Digital underground – VOIP Services Analysis and Concerns

December 22nd, 2009

NEW technologies require new laws and regulations. But these regulations must be sensible and they have to be enforced uniformly. The tragedy in Bangladesh is that we make senseless regulations and do not enforce the sensible ones. As a result, businesses get destroyed, our workers migrate and then we highlight “record remittances” to console ourselves.

To illustrate, let us focus on recent events in the telecommunications and internet sector.

It is hard to find a better example of senseless regulation than Voice over Internet Protocol (VoIP). VoIP is much maligned by the Bangladesh Telecom Regulatory Commission (BTRC) and the media because it is “illegal.” But nobody explains the rationale behind making VoIP illegal. Unlike cars, firearms or alcohol, all of which require licenses in Bangladesh, VoIP does not carry with it the possibility of harming another individual. Why should VoIP operators need a license?

VoIP hurts the companies that have invested heavily in traditional telephony systems by providing the same services to customers more cost-effectively. In Bangladesh, the state-owned Bangladesh Telecommunications Company Ltd (BTCL, formerly BTTB), is the only company that has invested heavily in the traditional system and therefore is the only one who stands to lose if VoIP technology is widely adopted.

Naturally the question arises: if this were not a government monopoly, would it be given such protection from cheaper technologies through regulations? After all, the government is not moving to protect handloom weavers from machine-looms or the ayurvedic medicine industry from big pharmaceuticals, both instances where a new technology undercut an established one.

We keep hearing the refrain that BTRC’s strict enforcement of this senseless regulation brought more money into the government coffers. Yes, it did, by ensuring that a government monopoly could charge the consumer (you and me) more than their more efficient competitors. The strange phenomenon of our tax money going to bureaucrats enforcing regulation that deprives us of a cheaper way of calling our loved ones in distant lands perfectly encapsulates the dysfunction of present-day Bangladesh.

Of course making VoIP illegal has not stopped it from spreading. Rather, it has enabled political patronage, which thrives when governments hold too much power over the citizens’ ability to earn a living. Ironically, the very media that was instrumental in bringing to light the corruption under the last elected government seems to have taken hold of the wrong end of the stick on this issue. Instead of asking for greater liberalisation of VoIP to prevent further government corruption in this sector, they have decided to stigmatise this technology altogether.

And the mainstream media’s silence — for whatever reasons — over the last minute changes of a very sensible rule, regarding eligibility of bidding for Wimax licenses, that might have long-term consequences, is very puzzling.

No major print media outlet has reported the irregularities surrounding the post-auction complications of the Wimax licenses. There linger questions as to whether one of the companies set to get a Wimax license, Mango Teleservices, was eligible to enter the bidding in the first place. Mango Teleservices won the license after 4 other companies were unable or unwilling to acquire them.

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