An analysis of policy conducted by: Lauren Moloney-Egnatios Prepared for: Schools OnlineLebanon’s draft law for Service Provider Licensing Regulation (2009) Draft Law passed on February 10, 2010SIS 645: International Communications and Cultural Policy
Table of Contents:I.Executive SummaryII.BackgroundIII.The Issue (as relevant to Schools Online)IV.Policy Analysis A.Description B.Communications Model Analysis C.Strengths and WeaknessesRecommendations for Policy ImprovementVI. Implications for LebanonVII. Implications for International RelationsVII.Bibliography 2
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 Public school curriculum can be outdated and lacks resources necessary to train the next generation of Lebanese leaders in the latest tools (Metzger: USAID/BEIRUT 2001, 3).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 inLebanon. Its mission is very difficult to achieve with slow, costly and inadequate bandwidthcapacities. In the past, Schools Online showed great commitment to potentially investing inLebanon’s educational sector. For example, a 2001 USAID report on Beirut reports that SchoolsOnline donated a significant sum of money to a Lebanese Foundation expanding internetconnectivity in public schools (Metzger, 200, 10). In addition, an informational interview in2012 revealed that this educational organization is merely waiting for adequate signs of “ICTinfrastructure stability” before investing in the establishment of ILCs throughout the country.The policy analyzed below in this paper provides recommendations for better informing thedecision of Schools Online about whether ISP licensing and service regulation will, in fact, yieldICT stability the new business will need to achieve its mission.III.Background: Despite it’s politically complex and sectarian government, Lebanon is one of the moredemocratic countries in the Middle East. The country’s business climate is friendly to direct 4
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 ClimateReport, http://www.state.gov/e/eb/rls/othr/ics/2011/index.htm). In this way, Lebanon is differentfrom some of the neighboring Arab countries in that new ICT development projects in Lebanoncan 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 internationaland national telecommunications sector. The Ministry of Telecommunications (MOT) solelyowned and/or licensed all fixed, mobile, and wireless networks. OGERO (Organisme de Gestionet dExploitation de lex Radio Orient) is a 100% government owned telecommunicationscompany 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 theMinistry of Telecommunications, Ogero played a pioneering role in introducing internet servicesto the first country in the Levant region: Lebanon. Before the attempt to privatize thetelecommunications sector in 2002, Ogero was the only entity in Lebanon responsible for theoperations, maintenance, sales, marketing, billing and management of the fixed telecom networkin 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 NationsReport, “National Profile of the Information Society in Lebanon”, 2009). In efforts to transformLebanon’s telecommunications market and revitalize the economy that suffered from years ofcivil war, the Lebanese Government made it a national imperative to turn thetelecommunications sector into a competitive market through privatization. Tied to this initiativeMOT 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 developtelecommunications in Lebanon. It’s primary duties are to encourage investment, competitionand transparency in the private and public sector and consequently, ICT growth, through theregulation of licensing and the monitoring of dominant or abusive activity in the market thatinhibit competition (TRA website: http://www.tra.gov.lb/). It is believed that the TRA representsa significant step signaling the beginning of the liberalization and restructuring process of theLebanese telecommunications sector. The 2002 Telecommunications Law 431 is the current law governing telecommunicationssector and delineating the powers and duties of both the TRA and the Ministry ofTelecommunications. It recognizes the Lebanese Government’s (MOT owned Ogero) monopolyover international telecommunications and national phone network (Open Net Initiative, 2009),yet attempts to liberalize the national telecommunications sector by opening it up for privateparticipation. For example, the law allows telecommunications service providers to set their ownrates 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 ofTelecommunications took a major step and began offering ISP services at the same rates asprivate sector ISPs. In doing so, it was MOT’s objective to directly intervene in order tostimulate competition with the private sector (United Nations, 2009). 6
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 highconnectivity fees. Due to the centralized and limited bandwidth capacity, internet service wascharacterized by poor quality and outdated infrastructure. The centralized ISP and lack of modern ICT infrastructure led to massive inefficienciesfor individuals and businesses in need of quality internet service. Due to poor development ofICT infrastructure, there was (and still is) a sizable digital divide between rural and urbancommunities in Lebanon. Those who were able to subscribe to internet services experiencedslow speeds due to a lack of broadband capacity that could accommodate multiple userssimultaneously. The centralized system also increased the presence of illegal ISPs whose qualityand service lacked regulation and monitoring by a governing authority. These illegal ISPscontributed to the problem of internet speed inefficiency by squeezing bandwidth capacities totheir limits, making it increasingly difficult to connect to the internet with more users sharingconstrained broadband width. Thus, businesses needing a reliable, efficient and affordable internet connection hadlimited options. Consequently, Lebanon’s highly educated and creative workforce had limitedjob opportunities and many citizens began to seek opportunities elsewhere, causing the economyto suffer greatly after the political turmoil of 2006. Most businesses chose to invest in othercountries 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 LearningCenters in rural communities of ICT developing countries as education development initiativesis impossible to achieve with slow, costly and inadequate bandwidth capacities. With the objective of combatting illegal ISPs, improving internet penetration rates andthe quality of internet services in Lebanon, the TRA created the Service Provider Licensing DraftLaw in 2009. It was approved by the Ministry of Telecommunications and passed by the StateCouncil in 2010. It attempts to solidify the privatization process of the service providertelecommunications market. Pertaining to internet services, the draft law outlines the applicationprocess and procedure, as well as the provisions for ISP licensees. On the surface, this draft lawseems to liberalize the ISP market to stimulate much-needed competition in thetelecommunications sector. Given that internet penetration rates were at almost 40% in 2010, an11% increase since 2009 (International Telecommunications Union: Statistics, 2012), some evenbelieve that the TRA’s regulatory framework for service providers has contributed to significantICT development over the past 5 years. However, the policy analysis below reveals that if the Lebanese government wants totruly liberalize the telecommunications sector, it has a long way to go. In fact, the Ministry ofTelecommunications still has a strong hold over key ICT infrastructure making it impossible forISPs to operate independently from the government of Lebanon. In addressing the underlyinginfrastructure issues of the TRA, its draft law of 2009 and the power of MOT in thetelecommunications sector, this report will reveal how the Lebanese Government can bettershape their policies to improve internet penetration rates and continue to develop ICTinfrastructure in Lebanon. 8
Policy Foundation: A.Description and Objectives: The main objective of the TRA’s Service Provider Licensing Regulation of 2009 is to increasecompetition in the telecommunications service provider market and consequently, lower internetconnectivity prices, improve internet penetration rates and deliver higher quality internet servicein doing so. If the draft law achieved such goals, educational non-profits such as Schools Onlinecould achieve its mission to improve internet connectivity in public schools. Thus, an analysis ofthe 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 radiofrequencies; 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 anofficial application process and procedure for licensing ISPs and holding them accountability toquality 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’simperative to privatize ISP ownership. Section 1a) declares that “anyone wishing to apply for aClass License without Radio Frequencies” [can do so, if the person submits in writing theapplication 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 bothdomestic and foreign ISP companies to invest in Lebanon. The underlying assumption behindthis article is that increased ISP ownership translates into a more competitive internet service
market which would likely decrease prices for internet service consumers. Consequently, withlower 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 alsoto deter internet users from connecting using illegal ISPs. Privatizing ISPs allows for increasedconsumer 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 ascompanies compete for customers. Before ISP licenses were open to private companies, Lebanonwas notorious for illegal ISPs. Illegal ISPs’ connections were not only unreliable and failed toprotect their users, but the lack of monitoring of quality allowed illegal ISPs to squeezebandwidth capacities to their limits, slowing down internet efficiency and discouraging usersfrom successfully connecting. Article fifteen’s application process attracts domestic and foreignISP 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 theTRA. 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 aprocedure 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 actingas a “watchdog” and on behalf of citizens’ interests. This section of the policy holds ISPsaccountable for protecting users’ information and right to dispute or make complaints regarding 10
the services they receive from the ISP. This section also mandates transparency from ISP licenseholders. If quality services are not being delivered by ISPs, the user has the right to makecomplaints. 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 toconditions defined in accordance to the telecommunications law 431 for delivering qualityservice. For instance, the Telecommunications Law holds ISPs responsible for meetingequipment and quality service standards (article 23) and in the case of monopoly pricing, theTRA can impose prices and tariff standards for ISPs with significant power in the market. Thisarticle’s objective is to encourage a more liberal service provider market, as well as, attempt topromote businesses’ and individuals’ subscription to legal ISPs by acting as regulators of ISPlicensees’ 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 aPublic Service model (in a quasi-development model state) to a Liberal model with a publicinterest tradition. Before 2002, the government had a monopoly over the domestic andinternational telecommunications sector. Its actions in the telecommunications sector reflectedthe Public Service model in many ways. First, in 1996, the government first introduced theinternet in Lebanon out of “public necessity”. This decision reflects the Public Service model inthat 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 skilledworkforce, the government made a quasi-development communications model decision todevelop Lebanon’s ICT infrastructure and informational services for economic gain. Incollaboration with international governments, NGOs and the private sector, Lebanon’s ICTpolicies 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 thetelecommunications market and moving towards a more Liberal model of communication. However, given that the telecommunications sector is far from free of governmentintervention, the policy more accurately reflects the Liberal communications model with a publicinterest tradition than it does the free market tradition. First, similar to the Liberal model with afree market tradition, the policy assumes that privatizing ISP licensing will increase competitionand help develop the market place of ideas. This is reflected in the policies nondiscriminatoryregulations and low entry barriers for allowing anyone to apply for an ISP license, so long asproper procedure is followed. Another feature of the policy that greatly reflects the Liberal Model with a public interesttradition is the fact that the government established an independent regulatory agency to serve asthe “watchdog of public interest”: the Telecommunications Regulatory Authority. The TRA notonly determines who is best financially positioned and equipped to become an ISP, but it alsoregulates the quality of internet service each ISP delivers. In this way, the TRA is servingcitizens’ interests in screening the application process for ISPs, and monitoring for potentialabuses 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 12
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 andright to dispute services provided by ISP owners. Yet another feature of the policy is characteristic of the government’s attempt totransform the telecommunications sector from reflecting a Public Service model to a Liberalmodel with a public interest tradition. The ISP licensing regulation policy assumes thecharacteristic 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 ICTinfrastructure that the operating arm of the Ministry of Telecommunications, Ogero, has in thetelecommunications sector. It has almost total control over international telecommunications,buying and selling bandwidth capacity, national telephone fixed line connections, and even anadvantage over DSL services. Since 2007, MOT became an ISP, as well. Therefore, thegovernment 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 publicinterest tradition in that there are clear provisions for protecting the newly privatized marketagainst monopolies on telecommunications service. Under article twenty-one, section h, the TRArequires all license holders to “promote competition” and “comply with specific conditionswhich 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 internetservice providers market power is a strong indication that preventing monopoly is a major issuefor Lebanon’s ICT policies at this time. Strong anti-trust laws are the only way the LebaneseGovernment is able to support the competitive open telecommunications market the governmentis 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 14
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 supportslow structural barriers for new entrants and competitors. Article fifteen, section one, does notdistinguish between foreign and domestic ISP license applicants. So long as proper procedure isfollowed for the application process, the policy reflects open and nondiscriminatory regulationsin 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 theTRA and the Lebanese Government to promote local entrepreneurship in information services.For example, Lebanon’s Government passed the “The Investment DevelopmentLaw” in 2001. It authorizes the “Investment Development Authority of Lebanon” (IDAL), toaward licenses and grant special incentives, exemptions and facilities to larger enterprisesmaking 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 strategicinternational-local partnerships through joint venture, equity participation, acquisition, andothers. In the last few years, many factors have encouraged foreign companies to set up offices inLebanon. According to statistics from the Lebanese Ministry of Economy and Trade 45 foreigncompanies launched offices, representative offices or branches in Lebanon in 2005 (LebaneseMinistry 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 divisionincentivizes more domestic and foreign investments. The ICT sector of Lebanon is increasinglyattractive after a World Bank report assessed that a “10% increase in broadband infrastructurecould result in a 1.2-1.5% increase in GDP” (The Business Year: Off the Blocks, 2012). A morerobust ICT infrastructure will attract local and foreign businesses and encourage them to investand establish offices in Lebanon. Lastly, one of the greatest strengths of Lebanon’s communications policy is that there is acomplete absence of censorship and technical filtering by ISPs and government (Open NetInitiative, 2009). The lack of content regulation on the internet reflects the overall liberal mediascene and free market economy. This strength aligns with Lebanese press laws which do notrestrict freedom of speech (Open Net Initiative, 2009). The country is home to many religionsand sectarian political parties. It is no surprise that the Lebanese Government andtelecommunications sector do not attempt to regulate expression among these diverse voices andoffers a plethora of outlets both on the web and among other media sources for diverseperspectives 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 withholdingbandwidth capacity for sale, causing prices to rise in the private market. As a result of thegovernment’s power in the market, bandwidth pricing in Lebanon is extremely high relative toother countries. Because the policy fails to take into account this unequal power structure, ISPsincur high costs for bandwidth capacity and these costs are passed down from ISPs to thecustomer. The high pricing restricts economic growth as businesses invest in more ICTdeveloped countries with larger bandwidth for cheaper prices. This pricing structure also reducesnet 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 toprovide access of internet services to all social groups and consequently, only the upper andmiddle socio economic class are represented on the internet. On that same note, the policy does not address that key components of the ICTinfrastructure that favor the government owned company, Ogero. For example, in 2007, theMinistry of Telecommunications launched DSL service in Lebanon. In order to launch theservice, the Ministry and ISPs signed a memorandum agreeing that Ogero would compete “onequal 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 wasand has been much quicker and easier for Ogero to provide DSL service to customers than forISPs. Thus, in failing to address these significant market power inequalities, the policy weakensthe private sector and increases the power of the state who is a merchant both buying andselling key ICT infrastructure to its competitors.
The last weak point of the policy has to do with a lack of transparency around minimumservices that ISP licensees are required to provide. Though the Service Provider LicensingRegulation law defines the applications process and mandates that ISPs provide the TRA withinformation regarding the quality, availability and price of its services, it does not set a minimumbandwidth speed that the ISP has to provide its customers. According to surveys by theregulatory agency, TRA, the average broadband access speed was at less than 1Mbps (TRA:Broadband Access-Economic Benefit and Challenges, 2009). Resulting, both individual andbusiness 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 StateCouncil passed a decree in August 23, 2011 to set a minimum speed to 1 MB per second anddecrease the monthly cost of internet services for ISP subscribers. The decree is expected toimprove the internet penetration rate and challenge the two main issues that have hindered theICT 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, thegovernment should consider some qualitative changes in the policy itself before looking toincrease the overall quantity of service providers in the country. The Lebanese Governmentassumed that increasing the quantity of ISPs without releasing its stronghold over key ICTinfrastructure, such as bandwidth capacity, would positively impact the overall internetpenetration in the country. However, it is clear through this analysis report that until thegovernment releases its stronghold on bandwidth capacity and/or increases total bandwidthcapacity available in Lebanon, non-profits like Schools Online will continue to have issues withslow internet speeds at high prices. Thus, it is not recommended that Schools Online establish 18
offices in Lebanon until the telecommunications sector reflects a truly liberal, free market, freefrom government intervention and stronghold over key ICT infrastructure. Today, the Lebanese Government has already begun to improve the Service ProviderLicensing Regulation of 2010 in issuing the August 23, 2011 decree that sets a minimumbroadband speed to 1 MB/second and lowers the monthly cost of internet service. The moreefficient internet speed will help businesses and individual users alike, improving the quality ofservices (in setting a minimum broadband access speed) that ISPs must provide at a regulatedprice. The lowered monthly cost will induce populations from lower socio-economic classes tosubscribe to ISPs and consequently, the total net penetration will rise. The Service ProviderLicensing Regulation in conjunction with this new decree should incentivize initiatives such asSchools Online to establish Internet Learning Centers throughout Lebanon. The two policies willliberalize ISP ownership, providing a variety of services to choose from and qualitativelyimprove ISP services in setting a minimum broadband access speed to 1MB/second. As a means to incentivizing development in the education sector and ICT infrastructureof 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 internetconnectivity to schools and rural communities. With less operational funds from which todevelop their initiative, Schools Online would be more likely to establish and sustain InternetLearning Centers in Lebanon if the monthly internet subscription costs lowered overalloperational costs. Providing financial incentives to non-profits like Schools Online would aid inthe development of the ICT infrastructure of Lebanon in that there would be a significantincrease 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 educationor 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 providingincreased regulation over the market power of the state owned fixed telecommunicationscompany, Ogero. Ogero is the only merchant in Lebanon that buys and sells bandwidth in thelocal 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, AlAkhbar English, 2012). With a policy that more explicitly regulates the power of Ogero anddefines the terms for bandwidth supply by Ogero, the private sector will be better positioned tocompete freely with the government without having to worry about the state owned companyabusing its market power. More specifically, the policy should ban Ogero from withholdingavailable bandwidths from sale to competing ISPs, forcing ISPs to buy at higher prices from themarket or, worse, buy from illegal bandwidth supplies. In doing so, the policy would be morereflective of a liberal, free market model of communication. This approach would ensure that theISP market more closely mirrors Lebanon’s free market economy and is protected from anymonopolies 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 20
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 severalimplications for international relations and development of communications policies in othercountries. For one, the policy demonstrates to the international public sphere that while manycollaborative efforts have been made to create regulatory framework and policies liberalizingthe telecommunications sector, in practice, the telecommunications sector is still not a trulyfree market. So long as the government continues to have a strong hold over key ICTinfrastructure and supply, the private sector will not be able to successfully compete againstthe state. Thus, international businesses and government seeking to collaborate with Lebanonneed 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 ServiceProvider Licensing Regulation, other countries with governments that have historically had amonopoly over the telecommunications sector and/or whose communications policies reflectedthat of the Public Service model can observe ways that they can begin to shift the sectortoward a more liberal model of communications model. First, these countries should begin toprivatize service provider ownership through the removal of structural barriers for newentrants and competitors as Lebanon’s TRA did in the draft law. Second, by establishing anindependent public agent as the “watchdog” of citizen interests, the government is removing
VII. Bibliography1. 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 BusinessClimate 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 16,20126. 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. AccessedJune 17, 2012.11. Abbassi Jawed. “Information and Communication Technology in the Middle East: Situationas of 2010 and Prospective Scenarios for 2030”. Center for Social and Economic Research, CaseNetwork 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=129213. Chakrani, Hassan. Al Akhbar English online publication. “Lebanese Internet: Rotting on theVine.” Published June 6, 201214. Ministry of Telecommunications. “Telecommunications Law No. 43: Ratified by theLebanese Parliament.” 2002. (http://www.tra.gov.lb/Library/Files/Uploaded%20files/Law431/Law-431-EN.htm)