The 2011 budget presented by South African finance minister Pravin Gordhan includes a R450 million item to implement a national broadband strategy. This money is misdirected. I explain why, and offer a compromise alternative, over at ITWeb: Throwing good money after bad.
In the venerable tradition of nicknaming communications ministers, the new appointee, Radakrishna Padayachie, has earned the hopeful moniker of Jewelweed. This is another name for Indian Balsam, which is reputedly a cure for Poison Ivy. Read the column.
ICASA, the South African telecommunications regulator, has cancelled a proposed auction of radio frequency spectrum, in bands which would have been useful for wireless broadband services. Its reasons? It can’t decide what technology to dictate, among others. What a mess. Here’s my take, published at ITWeb yesterday: Just sell it already!
Our new communications minister, General Surprise (or rather, General Disappointment), went to visit Cuba, to escape the sordid media coverage he is getting back home. He wants South Africa and Cuba to share technology expertise. This warranted a little rant on ITWeb: Cuba veneration survives Poison Ivy.
Having returned from a highly successful trip to Austin, Texas, for South by South West (see my coverage here), it’s back to the routine of weekly columns for ITWeb and The Daily Maverick.
I dubbed the new communications minister, retired head of the defence force Siphiwe Nyanda, “General Surprise” when he was appointed. It’s been suggested to me that a more apt nickname would be General Disappointment. I agree.
Last weekend, we sat in the dark, contemplating the great challenges we face in saving the planet. As if the planet needs saving, and we’re the saints to do it. this, naturally,
prompted a column for The Daily Maverick.
That’s the question I’ve been asking myself recently. I’d been cautiously optimistic about Siphiwe Nyanda’s early moves as the communications minister in Jacob Zuma’s new South African government, but things are looking increasingly grim for the general, as I discuss here: The general’s reversal.
Shock. Horror. SMS messages are more expensive than data transmission from the Hubble Space Telescope. So says a scientist at the University of Leicester.
Problem is, academics are often surprisingly ignorant of economics, whether in theory or in practice. This — and the fact that most haven’t ever worked for a private firm in the real world — may explain the appeal of radical-left politics among university faculties across the world.
This fellow, probably an excellent scientist, is an excellent example. He doesn’t recognise as simple fact that price has no relation to cost. None whatsoever. You cannot derive price from cost, nor infer cost from price. Impossible, unless the price is regulated.
(The scientists at physorg.com don’t know much about writing headlines, either, but we can let that slide since they don’t presume to write media analysis.)
Space scientist says texting is four times more expensive than receiving scientific data from space
A University of Leicester space scientist has worked out that sending texts via mobile phones works out to be far more expensive than downloading data from the Hubble Space Telescope.
Dr Nigel Bannister’s calculations were used for the Channel 4 Dispatches programme “The Mobile Phone Rip-Off”.
He worked out the cost of obtaining a megabyte of data from Hubble — and compared that with the 5p cost of sending a text.
He said: “The bottom line is texting is at least 4 times more expensive than transmitting data from Hubble, and is likely to be substantially more than that.”
He went on to explain that text messages comprise 140 bytes, which is £374.49 per megabyte.
He concludes: “Hubble is by no means a cheap mission — but the mobile phone text costs were pretty astronomical!”
Undoubtedly. We’ll let that pun slide too, but note that he’s not exactly comparing apples with apples, is he? My PC is also more powerful and expensive than the computer that drives the Hubble. Does that mean… what does that mean?
As Dr Bannister points out, data transmission from Hubble is measured in megabytes. Text messages are very many individual small messages, that have to be routed around the network separately. A similar comparison will find that internet access is vastly cheaper, per byte, than text messages, and that comparison likewise misses the point completely.
It may well be true that text messages are a ripoff. But a comparison with Hubble transmissions doesn’t make the point.
Price is simply an agreement between two people on the subjective value to one party of something the other has. If something cost me nothing to acquire, and has no real inherent value, but I then sell it at auction, did I rip anyone off? If item one cost me a million, but I can’t sell it for more than a hundred bucks, am I being ripped off? If identical item two cost me ten bucks, but I sell it for a hundred, are the tables now turned? Cost is one decision factor (of many) for a seller, because the seller may want to cover it, as one condition of agreeing to a transaction at a given price. Knowing the cost might also be a decision factor for the buyer, because he may choose to procure or produce the services or goods himself if he thinks that doing so will have more value. But cost is not, it is never, the basis or justification for a price in a free market. “Cost-plus” is a regulatory abomination, not a means by which price is discovered in a free market. And finally, there’s no such thing as a “fair” or “unfair” profit. By definition, in a voluntary exchange, the profit is fair no matter how high or low it is, otherwise the exchange wouldn’t have taken place.
If you think text messaging is too expensive, well, then don’t use it. Set up an alternative. Use instant messaging. Use voice. Stop waffling at your victims friends during movies or sports games. If you use text messaging, you’ve implicitly agreed that the price of a message is fair. Until operators can’t sell enough volumes there’s no reason, financial or moral, to reduce the price.
Instead of deploring the people who make commercial choices of which he disapproves, perhaps our scientist friend should express his gratitude to the involuntary payers of the tax that permits academics, sans economic nous, to download data cheaply from Hubble. And he might note that looking up the etymology of “nous” is pretty cheap, unless you prefer to buy a real, paper dictionary, or you choose to query an online version using text messaging.
I’ll be away most of this week, chairing some conference sessions. I have a few months’ worth of Brainstorm and Maverick columns stored up, though, so I’ll post a few of these for your reading pleasure when I get a chance.
Unfair, unreasonable and ludicrous
Those aren’t my words. Those are the words of members of the Security and Constitutional Affairs Select Committee in the National Council of Provinces.
Stupid. Imbecilic. Naïve. Batty. Those would be among the words I’d choose. Half-baked. Dim. Preposterous. Simple-minded. Goofy. Witless.
I’m talking about the recent amendment to the Regulation of Interception and Provision of Communication-Related Information Act, pushed through parliament by the Justice Department.
Let’s just call it the spy law, since that’s what it is, and many people must be familiar with the hoohah in the United States over similar “domestic wiretapping” provisions in anti-terrorism laws.
According to market researchers BMI TechKnowledge, there are somewhere north of 40 million cellular telephone users in South Africa. The majority of those are prepaid customers, who prefer, whether for creditworthiness or other reasons, to buy SIM cards and airtime as and when they need them.
This amendment requires everyone who uses a cellphone SIM card in South Africa to register their identity and residential details with their operators.
It’s loco. Pointless. Dense. Harebrained. Illogical. Bonkers.
The primary reason cited for the requirement is fighting crime. Organised crime, in particular.
Now I don’t know about you, but if I’m going to commit a crime, I’d go to some lengths not to identify myself to authorities. I’ll get an untraceable phone, or make it so. And if I can’t get a phone that’s untraceable, I’ll – I hope I’m not giving away any crime secrets here – meet my accomplices in person.
Criminals aren’t the sort of considerate people who obey the law. I’d have thought the definition of criminal would make this clear. This won’t curb any but the most petty crime, committed by the most incompetent criminals, against which I’d have thought the police don’t need all that much help.
Futile. Brainless. Ridiculous. Potty. Derisory. Lunatic.
This requirement is going to be tremendously impractical. It will create reams of data, most of it probably wrong. Many cellphone users don’t even have formal addresses, or they move regularly, or don’t have proper identity documents because Home Affairs hasn’t had its home affairs in order for years.
How are mobile operators supposed to ensure the information is accurate in the first place, and stays up to date in the second? I’ll bet that more than half of the information so gathered will be useless to law enforcement, and the other half won’t be needed.
It’s feebleminded. Doltish. Mindless. Dumb. Flaky. Absurd.
The cost of recording and maintaining all this data will be borne by whom? Mobile operators? You have to be kidding me. It will be passed on to consumers. Instead of reducing the cost of telecommunications, as the president mandated in a state of the nation speech some years ago now, this domestic spy law will significantly raise it.
Wacky. Foolish. Moronic. Dippy. Nonsensical. Dopy. Nuts.
It will undermine the spectacular success of low-cost prepaid telephony in South Africa. If cutting off half the people who’ve gained access to telephony thanks to prepaid is the government’s intention, the spy law is great.
Insane. Kooky. Irresponsible. Laughable. Half-witted. Ludicrous. (Oh, scratch that; the NCOP has that covered.) Retarded.
A government that has easy access to reams of private data is sure to abuse it. Even assuming that we trust the government in general, can we extend this trust to the bad apples within government? Can we trust private organisations that have no inherent need for the data, because they’re not, for example, providing us with credit? This extends the circle of organisations whose intent and competence we need to trust with private data even further. It’s a fundamental infringement on privacy and individual liberty. It’s how a police state operates.
Ill-advised. Nutty. Fruity. Fruity-and-nutty. Obtuse. Short-sighted. Barmy.
This law also requires all foreigners to register their cellphones when they’re in South Africa. Never mind the annoying impracticality of that, or that it doesn’t exactly say, “Welcome to the free South Africa”. If even one refuses, the measure is unenforceable, unless all international roaming is blocked. And if we do that, South Africans won’t be able to use their own phones internationally either. We’ll cut ourselves off from the global village. It’s that simple.
Rash. Mindless. Idiotic. Unthinking. Cockeyed. Thick. Irrational. Senseless. Ludicrous. Loony. Daft.
I’ve run out of words. Oh wait, no, I haven’t. There’s still cretinous. But I’ll save that word for a future column on the subject.
No synonyms were harmed in the production of this column.
A core function of government is to protect the person or property of its citizens from unlawful infringement by other citizens. This can be done privately, of course, but the point is to have an independent third party assigned to protect citizens from each other, to amicably resolve disputes, and to act against those who infringe on the rights of others.
When a government takes it upon itself to protect citizens from their own stupidity, carelessness and recklessness, however, things get rather silly. First, you’ll be told that you can’t smoke, because your likely early death doesn’t make up for your medical care, paid for by others. Then, you’ll be told that you can’t eat this or that variety of fat, because some fraction of the population (probably not including you) is overweight and too lazy to do something about it.
Eventually, they cover objects in foam padding, to prevent you from carelessly injuring yourself if you don’t look where you’re going. The Daily Mail deserves a nod for referring to “the dangers of ‘unprotected text’“.
Is Britain turning into a taxpayer-funded padded cell? A communal, egalitarian bedlam?
Prompted by Wessel van Rensburg’s comment on another post, I dug through my archives to find a story I wrote for CIO Africa in September 2004, on Somalia’s telecommunications industry. It is not available online, but I have permission to quote it here in full:
Absent rules, luxuriant growth
Somalia’s telecom sector: a case study in anarchocapitalism
By Ivo Vegter“A wild rose roofs the ruined shed / And that and summer well agree.” — Samuel Taylor Coleridge, A Day Dream
The most unlikely places throw up the most unlikely tales. Though Somalia has had no government for over a decade – or rather, because of this – international call rates are the lowest in Africa, most of the country has telephone coverage, and you can get an Internet account in a day.
When Somalia’s former ruler, General Muhammad Siyad Barre, was ousted in January 1991, the country rapidly degenerated into turmoil. The country has been fought over by secessionist factions and warlords ever since. A shortlived attempt at US intervention led to a famous withdrawal, and more recent peace negotiations in neighbouring Djibouti have spluttered fitfully without achieving much by way of either peace or effective government.
Before the collapse of the Barre regime, there had been 8 500 fixed lines, most of which were in the capital, Mogadishu. Even that meagre public switched telephone network was destroyed, leaving the country entirely bereft of telecommunications of any description.
Yet, when Walter Brown, an African telecommunications expert with the International Telecommunications Union (ITU), was asked by the Ugandan delegation to a 1999 conference on rural telecoms about the best way to introduce a mobile phone operator, he suggested talking to the Somali delegation. At the time, the Somalis had a deal on the table for a tenth of what the Ugandans could extract from likely equipment vendors.
Speaking to CIO Africa at Johannesburg’s Kind of Blue, the jazz restaurant to which he has since retired, Brown says, “My presentation to the ITU conference said that technology lends itself to a private sector approach, by moving away from circuit-switched telecoms to packet-switching even in rural areas. It can be done cheaply, using any bearer you wish – radio, powerline, satelite, copper, fibre – and you can deal with any vendor you like.”
He recalls: “I made many friends, but made enemies of large industry players who needed to dump circuit-switching technology somewhere. Many delegates said the environment didn’t allow them to speak out.”
Not so the Somali delegation, which had no government to answer to, no vendors to mollify, and no legacy systems to consider.
According to the CIA World Factbook, the small industrial sector has been looted for scrap metal – among the country’s chief exports – and there is no formal banking sector. Yet despite this seeming anarchy, Somalia’s service sector has managed to survive and grow.
“Telecommunication firms provide wireless services in most major cities and offer the lowest international call rates on the continent,” it states.
Accurate statistics are hard to come by in a situation as fluid and chaotic as Somalia.
While the ITU estimated there to be about 10 000 main lines in operation at the end of 2000, the latest World Factbook figures, which date to 2002, estimate that there are 100 000 main telephone lines, 35 000 mobile phones, and 89 000 Internet users.
Writing in the United Nations Development Programme (UNDP) magazine, Choices, reporter Finbarr O’Reilly quotes Abdi Karim Mohamed Eid, manager of private telecommunications company Telesom, as saying, “If you add up the other companies, there may be around 20 000 Internet subscribers in [the northern region of] Somaliland. That’s much more than we anticipated initially and it’s a remarkable achievement given that there is no backing from the international community. This is solely done by the Somali business community. We are really proud of that.”
According to O’Reilly, 87% of the country now has telephone service, and some operators claim to be able to install fixed lines withing two days of applying, and establish Internet accounts within 24 hours. His figures of 105 000 fixed and 39 000 mobile lines back up the CIA’s numbers. An older report from the Somali Telecom Association (STA) state that 47 out of 74 towns have telephone service. And international call rates are as low as $1 per minute.
“It was clear supply and demand,” says Brown. “There was a need, and it got supplied. The service is reliable, because operators know if there is no service, there is no money. And you can get service within days of applying.”
The STA was formed at the behest of the UNDP and the ITU, in order to address the problem that to reach all people will telephones in Somalia, people had to subscribe to at least three different networks.
“With no government, no regulator, and no policy, they formed interconnect agreements,” says Brown. “Vendors didn’t take them seriously, until they started making money. Now companies like MCI help broker deals for Somali operators. Tariffs are set according to supply and demand, and are the cheapest in Africa.”
He adds: “They did well, and were able to advise Uganda to get rid of their oversight yokes.”
Not that complete anarchy is necessarily a good thing, of course. Though nobody imposes taxes on telephone calls, protects incumbent monopolies, demands exorbitant licence fees or imposes counter-intuitive technology restrictions, nobody collects refuse, supplies reliable electricity or provides adequate security either.
But Somalia’s experience with free-market telecommunications shows that the continent’s penchant for regulation, red tape and big government is not the solution to local development challenges.
It adds a new dimension to the existing weight of evidence that argues the benefits of telecommunication for the developing world.
“Consider the ITU study on the transport sector in Yemen,” explains Brown, “where simply providing communication long highways cut the costs of trucking companies by as much as 80%. Or the study in Sri Lanka, where farmers improved their income by 70% simply using a public telephone box.”
Somalia is a case study for the truth Brown learnt in a career spent at telecoms operations ranging from Zimbabwe’s PTC to the Iridium satellite venture to the ITU: “Oversight should not manage. It should lead, encourage and incentivise.”
Left free to innovate, an entrepreneurial people will find ways to succeed despite the most adverse of circumstances. Development goals foisted upon them by supranational organisations merely sound lofty. Liberalisation plans managed by government merely sound responsible. What makes the difference, in the end, is mere supply and demand.
2004 (c) CIO Africa, BDFM Publishers
This “column” in the Sowetan, dated 7 November 2007, leaves me somewhat speechless. It’s filed under “columnists: Ido Lekota”, but you’d swear it’s a news report written by Thuli Zungu. And while I admire the effort Barend Burgers Attorneys put into swindling the hapless writer into giving them free publicity, reporting the passage of a five-year-old law seems a little superfluous.
Cyber war intensifies
Thuli Zungu
07 November 2007
New law targets online criminalsWhen the world entered the 21st century technological reasoning power became increasingly sophisticated, and so did cyber-crime.
Online misdemeanour, commonly referred to as cyber-crime, is a new type of criminal activity which started rearing its ugly head in the early 1990s as the Internet became a common place for online users worldwide.
But the long arm of the law is catching up with those who commit cyber-crimes.
After many years of legal uncertainty, Parliament has enacted the Electronic Communications and Transactions Act (ECT), which comprehensively deals with cyber-crimes.
If the “journalist” who wrote this rubbish had applied some of this 21st century technological reasoning power, and had bothered to do so much as glance at the actual legislation, they might have noticed it’s called Act 25 of 2002. Granted, that newfangled interweb thing is infested with terrifying cyber-criminals, but aren’t Sowetan reporters supposed to be fearless?
Anyone heard yet that Nelson Mandela was released from prison and has been elected president of South Africa? Remember, you read it here first.
After years of delays, restrictions, monopoly domination and a government that enforces a “managed liberalisation” policy that is neither managed nor liberal, there have been growing signs — despite government — of a sort of springtime in the South African telecommunications industry.
Russell Southwood, who runs the London-based Balancing Act Africa, covering telecoms and internet issues in Africa, agrees:
Almost unnoticed the rules of the game are changing and the South African market shows key developments that will transform how markets operate. DSL subscribers there look set to break through the “critical mass” barrier and there are irresistible pressures building up for low prices and no caps.
He says numbers of internet users (and in particular broadband users) are reaching levels that will begin to make an impact on traditional media, too. Competition is coming from newly licenced entrants, mobile operators, and ISPs that are able to compete under the new legal environment for telecoms.
So everybody is now rushing into infrastructure and the vertical integrators … will offer triple and quad play. Telkom will probably now face nine competitors. The traditional contenders will be: MTN, Vodacom, Neotel, and Sentech (that has already decided to get out of the retail space). Possible insurgents contenders will include: MWeb, IS, Verizon and Datapro. Rumour has it that after the recent issue of Wi-MAX spectrum that there is enough remaining spectrum for 4 players Neotel’s retail launch will take place in March/April of next year and it is working on a triple/quad play product.
… The market is unlikely to sustain nine infrastructure players but this flurry of competition will open up the VoIP market, lower national prices and grow the user base for a wider range of services. And what’s not to like about that?
Lots of interesting detail in his article.
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