Trinidad and Tobago Computer Society (TTCS) comments on TATT's Draft Policy on Micro, Small and Medium-sized International, Public Telecommunications Services and/or Network Providers in Trinidad and Tobago http://www.tatt.org.tt/ddocs/itpt.pdf (PDF ; 342K) Below is the Trinidad and Tobago Computer Society comments on the aforementioned draft policy. Dev Anand Teelucksingh Trinidad and Tobago Computer Society at http://www.ttcsweb.org/ "networking local computer users!" ***************************************************************************** Terms used : VoIP - Voice over IP IPTSNP - micro, small and medium-sized International Public Telecommunications Service and/or Networks providers TATT - Telecommunications Authority of Trinidad and Tobago ----------------------------------------------------------------------------- 1.2 This policy is designed and targeted specifically to the micro, small and medium sized enterprises that offer international public telecommunications services and/or networks and not the larger Service and/or Network Providers such as the incumbent provider (Telecommunications Services of Trinidad and Tobago - (TSTT) and other similar corporations." ----------------------------------------------------------------------------- Why has TATT singled out micro, small and medium sized enterprises with this policy? There should be a single Voice over IP (VoIP) services policy with a relevant subsection for the micro, small and medium sized enterprises. TSTT competes directly with the IPTSNPs and the lack of an overall VoIP policy could give it an unfair advantage. ----------------------------------------------------------------------------- 4.3 TSTT was then mandated to provide public domestic and international telecommunications services and the continued expansion of its network to areas without telecommunications facilities, whether profitable or not. The latter requirement was known as its universal service obligation. In order to meet these commitments, TSTT was required to use, in part, its revenues earned from its international telecommunications services to fund its universal service development. ----------------------------------------------------------------------------- In this section, TATT has made statements that suggests it believes claims made by TSTT that - it is losing money operating the land line service. - it must use its revenue from overseas calls to compensate for alleged losses due to maintaining land line rates at their current level. - it has lost money due to the expansion of its network to areas without telecommunications facilities. No evidence has been presented to the public to support these claims. Because TATT included this statement in the draft policy without providing some sort of supporting evidence, the statement can be (mis)interpreted as TATT being sympathetic towards TSTT. Such perceived sympathy might easily be used to support the claim that TATT is not supporting the micro, small and medium sized enterprises. ----------------------------------------------------------------------------- 4.4 With the advent of the Internet, a number of Internet Service Providers (ISPs) have begun operations in Trinidad and Tobago, providing access to the global public data communications network for members of the public. Currently there are approximately 22 of these ISPs operating in Trinidad and Tobago. -------------------------------------------------------------------------------------- How did TATT arrive at the figure of "22"? There are approximately 12 ISPs in Trinidad and Tobago: - The AIISP (http://www.aiisp.org) lists 10 ISPs in its membership. - Cable Company of Trinidad and Tobago (CCTT) (operates cable modem service in selected areas of Trinidad). - TSTT. Who are the other 10 ISPs? ----------------------------------------------------------------------------- 4.8 Currently the IPTSNPs do not contribute to the social and economic development programmes nor do they pay 3% of their gross annual revenues as do TSTT. It is thus clear that there is an imbalance in the manner in which the IPTSNPs and TSTT operate. 4.9 Conversely, the presence of these IPTSNPs has made available a traditionally costly service at affordable rates, while providing an alternative to TSTT’s international service. ----------------------------------------------------------------------------- These two Sections contradict one another ; section 4.8 is phrased in such a manner that it suggests IPTSNPs are harming the operations of TSTT and the national economy while section 4.9 is suggesting that IPTSNPs are actually beneficial to the national economy. IPTSNPs may not contribute DIRECTLY to the social and economic development programmes (i.e. by handing over a percentage of their revenue)but they contribute in an indirect manner to the social and economic development of the nation: - through the creation of jobs. - payment of National Insurance and Health Surcharge for employees. - payment of corporation taxes. - by purchasing goods and services from other companies. - payment of VAT. e.g. when they purchase goods and services. By definition: - A "Micro-Sized Enterprise" is not expected to earn revenues in excess of TT$99,000.00 (reference Section: 2.10). - A "Small-Sized Enterprise" is not expected to earn revenues in excess of TT$750,000.00 (reference Section: 2.11). - A "Medium-Sized Enterprise" is not expected to earn revenues in excess of TT$6 million. (reference Section: 2.12). Although TSTT's gross annual revenue has not been publicly disclosed, TSTT has declared an after-tax profit of TT$439 million for the year ending March 31, 2003, with Cable and Wireless (which owns 49% shares in TSTT) reporting its share of profits from TSTT to be 34 million pounds (roughly TT$340 million) in 2003. It is therefore unreasonable to expect IPTSNP to have the same financial obligations (3 percent gross annual revenue) to social and economic development programmes as TSTT. At the least, the percentage of the financial obligations of IPTSNPs should be based on their amount of revenue similar to how personal income tax varies with the income of the individual. (References : Trinidad Guardian, Thursday 5th June, 2003 http://www.guardian.co.tt/archives/2003-06-05/news1.html Cable and Wireless Annual Report 2003, page 37 http://www.cw.com/docs/media_events/media_centre/reports/0203/annual_report_2003.pdf ----------------------------------------------------------------------------- International Public Telecommunications Service and/or Network Providers (IPTSNP) 5.3 Alternative public telecommunications networks are being developed, and have enabled the provision of international telecommunications services using mechanisms that bypass the traditional service provided by the incumbent. Hence, revenues needed to fulfill necessary social and economic objectives are being diverted by private enterprise venture. 5.6 The private sector is reminded of its responsibility and duty to contribute to Trinidad and Tobago’s social and economic development. Consequently, the practice of providing a service in a manner that can be viewed as having a detrimental impact on the existing social and economic fabric of society by causing higher domestic telephone tariffs and the inability to expand telecommunications access to unprofitable areas will not be encouraged. This is emphasized when one considers that as more consumers have access to the national telecommunications infrastructure, more business opportunities and the demand for further services will be generated. This will bring greater benefits to all stakeholders, and not a select few, as is the case of unregulated IPTSNP operation. ----------------------------------------------------------------------------- "...the practice of providing a service in a manner that can be viewed as having a detrimental impact on the existing social and economic fabric of society by causing higher domestic telephone tariffs and the inability to expand telecommunications access to unprofitable areas will not be encouraged...." This is an odd statement as it goes against the statements in 5.1 re: Entrepreneur and Telecommunications; it implies that TATT will restrict competition by the IPTSNPs if the incumbent provider TSTT complains of the impact of IPTSNPs will have on its revenues and warns/threatens to increase domestic telephone rates. If this is the intention of the Draft Policy, TATT will be better off abandoning the idea of introducing competition and simply allow the incumbent (TSTT) to continue to be the sole telecom provider in Trinidad and Tobago. TATT should recognise that the incumbent provider TSTT has provided "service in a manner that can be viewed as having a detrimental impact on the existing social and economic fabric of society". Trinidad and Tobago has not been able to keep pace with other countries in developing the sort of affordable communications services that is essential for economic development in the information age. ----------------------------------------------------------------------------- 5.7 Due to continued technological developments, telecommunications have evolved into advanced multimedia communications services. In this regard, services that provide interactive voice or a relevant substitute, which include but are not limited to video conferencing, to members of the general public shall be classed under the same regulatory framework to ensure the necessary social and economic development objectives are achieved ----------------------------------------------------------------------------- "relevant substitute"? The term is not clear as data services such as instant messaging (IM) can be considered substitutes for interactive voice services. ----------------------------------------------------------------------------- 6.5 In a news release on 21st January 2004 from World Dialogue and Regulation newsroom, Panama will soon introduce a new scheme that taxes traditional and Internet phone calls at the same rate. Panama’s regulator has estimated that Panama has lost US$12 million in taxes from the use of the Internet to make international telephone calls. Turkey and Pakistan are also expected to adopt new regulations similar to Panama’s, which treat VoIP service providers the same as traditional phone providers. ----------------------------------------------------------------------------- The three countries (Panama, Turkey and Pakistan) plan to tax traditional and VoIP calls at the same rate. There is no favouritism towards traditional service providers, there is no discrimination against VoIP. Unfortunately the Draft Policy ( on Micro, Small and Medium-sized International Public Telecommunications Services and/or Network Providers in Trinidad and Tobago) as written, will discriminate against IPTSNPs by favouring the incumbent. ----------------------------------------------------------------------------- 6.7 ....The ITU has recommended that countries consider a technology neutral approach in regulating like services in a competitive market, while universal service and/or access programmes will be fundamental to provide service to all users in circumstances where the market fails to provide telecommunications services to certain subsets of users, such as subscribers in rural and remote areas. (Cited Source : International Telecommunications Union, The Essential Report on IP Telephony, 2003,) ----------------------------------------------------------------------------- This paragraph is presented as a direct quote from the ITU report but the paragraph does not exist in this form in the report. The paragraph's two points, regarding : - "countries consider a technology neutral approach" is misleading and - "universal service and/or access programmes will be fundamental" is not mentioned in the report. ITU, The Essential Report on IP Telephony, 2003, http://www.itu.int/ITU-D/e-strategy/publications-articles/pdf/IP-tel_report.pdf From page 78 of the report (page 92 of the PDF): "The policy implications of IP telephony should be examined within the context and complexity of the changes in the market environment.....As the basis for determining policies specific to IP telephony, ITU Member States may benefit from a review of their more general domestic telecommunication regulatory frameworks with the following in mind: ....... * Policies that allow flexibility in the choice of technology and its application to address user needs and to permit users to choose among different prices and qualities are more likely to encourage investment and stimulate development. * Consider, in competitive markets, whether to take a technology-neutral approach by applying regulations in an identical manner to like services, regardless of the technology used to provide these services. ....... Countries have taken widely differing policy approaches toward IP telephony, which may be related to different prevailing market conditions or degrees of liberalization. No policy model is universally applicable. A number of approaches may be appropriate. The sharing of these different approaches can help policy-makers define and evaluate options to address issues specific to their country." Re: universal service. From page 63-64 of the ITU report in question (pages 77-78 in the PDF) "III.4.4 Economic implications of USO on IP telephony In many countries, the largest or dominant operator has an obligation to provide basic services directly to any customer who reasonably requests it, or to ensure that all citizens have access to certain services. In some cases, this is accompanied by specific obligations to extend network infrastructure to unserved areas. These requirements are sometimes referred to as universal service or universal access obligations. Because universal service/access obligations require provision of services to customers in areas which are uneconomic to serve, the universal service/access provider faces costs as a direct result of its obligation. In some jurisdictions (e.g. the USA), other operators contribute to the funding of these costs through competitively neutral funding arrangements. Elsewhere (e.g. Australia and the UK), costing studies have established that the costs of universal service provision are offset by benefits accruing to the universal service provider directly as a result of the universal service obligation - where this is the case, there is obviously no need for universal service funding arrangements. In Hong Kong, the operators of external telecommunication services have the obligation of sharing the cost of providing universal service of the domestic telephone network in accordance with the volume of traffic handled. This obligation is not dependent on the technology used. Thus operators of external telecommunication services based on the IP telephony technology are also required to pay their share of the universal service contribution (currently about 10 Hong Kong cents per minute). Furthermore, where the calls are delivered through the domestic telephone network, a Local Access Charge (currently about 13 Hong Kong cents per minute) is payable to cover the cost of transmission over the domestic network. Again, this is not technology dependent and IP telephony operators are subject to the same obligation as operators using other technologies. The deployment of IP telephony has the potential to reduce the cost of universal/service access. If IP telephony is used extensively in jurisdictions where contributory funds operate, regulators may wish to review funding arrangements. In these cases, the cost of universal service/access obligations will need to be re-assessed to reflect changes to the cost base resulting from the deployment of IP telephony. Certain universal service funding schemes may present the possibility of inequalities, where only some providers of functionally equivalent services are taxed in respect of those services while others are not, based solely on the technological platforms which they employ. Worse, it creates incentives for those operators that have traditionally paid into universal service schemes to switch to alternative platforms, reducing even more the volume of traffic on which payments are payable. The universal service funding schemes of Uganda and Nepal offer a creative solution to the problem of this issue. In both the countries, ISPs are required to be licenced and to contribute a small portion (1-2 per cent) of their revenues to the universal service fund. These funds are intended to be allocated through competitive tendering. In this way, the possible cost advantage enjoyed by ISPs is somewhat lessened because universal service charges cannot be avoided." ----------------------------------------------------------------------------- 7. Cost Structures (iii) ....Pricing for IPTSNPs should be based on time of use rather than distance and time. Tariffs based on the cost of the underlying network elements for packet-based Service and/or network providers will be impossible to accurately quantify. Thus a fixed tariff for international public telecommunications services and/or networks using non-circuit technology is the most appropriate approach. The actual tariff charges will be approved by TATT as part of the regulations for International Public Telecommunications Services and/or Networks. While TATT recognises that a reduction in international calling rates is beneficial for the average consumer the mechanism for this benefit must be regulated in a fair and transparent manner. TATT is cognisant that competition and competitive rates for international communications services and/or networks is desirable for the general public and the development of the telecommunications industry. ----------------------------------------------------------------------------- If a fixed tariff is applied to IPTSNPs, the incumbent telecom provider (TSTT) can price its VoIP service to be lower than that of the IPTSNPs, giving an unfair advantage to the incumbent. This is why it is essential to have a single VoIP policy for all providers (both incumbent and IPTSNP). ----------------------------------------------------------------------------- Section 8: Quality of Service Quality of Service is a key concern for packet-based services especially voice when the Internet is used. One of the major challenges in packet-based telephony is the realisation of a similar Quality of Service compared with that of traditional circuit-switched telephone networks. These challenges may be categorised into: a. Technical considerations which degrade the quality of the communication and which may be summarised as follows: ....... (ii) Delay: The total time for transmission of packets from source to destination including the time taken to reorder the packets and compensate for variations in transit time. A delay of less than 400ms must be achieved before an interactive voice conversation can proceed in a meaningful manner. ..... ----------------------------------------------------------------------------- How can these standards be guaranteed by IPTSNPs? There is mention of a under 400ms response time, in which case, the only ISP which can provide that would be the incumbent, TSTT. The Quality of Service (QoS) standards for ITPSNPs should not be similar or higher than that of a traditional circuit-switched telephone network as this would be a barrier to IPTSNPs to enter the market and would provide little benefit to consumers. Consumers are better served if they are able to make price and quality choices among ITPSNPs and larger providers. Consumers may be willing to pay for higher quality or accept reduced quality for a lower price if their alternative is no connection because they cannot afford it. ----------------------------------------------------------------------------- Section 8.1 Performance Bond TATT is committed to Quality of Service Standards for the provision of international voice and/or data services for the general public. The IPTSNPs who are awarded concessions will be responsible for providing their customers with an acceptable Quality of Service pursuant to Part IV Section 45 of the Telecommunications Act 2001 and the rules and regulations set forth by TATT. Consideration will need to be given, therefore, to the establishment of a Performance Bond by the IPTSNPs in order to ensure that acceptable service quality levels are maintained. The relevant regulations of TATT will specify the quantum, structure and all other necessary information in relation to the Performance Bond. ----------------------------------------------------------------------------- IPTSNPs should not have to pay a performance bond. A performance bond further increases the barriers to entry by potential IPTSNPs. Apart from the difficulty of ensuring quality of service over the Internet, a performance bond implies that a potential IPTSNP will have to invest in equipment to continuously monitor QoS parameters. Such investments will increase the cost of operations and will invariably result in increased prices to the public and jeopardise the stated intentions of this policy. Bandwidth providers (including the incumbent provider TSTT) providing Internet access to IPTSNPs do not guarantee QoS to its customers. How can IPTSNPs have control over this? The ultimate judge for the quality of a phone conversation is the consumer. For a IPTSNP to be successful, it has to provide a service of sufficient quality for consumers to use and pay for. If the consumer's opinion of a IPTSNP's service is poor, the consumer will seek other IPTSNPs and/or other providers. ---------------------------------------------------------------------------- Section 10 Packet-based voice service providers may not provide adequate access to emergency services..... In addition because packet-based services are powered by mains electricity, they will not be available if mains power is disrupted during an emergency. ... Although these objections may be exaggerated, some packet-based providers in the USA give their customers the opportunity to register their location. Without CLI, the call handlers in the emergency centres will ask for the caller's location, as they have to for emergency calls from mobile phones and in centres that do not provide CLI. If mains power is lost, many packet-based customers will have access to emergency services via a separate PSTN line or their mobile phone. IPTSNPs may therefore be required to provide CLI or access to Emergency Services. ---------------------------------------------------------------------------- Of what use is access to emergency services when the user (based in Trinidad) is making an international call to a relative or friend from a IPTSNP? Such access makes sense if the VoIP call is internal to Trinidad or Tobago. Does this mean that TATT will allow IPTSNP to offer local calls and bypass the traditional TSTT land line voice service? Given the nature of a packet-based voice service it is unreasonable to expect IPTSNPs to provide calling line identity (caller id) and/or provide access to emergency services at this time. As the technology matures, such a solution may be easier to implement in the future. According to this section: "...because packet-based services are powered by mains electricity, they will not be available if mains power is disrupted during an emergency." It must be noted that while a Public Switched Telephone Network (PSTN) may not be powered by mains electricity, it is still vulnerable. e.g. in the event of a natural disaster such as a hurricane. ---------------------------------------------------------------------------- 13.8 Existing international public telecommunications service and/or network providers. Concession and Surcharge Fees. (i) Concession Fee An annual Concession Fee will be levied on all International Public Telecommunications Service and/or Network Providers operating in the Republic of Trinidad and Tobago. 13.9 International Public Telecommunications Service and/or Network Providers who are awarded a concession will be required to post a Performance Bond with TATT. The relevant regulations of TATT will specify the quantum, structure and all other necessary information in relation to the Performance Bond. ---------------------------------------------------------------------------- An annual concession fee will increase the cost of IPTSNP service which will be passed on to consumers. Regardless, the method of calculation of the concession fee and performance bond should be publicly disclosed to ensure that IPTSNPs can determine their startup costs beforehand. Such fees should apply equally to all potential IPTSNPs who apply for a concession. ---------------------------------------------------------------------------- Section 17: Appendix II: Part A: INFORMATION REQUIRED FROM BUSINESS PLAN ---------------------------------------------------------------------------- Given that micro, small and medium sized enterprises are being encouraged to invest and operate in a relatively new and thus risky field of technology, some of the requirements of this section appear excessive and unnecessary. In particular: ---------------------------------------------------------------------------- "2. Financial Projections A financial projection for 3 years must also be submitted." ---------------------------------------------------------------------------- This is unreasonable since technology changes so rapidly. Projections based on use of current technology will easily be voided when new technology is released into the market. ---------------------------------------------------------------------------- "3. Financial Strength and Stability - Evidence of existing long-term financial resource and capitalization. - Description of financial capacity, investments, revenues, resources of finance. - Submission of financial references." ---------------------------------------------------------------------------- - Why must micro, small and medium sized enterprises reveal so much confidential information? - What guarantee do they have that such information will be kept confidential? - What guarantee do they have that such information will not be used against them? It is possible that revealing such confidential information can destroy any advantage a ITPSNP has over the competition and jeopardise its future financial viability. ---------------------------------------------------------------------------- "4. Technical Proposal. * System Overview....." ---------------------------------------------------------------------------- It is possible that revealing too much confidential information can destroy any advantage the micro, small and medium sized enterprise has over the competition ---------------------------------------------------------------------------- "* Quality of Service - the applicant shall state the level of quality of service the customer can be assured, in the delivery of the desired services, and the customer related services. Each applicant must have a customer service plan and a dedicated Customer Service Department in order to resolve consumer complaints and concerns." ---------------------------------------------------------------------------- The "customer service plan" and "dedicated Customer Service Department" are good theoretical requirements but are they practical to implement? Having staff dedicated to this one job will increase the operating costs of the business. Can a Micro-Sized Enterprise (which by definition employs one(1) to five(5) persons; Reference Section: 2.10) truly afford to operate a dedicated Customer Service Department? TATT should be aware that while "Quality of Service" is a noble goal mandating "a dedicated Customer Service Department in order to resolve consumer complaints and concerns" is no guarantee of good service from the relevant business. The nation has an example in the incumbent provider, TSTT. It has been providing telecommunications services for decades (therefore it has expertise), it has a large customer service staff (therefore it has both capacity and capability to address customer issues) yet its customers experience service-related problems (when dealing with staff at these offices or with the actual telecommunications) on a daily basis. TATT is holding the micro, small and medium sized enterprises to a higher standard than the incumbent and therefore providing an unfair advantage to TSTT. ******************************************************************** Dev Anand Teelucksingh Trinidad and Tobago Computer Society at http://www.ttcsweb.org/ "networking local computer users!"