 01-07 November 2000 |
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New Economy – same old monopolies
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| 3 |continued from previous page Interview with David Take page 3 But Melita Cable, per se, being a major player in the market, should be declared dominant from day one. This is a company that has access to 65 per cent of the market in Malta. So even in marketing, cross-selling, call it what you will – it is obviously dominant. Even if we assume for one moment that they are not going to break the law in the sense that they are not going to bundle their services, they still have a very significant ability to influence the Internet market. They already have in excess of 200 test sites with cable modems. So it is very clear that they will be in a very strong position to market their product. We have no problems with the product or the company. What we are saying is that this company is dominant and is going to be allowed to enter the Internet market in a dominant way, while still being not being declared dominant. Government is going to allow it to gain a 25 per cent share of the Internet market without being declared dominant. Even then, the methods outlined in the law as to what should happen when a company is dominant are extremely vague. For example, in the law it says that when a company is dominant, I then have a right to use its ducts and its poles. We have been an ISP for five years and we have never gone up a pole or into a duct. We just buy services. All we’re saying is that government should oblige Melita Cable to sell to us. Have you held discussions with Melita Cable with a view of reaching an agreement to everyone’s satidfaction? Over the last three months we have said to ourselves, ‘Let’s try to discuss matters with Melita Cable’ and we held two meetings with them. During the first meeting, it was explained that the main issue to be discussed was the cost of international bandwidth. Yes, as ISPs, we are very disturbed by the prices that we are being forced to pay for international bandwidth. This is a result of Maltacom’s monopoly, which is dictating the prices of bandwidth. We discussed these issues and we agreed that the international gateway should be opened before 2003 because this is an issue that will keep the whole country back. I think that the country is crying out for a new fibre, other than that of Telecom Italia. What if something, for any reason, had to happen to that fibre? The results would be catastrophic. You cannot have a country depending on one cable, which is the situation that we have at the moment. The fact that Telecom Italia know that they have us where they want us and they are obviously dictating prices at a time when you can buy, for example, a 34 megabit connection for something close to USD80,000 per month - while here we are paying something in the region of USD25-30,000 per month for a three megabit connection. We are in on-going discussions with Maltacom, we hassle them daily about the price of bandwidth and other issues. However, the issue that we wanted to discuss with Melita was that relating to Internet via cable, this was approximately just over one month ago. Expensive bandwidth is certainly an issue but Melita wanted to make it the sole issue. We were told that Melita is not interested in entering the data market whatsoever, as they did not think there was a market - with the availability of other technologies such as ADSL. If Melita is not interested in providing Internet access to its customers, then what is preventing them from selling local ISPs the ability to do so? Melita said that they wanted to discuss the possibility of reaching some kind of business plan, whereby it would be feasible for them to offer us their services. So its no longer a technical issue, even Melita accepts that it is no longer a technical issue. It is a business plan issue – can they make more money with us or without us? However, they now have the idea that they can make more money without us and they have pulled all the strings they felt they had to pull within government for this to happen. I am extremely disappointed that government has back-tracked on its word less than six months after achieving what we felt was a milestone. In the Prime Minister’s words, we were ahead of all Europe. When we met the Prime Minister a couple of weeks after the ISP regulations of 1995, he told us that these regulations had put us at the forefront of Europe. Now, six months down the line, we have put ourselves in the position of creating exactly what the EU regulations are laid out to prevent – a distorted market. They have single-handedly distorted the market beyond all recognition by allowing one player who is a) is dominant and b) is intent on taking Maltacom on head-on. While government is supposed to be removing monopolies in the sector, in a stroke they have given Melita a new monopoly. Melita is the only one of the three players that retains a monopoly. Their cable television monopoly was removed and instead they were given a monopoly for Internet/data over cable. What are you asking of government to amend the situation? We feel that government should immediately withdraw the new regulations that will be published shortly, unless the regulator is prepared to declare Melita Cable as being dominant from day one. Furthermore, there are a number of misgivings in the regulations as to how a dominant company would be forced by the regulator to open up its network. We have sent government a 22 page document outlining where the problems are, what directives are being broken - both in fact and in spirit - and we have had no reply over the last two months. No reply, although Minister Galea has gone on record saying that government is considering our proposals, but the results of these considerations has not arrived. Basically, the situation today is that Melita Cable are testing their infrastructure to provide internet services in the same way that they could be testing to provide the service to ISPs, with the view of fair competition. The government is listening to what we are saying, they almost always agree with our standpoint but still nothing is done. Our suspicion is that a game is being played, maybe a commercial game, or a political game – but it is not a game that is being played according to the rules. Last October, ISPs ended up shutting down Melita Cable’s network, this was a very extreme measure and is something that we would not like to do again. However, the bottom line is that we have our subscriber’s interests to protect, as many of our subscribers would like to have Internet over cable and they would like to have it via their respective ISPs. Why should they be forced to change ISP to have that service? Government here has a chance to offer Internet users a true choice. Merely allowing cable to pick and choose who and who not to sell to, in its own commercial interests, is wrong in the same way that government has trade laws which say that companies cannot refuse people business without a very legitimate cause such as non-payment. In the same spirit, no telecom operator should be allowed to withhold its services from any other service provider. When you look at what is happening in this so-called liberalisation process seems to be the carving up of the market between three companies. They are all being given a little chunk and it seems that when government thought of liberalisation, the only people that were interested in this were those three companies. Meanwhile, future companies or existing smaller companies are not being given due consideration in the process and it seems that we are not even being tolerated. Government is literally legislating against us and in favour of Melita Cable in this case. Government has, in one stroke negated free competition and has basically said that ISPs are expendable. We are not prepared to sit down and let the government take our business away and take our subscriber’s right to choose away. We are not going to take this sitting down. If anyone in the authority or in Melita Cable believes that this is a closed case, they haven’t even started yet. This is something that we will see through to the end. If certain people don’t want ISPs to be in this market, then they should stand up and say so, but we will not sit down while people try to push us out. Photos by Paul Blandford | ||||||
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