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Final Policy Analysis Report (2012)


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Final Policy Analysis Report (2012)

  1. 1. 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, 2010 SIS 645: International Communications and Cultural Policy
  2. 2. 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 WeaknessesV.Recommendations for Policy ImprovementVI. Implications for LebanonVII. Implications for International RelationsVII.Bibliography 2
  3. 3. I. Executive Summary: Internet penetration rates in Lebanon are low compared to neighboring Arab countries and internet connectivity is one of the slowest in the Middle East. This report analyzes the 2009-2010 draft law for Service Provider Licensing Regulation created by the Telecommunications Regulatory Agency. The original objective of the draft law was an attempt to combat illegal ISPs, improve internet penetration rates and the quality of internet services in Lebanon. However, this report reveals that there is still a large disparity between the written law and the reality of the telecommunications sector. 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. In the conclusion section, implications of the policy will be outlined and recommendations will be provided to the Lebanese Government as to how the policy can be improved to promote a more perfect information environment with healthy competition in the telecommunications sector, as defined by the participatory model of communication.Introduction: For the most part, Lebanon has enjoyed a long history of quality education. Most of the country is literate, often in threeor more languages (Arabic, French and English). However, computer (and Internet) penetration in schools, particularlypublic schools, is low. Public school curriculum can be outdated and lacks resources necessary to train the nextgeneration of Lebanese leaders in the latest tools (Metzger, 2001, 3). Schools Online, attempts to combat the national digital divide while simultaneously, improving nations’ educationalsectors by establishing Internet Learning Centers in developing countries ( Schools Onlineis part of the educational division of Relief International, a humanitarian non-profit agency that provides emergency relief,
  4. 4. rehabilitation, development assistance, and program services to vulnerable communities worldwide. It is the mission ofSchools Online to help students gain access and use the communication and information resources of the Internet forlearning and cross-cultural dialogue. Thus far, Schools Online has not been able to establish an Internet Learning Center in Lebanon. Its mission is verydifficult to achieve with slow, costly and inadequate bandwidth capacities. In the past, Schools Online showed greatcommitment to potentially investing in Lebanon’s educational sector. For example, a 2001 USAID report on Beirutreports that Schools Online donated a significant sum of money to a Lebanese Foundation expanding internet connectivityin public schools (Metzger, 200, 10). In addition, an informational interview in 2012 revealed that this educationalorganization is merely waiting for adequate signs of “ICT infrastructure stability” before investing in the establishment ofILCs 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, yield ICT stability the newbusiness will need to achieve its mission.II. Background: Despite it’s politically complex and sectarian government, Lebanon is one of the more democratic countries in theMiddle East. The country’s business climate is friendly in that it does not distinguish between foreign and domesticinvestment in commercial policies (State Department:2011 Business Climate Report, In this way, it is different from some of the neighboring Arabcountries in that new ICT development projects in Lebanon can enjoy the general business climate in the country: trade isopen, taxation is reasonable, and related commercial policies compare favorably to other countries in the Middle East. Historically, the Lebanese Government held a monopoly over the international and national telecommunicationssector. The Ministry of Telecommunications (MOT) solely owned and/or licensed all fixed, mobile, and wirelessnetworks. OGERO (Organisme de Gestion et dExploitation de lex Radio Orient) is a 100% government ownedtelecommunications company established in 1972 and supervised by the Ministry of Telecommunications( In 1996, through the support of the Ministry ofTelecommunications, OGERO played a pioneering role in introducing internet services to the first country in the Levant 4
  5. 5. region: Lebanon. Before the attempt to privatize the telecommunications sector in 2002, Ogero was the only entity inLebanon responsible for the operations, maintenance, sales, marketing, billing and management of the fixed telecomnetwork in 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 Nations Report, 2009). In efforts totransform Lebanon’s telecommunications market and revitalize the economy that suffered from years of civil war, theLebanese Government made it a national imperative to turn the telecommunications sector into a competitive market. Tiedto this initiative MOT 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 (see below),it is legally mandated to liberalize, regulate, and develop telecommunications in Lebanon. It’s primary duties are toencourage investment, competition and transparency in the private and public sector and consequently, ICT growth,through the regulation of licensing and the monitoring of dominant or abusive activity in the market that inhibitcompetition (TRA website: At the time of its establishment, the international sphere believed thatdevelopment of the TRA was a significant step towards liberalization and restructuring the telecommunications sector. The 2002 Telecommunications Law 431 is the current law governing telecommunications sector and delineating thepowers and duties of both the TRA and the Ministry of Telecommunications. It recognizes the Lebanese Government’smonopoly over international telecommunications and national phone network (Open Net Initiative, 2009), yet attempts toliberalize the national telecommunications sector by opening it up for private participation. For example, the law allowstelecommunications service providers to set their own rates 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 of Telecommunications took a major stepand began offering ISP services at the same rates as private sector ISPs. In doing so, it was MOT’s objective to directlyintervene in order to stimulate competition with the private sector (United Nations, 2009).III. Issue: Before the 2002 law attempting to privatize the national telecommunications market, the 100% state ownedcompany, OGERO, set premium rates for internet connectivity. As a result, the internet was a service reserved for the
  6. 6. upper socio-economic class who could pay the high connectivity fees. Due to the centralized and limited bandwidthcapacity, internet service was characterized by poor quality and outdated infrastructure. The centralized ISP and lack of modern ICT infrastructure led to massive inefficiencies for individuals andbusinesses in need of quality internet service. Due to poor development of ICT infrastructure, there was (and still is) asizable digital divide between rural and urban communities in Lebanon. Those who were able to subscribe to internetservices experienced slow speeds due to a lack of broadband capacity that could accommodate multiple userssimultaneously. The centralized system also increased the presence of illegal ISPs whose quality and service lackedregulation and monitoring by a governing authority. These illegal ISPs contributed to the problem of internet speedinefficiency by squeezing bandwidth capacities to their limits, making it increasingly difficult to connect to the internetwith more users sharing constrained broadband width. Thus, businesses needing a reliable, efficient and affordable internet connection had limited options.Consequently, Lebanon’s highly educated and creative workforce had limited job opportunities and many citizens beganto seek opportunities elsewhere, causing the economy to suffer greatly after the political turmoil of 2006. Most businesseschose to invest in other countries with more ICT development, quality ISPs offering available bandwidth capacities ataffordable prices. This is the case of Schools Online. Its mission to spread Internet Learning Centers in rural communitiesof ICT developing countries as education development initiatives is impossible to achieve with slow, costly andinadequate bandwidth capacities. With the objective of combatting illegal ISPs, improving internet penetration rates and the quality of internetservices in Lebanon, the TRA created the Service Provider Licensing Draft Law in 2009. It was approved by the Ministryof Telecommunications and passed by the State Council in 2010. It attempts to solidify the privatization process of theservice provider telecommunications market. Pertaining to internet services, the draft law outlines the application processand procedure, as well as the provisions for ISP licensees. On the surface, this draft law seems to liberalize the ISP marketto stimulate much-needed competition in the telecommunications sector. Given that internet penetration rates were atalmost 40% in 2010, an 11% increase since 2009 (International Telecommunications Union: Statistics, 2012), some evenbelieve that the TRA’s regulatory framework for service providers has contributed to significant ICT development overthe past 5 years. 6
  7. 7. However, the policy analysis below reveals that if the Lebanese government wants to truly liberalize thetelecommunications sector, it has a long way to go. In fact, the Ministry of Telecommunications still has a strong holdover key ICT infrastructure making it impossible for ISPs to operate independently from the government of Lebanon. Inaddressing the underlying infrastructure 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 better shape their policies toimprove internet penetration rates and continue to develop ICT infrastructure in Lebanon.IV.Policy Foundation:A.Description and Objectives: The main objective of the TRA’s Service Provider Licensing Regulation of 2009 is toincrease competition in the telecommunications service provider market and consequently, lower internet connectivityprices, improve internet penetration rates and deliver higher quality internet service in doing so. If the draft law achievedsuch goals, educational non-profits such as Schools Online could achieve its mission to improve internet connectivity inpublic schools. Thus, an analysis of the 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 theapplication process and procedure for class licenses without radio frequencies; 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 TRAsetting up an official application process and procedure for licensing ISPs and holding them accountability to qualitystandards 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’s imperative to privatize ISPownership. Section 1a) declares that “anyone wishing to apply for a Class License without Radio Frequencies” [can do so,if the person submits in writing the application provided by the TRA] (TRA: Service Provider Licensing Regulation DraftLaw, 2009). In creating low entry barriers for private sector applicants, the policy is encouraging both domestic andforeign ISP companies to invest in Lebanon. The underlying assumption behind this article is that increased ISPownership translates into a more competitive internet service market which would likely decrease prices for internetservice consumers. Consequently, with lower prices, the assumption is that overall net usage in the country wouldimprove.
  8. 8. In creating an open application process for ISPs, the intention behind article fifteen was also to deter internet usersfrom connecting using illegal ISPs. Privatizing ISPs allows for increased consumer choice when selecting how (and forhow much) consumers will connect to the internet. Moreover, under perfect market conditions, competition in the sectordrives prices down as companies 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 to protect their users, but thelack of monitoring of quality allowed illegal ISPs to squeeze bandwidth capacities to their limits, slowing down internetefficiency and discouraging users from successfully connecting. Article fifteen’s application process attracts domestic andforeign ISP 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 the TRA. 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 a procedure 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 acting as a “watchdog” and onbehalf of citizens’ interests. This section of the policy holds ISPs accountable for protecting users’ information and rightto dispute or make complaints regarding the services they receive from the ISP. This section also mandates transparencyfrom ISP license holders. If quality services are not being delivered by ISPs, the user has the right to make complaints.Moreover, ISPs cannot change the availability of their services, quality or price, without making the modifications knownto the TRA. In addition, Article 21 mandates that the TRA has the right to hold ISPs accountable to conditions defined inaccordance to the telecommunications law 431 for delivering quality service. For instance, the Telecommunications Lawholds ISPs responsible for meeting equipment and quality service standards (article 23) and in the case of monopolypricing, the TRA can impose prices and tariff standards for ISPs with significant power in the market. This article’sobjective is to encourage a more liberal service provider market, as well as, attempt to promote businesses’ andindividuals’ subscription to legal ISPs by acting as regulators of ISP licensees’ quality standards, pricing structure,customer complaints and user protection.B.Assumptions and Communication Policy Models: 8
  9. 9. The ISP license regulation policy reflects the government’s attempt to transform from a Public Service model (in aquasi-development model state) to a Liberal model with a public interest tradition. Before 2002, the government had amonopoly over the domestic and international telecommunications sector. Its actions in the telecommunications sectorreflected the Public Service model in many ways. First, in 1996, the government first introduced the internet in Lebanonout of “public necessity”. This decision reflects the Public Service model in that the government was the sole provider ofthe internet and set the rates for such service (Venturelli, 2012). Using this approach before draft law of 2009, informationservices 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 skilled workforce, the government madea quasi-development communications model decision to develop Lebanon’s ICT infrastructure and informational servicesfor economic gain. In collaboration with international governments, NGOs and the private sector, Lebanon’s ICT policiesand infrastructure have significantly improved to better reflect its free market economy. The ISP license regulation draftlaw of 2009 was a first step towards liberalizing the telecommunications market and moving towards a more Liberalmodel of communication. However, given that the telecommunications sector is far from free of government intervention, the policy moreaccurately reflects the Liberal communications model with a public interest tradition than it does the free market tradition.First, similar to the Liberal model with a free market tradition, the policy assumes that privatizing ISP licensing willincrease competition and 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 as proper procedure isfollowed. Another feature of the policy that greatly reflects the Liberal Model with a public interest tradition is the fact thatthe government established an independent regulatory agency to serve as the “watchdog of public interest”: theTelecommunications Regulatory Authority. The TRA not only determines who is best financially positioned and equippedto become an ISP, but it also regulates 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 potential abuses of the market thatwould hinder the ability of citizens’ to access the internet efficiently.
  10. 10. In addition, the TRA regulates the licensing of public airwaves such as radio frequencies. The Liberal model witha public interest tradition assumes that public airwaves are a public resource that requires regulation. In this way, the TRAis serving as a regulatory agency or a “watchdog by monitoring who is using public airwaves and how they are beingutilized. Furthermore, in outlining the conditions of services for ISP license holders in article twenty-one, the TRA is alsoacting as the regulatory agency for protecting users’ personal information and right to dispute services provided by ISPowners. Yet another feature of the policy is characteristic of the government’s attempt to transform thetelecommunications sector from reflecting a Public Service model to a Liberal model with a public interest tradition. TheISP licensing regulation policy assumes the characteristic notion that the, “marketplace of ideas works most of the timebut not always” (Venturelli, 2012). This assumption is reflected in observing the monopoly over key ICT infrastructurethat the operating arm of the Ministry of Telecommunications, Ogero, has in the telecommunications sector. It has almosttotal control over international telecommunications, buying and selling bandwidth capacity, national telephone fixed lineconnections, and even an advantage 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 marketto 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 public interest tradition in thatthere are clear provisions for protecting the newly privatized market against monopolies on telecommunications service.Under article twenty-one, section h, the TRA requires all license holders to “promote competition” and “comply withspecific conditions which may be imposed on Service Providers with Significant Market Power”(Draft Law 2009). TheSignificant Market Power law defines “criteria for identifying a significant market power”, potential abuses of serviceproviders with SMP and regulations to be applied to service providers with SMP” (Significant Market Power, 2009).Clear regulation and monitoring of internet service providers market power is a strong indication that preventingmonopoly is a major issue for 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 government is striving to achieve.C.Strengths: Utilizing the participatory model as a benchmark of success in analyzing policies such as the 2009 ISPLicensing Regulation Draft Law, one is able to better comprehend this policy’s strengths. The first is that it demands 10
  11. 11. 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 withfair and equal opportunity to report complaints and disputes regarding the services provided. In addition, ISP licenseesmust report any changes in tariffs, quality or availability of services, as well as provisions regarding the quality ofequipment being utilized (TRA: Draft Law, 2009). Another strength of this policy as it relates to the participatory model is that it supports low structural barriers fornew entrants and competitors. Article fifteen, section one, does not distinguish between foreign and domestic ISP licenseapplicants. So long as proper procedure is followed for the application process, the policy reflects open andnondiscriminatory regulations in allowing anyone to apply for an ISP license. Since this policies inception in 2010, fifteenISPs, have received licenses and are fully operating in Lebanon. An additional strength of the policy is that diverse capital sources have been sought by the TRA and the LebaneseGovernment 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) to award licenses and grantspecial incentives, exemptions and facilities to larger enterprises making new investments in information services (TRA:Investment Institutions. In an attempt to attract foreign investments, IDALlaunched in 2003 the "Investors Matching Service" to facilitate the creation of strategic international-local partnershipsthrough joint venture, equity participation, acquisition, and others. In the last few years, many factors have encouragedforeign companies to set up offices in Lebanon. According to statistics from the Lebanese Ministry of Economy and Trade45 foreign companies launched offices, representative offices or branches in Lebanon in 2005 (Lebanese Ministry ofEconomy: Statistics on Foreign Companies, Increased competition in the ICT sector is expected as the TRA financial division incentivizes more domestic andforeign investments. The ICT sector of Lebanon is increasingly attractive after a World Bank report assessed that a “10%increase in broadband infrastructure could result in a 1.2-1.5% increase in GDP” (The Business Year: Off the Blocks,2012). A more robust ICT infrastructure will attract local and foreign businesses and encourage them to invest andestablish offices in Lebanon.
  12. 12. Lastly, one of the greatest strengths of Lebanon’s communications policy is that there is a complete absence ofcensorship and technical filtering by ISPs and government (Open Net Initiative, 2009). The lack of content regulation onthe internet reflects the overall liberal media scene and free market economy. This strength aligns with Lebanese presslaws which do not restrict freedom of speech (Open Net Initiative, 2009). The country is home to many religions andsectarian political parties. It is no surprise that the Lebanese Government and telecommunications sector do not attempt toregulate expression among these diverse voices and offers a plethora of outlets both on the web and among other mediasources for diverse perspectives and voices to be freely expressed.C.Weaknesses: Though the Service Provider Licensing Regulation draft law has strengths, there are many fundamentalweak points of the policy. First, while it was the policy’s objective to improve the quality of internet service provided andincrease internet penetration rates by increasing competition and lowering costs for internet services, the draft law doesnot actually take into account the availability of bandwidth capacity for sale to ISPs. ISPs have the option to buybandwidth capacity from the government owned company, Ogero, or private international bandwidth providers. Due tothe government’s strong hold on key ICT infrastructure and equipment such as bandwidth capacity, the policy is actuallystrengthening ISPs dependency on the government when purchasing bandwidth capacity. Moreover, the government has the potential to control the market by withholding bandwidth capacity for sale,causing prices to rise in the private market. As a result of the government’s power in the market, bandwidth pricing inLebanon is extremely high relative to other countries. Because the policy fails to take into account this unequal powerstructure, ISPs incur high costs for bandwidth capacity and these costs are passed down from ISPs to the customer. Thehigh pricing restricts economic growth as businesses invest in more ICT developed countries with larger bandwidth forcheaper prices. This pricing structure also reduces net usage so that only upper socio-economic classes can afford tosubscribe to internet service. Thus, the policy is weak in that it does not allow for high levels of internet penetration, failsto provide access of internet services to all social groups and consequently, only the upper and middle socio economicclass are represented on the internet. On that same note, the policy does not address that key components of the ICT infrastructure that favor thegovernment owned company, OGERO. For example, in 2007, the Ministry of Telecommunications launched DSL servicein Lebanon. In order to launch the service, the Ministry and ISPs signed a memorandum agreeing that Ogero wouldcompete “on equal footing” with the private sector in bringing DSL services to Lebanon (Abbassi, 2011). However, given 12
  13. 13. that OGERO maintains ownership over key infrastructure such as landlines, it was and has been much quicker and easierfor OGERO to provide DSL service to customers than for ISPs. Thus, in failing to address these significant market powerinequalities, the policy weakens the 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 minimum services that ISPlicensees are required to provide. Though the Service Provider Licensing Regulation law defines the applications processand mandates that ISPs provide the TRA with information regarding the quality, availability and price of its services, itdoes not set a minimum bandwidth speed that the ISP has to provide its customers. According to surveys by the regulatoryagency, TRA, the average broadband access speed was at less than 1Mbps (TRA: Broadband Access-Economic Benefitand Challenges, 2009). Resulting, both individual and business users cannot benefit from broadband during peak net usehours: the more people online, the slower the internet. In efforts to enhance the Service Provider Licensing policy, theState Council passed a decree in August 23, 2011 to set a minimum speed to 1 MB per second and decrease the monthlycost of internet services for ISP subscribers. The decree is expected to improve the internet penetration rate and challengethe two main issues that have hindered the ICT sector and economy from developing in the past. V.Recommendations The Service Provider Licensing Regulation of 2010 can be greatly improved. First, the government should considersome qualitative changes in the policy itself before looking to increase the overall quantity of service providers in thecountry. The Lebanese Government assumed that increasing the quantity of ISPs without releasing its stronghold overkey ICT infrastructure, such as bandwidth capacity, would positively impact the overall internet penetration in thecountry. However, it is clear through this analysis report that until the government releases its stronghold on bandwidthcapacity and/or increases total bandwidth capacity available in Lebanon, non-profits like Schools Online will continue tohave issues with slow internet speeds at high prices. • It is not recommended that Schools Online establish offices in Lebanon until the telecommunications sector reflects a truly liberal, free market, free from government intervention and stronghold over key ICT infrastructure.
  14. 14. Today, the Lebanese Government has already begun to improve the Service Provider Licensing Regulation of2010 in issuing the August 23, 2011 decree that sets a minimum broadband speed to 1 MB/second and lowers the monthlycost of internet service. The more efficient internet speed will help businesses and individual users alike, improving thequality of services (in setting a minimum broadband access speed) that ISPs must provide at a regulated price. Thelowered monthly cost will induce populations from lower socio-economic classes to subscribe to ISPs and consequently,the total net penetration will rise. The Service Provider Licensing Regulation in conjunction with this new decree shouldincentivize initiatives such as Schools Online to establish Internet Learning Centers throughout Lebanon. The two policieswill liberalize ISP ownership, providing a variety of services to choose from and qualitatively improve ISP services insetting a minimum broadband access speed to 1MB/second. As a means to incentivizing development in the education sector and ICT infrastructure of Lebanon, the policycould provide even lower monthly cost for new businesses and non-profits with missions such as Schools Online thathelp developing countries bring internet connectivity to schools and rural communities. With less operational fundsfrom which to develop their initiative, Schools Online would be more likely to establish and sustain Internet LearningCenters in Lebanon if the monthly internet subscription costs lowered overall operational costs. Providing financialincentives to non-profits like Schools Online would aid in the development of the ICT infrastructure of Lebanon in thatthere would be a significant increase in multiple public access points for internet services in more isolated, ruralcommunities. In other words, a policy that lowers cost for non-profits developing the education or ICT sector wouldcontribute to the reduction of the national digital divide in Lebanon. Lastly, and perhaps most importantly, the policy could be enhanced by providing increased regulation over themarket power of the state owned fixed telecommunications company, OGERO. OGERO is the only merchant inLebanon that buys and sells bandwidth in the local market. Due to its dominant position in the telecommunications marketover land lines, DSL services and its ability to supply bandwidth capacities to private ISPs and companies, OGERO hasweakened the private sectors’ ability to compete with the government (Chakrani, 2012). With a policy that more explicitlyregulates the power of OGERO and defines the terms for bandwidth supply, the private sector will be better positioned tocompete freely with the government without having to worry about the state owned company abusing its market power.More specifically, the policy should ban OGERO from withholding available bandwidths from sale to competing ISPs, 14
  15. 15. forcing ISPs to buy at higher prices from the market or, worse, buy from illegal bandwidth supplies. In doing so, thepolicy would be more reflective 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 any monopolies over key ICTinfrastructure fundamental to the telecommunications sector’s growth.VI.Implications:Lebanon: Further government action is needed to transform Lebanon’s telecommunications sector into a liberal, freemarket economy. Implementing the aforementioned recommendations would yield several opportunities for the nation. Byhelping the private sector compete on equal footing with the government and increasing available bandwidth capacity inLebanon, the government is creating a truly liberal, free telecommunications market. This thriving market would providejobs to thousands of the highly educated and skilled Lebanese workforce in need of employment opportunities. With theretention of its skilled labor and IT trained youth, Lebanon could become a regional ICT powerhouse in the future.Development of Communications Policies in Other Countries: Analysis of the Service Provider Licensing Regulation of2009-2010 yields several implications for international relations and development of communications policies in othercountries. For one, the policy demonstrates to the international public sphere that while many collaborative efforts havebeen made to create regulatory framework and policies liberalizing the telecommunications sector, in practice, thetelecommunications sector is still not a truly free market. So long as the government continues to have a strong hold overkey ICT infrastructure and supply, the private sector will not be able to successfully compete against the state. Thus,international businesses and government seeking to collaborate with Lebanon need to be aware of this large discrepancybetween the written law and reality. Many lessons can be gleaned from this policy’s strengths. In viewing the Service Provider Licensing Regulation, othercountries with governments that have historically had a monopoly over the telecommunications sector and/or whosecommunications policies reflected that of the Public Service model can observe ways that they can begin to shift thesector toward a more liberal model of communications model. First, these countries should begin to privatize serviceprovider ownership through the removal of structural barriers for new entrants and competitors as Lebanon’s TRA did inthe draft law. Second, by establishing an independent public agent as the “watchdog” of citizen interests, the governmentis removing itself from the regulatory role. A public, independent agency like TRA allows for a balanced regime of
  16. 16. checks and balances in determining non-discriminatory, standard and transparent policies around who enters the privatemarket and holds a license to compete to provide services. However, contrary to the case of Lebanon’s TRA, internationalgovernments should make every attempt to allow the regulatory agency to act as independent from national governmentinfluence as possible. International governments can also learn from the shortcomings of the Service Provider Regulation policy. Forexample, the TRA failed to take into account the speed caps that ISPs often establish in their terms of user service due tolimited broadband capacity. Governments seeking to transform their telecommunications sector into a liberal, free market,while simultaneously developing their ICT infrastructure, need to explicitly define the minimum acceptable bandwidthspeed to be made available for ISP subscribing customers. Policy makers must also be aware of who the main suppliersare of key ICT infrastructure and equipment. If it is the objective of international governments to completely liberalize thetelecommunications market, they must be sure policies and regulatory frameworks privatize all key ICT infrastructure andgive incentive (in the form of reduced prices or easy access to ICT resources) to private companies entering a marketformerly monopolized by the government.VII. Bibliography1. Metzger, Jonathon. “Review of the ICT Sector in Lebanon and ICT Opportunities forUSAID/Beirut”.USAID/BEIRUT, March 2001, pg. 10. Bureau of Economic, Energy and Business Affairs: Department of State 2011 Business Climate Report, 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: Telecommunications Regulatory Agency website:, accessed June 16, 20126. OGERO website: Accessed June 12, 2012.7. International Telecommunications Union: Statistics:, updated in 2012.Accessed June 14, 2012.8. Telecommunications Regulatory Authority: Service Provider Licensing Regulation Draft Law, 2009. 16
  17. 17. 9. Telecommunications Regulatory Authority: Investment Institutions. June 14, 2012.10. The Business Year: Off the Blocks, 2012. Accessed June 17, 2012.11. Abbassi Jawed. “Information and Communication Technology in the Middle East: Situation as of 2010 andProspective Scenarios for 2030”. Center for Social and Economic Research, Case Network No.105. Published October 1,2011. TRA: Broadband Access: Economic Benefits and Challenges, January 2009. Chakrani, Hassan. Al Akhbar English online publication. “Lebanese Internet: Rotting on the Vine.” Published June 6,201214. Ministry of Telecommunications. “Telecommunications Law No. 43: Ratified by the Lebanese Parliament.” 2002.( Venturelli, Shalini. 2012. Global Communication Policy Models [Power Point Slides].