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Broadband: The Foundation for 21st Century Caribbean Development Address to the Broadband Caribbean 2016

Dr. Didacus Jules Director General

Organisation of Eastern Caribbean States July 2016

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1 INTRODUCTION Let me first of all say how grateful I am for this opportunity to speak to this topic and to put forward the OECS broadband manifesto. In Finland, broadband has

been declared a human right and it was decreed that by 2010 every Finn was to have access to 1 Mbs internet access and by 2015 to 100 Mbs! Which is to say that the right to internet access is essential for the exercise and enjoyment of the right to freedom of expression and opinion and other fundamental rights. This is a vital philosophical

starting point for our discussion because in the narrative of our providers, broadband is nothing more than a commercial product, the extent of access to and enjoyment of which is directly proportional to your ability to pay.

For us, broadband is oxygen. It is a vital medium through which the expression and exchange of ideas and perspectives can flow (and I cringe at what the term FLOW has come to mean in our context) seamlessly across time and space. If there is any technology that signals the

arrival of the new Century it is broadband because it is foundational to what is increasingly referred to as the Fourth Revolution. Broadband is as essential to life, production and society as water and electricity.

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Setting the Scene - Context: Our topic proposes broadband as the foundation for 21st Century Caribbean Development with some pretention to future tense. Let us be very clear about our current context - the 21st century is already here; it has already come to the neighbourhood! Let us not make it sound so "future". After all, someone

once said that “today is the tomorrow you were worried about yesterday”. So Brexit is the BIG happening thing with profound strategic implications for the region. It carries the potential challenge of differentiated relationships with Europe and with UK (or what may remain of the UK). Within the parameters of our discussion today, what is important about Brexit is its counter hegemonic and somewhat contradictory reaction to globalization. With Brexit the British are signalling on the international front a major retreat from the notion of a single space. They are retreating from the closer embrace of Europe; they are asserting a British identity as a cultural marker for sovereign excursions into the global space. Harvard University Professor of International Development Calestous Juma identifies four attributes of a systems approach to globalization:

1. Capability nodes and corridors – necessary to transact globally 2. Connectivity – the backbone of the internet 3. Global mobility – facilitated by a quality transportation and energy

infrastructure 4. Increasing interdependence among countries

For our purpose today, the focus is on connectivity. Juma has argued that:

“Global networks created opportunities for nations, communities and firms to operate on a much larger scale worldwide. But this very

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phenomenon also makes it possible for these entities to strengthen their local identities.

Viewed this way, it should not come as a surprise that nations around the world seek to strengthen their sovereign identities as they work to be part of larger transnational alliances.”

Brexit is an expression of that contradictory dynamic. We should not however be too quick to predict the end of globalization because as the latest McKinsey Global Institute report “Digital Globalization: The New Era of Global Flows” reports:

“Remarkably, digital flows—which were practically non-existent just 15 years

ago—now exert a larger impact on GDP growth than the centuries-old trade in goods... And although this shift makes it possible for companies to reach international markets with less capital-intensive business models, it poses new risks and policy challenges as well. The world is more connected than ever, but the nature of its connections has changed in a fundamental way. The amount of cross-border bandwidth that is used has grown 45 times larger since 2005. It is projected to increase by an additional nine times over the next five years as flows of information, searches, communication, video, transactions, and intracompany traffic continue to surge. In addition to transmitting valuable streams of information and ideas in their own right, data flows enable the movement of goods, services, finance, and people. Virtually every type of cross-border transaction now has a digital component.”

All of this has application to the Caribbean context which may not present as dramatic a trend as the European space but which nonetheless has recorded increases in the flows of digital information. Some of the drivers of that increase in the Caribbean space would include the widespread utilization of over the top services (Whataspp, Skype, IMO etc.), digital commerce (Amazon and online

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orders of goods) – most of these are consumerist in their orientation but not developmental; an issue that will be explored later.

It must be emphasized that the notion of a single ICT space while not absolutely dependent on the pre-existence of a single economic or geographic space, cannot achieve its optimal fulfilment without the politico-economic convergence of a single space. And this is a

critically important consideration in the Caribbean context. Put bluntly, the ideal of a single ICT space in the Caribbean will never be fully realized in the absence of the economic convergence that the CSME heralds. In the absence of this convergence, the spread of ICT technology in the region will continue to unfold in national silos with telecomm providers exploiting that fragmentation for profit maximization in each isolated space. Again put bluntly – until we in the OECS assert the primacy of the single economic space, the providers will not be forced, for example, to remove roaming charges between OECS countries. In the aftermath of Brexit, any call for imitative exits from CARICOM must take into account the reality that no Caribbean country has the critical mass to effectively survive the tide of globalization except in alliance with some other nation states. In our hemisphere, the ground is constantly shifting with different permutations reflecting different interests whether they be political, linguistic or economic. So we have OAS, MERCOSUR, ACS, CELAC, ALBA, UNASUR, SICA, CAN and this is not exhaustive. So ultimately it comes down to the imperative of aggregation of will, intent and size to create advantage in a fiercely competitive world.

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2 CARIBBEAN DEVELOPMENT The Caribbean trajectory and its aspirational goals Everything is happening at an exponential pace – and whether it be climate change, technology advancement, diplomatic alignments, trade and other alliances – the Caribbean is increasingly forced to confront its vulnerabilities. Caribbean nation states are trying to articulate their NATIONAL aspirations and shaping the ICT policy to that agenda. Notwithstanding the technical rhetoric about convergence in the ICT arena, the reality is that implementation is essentially national. For broadband to play the foundational role that it must in Caribbean development, we must start with a technologically up-to-date regional vision of development. We need to agree what the construct of regional possibility is and this must - in a spirit of realpolitik – embrace and allow for national differentiation within a framework of every deepening regional convergence. It is from this broader conception of that regional framework that a regional regulatory framework can emerge.

Broadband however is too strategic a developmental pillar to be reduced to purely a matter of regulation. This understanding of to be broadband as a commodity regulated is a limiting perspective that prevents us from seeing the unlimited possibilities in , broadband as a human rightas a social good and as a factor of

production in the global economy. The commodification of broadband outside of a regional development paradigm results in us seeking to influence the landscape by essentially national policies. These policies are seeking to regulate regional giants whose business strategy is

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feeding on the fragmentation of the Caribbean markets. There are two sides to this argument. On the one hand, it has been recognized that given the scale of these fragmented markets, aggregation will provide the economies of scale and efficiency that can offer the capacity required at a price that is affordable. On the other hand, the fragmentation of the markets provides an opportunity for transnational providers to benefit from a single platform but differentiate on the basis of the maximum price tolerance of each market silo. The table below shows the difference that demographics can make:

The original OECS membership has an aggregated population of 631,000 people with a GDP of US$5 billion and a per capita income of US$8,444. Martinique is now an Associate Member and it is anticipated that Guadeloupe will shortly join. The inclusion of these French territories dramatically changes the market moving the population to 1.5 million, the GDP to us$15 billion (triple) and the per capita income to us$9,841.

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Whether one views these figures from a purely commercial perspective or from a social rights perspective, one can see the difference that aggregation makes to scale and to the attendant opportunities for broadband.

3 BROADBAND IN THE REGION Broadband is a promise whose reality has been sadly short changed because we have dropped the post mobile liberalization ball and because the providers have treated broadband as an EXTRACTIVE rather than a STRATEGIC DEVELOPMENTAL opportunity. Their extractive models are built from the wealth of data that they have available to them which is not open to us and they can be strategic in their market projection while we flounder to grasp the scale of opportunity that resides in our own market. These islands might be small but they represent one of their most lucrative markets on a per capita spend for telecoms. The biggest impediment to the development of broadband is the failure of govts to establish the policy environment that would stimulate vibrant private sector investment and stimulate Caribbean creativity. Our regulatory frameworks which were developed in the early days of liberalization have been rendered obsolete by technological innovation and the market dynamism of the ICT sector. We can only effectively manage this situation if we do this REGIONALLY. The current reality is that it is our fragmentation that permits providers to negotiate with us separately. Notwithstanding the intense competition among themselves, the telecomm providers have unified voice in CANTO whose advocacy postures condescendingly assume a level of ignorance on telecoms issues that Caribbean

people fortunately do not possess. The Chairman of CANTO has tried to argue that the new ECTEL regulatory regime that is currently being finalized is proposing a “too strict net neutrality” and that Over the Top services such as Whatsapp, Skype,

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Netflix and Facebook calling must be taxed by Governments to level the playing field. These calls have been repeatedly made and repeatedly rejected but the insistence of the providers is an indication of their stubborn incapacity to rise to the challenge of innovation, change their business model and add value not just to consumers but to citizens. Broadband in a technologically backward society is a consumer product with a narrow pipeline; broadband in a 21st Century society is the basis for almost everything that enriches the quality of life of the citizen from the registration of his/her identity at birth through every stage of life and the backbone that adds quality to his education, to her health and welfare, to his financial sustainability, to their entertainment options. If you have a vision of the OECS as a single economic and social space, with free movement of people, goods, services, capital and ideas, then logically this will inform what broadband must be used for. And this graphic shows how critical a modality of “transportation” broadband is for the OECS Single Space.

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The OECS Single ICT Space is designed to facilitate and strengthen the free movement, growth and development of people, services, goods, capital and ideas. The components of that Space are layered on a foundation of a robust ICT infrastructure and the three primary components are collaboration and partnerships; supporting policy and affordable access. The collaboration and partnerships are focussed on entrepreneurs and innovation; the supporting policy principally seeks to cultivate local content and applications (vital to our meaningful engagement in the digital economy and culture) and affordable access is a supporting pillar for education and capacity building at all levels and all sectors:

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4 THE PRECISE PICTURE I would like to paint a precise picture of the key elements of broadband in the OECS and how we are proceeding to make it a ubiquitous reality in our Single Space. As indicated earlier this will necessitate a shift from a purely consumption paradigm to an innovative production paradigm and incorporate both for national development. We also see this as more than a commercial engagement and as an opportunity for forging deep Private Public and Civic partnerships. The roadmap for this journey includes:

Significant highlights of this map include:

o Internet exchange points proliferation across the OECS – providing each locale with its own local internet that enhances its participation in global broadband networks in a manner that is respectful of its conditions and its potential. A major concern is to ensure that the smallest markets and the more far flung locales are not disadvantaged – the Grenadines, Barbuda,

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Montserrat. Underserved communities which most need broadband must be guaranteed access that should not be based on demographic, geographic, or market size. We have a developmental obligation to ensure ubiquitous broadband

o Data as an enabler to disruptive

systems – the most valuable commodity in the digital realm is data. Access to data is the guarantee of equity in that realm and if we are to create value and leverage our potential in that space, the generation and utilization of data is essential to that objective.

o Broadband as an enabler of capital flows across the region. Little needs to be said about this imperative given the grave and present danger of the correspondent banking crisis that we now face.

o Education and e-learning – an entirely new paradigm of education for all ages and stages with the capacity to learn anywhere at anytime.

o E-governance in the delivery of public goods and services in a more equitable and

efficient manner and bring public service to new standards of service delivered to a device near you.

o The definition of an entire matrix of services and opportunities aligned to the OECS Growth & Development Strategy and the UN Sustainable

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Development Goals that leverage broadband

Let me end by reiterating the broadband demands of the OECS to private providers that will be encoded in the new ECTEL licencing regime: Benefits to Consumers

• In relation to mobile, data and fixed line roaming all territories in which the

operator provides services should be treated as one market • Entry-level broadband should be defined at a minimum network speed of 5

Mbps with a maximum pricing of 5% of the national average wage in each OECS territory (lesser speeds can be offered but not marketed as broadband)

• Implementation of, and support for, fixed and mobile number portability • Deployment of LTE or equivalent 4G mobile broadband • Published quarterly reports on state and quality of customer service, based

on defined standards and metrics common to all markets of operation

Strengthening Infrastructure

• Participation in, and support of, national Internet Exchange Points • Infrastructure sharing to limit duplication, and gearing investment toward

underserved areas, product innovation, market growth and improved customer service.

,

Transparency and Accountability

• There should be no restriction on sharing of operator information amongst CAIRCOM regulators

• There should be transaction transparency for market-dominant operators • There should be open-use platforms for release of relevant national and

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regional market data.

Fair Use of Subsea Cable Infrastructure

• Subsea cable infrastructure should be deemed an “essential facility” as defined in telecommunications law and regulated accordingly

• There should be full disclosure of capacity, utilization, ownership, life, cost and wholesale bandwidth pricing of Caribbean cable systems.

Social Development Support

The presence of large, multinational telecommunications service providers in the OECS is an opportunity to advance implementation of the OECS grant funding program to support local content development, entrepreneurship, innovation and technical capacity building. Providers can be invited to:

• State their policy for contracting of local providers to support service, integration and implementation, critical to local utilization and capacity building.

• Be voluntarily accountable for supporting local social development initiatives

• Guarantee global best practice and transparency in treating with staff rationalization and related human resource management matters.

If we are to move broadband from a consumer product to a ubiquitous social right; if we are to move from being users of the internet to being content creators and innovators in cyberspace the demands being required in ECTEL’s new regime is an important first step in that direction.

Thank You.