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Le Meridien Phoenicia – The Malta Business Weekly Business
Breakfast
Telecoms regulator outlines his
plans, urging ISPs to look ahead
by David Kelleher
Last week’s business breakfast organised by The Malta
Business Weekly and hosted by Le Meridien Phoenicia failed to
produce the heated debate that many had expected.
Judging by the excellent turnout for the breakfast, one of the
most crowded ever, the impression given was that everyone was
waiting for the chance to grill the regulator. After all it
was his first presentation since the Telecommunications Authority
was set up on 1 January.
Joseph V. Tabone’s speech which took nearly 25 minutes
was seen as a mild approach to a subject that in Malta is regularly
under the spotlight. Yet, even after his presentation the expected
questions were never asked. It was the oddest business breakfast
ever. With so much anger and confrontation between all those
involved in the recent disputes, it was strange that none had
an issue to pick on or a point to argue with the regulator.
Whatever the reasons for those present to remain silent and
those who asked questions to be mild in their approach, says
a lot about how matters are tackled on this island.
It is probably this approach to diversity and conflict that
led Mr Tabone to speak as much as possible about a new beginning.
He urged everyone to look forward to the opportunities ahead.
Unfortunately, the ISPs made it very clear to him that past
experiences were not going to be swept under the carpet.
In response, Mr Tabone admitted that their claims may be justified
yet called on them to look ahead without forgetting the past,
yet not using it as a stumbling block to progress in the sector.
The regulator started off his presentation by quoting the Gartner
Group. The European Internet economy, he said, will increase
from US$40.8bn to US$1.3tn by 2004, nearly 15 per cent of Europe’s
GDP. Spending on technology alone across Europe has risen from
around one to 2.5 per cent of GDP. Around euro10bn venture capital
funds were targeted at new high-tech and Internet firms in the
year 2000.
The commercialisation of the global Internet, he added, promised
to produce an even more profound transformation of business
and economic forces, despite the recent downturn in dot.com
initiatives.
Far from being a medium for the exchange of frivolous communications,
the Internet served as a conduit for business transactions of
all sorts from shopping to education and business to business
transactions.
This advantage was available regardless of an organisation’s
size, geographical location, or market coverage. Computer to
computer communications via Internet has become the norm in
which business is conducted. While Malta has been a late starter,
it has been fast in the uptake.
Considering Malta’s smallness and geographical position,
the Internet places our operations in a global context. “This
brings the local operation into the international field and
therefore renders it subject to the international normative
code of practice. It was this international code which was broken,”
Mr Tabone said, referring to the recent dispute. “It was
for this reason, and also for the disruption of business and
personal communications that government and the Communications
Regulator were compelled to intervene during the episode.”
Mr Tabone briefly described the background to the dispute, comparing
the original national exchange (MIX) to a post office, chosen
for its integrity (university) and capacity to sort and re-route
all traffic, locally and internationally.
The dispute was created when a group of the ISPs pulled out
of MIX, he said, adding that the genesis of this decision was
a long and acrimonious dispute over the use of Melita’s
infrastructure and about fair competition in the sector.
“The action was responsible for the resultant chaos, to
the detriment of business and all private Internet clients.
The action was attended by an unremitting bombardment of statements
from the renegade ISPs claiming technical and performance enhancements
incomprehensible to the average consumer, completely oblivious
to the detrimental impact of their action and insensitive to
media and client urgings to act responsibly. Government and
Regulator were inundated with complaints. Attempts at mediation
were unsuccessful, and thus the subsequent regulatory intervention
and restoration of order on Christmas Eve,” said Mr Tabone
This was, he continued, a dark episode in the short history
of the Internet. “We simply cannot afford a repeat.”
Upon closer analysis, Mr Tabone said he had some sympathy with
the ISPs’ grievances but not with their tactics. The dispute
was largely about limited choices in the communications infrastructure,
both local and international. He said a strategic priority for
the Regulator is to enhance infrastructure choices and realise
competition.
With regards to international links, an alternative submarine
cable and better satellite communications may provide the answer.
Mr Tabone also outlined his plan of action with regards to meetings
he held earlier this week with the ISPs. These, he said, included:
• Model and operations of a Malta national exchange: He
is amenable to new configurations, provided these enjoy the
confidence of all ISPs and safeguard the interests of all clients.
• Code of Practice including penalties for non-adherence.
• Improving access and performance: what can be done to
improve the present levels of participation and to widen Internet
use in Malta?
• Future opportunities: ISPs have till now been confined
to the lower end of the value chain, signing customers and providing
access. The more exciting opportunities are further up the value
chain: provision of training, design, development and support
of web sites, e-commerce application design including Internet
interfaces, development and support, including a slice of government
initiatives, call centres, billing centres, consulting...
• Sustainability: ensuring integrity and sustainability
of service provision.
• Convergence: of telecommunications, information technology,
media and electronics.
• Information society: what is the role of the ISPs as
one of the key enablers to attain this ideal?
The regulator ended his speech by commenting on the lack of
meaningful dialogue which characterises our culture, the propensity,
he said, to legal recourse, or worse still, to pirate tactics
in conflict resolution.
However, he felt that some of the disruption which occurred,
although not necessarily all of it, was simply not intended
as alleged in some quarters. The delays and unconcluded transactions
were the result of technical difficulties and not deliberate
hacking. He felt this because the ISPs he has met impressed
him with their commitment, pride and fierce competition in their
work.
Following his speech, Mr Tabone was congratuled on his appointment
by Juan Borg Manduca, chairman of the ISPs. Mr Borg Manduca
said the ISPs were looking forward to working with him and to
solve a number of issues such as cross subsidisation and access.
Aldo Calleja, from Waldonet, urged Mr Tabone to look at the
long correspondence the ISPs had with the previous regulator
and to bring some justice into the sector.
Mr Tabone replied that this was one of the issues that would
be discussed but the most important thing is to focus on the
issues regarding the future.
Mr Calleja interjected saying that the issues which were raised
in the past had been left unanswered, despite protests from
the Chamber of Commerce. Just as mobile telephony rates were
reduced, the authorities must see that no abuse takes place
and history does not repeat itself, he said.
While understanding Mr Calleja’s point of view, the regulator
said that similar situations were found elsewhere but one had
to look to the future and not to the past.
David Walsh, CEO of Crimsonwing, a British company, said that
a business to business solution which now manages 15 million
Internet transactions a day was designed in Malta by a group
of bright young people, emphasising on the bright future that
lay ahead.
In reply, the regulator said that the talent existed in Malta
and that any disadvantages that existed since creation no longer
applied.
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