Why Blocking VoIP Services is Bad for Consumers and Bad for the Region
By Bevil Wooding
“…we are empowering individuals and businesses to get the best out of the internet when and how they want.” – Mark Linehan, CEO of Digicel Jamaica
In general, it is always troubling when private firms place their profit-driven interests above larger societal good. When such interests, impact open access to the Internet, and all of its services, the ramifications can undermine economies and disempower whole sectors of society.
The Internet has woven itself into every aspect of modern life. The laws and principles governing it shape economic and political decisions around the world and affect every industry, every business, and billions of lives. This is why the move by two major Internet Service Providers (ISPs) in the Caribbean to block or throttle services from popular Internet applications such as Skype and Viber, do not augur well for consumer choice, entrepreneurial enterprise, or market growth.
This should be a point of grave concern to governments, regulators, businesses and consumers across the region. The action of these ISPs sets a dangerous precedent and could have a deleterious impact on efforts to leverage ICTs for both economic and social development across the region.
Optimizing Network Performance or Profit Margins?
The ISPs argue that they are preventing unauthorized use of their networks. According to Digicel, it has blocked a number of VoIP applications including Viber, Tango and Nimbuzz because “the apps were not paying Digicel for routing their traffic over its networks.”
Digicel Haiti’s CEO Maarten Boute said, “It is time for us to act to protect our business, our customers and the integrity of our service and ensure that the Haitian government gets the money it is owed.” This argument has also been used in Jamaica and Trinidad and Tobago.
As noble as they would like the public to believe their intentions are, it seems what they are really protecting is their own interests and their own profit margins.
Discriminating against certain types of data traffic that run across their networks does not protect customer interests, and it certainly does not safeguard taxation revenues to governments. They are in fact discriminating against certain type of data traffic that challenges their business model. And instead of innovating and evolving, their response is to stifle competition, and frighten the region’s governments with threats of diminished revenues.
ISPs Are Gateways NOT Gatekeepers
Too much progress has been made in the telecom and ICT sector in the Caribbean to allow avaricious service providers to drag the region into a digital dark age.
Historically, ISPs have acted as gateways to the Internet and the many applications, services and content that live on the computer servers connected to it. But their role was never intended to be as gatekeepers, determining which data bits and web services should load better or worse.
This important distinction is what has allowed the Internet to evolve into a platform for innovation and empowerment now used by over a billion people today. It is also the reason why the Internet economy has experienced a growth-rate that is orders of magnitude greater than the telecom industry.
A 2013 Kauffman Foundation report showed that in the previous three decades, the high-tech sector was 23 percent more likely, and the information technology sector 48 percent more likely, to give birth to new businesses than the private sector overall. Mobile-based markets will only expand, too; the Boston Consulting Group projects that mobile devices will account for four out of five broadband connections by 2016.
All this innovation has taken place without the permission of ISPs. It would be irresponsible and foolhardy to allow the model to be distorted in the Caribbean.
Innovation Without Permission
Local telecom duopolies already define most markets in the Caribbean, giving customers little choice for high-speed fixed line or mobile broadband access. Further, the region has the inglorious distinction of having some of the highest international call termination rates in the world, as well as artificially high intra-regional roaming charges.
Why are roaming costs and international call rates so expensive? And who benefits the most from this? There are reasons why Internet-based voice services like Skype, Viber, Vonage and Magic-Jack so popular. These services provide consumers and business across the region with an affordable option for communicating with friends, family and business partners. It is important to note that they are affordable options, not free options.
Consumers still have to pay for the Internet access needed to access these services. This is where the ISP argument for treating VoIP traffic as special fall apart. Consumers pay for the web-based services when they pay for their Internet access. In any healthy, competitive marketplace, service providers are expected to take these revenues from consumers to continue making improvements to their network to handle consumer demands.
Right Words Need Right Actions
Mark Linehan, CEO of Digicel Jamaica seem to have understood this basic business reality when he said at the launch of Digicel’s mobile 4G service in Jamaica, “…we are empowering individuals and businesses to get the best out of the internet when and how they want.”
LIME’s Corporate Communications Manager, Shand Merchant at the launch of the company’s mobile broadband service in Antigua and Barbuda, also seemed clear on the providers role “Our new 4G network means that they can now realise the full potential of their handsets. There is a huge demand for mobile data and this upgrade will not only help us to improve the customer’s experience, but to also better meet that demand as more customers move to smartphones, tablets and other data-capable devices.”
So why the apparent about-turn, after making such unambiguous statement of the value and role of mobile broadband service as an enabler and empowering force for consumers across the region?
The position of Lime and Digicel can be considered a direct challenge against the efforts of regional governments and regulators to provide consumers with choice and foster knowledge based economies. The actions of the regional ISPs will now certainly test the resolve and capacity of local regulators to defend consumer choice, and uphold the core tenants of net neutrality across the region.
Enabling Caribbean Innovation
Data, not minutes, is the currency for the modern telecom provider. This is why telecom providers have to evolve to meet the realities of business in the Internet age. Increasingly users want just an Internet connection from the carrier.
Talmon Marco, CEO and founder of Viber Media in response to his company’s popular application being blocked, said of Digicel CEO Denis O’Brien: “Mr. O’Brien is on the wrong side of history. His arguments are a decade old. Most carriers around the world have come to realise that users want and expect the advanced messaging, voice and video services offered by Viber and its competitors.
Thankfully, other major providers in the Caribbean remain committed to an open and neutral open Internet. Columbus Communications, the largest provider of wholesale broadband in the region, issued its own statement:
“…From what we understand, no other major international provider engages in the practice of blocking legitimate VOIP and similar apps. Converged technology and access to content via multi-platforms (audio, video and data content via multiple devices, phones, tablets, televisions) is now the norm.
This practice can be considered punitive to customers, restricting their choices and certainly putting them at a disadvantage compared to international counterparts. Customers’ expectation today is that they can access data and voice ‘on the go’, at their convenience, on their device of choice.
Columbus maintains its position that broadband enables all current and future innovations. This is the strength of our infrastructure and what differentiates our service from what is offered by our competitors. Our responsibility as an ISP is to advance the adoption of technology and broadband in all of its avenues; in the long-term the industry will only flourish.”
The Telecommunications Services of Trinidad and Tobago (TSTT) says its policy on VoIP use via its mobile network dictates that customers be provided with a conduit to voice and data services.
“VoIP essentially is data on the mobile network, much like e-mail, YouTube, social media or downloading apps and games. Each local provider must therefore decide, based on what it knows of the capabilities of its network, how to treat with customers using VoIP,” TSTT stated.
Safeguarding Caribbean Development
The openness of the Internet has been a catalyst for many of the social and economic advances experiences in the Caribbean over the past decade. Safeguarding the advance must be a national and regional priority.
Governments and regulators across the region must take swift and decisive action to protect consumer choice, and the neutrality and openness of the Internet across the Caribbean. Telecom providers have already demonstrated their capacity to take advantage of under-resourced, and in some cases under-informed national regulators.
Obviously, updating legislation and internet governance policy will take time. However, there is a definite role for regional bodies like the Caribbean Telecommunications Union to define a regional response, and a policy framework to protect national interests. Consumers and businesses, also need to make their position known. Too much is at stake for anyone to remain ignorant of the issues, or worse, silent in response
Bevil Wooding is the Chief Knowledge Officer of Congress WBN (www.congresswbn.org), a values-based, international charity and the Executive Director of BrightPath Foundation, a technology education non-profit organization. Reach him on Twitter @bevilwooding or on facebook.com/bevilwooding or contact via email at email@example.com.
Side Bar – Defending Caribbean Net Neutrality
Net neutrality holds that ISPs shouldn’t preferential treatment to some web services over others or charge some companies arbitrary or punitive fees to reach their customers. Net neutrality is not some pie in the proverbial sky concern. It core principles have been a major contributor to the unqualified success of the global Internet economy.
The Internet was conceived as a public commons, where providers merely connect everyone, rather than regulating who spoke with whom. Large and small companies can link up computer servers, mobile phones, tablets and increasingly wearable devices. All of this integration and innovation has relied on one critical feature of the global Internet: no one needs permission from anyone to do anything.
It would be a travesty if narrow interests are allowed to define the future of the Internet in Caribbean. The next generation of entrepreneurs, app developers, digital artists, authors, indeed the future of the region’s development, are based on the deliberate steps we take to protect an open Internet today.