International gateway access and access to national backbone infrastructure

One of the main drivers of the cost of international calls and Internet access is the cost of international connectivity, as determined by physical access to satellite and submarine fibre-optic cables. Competition in the international market is an essential element to reduce those costs.

The cost of satellite connectivity remains high, yet many countries around the world still lack access to submarine cables, either because they are landlocked, because they have not yet connected to an available cable, or because none is available (e.g. in the Pacific Islands). Landlocked countries may be able to negotiate a “virtual coastline” -- the possibility of owning and operating a cable landing station in a neighbouring country’s territory. Still, they must depend on the existence of affordable access to infrastructure to and within that country in order to transit their traffic. 133

Studies have shown that countries with access to submarine cables generally have lower international call prices. And where competitive access has been introduced, prices are generally significantly lower than in those countries that have retained a gateway monopoly.

Such studies have also shown that although access to high-capacity submarine fibre-optic infrastructure is a significant factor in lowering the cost of international voice services, it is not sufficient. Countries also need to ensure competition in the international facilities segment of the market, in particular. if services are to become more affordable and accessible. Also, where there is insufficient infrastructure for national backhaul, prices remain high and accessibility is limited.

Competition in international connectivity (i.e., sub-marine cables and satellite connectivity) and access to services such as international and Internet gateways is key to lowering the cost of bandwidth and broadband prices for consumers. If countries liberalize their access to gateways and allow multiple international access providers (e.g. multiple sub marine cables, a mixture of cables and satellite, etc.), the cost of commercial Internet access will drop. That means schools that have to pay commercial rates will pay less, and universal access and service funds subsidizing costs will also have to disperse less money – or those programmes will be able to serve more areas or end users.

It is not enough to have more infrastructure and international access. The introduction of more options in terms of international connectivity must be accompanied by effective interconnection and gateway regulatory frameworks that introduce new models of sharing and collocation and reduce barriers to existing private, government and international networks. Such frameworks are essential in allowing existing and new market entrants to expand into broadband and other services.

As stated in a 2008 ITU Trends in Telecommunications Report, lower prices, increased demand and enhanced international capacity are linked. A combination of all of these market forces may be needed for developing countries to reach their development goals, including introducing ICTs in schools and attaining the important goal of providing connectivity to schools.

Likewise, regulatory frameworks that allow for free or low-cost access to national fibre backbones are essential to facilitate school connectivity. As stated in the 2008 ITU Trends in Telecommunications Report, while competition at the international level has often driven down the price of bandwidth, national bandwidth prices in developing countries are set by one or two providers and, as a result, often remain high. Access to a national broadband fibre network is as important a priority as building an effective national transportation network.

Increasingly, regulation addressing the sharing of infrastructure by telecommunication operators is focused on two broad issues that are often viewed as the stumbling blocks to speedy roll-out of national telecommunication infrastructure. First, there is the need to open up access to “bottleneck” or “essential” facilities, where a single dominant infrastructure operator provides or leases facilities. Second, there is a need to promote market investment in high-capacity infrastructure to un-served or under-served areas. This too can have an influence on school connectivity.

It may be sufficient to revise licensing frameworks to authorize one or more new entrants to enter the backbone market and to work with local government officials to secure rights-of-way to lay the fibre backbone network. Local governments could be encouraged to provide rights-of-way, for example, in exchange for connecting schools and hospitals to the high-speed backbone network. 134

133 Broadband Strategies Toolkit, Chapter 5.4, World Bank, 2011, available at: http://broadbandtoolkit.org/5.4
134 Trends in Telecommunication Reform 2008, Six Degrees of Sharing, ITU, 2008.

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