 1991. Although this is first and foremost a legal matter, it concerns technical concepts thus I offer a technology-based argument. If the agreement of 1991 had envisaged all technologies, then, first off, there ought to have been no need to make a distinction between voice and data since under convergence they become one and the same. Having misplaced my copy of the contract, I have to rely on memory when I say that broadcast networks in general were specifically omitted, but video (almost exclusively distributed by television broadcast in those days outside of theatres and videotapes) was not mentioned in the agreement. Again this would tend to show that the present day situation where non-broadcast television networks such as cable outfits are digital operations, was not countenanced. If our cable television operators were to provide digital television services, then the video payload would be in the form of a stream of data. Would the cable television operators then be in violation of GT&T’s rights? If the answer is no, it means that there are limitations to the interpretation of “all data transmission”. If the answer is yes, I would be at a loss to appreciate, how a company could have rights to a service nowhere stated in its agreement, when care was taken to specify the other two services. For that to be so, the exclusive right would seem to me to apply to the underlying transport mechanism (in this case a data network), rather than the service per se delivered over that network, (video) which was never mentioned in the agreement. But this brings us back in a circle! If the right applies to the transport mechanism but the agreement had no concept of future technologies, then it is only logical that the right was limited to the transport mechanisms in place at the time that the agreement was made! This raises the question as to whether Internet service too ought or not to be part of the provider’s service portfolio since data transmission at the time was largely limited to fax and telex messaging. The permutations are endless and require the application of legal minds to any unravelling process.
Personally, I would welcome an unbiased legal opinion. In the meantime, I believe that with respect to bolstering declining revenues from the sector, the public interest may be better served by hiring good accountants to determine the reasonableness or otherwise of allowing 1.2 billion in advisory fees as a legitimate expense as opposed to taxing the cafés out of existence.
