IGF 2019 – Day 1 – Raum IV – WS #101 What operator model(s) for digital inclusion?

The following are the outputs of the real-time captioning taken during the Fourteenth Annual Meeting of the Internet Governance Forum (IGF) in Berlin, Germany, from 25 to 29 November 2019. Although it is largely accurate, in some cases it may be incomplete or inaccurate due to inaudible passages or transcription errors. It is posted as an aid to understanding the proceedings at the event, but should not be treated as an authoritative record. 

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>> MODERATOR:  Good morning.  We're about to start the workshop.  So please be seated.  I'll ask you to put the PowerPoint up.  Thank you.

Welcome to this workshop this morning with the title of What Operator Model(s) for Digital Inclusion? My name is Bengt Molleryd.  I'm chair for working party on infrastructure policies.  What we will do here this morning, we will raise a couple of important questions.  How to bridge, basically, the Digital Divide and how we can facilitate a digital inclusion.  With me here today is Chenai.  She is web foundation with research manager.  And then we have Verna Weber, head of the unit on the communication infrastructure unit.  And we have Christoph with us.  So what will happen here, first, I will make a short introduction and then the three panelists will make each presentation and basically around two questions.  So welcome.  Prepare your questions and intervention.

So very much, welcome.

Internet usage keep growing but we all know that not everyone is connected.  Not everyone that wants to be connected are connected.  I don't know exactly where we are today but something around 4 billion people around the globe are having internet connectivity.  And I think mobile usage are somewhere around 7 billion users in the world.  So still, there are a lot of people in the world that are not able to connect that would like to connect.

And, certainly, it varies to what extent people are connected in urban versus rural areas.  And certainly, depends on the geographical ‑‑ the dispersion of population like in the Netherlands where everyone is connected with 30 megabyte.  20% of the households have cable.  While in my country, Sweden and Finland on the right side here, we have a lower share of people in the rural areas that are able to connect with 30 megabyte.  And also today we'll talk about a large number of other countries these numbers are lower.

The idea with the workshop is really to link the digital inclusion to the development of technology as well as the business models that companies are pursuing around the world.  And certainly, with the convergence of IP networks, things that change compared to old times with more dedicated networks.  And also, through the IP of networks where services can be separated from the actual transmission.  And we have a number of emerging technologies that could alter the picture with blockchain which are part of these networks.

If you look at the business model that are applied for operators around the world, most commonly (?) where they are investing in the networks and producing the services and selling to the retail customers.  In telecom and the cable which depends on the different geographical areas.  But also a trend that we will hear more about, the wholesale.  Wholesale operators, both public, private and dedicated operator that is increasing in significance around the world.  Clearly, opening up the networks for service providers.  And then, new kinds of players that are interested in this entering the field.  We call them terminal equipment or online service companies, service providers that are also entering within the operator space.

Two recent works produced by OECD.  One report is addressing the operators and the future examining the different operators and the different business models development around the world.  These are available at the digital library.  And it gives a large number of examples both municipal networks in the number of countries and also privately investment of wholesale operators and the developers operating around the world as well as technology development.

And the other report is bridging the rural Digital Divide which is the big question for all governments.  How to reach down connected.  In order to be the networks, you need capital.  That will never go away.  The capital intensity of the infrastructure is there.  But how we can solve it?

This report address and give a large number of examples around the world of how to bridge the Digital Divide.  And this work has to continue because as said initially, there is a large number of people unconnected that would like to be connected.  And also for societies.

The objective and the aim with this workshop is to discuss concrete and innovative ways to connect people and businesses for expanding the digital inclusion.  We will hear about examples that telephonic is involved in.  I also would like to ask you to also be active and see if you have other proposals.  The community network examples is also interesting to hear more about.

So what we'll do in the first part, is to see the different operator models and digital inclusion.  Each of the panelists will give and make an intervention.  And then the second part is they will do explore and examine the challenges and possible solutions to these challenges in order to bridge this Digital Divide.  And fourthly, the Q and A.  I invite to you raise questions.  And question what you have heard or add new aspects that could be relevant for the discussion and then we will wrap up.

So the first part is addressing two questions.  What new business models and technological solutions can assist to narrow the digital Broadband divide?

And what operator models have proven to work well to expand connectivity?

So with that, I invite ‑‑ we will do ‑‑ and the second part, we will raise the questions what are the main existing challenges to expand the quality of affordable Broadband and what tools can be developed tone sure that internet access is sustainable and inclusion.  With that, I would like to invite Verna Weber to make a presentation or intervention to her view.  For the first two questions.

>> VERNA WEBER: Thank you and good morning, everyone.  As Bengt mentioned, we did this report on the operators and their future and looked at the different business models.  We looked at integrated operators.  This is typically operators offering fixed and mobile Broadband services.  Then we looked at cable operators.  We looked at wholesale operators and internet companies.  And now to the question what kind of business model work to connect rural and remote areas?

So what we can see is that, first of all, in all of the different areas, we see all these types of operators; right?

We have a couple OECD companies that serve rural areas.  We have the traditional tal‑coast.  We have internet companies that have innovative models.  The Google living project is one.  Some are experimenting with drones.  And we have the wholesalers.  So out of these models, though, what we see is the wholesale model is growing.  What we see is a couple of communities basically relying on infrastructure.  We see a lot of those in Sweden where Bengt is from where basically the municipalities build up a fiber network, and it's open access and people can compete on the retail level.  And I think we're hearing another example of a wholesale model from Telefonica.  So this is something we see in urban and rural areas.  And that allows you to have one infrastructure you create where otherwise it's not reliable to have infrastructures.  But then we see you get competition which is something important on the retail level.  So you open the infrastructure for people to compete basically on the retail level.

Then, what we also see is we have some type of different business models that seem to work rather well in the rural area.  One example is from Germany.  There is one operator that is deploying fiber only in very rural and remote areas.  In villages that often do not even have a cable connection, which is something that is not ‑‑ most of Germany has some sort of cable.  And the way they do this is by demand aggregation.  They go to the village and say we need a commitment from the village to get at least 40% of the households connected and buying our services.  So once we have this demand aggregated, they start rolling out infrastructure.  What is interesting is in most cases also open access based.  They let other providers on their fiber network.  And what they are also doing, this is especially important when it comes to rolling out a mobile infrastructure like 4g, 5g.  They are connecting the towers of the different operators with their fiber.

So what I had done, I'm from the OECD, we're always looking at policies.  What kind of policies work?

There are a couple.  So I just mentioned three.  So what we see is that we think it should be the private sector.  That a private sector cannot do it on its own.  The government is providing subsidies where it's often a public/private partnership or subsidies and the operators are rolling out the networks.  So basically, we see in some areas, there is some need for public intervention.

The second issue which is actually an important issue is to streamline rights of race.  So especially in a lot of rural and remote areas, it's quite burdensome for the operators to roll out infrastructure.  There's a lot of red tape.  You have different government levels.  It's quite hard to get this right.  So what we recommend there is really streamline the rights.  That makes it cheaper for them.

And our third area is the use of public space.  For more communication networks there.  What we see is a couple countries have tried tendon indicate where they have their basically their public space where providers can put the infrastructure and we recommend.  One, it should be transparent.  Which public spaces can be used.  And second, it should not be about (?) But how can we get rural and remote areas connected.  I think I'll leave it here for the moment.  Thank you.

>> BENGT MOLLERYD: Thank you, Verena.  And with that, give the floor to Christoph and Telefonica's interesting example.

>> CHISTOPH STECK: Thank you.  You are putting up the slides.  I think as Bengt and Verena have said, I will provide a specific case of what we call internet for all in Spanish in Peru.  We are the leading operator in Peru for providing fixed and mobile services.  And basically, that's a project we started officially beginning of this year for quite a long time.  Nearly two years.  The set up was not easy.  It is based on ‑‑ I think the slides have been up there and then they disappeared.  They are working it.  Here we go.  Here we go.

So this is specific set up where we kind of innovate in various aspects.  First of all, it is kind of joint investment together with Facebook and two regional development banks.  They are like public development banks and provide funding.  Facebook as well.  And we as well.  So we basically teamed up between the four and created a specific company addressed for the rural area.  It's not Telefonica.  It's called ITP.  And basically, it operator is providing open wholesale access specifically in remote and rural areas where there's no connectivity or there is basically very basic connectivity.  I'll show you in a second what that means.  It's quite interesting because we have really put us quite ambitious targets.  One you see here.  We want to lower the (?)

In comparison to what normal capex investments are from outside.  And we'll show you this is based on using technology in a different way.  Also open to include everyone.  We just announced these days of the first agreement with Loon.  That's the initiative by Google where they have balloons flying at 25 kilometers above Earth and they are basically giving connectivity to using these balloons.  And we are covering for them for a long time right from the first experiments.  And we basically feel it's time to open it up.  So we are going to work with them for very remote areas in Peru where we have the (?) In Peru.  And we will build there for 200,000 people connectivity using the balloons provided by Google.

And that's not Telefonica.  That's IPT.  So we're teaming up with them.  So I mean, just the setup is quite unusual, I can tell you.  And we are open to sign up others as well.  It's really a model where we feel, in essence, that if you have very remote areas, we're usually also the buying power is lower.  You have kind of a double sandwich of a problem.  You have higher costs in rolling out the infrastructure.  Sometimes you don't have electricity.  And then at the same time, you have less people.  And they are able to spend less than people in cities.  From an economic point of view, it's like the worst-case scenario.  That's why there's no connectivity it's just that there's no commercial base.  So let's change that and how can we bring up the demand?

The demand is very simple.  I hope she won't get any kind of heart attack.  But, of course, it's a monopoly you build.  We have to do it in the way she described before that we're opening up.  So we create the competition regarding the commercial services on the service level.  Otherwise, from our point of view, there's no viable case.  You have to work with subsidies.  And we feel subsidies in countries like America are not sustainable.  You never know when the next budget comes up and the subsidies are not there anymore.  And our investments are done for generation, for 25‑30 years.  You can imagine this is complex to work with subsidy models.  I'm not saying that's totally possible but it's a challenge in itself.  So basically, that's what we do.

I just wanted to show you a little bit what's really happening on the ground.  We basically have 6 million people in Peru without internet access or mobile Broadband.  We have double strategy, first of all.  This is the area you see the blue spots on this map and the blue bubble.  We have around half of these 6 million people where you have connectivity, but this is kind of 2G network only and you don't have the Broadband connectivity.  So basically, what we're doing here is building overlay.  That means we're upgrading these sites to 4G basically providing an overlay network to give connectivity.  The problem with the existing very unreliable connectivity or something like that is we feel this is becoming obsolete.  These networks will not be maintained.  We are basically going to a problem where these networks will disappear.  So we're trying to build a longer‑term overlay.  So this is like upgrading from 2G to 4G where there is already connectivity existing.

And Greenfield is no connectivity whatsoever.  You don't have, for example, mass and towers.  You have not energy sometimes provided.  So we work with solar energy to give energy in these areas.  You don't have the transport network.  That's the backbone where basically you bring from the excess network from the antenna to the core internet.  So all of that needs to be built.  This is quite a challenge.  That's what people sometimes think about when we speak about real connectivity.  Having said that, half of the people who are unconnected in Peru live in areas where we have to build overlay.  That means there is some form of basic connectivity but not on the level that you can really have a good internet use.  So these are different challenges, I would say.

Just to give you a kind of idea what we achieved in five months.  We're working that for over two years.  We launched it officially five months ago.  We have connected half a million 4G clients already.  We have built around 500‑4G sites.  Average revenue per users.  More people spend than what we expected initially.  So that's important.  It shows that there is potential for growth in these areas as well.  And we are basically working towards the target of getting 4 million connected in the next two years.  There are regulatory issues but maybe we can keep it for the second part.  I have a little video here.  I think it's in Spanish, but you can put subtitles in YouTube and it comes up in English.  Not sure if you want to put it up.  It's just two minutes.  Gives you an idea of what happens when connectivity comes to these areas.

you have to click on the picture.  It should start.  If it's not working, don't worry.  You can find it on YouTube.  It will be coming up.  You can have a look at that.

So just to finalize, that's the project.  We're quite excited about it.  We feel this is an alternative model to what we've seen before as more publicly funded open wholesale networks.

We see there is interesting demand as well in how we use technology.  And that's something I should describe to you.  I said that we innovated in various parts.  One of the interesting things is that by teaming up with Facebook, for example, we found out there are better ways to plan networks.  I say that very bluntly.  It's a little bit a shame.  Of course, we're operators.  We have a good idea what happens on our network.  When there's no network, we put up the finger up there.  It's really difficult to find the islands, as we call them, of demand.  We've seen before some examples how you can do that and try to find out if there's some demand in the areas.  You can use technology.  What we developed with Facebook was using ‑‑ we cannot see what that is.  We use crowd data to find out what people are doing.  If there is, for example, just the information if there is enough smart phones in an area shows that there is potential demand for Broadband.  If you see there are a lot of people using smart phones and no connectivity, we see there is a demand.  We can sometimes even see what applications used and if there's a lot of videos and so on involved.

So we can basically use big data to find these islands of unserved demand.  And that means that we can plan much easier that if you put their connectivity, we're going to get quite a good response.  Then we're working with a lot with Facebook and many other operators called telecom project.  It's RND work to look into open run solutions.  So there are quite fascinating ideas around open radio access network.  You go basically to more open source solutions for radio access as well.  That brings down cost a lot.  And these kind of things.  So we're trying to innovate in various areas.  First how we brought together the people working on that project.  Then in the way how we deploy the technology.  Super specifically focused on being experts in connectivity to areas.  That's not what we do in cities.  But we can do it in these areas.  Doesn't mean it's bad quality.  Just means you have to operate differently and have other priorities.  And the third part is innovation on the regulatory side which is more of the Peruvian regulator.  That's one of the barriers we need to write regulation to be able to do these things.  I will stop here.

if you want to put the video.  It's two minutes to give you an idea.

[ Video ]

[ Video in non‑English language ]

>> That was not the video but that's okay.

>> BENGT MOLLERYD: Thank you very much.  Recommend you to look at the YouTube afterwards.  With that, thank you.  And welcome back to this example in the next phase of questions.  Before that, I would like to hand over the floor to Chenai.  You have the floor.

>> CHENAI CHAIR: Thank you very much.  It's always interesting to hear from previous speakers how they've been addressing these issues.  I am a gender and research rights (?)  And I actually look at operator models from the user perspective.  What does it mean to actually be connected?

For all of my research, the one thing that I think is lacking from operator models is actually thinking about the meaningful connectivity aspect to it.  I think it's not ‑‑ thinking about OECD countries but from an African perspective because this is the perspective I know.  At the end of the day, it's the bottom line.  Meaningful connectivity has been done to ensure operators are able to address (?) moving towards the data segment.  So there's more investment in that aspect.  I think a couple years ago, South Africa had the biggest case with the rise around (?)  They should be addressed as full‑on open rarities.  However, they were providing a cheap alternative to be able to communicate and introducing models to ensure they can protect their traditional voice.  So in that instance when you place it in that context of what actually is this, when we talk about operator models for inclusion, are they focusing around meaningful inclusion that allows people to have freedom, power and flexibility to determine how they will be connected and how they will enjoy the internet?

So for me, that's my starting point.  So in reflection to some of the models as the previous speaker was talking about how they've worked with Facebook and a big bank.  I'm assuming it's a big bank.  That idea alone already highlights to these operator models are not inclusive of the people they are trying to include into the system.  So then if you think about alternatives that have been produced, I'm happy we have people that actually do work and add on to what I'm about to say.  I do think in thinking about operator models for inclusion, there is a need to actually assist at the end of the day who actually is included in the design of the process and who actually has a say on what has to be wrote out.

So currently, in South Africa, there's this hype to get everyone involved in building for the fourth industrial revolution to have 5G ready networks.  When you assist the quality in urban areas, you do find that in lower income urban areas, they have poor connectivity.  So while the operator has reached the threshold to ensure they've covered capital city and everyone has their towers everywhere, when you go on the ground and do the research with these people you are trying to ensure they included, they are still having to have multiple sim cards to have network at time of the day and two, they can afford it.  In developing the operator models in inclusive, the question is around are they going to allow them to make (?) at an affordable price and at good quality and allows them to have power over the kind of services that they can have?

And I think also the question around ‑‑ a point was raised around business cases to actually then go into under‑served areas and does it make sense for a bigger operator?

If you are not going to make as much money as necessary, I can understand you don't want to be in there.  But collaborate beyond the big operators.  If we come together, we would be able to tap into this market and support alternative means of access.  So that's when you find in some cases, community networks have been wrote up because of the bottom up approach.  That allows people to have ownership and resources and understand what it is that's going on.  So I think an example of how fiber metrics being wrote out, cutting on to the fiber networks and thinking there was copper in there.  That's a question of have we actually made people have ownership of these networks we're rolling out to ensure they can have good access?

So I think that idea of business models that then allow for operators themselves to say this is a business case that allows us to evolve can happen where it's been succeeding but there's a need to open up more to allow alternative players and support alternative players and not see them as competition.  So I'll give you an example of one of the issues around with the OTG models that are coming up.  Operators have a choice that either they would evolve and launch OTG models or partner with the OTG models.  That was the only way they could ensure and maintain market revenue.  When you looked at the quality of services as a way to ensure people stay on the network, they were quite problematic.  So I think in thinking about operator models for inclusion, we have to really ask ourselves inclusion for who and who is at the table and who is participate and going who has ownership?

Is it meaningful connectivity that allows for meaningful usage of this network?

At the end of the day, one of the challenges you will roll out this network but there's no update to it.  That, for me, as I've been listening to this panel a knead to address the demand issues and include them in these models for operator networks that allow for inclusion.  At the end of the day, we have to be truthful that revenue is the bottom line.  This is what we want to focus on.  If rather than saying let's try to be inclusive but not actually deal with the issues around inclusivity.  I think I ended up critique the comments but those are the questions that need to be taken into account when we're saying we're working towards creating operator models that allow for inclusion.

>> BENGT MOLLERYD: Thank you.  Certainly, there are a number of perspectives on the inclusion.  Who has the right?

Who has the control?

Where is the money coming from? Et cetera, et cetera.  There's good questions there we will add into the discussion.  Before that, it's also possibility now in part two to say what is the main existing challenges to expand the quality and affordable Broadband services?

As she already raised some of these issues.  I think we'll let the panelist address two questions here.  What's the main existing challenges to expand the quality of affordable Broadband services?

And secondly, what tools could be developed to ensure internet access is both sustainable and inclusive?

For all groups of people.  So I will hand over to Verena to give your view.  Main existing challenges and what tools could be developed for access in order for access to be sustainable and inclusive.  Please, Verena.

>> VERNA WEBER: We started talking about some challenges.  I think we both raised the fact that often for the private sector if you do it like the normal way, there is just no positive business case.  So we need to find solutions to work on this.  I mentioned the solutions is the wholesale model.  The second one is increased user infrastructure sharing so that operators share the infrastructure among themselves.  So there are different levels.  So passive infrastructure sharing.  Then when it comes to active infrastructure sharing, we always made sure we maintain the competition in those areas.

Then the second one is around how can we remove barriers like policy barriers?

I think that's an important one.  I mentioned the streamlining rights of way.  Then we need to make sure there is enough spectrum available, et cetera.  And then like a third big challenge is the uptake by the population.  So basically, people need to be able to afford a Broadband connection.  But people also need to know why it's good for them to use the internet.  And I have some Columbian colleagues in the room.  I used to work for a Columbian minister.  And there, the situation was in Columbia you have a lot of micro companies.  It's a one person running them.  A person selling construction supplies, et cetera.  And none of these shops were connected.  And so the ministry went down and like okay, guys, why are you not connected?

We thought number one reply would be because we cannot afford it.  The number one reply was because we don't think it's useful for us.  Basically, what they did was worked together with the bigger companies to come up with applications for the whole supply chain.  There are either buyer or sellers of the bigger companies to develop digital applications that were useful for the whole supply chain of the bigger companies said, look, we have no trance ‑‑ trans parity.  And basically, allowed to increase the revenues of the very small companies by 20%.  People are like, okay, if I'm connecting, I see why this is useful for me, for my business, for my family.  And, actually, this is how the uptake was achieved.  Demand side issues are important.  Raising awareness.  What can you do with it?

How can it be useful?

We know that entertainment is a big part.  But it's, by far, not the most useful part.  So how can people make use of the internet?

And she mentioned the ownerships.  This is an infrastructure everyone should care about.  So for us, at least, the main challenges.

>> BENGT MOLLERYD: Thank you, Verena.  And I'll hand it over to Christoph.  Based upon what you have told us, what are the main existing challenges to expand these quality networks and make it also affordable?

And you are building the network but still there's hidden agenda or something.  So give some color on that.

>> CHRISTOPH STECK: Of course, it's a huge hidden agenda.  Of course, we want to make money there.  It's not that this is awful on the country.  That's why we have half of the world population connected.  They try to make money with internet access.  So I think this intention is not bad.  The question's, of course, if you want to make reasonable return.  You don't want to make excessive return.  The idea is really that there is bottom of the pie remit.  Many happens in other parts of the world.  And the current model of operations of operators is honestly not able to provide connectivity there.  We are just not ‑‑ our networks have been built always with the idea of you buy equipment from a big producer, you know the names and then you deploy it.  And every antenna cost 150,000 Euros.  If I can just get a return of 2 Euros a month, that will take me so many years.  No, I don't do it.  Rather go to the areas where I can get that back in half of the time.  And that's it.  That's why you have white spots and that's a problem.  That's what we're trying to address here.  And we try to think out of the box here.  It's not easy for an operator to say ‑‑ and gave away what we had the network and everything to the company.  You can imagine that's not easy to give it away to a company where we have a share, of course.  It's not fully owned by Telefonica and we are working together with others and opening up to everyone.

So there are a lot of changes we did here.  And why do we do it in Peru and not somewhere else?

The answer to that is they have the right environment.  They have the right environment because they already years ago installed kind of possibility in the telecom regulation that there can be something like a rural operator.  I don't want to call it city operator.  But operator operating in populated areas.  The ones, you know.

and that helped us a lot.  So what are the issues they provided us?

One is, for example, regarding spectrum costs.  I mean, if you have (?), you want to provide, this needs to be some shared initiative by the public and the private.  I explained to you what the private can do and what we and others are doing.  It's something the regulator and the government has to step in.  One thing they have to consider is why do I ask for the same price in populated areas and rural areas?

If the business model is so different and the underlying factors are so different, is there not maybe a possibility to provide spectrum in rural areas that will be a subsidy which is not costing direct payment by the government?

And it will be more sustainable long‑term because you cannot easily turn that back.  So if governments have to pay every year, they stop paying.  If you can do it the other way around and give a long‑term license, for example, 25 years or longer, you have that in long‑term.  Use of funds.  The issue of connectivity in these areas are new.  We have set up obligations and funds.  The problem is these are very bureaucratic instruments.  For example, very often they only provide services for fixed networks.

They are for fixed networks.  Connectivity in these areas will be done by mobile.  We know that the regulation is not updated.  Even if they want to pay, they cannot pay to a wireless network like the one I described to you.  It would immediately open up funding easily from these funds.

Another issue imagine you ever been the main network.  What happens?

Very often we still have as Telefonica or another operator coverage obligations in our licenses of our regulation.  So if the coverage of this rural operator is not counting against what we have to deploy in this country, we're not interested.  It's that simple.  If you have still to cover this area despite there is a connectivity, it makes no sense.  It makes no sense for us to support wholesale open model.  These are all the things you have to consider and take into account from a regulatory side.  Otherwise, the model is not very appealing.  There's one good example.  Service and quality levels.  Very often for good reasons, regulators have included obligations has to be run nothing 24 hours or something like that.  That's good.

Fantastic.  Easy to do if you are doing it in the city center of Lima where you have engineers to go and fixed things.  Very hard if you do it where maybe the next engineer might be hundreds of kilometers away.  You have to fly in with a helicopter.  Really, these are the challenges you have on the ground.  So basically, we have to provide and do this kind of quality level so it makes sometimes no sense.  So what we've done ‑‑ Peru has provided us possibilities is, for example, we can outsource to communities to a certain degree.  That means there are people that are not employees of the company, but they have knowledge about the network and they can set up things.  The usual thing is the antenna falls over because of the last thunderstorm.  These are the real things happening.  And they can go and fix that.  And we don't have to do that with our own technicians.  So these are all little things.  One of my favorite is double taxation.  You have the wholesale operator and the service provider and the client and buying it, you have two times you have to buy connectivity.  Every time the state puts on a text.  If you only have one, you don't have that.  What happens?

The wholesale model is towards integrated operator model.  And these are little things.  If you are not having on the other side the interest and the conviction that you have to do that and you have to go down that route as well to help, you will not get anywhere.  Needs to be a joint private public initiative and you have to work towards a common goal.  If you have there, there are things you can do to expand connectivity.

>> BENGT MOLLERYD: Thank you very much.  Catalog of different activities addressed to the policy makers.  Before we open the floor, I would like to invite Chenai to give an intervention on this.

The challenges and tools and any suggestions on that.  Please.

>> CHENAI CHAIR: Thank you so much.  I think from my perspective is around enabling policy environments that are actually able to work in ensuring that we've got these operator models that allow for inclusive connectivity.  And also setting up monitoring targets to ensure that we can actually evaluate operator license to ensure they've done what they can and they would.  And also a way to ensure the rights of users at the end of the day the service is being rolled out.  To actually ensure we have evidence‑based policy making in place.

At the end of the day, if the research or the operators have the only ones to have the data, they can decide what goes out and what doesn't go out.  If you support public institutions that are able to conduct the research and provide a neutral point of view trying to be public interest, then you can actually say governments, there is what we have funded and this is what has come out.  At the end of the day, if the evidence is coming from the operator is a question of can everybody be able to access it and critique it and engage with it.  That is something operators are called to action to fund public interest research to ensure evidence‑based policy.  And I think issues around up tick have already been mentioned.  And in those connectivity areas and power dynamics.  As much as the power is being overlooked, we really have to understand the power dynamics of play.

And then I think in terms of tools, my suggestion would actually be to bring the public more into this conversation to support ‑‑ someone to ensure targets are actually set.  And set up a way of monitoring the network quality and speed.  When you think about meaningful connectivity, of course, a foundation started looking at meaningful connectivity and doing a survey to understand how people think about connectivity.  One of the issues is around speed.  Even though most regulators would say we have a platform people can complain first to the operator then to the regulator, you just realize if there is some form of interactive platform where people can log in, then perhaps we can have a conversation that moves beyond this is the target of having quality but to be able to monitor all of these and assess the levels of implementation.  In the challenges that we have, we've all been speaking about it.  In terms of action, fund the research to understand where we can develop the business models and support alternative models.  Make this more inclusive, critique the powers at place and get the public involved to assist the networks currently in place.  Those are my interventions.

>> BENGT MOLLERYD: Thank you very much.  And as you all heard, three different perspectives, you can say.  Verena given you public policy ideas, different activities that could be done in order to address these issues.  And the para todos in Peru, how an operator is taking big steps to change a new business approach.  And then Chenai is used to asking.  If there are networks in place, compare if there is new networks.  How do you get the networks in place?

But underscoring involvement of the public side and also involvement.  With that, I would like to invite you to make intervention.  We have someone from Columbia.  Maybe you would like to make an intervention from your perspective in relation to what has been presented here.  Please.

>> AUDIENCE: Thank you.  I'm not from Columbia.  My name is Calarae Moreno.  I don't want it to be somehow siloed.  I think it's about inclusion and how we were in the session with the director of the union where the current model is plateauing where new things need to be tried.  I think it's very bold what Telefonica is doing and acknowledging some of the things you acknowledge publicly.  I think all the resourcing there in the model.  I think you have gone through them and some of the issues around the bureaucracy.  It's about affordability.  How much does it cost for that user?

There has been issues around the pricing and the deal.  But there are some things that I wanted to bring up with the report that you mentioned to the private sector and how sometimes we only think about the private sectors as multinational or national big operators with full investment building of this network.  And something that was mentioned at the beginning.  I think that's no longer true.  I think the development integration in the countries with the positivity of the fiber.  I think the (?) to allow a ground approach in the sector to allow the operators and community networks to provide access.  I'm not saying there is not a role for Telefonica to play and definitely all of us here use the networks of the big operators.  I think in the places where those operators are not reaching for whatever reasons, there is a space for small operators to play a role.  There is a space for partners for the regulatory and policy environment to actually play a role to enabling those spaces.

Something maybe a couple points you mentioned.  You were talking about island of demand and how you were partnering with Facebook around that.  We are advocating for open telecom date.  Being recently supported.  And how making ‑‑ if all the operators, the information with the regulators is made available, then it would be in the public to know how those targets are being met.  Where the islands of demands are.  How small operators could actually get into a point of presence and understand where a new spectrum is.  It would allow definitely for public dialogue on how those funds could be used or not used.  I think that is something that could be done there.

And also around the spectrum fees and costs.  In the case of South Africa, there is a formula to calculate the spectrum fees that work at the national level as it was at the local level.  Talks about spectrum sharing.  Talks about demand areas.

taking those into consideration, you get to a price the regulator is happy, that the mobile operators operating at the national scale point to multiple access.  At the same time, it works at the local level for the small operators to use a spectrum.  So maybe that's something to look at.

but overall, I think my contribution would be like we need to look beyond private.  The business models maybe working in Europe.  We need to nuance the role of the private sector and recognize it's more median enterprise is connectively own can also play a role.  Thank you.

>> BENGT MOLLERYD: Thank you very much.  Any other question at this stage before I have the panel comment?

Please.  Introduce yourself.

>> AUDIENCE: Hi.  My name is Chargo.  I would like to ask to Christoph that talked about the Peruvian case.  You said the regulator played a crucial role in making possible to have rural connectivity in Peru.  What exactly the regulator did that other regulators supposedly are not doing?

>> BENGT MOLLERYD: I'll let the panel.  If you start.

>> I think I go first to your comments are very spot on.  Community networks.  Obviously, the networks can play a role in connectivity.  The only thing we are sometimes a little bit is your praised is it sounds like if it's a network, everyone has to support.  If it's a big operator, catch it if you can.  If the conditions are there in rural areas to provide connectivity based on lower spectrum costs based on other regulatory support using use of funds.  That's fantastic and should be accessible to all.  We can tray just because big is ugly and small is beautiful.  We should kind of try to make the market up as we would love to have.  But based on who can access these kind of possibilities and then let's see who can build and provide the best quality connectivity.  That's competition which is good for everyone in the end.  I think we're cooperating with community networks.  Great advantage in what they are which is closely linked to the community.  So we see they have been very good capacities.  So very often it's done by community networks and so on.  But also very different type of community networks.

Very small community networks.  And you have to see what it is.  The only thing I say clearly is fantastic.  Sometimes this idea of let's help the little ones just because we like little ones.  Which is fantastic.  I think it's not a good idea.  Scale is a big cost factor.  If there is possibilities to build cheaper connectivity and innovative ones, fantastic.  Very often, scale is an issue.  Basically, we're seeing big operators can create lower networks because of scale.  That's a competition and it's out there.  But please do the same roads for everyone.  That's the only thing we ask for that.

Regarding what the regulator in Peru did, I touched on a couple of things already.  Maybe I didn't clarify.  One of the things they did is, for example, they were flexible in using the USO funds.  That was one of the things that was clearly done.  It was also available, for example, for demand site measures.

The different service levels as well where the regulator create a specific kind of quality levels in that sense.  And service levels for the rural operator.  And also, spectrum policy.  These were a couple issues.  You can see these are very little kind of things they are doing.  In the end it combines to recognizing connectivity is different from a business model and the more developed areas in trying to create a model which can work based on open access and wholesale.  That's basically what they did and others looking in Latin America and trying to learn from the experience.

>> VERNA WEBER: Maybe to the first question, basically in the reports, we broaden the scope.  So especially when we talk about wholesale models.  We talk about a lot of municipality networks.  And we have a couple countries where we have that.  Obviously, we have the most is Sweden.  And there you have municipality networks like in big cities such as Stockholm.  And our example is here in Germany.  We're in Germany for the IGF.  You have providers that provide public service.  Like the traditional service like water, energy.  So some of them at the moment are building up fiber rings of fiber networks.  In there, it's basically some sort of a public company that is providing the service.  We have some countries where it's basically a private company.  We have some companies where it's a public company.  Typically, it works best if it's done in open access model.  We do mention that.  We do say there is a role for different types of players, et cetera.

>> BENGT MOLLERYD: Yes, please.

>> AUDIENCE: I'm Santiago from Columbia.  Just to make two comments.  One of them is that we use the spectrum option to kind of obligate to operators to provide service for at least 6,000 spots in rural areas.  So they gain the spectrum and instead of paying more, they compromise to connect those places.

and I think it's a clever way.  I didn't do it that's why I can say it's clever.  Other agencies did it.  So I think it was a clever way to do it.  So they have to invest those places.  And also we use the telecenter model.  So when there's 100 people living in a specific area, we provide satellite to connect.  It's not with the same speed and the same capacity.  But we combine the two of them.

And the other comment I want to say is it is important to build the demand of the Broadband, not just the offer.  I understand internet can change the history of the community or the reality of a ‑‑ but sometimes this is more like a political rhetorical than a reality.  So if we really transform lives with the internet, it's worth it.  And other agencies has to pay for the service.  For instance, if I'm going to provide health like a telemedicine, for instance, so the ministry of health could provide some money to pay for the cost because this ministry is saving money.  But if we are using the internet just for maybe ‑‑ I'm not saying it's not important.  Of course, it is important for people to use WhatsApp and Facebook.  We call this the e‑equation.  If we build more value of the internet not just the ministries of ICT.  Or the political agency, the one with the elections, for instance.  So even for education, we haven't proved the internet is confirming the location.  We provide computers there and we provide connectivity.  But the level of education is still the same.  Nothing has really changed in those areas.  So before to connect those areas, we should assure the internet is going to make a difference.  It's not a matter of how much is it.  Not to take the cable to connect the place.  But the value of the services and then the equation makes sense.  Thank you.

>> BENGT MOLLERYD: Thank you very much.  Do you have any more questions?

Yes, please.

>> AUDIENCE: My name is Haras, and I'm from Pakistan.  I just want to make a comment.  We talk about the rural community.  In this whole discussion, I did not find what we do in Pakistan and some other countries called universal service fund.  It's called universal access fund.  What happens is whenever the operator goes into the country as per the license requirement, the very small contribution which they pay to that fund.  And that fund is utilized to go to those areas where it's not commercial Leviable for the operators to go.  So the fund goes back to the operators to reverse auction model.  So all the operators can compete in that area and provide the telecom infrastructure to that area.  This has been a very successful model in Pakistan.  Has covered more than 10 million subscribers until now.  And the operator committed over $600 million in the last 7 to 8 years.  And they do intend to commit another $800 million to provide high‑speed mobile Broadband to the marginalized community which we are in the next four year we're looking the population to cover approximately 25 million.  This is a model that has been very successful in Pakistan and replicated by Africa and some other companies.  If somebody wants to look at the web site and can get an idea, want to use this in their own countries for the community, I think the successful model which is very acceptable by the operators, regulators and the government as a public, private partnership.  The web site address is www.usf.org.pk.  Thank you.

>> BENGT MOLLERYD: Thank you very much.  Any other examples from other countries or regions?

Please.

>> AUDIENCE: Hello to everybody.  My name is Wanjung.  So I can talk a little bit about experience of Latin America.  In the case of Latin America, the story of the universal service funds is not story of success.  In most cases, the funds have not been located.  We have to wait several years before they have been located or they have not been located at all.  There is some case even in which that money ended up covering general deficit so outside of the sector.  That is a service problem.  I was talking with public authority of Latin America last week and he told me that they weren't able to locate the funds because they are restricted to some specific technology similar to what Christoph said earlier.  The experience of the universal service funds need a rethink, I think.  We need to think out of the box.  Out of the box to find out how we can cover those regions, those rural regions or isolated regions with connectivity.  Internet para todos is thinking outside of the box.  Doing something different, something new.  There are other possible solutions.  But as in the case of this subsidized project from the service funds or the case of the community networks, we should be very careful with that initiatives.  We need to follow, of course, transparency, accountability, efficiency criteria.

But one thing that is very important to be aware is that in any case, subsidized project or a project that has been given benefits can end up eventually competing with nonsubsidized or non‑benefited project.  If that happens, you are creating serious distortion in the market.  With serious problems with the Columbia incentives to invest.  So we must be very aware about that.  That's very important when we think about this out of the box approaches.

>> BENGT MOLLERYD: Thank you very much.  Interesting to hear.  Please.

>> AUDIENCE: I'm Ashruf from South Africa.  I've been involved in ICT policy regulation for a number of years.  Some of the interesting dynamics is in our spectrum policy, we've opted for wholesale excess network which is open access and it allows different operators to make an impact.  And bid for auction in nondiscriminatory manner.  The positives around that is it allows smaller plays to come to the market.  It sort of tries to level the playing field as the operators have dominated the sectors for many years.  One of the huge debates I don't see come through is essentially the open OTT providers, over the top providers.  The large content providers particularly Netflix and Facebook who are huge beneficiaries of the system of digitalization of networks.  How do we create that power imbalance?

What is the role of the regulator?

What is the role of the policy maker?

For instance, in Uganda, there's a huge debate on the social media as the government ‑‑ as a result, they needed to intervene in a very interesting way.  As a result, there is a policy regulatory vacuum as over the top providers making huge amounts of revenue and that is sucked out of the local and national.  So there is some interesting debates.

hopefully, the EU or ITU or OECD can conduct research.  The national operators and then the smaller players.  I don't think there's enough research in it in that regard.

>> BENGT MOLLERYD: Thank you very much.  Before handing back to the panel and given the time, do we have any more suggestions or comments or examples you would like to give?

Any hands raised?

Thank you very much for the intervention.  I would like to hand over to the panel to give a reflection on what has been said.  And then after that, I will sum up.

>> VERNA WEBER: Maybe just on the last question.  This is actually not my department so I'm in the design tech innovation of OECD.  But we have a whole taxation department that is looking into the issues.  How to achieve if you want a balance.  So they also looked into the platforms.  So if you go to our web site and you do OECD taxation, then you will find an overview of what we've been doing.  We recently launched a report on that issue.  I'm happy to give you the link offline afterwards.

>> Yeah, maybe just to follow up very quickly.  I think that's the right way going through the OECD to kind of arrange a modernization of text polices.  Clearly, there's an imbalance.  That's widely recognized not just in developing countries.  So OECD is doing great work.  Hopefully, it gets implemented at some point in time.

Just wanted to go back to the comment from our colleague from Columbia.  I think what you mentioned about the spectrum and putting basically coverage obligation into spectrum and auction it with that, I think that's a good approach.  It's a very straight forward and a very smart approach. But I will speak about the country.  Here in Germany, they don't do that.  They auction the spectrum and basically are using the money they received which was quite a lot from the spectrum auction to set up a public fund.  So these kind of solutions in the end create delays in the investment.  I think if you take one thing away from here, I hope that it is everyday work and difficult work and it's going back to really kind of deploy connectivity here or not.  How can I update it?

With whom do I have to cooperate and so on.  So the moment you bring in too many people in the middle, it's not helping with the deployment.  So the idea to include it in the spectrum is great.

The standard for 5G and I think they will get good results.  Let the operators do it.  That's our everyday business and let's go forward.  And that's a great approach.  So what I just want to say is the demand side.  That's very important.  The demand is important.  One of the things I hope and I'm very honest here, is that we also understand of course there is contents and culture and there's language problems and all of that.

Education may be the biggest one.  I don't want to do more marketing here but Telefonica is doing a lot of things around education to teach the teachers.  Otherwise, you put networks and connectivity to the schools and no one is using it.  More important is to get out of the box here again and say we are producers.  And there's a lost creative energy in many emerging economies.  But I haven't seen they've taken opportunities and create business and opportunities to go forward.  We should have the idea of using that to improve communities and improve the societies where we are.  There's a lot of unserved demand on that side.  I can tell you this is one of my greatest concerns I would say.  How can we create this more innovative spirit also in the emerging economies?

People there are as clever in other parts.  And I don't see that sufficiently happening.  That will be one of the things which would drive demand and have with the demand issue as well.  So that's my final point on that.  Thank you.

>> BENGT MOLLERYD: Thank you very much. Chenai.

>> CHENAI CHAIR: Thank you very much.  My comment around the gentleman that spoke about the OTT taxation models.  There has been research done by research ICT Africa that have looked at the need for operators to innovate.  I think one of the first countries I worked on that.  They created new models of pricing packages to ensure they could capture the data revenue market.  The only challenge there was that in terms of the license around who has the ability to deliver an evolved network.  Allowed for the government to take away the license and give operators another opportunity to expand beyond what was there.  So I do think there is research and perhaps there is now more of a question of opening it up.  And the taxation issues now are more kind of like ‑‑ when you think about Uganda, that was more people out gossiping on the network.  Therefore, how do we make sure they don't do that?

And comes back to the issue of taxing a platform more people are using it as a cheap alternative to communicate.  And it does seem to protect the operators on the market.  So the work that has been done with the research ICT solutions and policy paper worked on has mapped out how operators can evolve more into the data market and see how they can capture the value chain beyond seeking regulation that protects them without evolving.  That's where around the whole debate around revenue comes from.

And (?) that's what I was trying to say when I said funding around research.  There is a demand.  In my work and understanding developing markets, what we've seen is the way we set here and define a consumer is completely different from when you get on the ground where people are limited with solutions.

they probably are spending as little they have on data and able to communicate and get access to information that is very difficult so there comes affordability issue and innovating with digital literacy.  Not capacitating people.  And one again, a call to action.  To actual low invest in research to understand trends of access and use and meaningful use.  How is it that in these economies, I'll give you a case of example of Zimbabwe.  They went into a country where it's one of the most expensive countries to access the internet.  But every solution that has been pioneered by smaller players by innovators has been designed to address solutions within the country.  So I do think there is more need to understand that in these context where beyond the telecom's environment where people are facing political environments that are actually shutting them down from being able to do more, how is it they are engaging?

It does allow us to question what we mean by consumer and producer and for someone to be a productive user of the internet beyond what our definitions are when we look at policy solutions and what's in existence.  So my closing point is a call to action to actually fund and invest to understand what is it that's being done with what is in there in those hard political environments that we are saying may be difficult to invest in or we're saying need to pushup take for demand for services.

>> BENGT MOLLERYD: Thank you very much.  Thank you.  The mission with it or the objective of this workshop to discuss a concrete and innovative ways to connect people in businesses for expanding digital inclusion.

What we have done here is we have heard about an example from Peru and you have all contributed with various examples from different continents.  And private company forming and stepping out of the comfort zone, thinking out of the box.  And also asking for regulators to step out of their regulatory comfortable zone in order to make it possible to change the market.  And we heard Chenai here and giving more evident base for how this could be done.  Research in order to bridge this Digital Divide.  And Verena provided us with a number of concrete steps that could facilitate expanded deployment of networks to connected.

This question is not simple.  And if there is no demand, there is no market.  If you are young today living in any country that you want to be connected.  And then we can value this in different ways.  It's clearly shaping our society.  I would like to thank you for coming here.  Thanking the panel to addressing these questions.  This questions have to be continued.  With that, I would like to thank you all with a big hand.  Thank you.

[ Applause ]

[ End session ]