Is this what NOFN was Meant to Do?

Another article appeared today in the Economic Times about NOFN/BBNL  plans to acquire an ISP license to provide e-services based on Wi-Fi in rural areas.

I had written earlier about the proposal to provide Wi-Fi for India's rural local Government offices and my worries on this count. 

Firstly focusing energies on the Village Panchayat Telephone or Government sponsored Common Service Centres(for internet) has not met with notable success in the past. What has succeeded  is the creation of a conducive environment for services and applications to flourish on a commercial basis.

 Thus, in the pre-mobile revolution era, India's subsidised Village Public Telephones which were supposed to be the village life line were often found to be lying in disrepair or being used as private phones of rural elite but once wireless appeared on the scene, commercially run public phones did roaring business.

Secondly, I fail to understand why the Government must select the technology and service provider to deliver e-Government services to citizens. If this was bid out with desired specifications, the lease cost solution could be selected. This would be conistent with the regulations laid down for Universal Service Funding in India

Thirdly, public money (USOF) is being used to fund NOFN/BBNL's OFC roll out which was meant for areas that markets would not serve. Thus, the network was to provide high capacity backhaul from villages to blocks on a non discriminatory basis. NOFN was never meant to be a service provider. If the argument is that its viability is uncertain, well, that is exactly why it is being fully subsidised. If  USOF was to float another tender for broadband access in non viable areas, then the selected access providers would need  back haul and BBNL would get its business and revenues. Ignoring competitive neutrality today means a heavy cost in terms of poor telecommunications in the future. We have already seen this pan out in the case of fixed lines and rural broadband in India.Should we be repeating the same mistakes?

Please also see my posts on NBN and lessons for NOFN.

Limiting Public Funding to Access Gaps

It is reported that the fact Sing Tel Optus has plans to roll out fibre to the  "basements of apartment buildings and shopping complexes [ and use] [t]he existing copper wiring within the buildings .. to deliver faster, NBN-like broadband speeds is being seen as a threat to NBN's viability. There are apparently other operators with similar plans too.

My question is why should the Government sponsor/fund NBN like roll outs in cities where markets may (and will) serve customers? Why should NBN's business model have factored in markets where competition cannot be ruled out?

It has been stated that,

Breaking NBN Co’s business model could force it to be reclassified from a profitable investment to a multibillion-dollar expense on the federal budget... NBN Co’s entire business model ran on the assumption of a flat national price for all customers. Labor’s NBN was designed to act as a cross-subsidy system where the higher revenues generated by city users paid for broadband in the bush.

This business model was discarded with the onset of  competition in  erstwhile monopolistic and fixed line based telecoms markets across the world. I have written earlier about the flawed and "Back to the Future" feel of ambitious National Broadband Plans based on incumbent centric National Broadband Networks.

Again there are lessons for India's NOFN which is basing its arguments of veering way from its original mandate of strictly (actual access) gap filling based on similar fallacious business viability models.

The NBN Debate Continues-Lessons for India's NOFN?

It is reported that an independent review of NBN ordered by the new Coalition Government of Australia has found that NBN costs and time lines have been understated and revenues overstated.

The news report states that,

"'The  full cost of Labor's original National Broadband Network plans would blow out by $29 billion and be completed three years late, the strategic review has found.

Communications Minister Malcolm Turnbull released details of the review he started 60 days ago on Thursday.The review found the fibre-to-the-premises NBN under Labor would have cost $73 billion, $29 billion more than forecast, and not be completed until 2024.It also found the current NBN Co corporate plan had overestimated revenues from the network by $13 billion.While the review found the cost and timing of the original plans would blow out, Opposition communications spokesman Jason Clare challenged the review's findings.He released an internal government analysis of the Coalition's plans, which he said revealed the new government's plans were "the wrong approach", and would not achieve the promised speeds.

Mr Turnbull has pledged download speeds of 50mbps by 2019 under the Coalition's plan, which will rely on copper connecting to fibre nodes, rather than brining the higher-speed fibre direct to all homes.

But Mr Clare said the analysis should the two stage approach - with 25mbps promised by 2016, expanding to 50mbps by 2019 - was unworkable.

He said the government's fibre-to-the-node plan would lower revenues from the network by 30% and the actual cost of fixing the existing Telstra-owned copper network, and was "unknown".

But Mr Turnbull said the review found the Labor network was "never achievable", and the results of the review would be "a crucial input into government policy".

Clearly the debate can go on forever. Nevertheless a mid term policy/projectreview and corrective steps are a good idea for any ambitious national broadband network roll out. India's NOFN/BBNL is already in difficulties. Ironically though it is being heavily subsidized because it is supposed to be financially nonviable and the PSU SPV route was chosen to cut red tape in Right of Way and other such causes of delay; the three PSU implementation partners in charge of this project are now citing the very same reasons for their difficulties and delays. Time for a review of costs and revenue projections and last but not lease scheme design? 

A Historic Pact or Something to Worry about?

Newspaper articles are hailing a historic infrastructure sharing pact  between two telecommunications bigwigs namely Bharti Airtel and Reliance Jio.This will reportedly  include optic fibre network – inter and intra city, submarine cable networks, towers and internet broadband services. The Times of India reports that,

"The cooperation is aimed at avoiding duplication of infrastructure, wherever possible, and to preserve capital and the environment. This will also provide redundancy in order to ensure seamless services to customers of the respective parties,"...."In future, the arrangement could be extended to roaming on 2G, 3G and 4G, and any other mutually benefiting areas relating to telecommunication, including but not limited to jointly laying optic fibre or other forms of infrastructure services. ..The pricing would be at 'arm's length', based on the prevailing market rates,"

While infrastructure sharing sounds good in theory, my worry is the lack of competition oversight when such agreements are entered into. Where is the ex ante scrutiny to ensure that other operators/subscribers are not put to disadvantage by such agreements among giant service providers which could easily have a detrimental impact on  competition in  end user service delivery. 

Competition and the PSU Incumbent

For the first time in the history of competition regulation in India, the Competition Regulator of India or Competition Commission of India has penalised a public sector monopolist (Coal India Limited)  for abuse of dominant position (in supply of dry fuel). A news item titled,  "'CCI slaps Rs.1,773 cr penalty on CIL" tells us that,

"As per CCI, CIL and its subsidiaries have been found to be “imposing unfair/discriminatory conditions in fuel supply agreements (FSAs) with the power producers for supply of non-coking coal.” Such conditions violate fair trade norms. Apart from issuing a cease and desist order against Coal India and its subsidiaries, the CCI has directed modification of FSAs. Besides, the regulator has asked the company to consult all the stakeholders for making the modifications in the FSAs. In recent times, CIL has drawn flak for fuel shortages that have been hurting power generation.

This is a positive step as much of what ails the Indian economy arises from monopolies in critical (input) sectors." We need to keep an eye on this aspect as far as telecommunications go too. 

Competition & Consumer Welfare-Infrastructure Provision

I salute the contents of two interesting news items from the Business Standard dated December 7, 2013. The first is titled "Try and Introduce Competition". It suggests that the dismantling of the government monopoly in power supply in New Delhi and replacing it by three area wise private sector monopolies has not sufficiently addressed consumer welfare and that we also need competition in each sub market for lower tariffs and quality of service rather than expecting the present regulated prices to substitute competitive markets. 

The second is a report on an interview with the Civil Aviation Minister and its title says its all- "I am not Minister for Air India." The article tells us that the Minister when questioned about his promotion of private competition made it clear that his job is consumer welfare rather than protection of the public sector incumbent. 

It would be good if the telecom sector were to recover from their past follies and pick up a cue rather than blunder ahead in a manner that harms competition. This is especially so when it comes to public funding/Universal Service. 

Reassuringly Sensible Approach to Future Regulation

It was good to read a press release titled, "ECTA Regulatory Conference - Competition should remain at the heart of EU telecoms regulatory policy." I reproduce it (verbatim) below as it is in my view a very significant post.What is particularly important is to not let political compulsions or economic downturns allow a movement away from competition and towards monopoly as incumbents would like. This is especially important as the arguments against competition in the era of NGN sound very similar to those propagated by interested parties in the eral of fixed line services before mobile services proved them wrong. Telecoms are always going to be subject to disruptive technologies and to be lulled into thinking that competition can harm or than monopoly is inevitable or desirable in view of the pressing need for universal broadband or in view of declining profit margins would be shortsighted.

This argument applies equally well to developing countries. In India, a short phase of  cut throat competition in the mobile voice segment caused by faulty policies of the recent past (ending with cancellation of licenses) and a sudden resurgence of faith in public rather than private sector for rural roll outs (owing to a beleaguered bureaucracy facing the aftermath of a phase of crony capitalism)  is leading many to the wrong conclusions.

The post reads as follows:

"European policy makers, regulators, key players from the telecoms industry and other stakeholders meet for three days under the auspices of ECTA to discuss pressing issues for the telecoms sector, including the recent European Commission proposal on the telecoms single market.With high level speakers, including Vice-President Neelie Kroes, the ECTA Regulatory Conference will address a plethora of issues ranging from net neutrality, data protection and consumer protection to regulation, competition, market structure, investments, the review of relevant markets and spectrum harmonization.

The implementation of a genuine single market for telecoms ranks high on the EU agenda, as does the role that regulation should play going forward. This conference will promote an open debate on the challenges the sector is facing and provide the opportunity to discuss how regulation can continue ensuring that tangible benefits are delivered by the EU’s pro-competitive framework and maintained in an NGA setting.

Tom Ruhan, Chairman of ECTA said "This conference is a great opportunity to stop and think. Alarming misconceptions regarding the state and performance of the sector and the role of regulation could divert the EU from a competition and end-user friendly path. We must not forget that competition has proven to be the best driver for efficient investments and also acknowledge the key role played by competitors in driving innovation and affordable prices for users (consumers, businesses and public administrations) as well as network investments. The immense benefits associated with open and competitive telecoms markets must not be undone by attempts to push for premature de-regulation. The review of relevant markets is particularly important in this regard. Regulation should also not be used to give a hand to those dominant companies, which have failed to take the necessary business decisions to adapt to a data centric world and now want to reduce competition instead of correcting their mistakes. Using regulation to implement the wrong industrial policies is a no-go.”

Erzsebet Fitori, Director of ECTA said “Experience has shown that ‘two is not enough competition’ for European consumers. More than ever we need pro-competitive policies, which recognise that regulation of the fixed infrastructure remains an essential competition enabler in an NGA environment and that investments are fostered and not hindered by competition. We must ensure that regulation remains neutral to whoever invests.”

The pro-competitive principles enshrined in the EU Regulatory Framework, namely the need to promote market liberalization and ensure open access to infrastructure, have been regarded outside EU borders as “best-practice”.[1] Indeed access based regulation - namely to physical access products of dominant operators - has played a key role in ensuring that new entrants are able to enter the telecoms markets, climb the ladder of investment, start rolling out their own networks and take the driver’s seat when it comes to NGA broadband deployment.[2] The need to make available, across all EU Member States, fully equivalent and fit-for-purpose wholesale access products, at a fair price and tailored to the needs of business services, is all the more necessary in the transition to NGA.

The development of a true single market depends on the genuine barriers being tackled, not on meeting demands of dominant operators for intervention aimed at reducing competition. Premature de-regulation or the implementation of unfit regulation must therefore be outright prevented. The upcoming review of relevant markets will have a fundamental role to play in this regard."

Internet for Indian Villages-Where does the solution lie?

One possible answer is that we have to encourage community participation rather than purely top down supply side big schemes. We have had little success with the former as for example the Common Service Centre scheme of Department of IT. 

My previous post "Wi Fi Internet for Indian Village Local Government Offices-Going Around in Circles?" has already suggested that USOF's proposed project for wi-fi and internet at panchayat offices may not necessarily meet with success as far as bringing internet to ordinary rural folk goes. I believe we have to allow big schemes to include the end users and NGOs into the design is we are to succeed. 

A good example of such a project has been documented in an article titled "Let NGOs provide rural net services" It describes a success story wherein involving and training locals in villages to provide services where big operators are not interested with the help of NGOs has enabled even illiterate villagers to benefit from online content (such as audio-visual content).

Such schemes require far more effort and time as was the case of USOF's Sanchar Shakti. However they are worth it in terms of outcomes.

 Einstein had famously said insanity is repeating the same thing again and again and expecting different results. Time to change our approach? 

Wi Fi Internet for Indian Village Local Government Offices-Going Around in Circles?

A news item in the Times of India (November 30, 2013)  titled "Govt clears internet wi-fi plan for rural India" states that a proposal to provde wi-fi hotspots and internet connections to India's Gram Panchayats has recently been approved. Slated to cost Rs 37.5 billion and targeted to be completed by 2016, the project will be funded by Indian USOF and will ride on NOFN infrastructure, 

This may be an excellent idea with two caveats. 

One is that past experience has shown that telecom services in Panchayats tend to be used only by the rural elite and are unavailable to the common people. During USOF inspections I have seen private public calling offices doing roaring business whereas the USO funded village public telephone located in the village panchayat (local self government office) bang opposite, on the other side of the village mud track was being exclusively used by the local elite. Villagers were in fact unaware of this state funded facility. Thus, given the social and economic set up of Indian villages such facilities could encourage better data keeping and connectivity within the government set up but are likely to percolate to rural society at large. The village school may have been a better venue for such a facility if empowering the common people is the aim, but then more effort would be involved in managing, maintaining and manning the facility. I have written before about the need to look at various other facets of the demand side eco-system. You need applications and trainers/facilitators in rural India. This requires a multi-stakeholder approach to project design. A good and successful example is USOF's Sanchar Shakti.

My second concern is who is providing the last mile service. I hope it is not NOFN. The entry of NOFN into access segment would in my view negate the very idea of Universal Service as a modern mechanism in a liberalized sector as being different from state owned monopoly service provision. Please see my previous articles in this regard under the same labels.

USOF India-Problem of Plenty

My last post suggested that perhaps USOF India needs to consider a review of regulation to ensure a level playing field. It should not become a another channel for funding the incumbent operator. The idea of the Universal Service Levy was in the nature of pay or play i.e. it would go back to those operators who participated in rural roll out. However the exception of funding the PSU incumbent by nomination rather than designing schemes for tendering is becoming the norm and private operators continue to expand their rural market share at the cost of the incumbent at their own cost!

A news item titled "USO Fund: Higher levy, lower allocation" bemoans the rising collection of USL and quotes an operator association (GSMA) as follows:

“[The USOF} needs to align the funding demands made on operators with its funding needs and with the financial state of the operators, seeking alternative funding sources where appropriate. It also needs to develop clear, transparent policies that are aligned with defined short- and mid-term milestones. USO policies should also focus on needs not met by markets,” 

Of course the NOFN project shall take up the lion's share of accumulation of USL and this project given on nomination basis to a SPV of three PSUs is already showing the typical signs of time and cost overruns. 

Plus ça change, plus c'est la même chose

An article in the Economic Times today laments that poor rural teledensity is lie to hamper achievement of India's broadband target of 175 million subscribers by 2017. Teledensity in rural India is crawling and is at present 41.64% compared to urban teledensity of 146%.We still have only about 16 million broadband connections. The usual culprits have been blames-poor rural demand and higher costs of rural roll out including non availability of fibre. 

I have recently written about NOFN/BBNL and why it should focus on its core objective of providing           non-discriminatory OFC backhand rather than trying to become a vertically integrated service provider. We already have one such public sector operator in BSNL (which has continuously resisted sharing its fibre with other service providers in spite of regulatory recommendations).

The poor results of USOF's substantial funding to the incumbent BSNL for rural wire lines and broadband are evident. Perhaps there is a need to review the entire strategy of promoting rural telecommunications. Perhaps the solution lies in a more level playing field via regulation (fixing the market efficiency gap) and public funding that encourages private participation. Please also see my previous articles on competition.

NOFN Veering Away from its Core Objective?

In a post titled BBNL and Competition Neutral Broadband Funding I had mentioned the proposal to make India's USF funded rural broadband back haul provider into a service provider.

In an article from the Economic Times it is now learned that BBNL is likely to acquire only an Internet Service Provider license. While this is better than it trying to become a unified service provider it is not what a state funded broadband back haul network is supposed to do. It would become difficult to regulate BBNL's wholesale bandwidth and ensure a level playing field vis-a-vis its own service provider arm. 

As regards the lack of interest among ISPs to venture into rural areas to provide internet, I would not agree with the justification provided in the article. The whole idea of NOFN/BBNL was to eliminate the high speed and bandwidth back haul issue and to allow private and public players to provide last mile access (with this problem taken care off). If the Government was to provide the latter too, the funding may as well have gone to the incumbent BSNL by way of budgetary support instead of creating another PSU monopoly.

A proper study and public consultation process would be in order before assuming a lack of interest  in tapping the rural market among India's multiple  ISP's. (392 as per Department of Telecom's website). There are competition issues here which invariably mean issues realting to long term health of the sector.

Internet for Rural Livelihoods

I have written earlier about internet based applications and services and their positive impact by way of bridging infrastructural gaps. An interesting article in this regard tells us about Taking Indian handicrafts online.

As per the article Craftsvilla.com is an e-commerce site that tied up with an NGO to provide an interface to about 5000 artisans across India to sell their handicrafts online thereby expanding their market access. There are challenges in terms of commissions paid to various service intermediaries and continued dependence of craftsmen on wholesale dealers but the reach of the handicrafts themselves expands to a larger market. 

My grouse is that the website does not sell handicrafts as handicrafts but rather tries to entice buyers by using references to popular culture.  Other than that this is a welcome initiative. What India needs is lots more connectivity and e-literacy so craftsmen can deal directly with buyers through e-commerce portals much as we use e-bay like sites as individuals.

Internet/Broadband in India-So Important and Yet So Scarce

An article by Mr Manzar in the Mint  highlights at the end of 2012, internet users were only 10% of the population making it among the lowest in the world in internet and computer penetration.

Another article by him points to the sheer importance of internet in creating awareness about government services and entitlements among illiterate rural poor who otherwise remain ignorant and are duped by unscrupulous elements. This was in the context of Indias' MNREGA-a rural employment guarantee scheme.
 An inspiring  article on "'Enabling access to vocational training content on cellphones" tells us about "'SkillTrain" being run Mr Ganesh.B in the state of  Madhya Pradesh.

"The company records videos of the module that students can download on their mobile phones for free and learn from it.SkillTrain offers four courses—mobile repairing, electronics, computer science and computer hardware—that extend from 12 to 20 modules. It plans to extend it to wider subjects such as welding, two-wheeler and automobile mechanic, electrician, plumbing and tailoring next year." 

The article also states that,

 "It is estimated that about 15 million Indian students drop out of school every year. The gross enrollment ratio in higher education in India is at 17.9%, much below the the global average of 27%.
The government has set an ambitious target to train 500 million people by 2022 to help them acquire vocational skills and provide an efficient workforce for industry. There is a shortage of trained manpower and even the available talent does not match the requirements of industry.
School dropouts fail to go for mainstream education for several reasons, including ineligibility, the family’s financial conditions, academic pressures and regulatory requirements."

Learning on the mobile for a fees was found to be more economical by students rather than travelling long distances to a training centre.

All this goes to show the importance of broadband connectivity which India is struggling to provide to especially its rural population.Please also see previous posts on Mobile VAS and USOF India's Mobile VAS Scheme Sanchar Shakti..

BBNL and Competition Neutral Broadband Funding

The Economic Time reports that BBNL(NOFN) which is at present an infrastructure provider may acquire a unified license and become a service provider. This broadband network funded by USOF India was to provide OFC connectivity to 2.5 lakh village panchayats (local self government offices) up to block level as private operators were not likely to cater to this market segment.

It is reported that,

"The government is looking to "revise BBNL's mandate" as it wants it to directly deliver high-speed broadband services down to the district level to maximise utilisation of NOFN infrastructure, which is the communications ministry's biggest telecom venture.

The immediate plan is use the NOFN resources to build a "government-user overlay network" — akin to a virtual private network — for delivering a host of citizen-centric e-services to bridge the digital divide across rural India.

The DoT has proposed joint funding of the "proposed overlay network" by the Universal Services Obligation Fund (USOF) and the ministry of rural development. It wants USOF to handle the entire upfront capex payout — pegged at Rs 3,750 crore — and the rural development ministry to handle opex over a 10-year span - estimated at about .`1,860 crore a year - putting the total cost at Rs crore, excluding taxes."

In my previous posts on National Broadband Plans and incumbent centric, public funded Broadband Networks I have highlighted the importance of competition and avoidance of market distortions or recreation of monopolies. I believe that if BBNL were to complete roll out and the government was to focus on            e-government services (applications), a host of private and public sector telecom service providers would step in to provide last mile connectivity for broadband enabled services on commercial considerations.

In fact it has recently been reported that India has croseed the billion mark as far as e governance transactions go. Also that, "[w]ith more parts of the country getting connected through the National Optic Fibre Network, industry watchers expect more citizens to be accessing government services over the internet. ... The network has been launched in pockets of Rajasthan, Andhra Pradesh and Tripura, with some 80,500 transactions already recorded."

Mobiles for Medical Help in Rural Areas

In an article titled "Soon Medical Services through Phone"it is informed that

"Notwithstanding challenges like low bandwidth and internet penetration, health professionals feel that there is a huge market (900 million Indian cellphone owners) waiting to be tapped. A recent study conducted by Apollo Hospitals and Georgia State University , Atlanta, gives credence to this belief. The survey found that nearly 28% people in rural areas and 46% in urban areas owned smartphones. Conducted across a sample of 1,866 people spread in five states — Chhattisgarh, Andhra Pradesh, Gujarat, West Bengal and Tamil Nadu — it also found that one-third of those interviewed had not undergone a health check-up in five years with 55% saying they were open to accessing medical services through mobile phones."

Given the overall underdevelopment of rural areas, doctors are not easily available. Providing medical services through ICTs is the best bet in rural India. This underlines the importance of universal availability of high speed broadband.

Committing to Consumer Friendly Regulation in Africa

A news item about the  first conference of African telecoms regulators on consumer affairs in Lagos tells us that regulators from Nigeria, South Africa and Ghana etc. stressed upon protecting and promoting consumer interests.

The article states that the conference was attended by telecoms regulators from South Africa, Ghana, Zambia, Zimbabwe, Kenya, Cameroun, Liberia, Rwanda, Benin Republic, Malawi, Angola, Sudan, Uganda, among other African countries and [It acted ]as a platform to bring together, African telecoms regulators and subscribers, to discuss common regulatory interest that will further enhance telecoms growth across Africa...Major issues raised at the conference, were multiple taxation imposed by governments in the various African countries, as well as unsolicited promo text messages that hit the subscribers' phones every minute."

Interestingly the Ghana Regulator is quoted as follows,

"...good regulation promotes competition in the provision of electronic communications networks, services and associated facilities; contribute to the development of the internal market, the interests of consumers; apply objective, transparent, non-discriminatory and proportionate regulatory principles; and promote technological and service neutrality.........

....too much regulations amounted to a “hidden tax,” because the costs of conforming to the regulations were passed on to the consumer in terms of higher costs. he explained that too many regulations might inject uncertainty into the marketplace, making it harder to raise capital and create new businesses."

I could not agree more.

Basic Broadband Now Universally Available Across Europe

As per an EC press release, Europe has achieved 100% coverage as far as basic broadband goes.

"Vice President of the European Commission, Neelie Kroes, today welcomed the milestone achievement of one of the main goals of the Digital Agenda for Europe:

“My motto is Every European Digital – now every European genuinely has the opportunity. We have more to do to improve networks and equalise the opportunity, but the opportunity is there.”

"Thanks to the extra coverage provided by satellite broadband, we have achieved our 2013 target of broadband for all. That's a great result for European citizens.

How we got to 100 % coverage?
Fixed (ADSL, VDSL, cable, fibre, copper) 96.1%
Mobile (2G, 3G, 4G) 99.4%
Satellite 100%

By the end of 2012, 99.4% of EU household had access to basic fixed or mobile broadband coverage; including 96.1% of households in rural areas. But the final 0.6% (or roughly 3 million citizens) included many families and businesses in isolated or rural areas where fixed or mobile broadband rollout is more cumbersome and expensive."

Going further,

"The Digital Agenda for Europe (DAE), has set a goal to make every European digital and ensure Europe's competitiveness in the 21st century. Essential to this goal is fast connectivity and the DAE broadband targets:

basic broadband for all by 2013;[achieved]
Next Generation Networks (NGN) (30 Mbps or more) for all by 2020;

50% of households having 100 Mbps subscriptions or higher"

 It is true that public funding has played a major role in these achievements but it is noteworthy that the same is subject to careful ex ante scrutiny to avoid market distortions that can harm the sector in the long run. I am of the opinion that India has a lot to learn from the EU's regulations in this regard.

Broadband Market in India

It is reported that,

"BSNL [with 9.97 million broadband subscriber[s] with continues to lead the table of top five internet service providers followed by Bharti Airtel (1.43 million), MTNL (1.10 million), Hathway (0.37 million) and You Broadband (0.32 million) till the month of July.

According to the data released by  the Telecom Regulatory Authority of India (TRAI), total broadband subscriber base in the country has increased from 15.19 million at the end of June 2013 to 15.24 million at the end of July 2013.

“This is a monthly growth of 0.33%. Yearly growth in broadband subscribers is 3.79% during the last one year (July 2012 to July 2013)”, it said. "

That for a country of 1.2 billion this broadband penetration is negligible and that the market is far from competitive is evident. Please see my previous posts on this issue such as,

-There is More to Broadband than Physical Infrastructure,

-Avoiding the Recreation of Monopolies in the Age of Superfast Broadband,

-Continuously Declining Wire Lines in India,

-Access Regulation as Important as nationwide Backhaul

and many others under the labels USOF India and Broadband Networks

Relevant Markets of the Future

It is interesting to think of broadband which people like me have already likened to a bridge across infrastructural gaps as being treated as a substitute to transportation, not for purposes of competition  law jurisdiction as my title may suggest, but at least as a competitor for public funding. 

Thus, a post titled "Building railways not broadband is a ‘strategic mistake" quotes a Microsoft personnel as saying that "The UK government is making “a strategic mistake” investing billions of pounds into railways rather than broadband." The said executive has criticized  "the government for not investing into the technologies needed to make mobile working a reality for more, instead sticking with the traditional investments for the commute to work. “The one negative fact about the future is the current and previous governments think we need to build railways instead of broadband infrastructure and networks,” 

I am not sure that the two investments are mutually exclusive for a country like U.K, but certainly one can envisage that the future would be one where mobile work or tele-commuting predominates. One can quite easily stretch one's imagination to a scenario where the broadband becomes more important than the railways when it comes to interacting with co-workers.

In developing countries broadband already compensates for lack of roads, hospitals, schools, work opportunities, social services etc.  My articles on the subject can be seen here.

Technology and Universal Service

I have two pieces of information to share. Both of them are related to technology and  telecom penetration.

The first is the welcome initiative on the part of the  Reserve Bank of India (RBI) in exploring  the possibility of providing SMS-based mobile banking through a single application on all types of handsets.

It is reported that,

"A Technical Committee on Mobile Banking has been set up to "examine the options/alternatives including the feasibility of using encrypted SMS-based funds transfer using an application that can run on any type of handset for expansion of mobile banking in the country," the central bank said.The panel will conduct an in-depth study of the challenges faced by banks in taking mobile banking forward to the desired level. At the end of July, there were about 70 lakh users of mobile banking, which is currently offered by 78 banks.The panel will also examine "any other optimum solution" that would take mobile banking to every nook and corner of the country, in addition to drawing a road map for implementing the solutions or options recommended."

With mobile penetration outstripping land lines in India and smart phones becoming affordable, this measure could greatly address the yawning financial inclusion gap in the country. As an interesting aside, the promotion of mobile banking  is identified by the Economist as one possible way to reduce channelization of rural household savings into financially less productive assets such as cows, in India! The article is called Udder People's Money and makes for interesting reading. Please also see my previous post on mobile VAS.

The second is news about the use of  television and radio channels to transmit cellular signals when systems are pushed beyond capacity as during a disaster. "Mai Hassan, a PhD student has managed to [change] the shape of the wireless signal so she could transmit on channels that use radio or television frequencies. She then had to change the direction of transmission away from the original channel. Instead of using traditional antennas, which transmit signals in all directions , she used smart antennas in mobile phones. Smart antennas transmit signals in a single direction and can steer the beam to any direction. By manipulating the direction of the cellular signals, Hassan was able to transmit calls and texts to a receiver while avoiding any interference with the original radio and televisions signals."

Please see my previous posts on disaster communications. I am of the view that keeping the public (rather than only official first responders) connected is of critical importance during disasters.

National Broadband Plans-The Largely Un-examined Competition Debate

I recently came across a very interesting post on the subject of competition in OFC roll outs. This well written post by Paul Budde argues that (in the Australian context but extrapolating through examples to the international context) either we do not really need infrastructure competition in OFC infrastructure or at least it is not a very practical possibility. He cites USA and Europe as examples of lack of nation-wide fixed line competition.

It would take much more than a blog post to analyse his arguments but I would like to make one simple counter argument. Why must we have a nation wide network? In vast countries like India, USA and Australia even regional or sub regional fixed networks would be a feasible option. In non viable areas, competitive service provision may be seeded by Universal service funding. Please see my post on the Indian USOF model at Broadband Networks through the Infrastructure Sharing Route. This model did succeed in creating potential competition to the incumbent with USOF subsidy even in a remote region of the country. Other posts on infrastructure sharing could also be viewed. 

Perhaps the inability to fathom such a model comes from historical reasons wherein in almost every country the incumbent managed to protect its monopoly by harping on the economies of scale issue and the best option with the state was to regulate prices etc. Regulating monopolies cannot solve inefficiency and lack of drive to innovate that plagues all monopoly service provision. Readers are invited to read my previous posts on NBN and NOFN. Today both networks are delayed and mired in roll out problems. There is a news item about NOFN planning to impose heavy penalties on its vendors who are delaying roll out. Need I say more. I have written earlier cautioning against the faddish nature of national broadband plans and the fact that they are likely to recreate monopolies with the usual set of associated problems.

Also, unlike Mr Budde, I am not so sure that mobile networks can ever be considered perfect substitutes for fixed lines. European regulators seem to agree with me.  

I do agree that service level competition is very critical, but as far as competition in broadband goes, if it is there at every level-all the better. 

Fixing the Market Efficiency Gap in India

I had mentioned in my post titled, "Regulate in Haste Repent at Leisure" about TRAI's recent recommendation in favour of  a considerable reduction in reserve price of spectrum and those relating to permitting spectrum trading. I had stressed that what is important is that all regulation must be based on sound economic analysis placing consumer interests above all. The latter includes a healthy, viable and competitive telecom sector. Another related post is "Regulate in Haste Repent at Leisure-Comments from EU and India" These are all under the labels Telecom Regulation & Competition

A lot has been said about the regulatory deficit in India. A recent article by Sanjeev Aga literally agonsies about this issue in relation to the Department of Telecommunications processing of TRAI's above mentioned recommendations.

A long quote from this article is added here as the writer is interesting and eloquent in his anguish:

"But let us even assume this Trai exercise eventually ends well. Would that address sector issues? Unfortunately, no. Consider policies that allow intra-circle roaming before an auction, and disallow it afterwards. Or those that confer technology-neutrality in 1999 and withdraw it in 2012 in the name of unliberalised-spectrum. For the jargon-challenged reader, spectrum liberalisation and technology neutrality mean the same thing (the Danish Business Authority website offers a clear explanation of this). Such ad-hocisms abound because policies are not supported by robust policy institutions. The better type of investors watch policy, but they derive confidence only from the quality of institutions behind the policy.

Planning Commission member Arun Maira worries that since we are not fixing institutions, India is falling apart. A complex, high growth, trillion-dollar economy, with money power sloshing around, has outgrown the governance model of the 1950s. Among the handful of quality policy institutions we have is the Reserve Bank of India, and that is a product of the Raj. The notion that ministers and ministry departments should run sectors such as hydrocarbons, aviation, telecom, power, or railways is anachronistic. The DoT has capable Indian Telecom Service officers who ran fixed line operations in Bharatiya Sanchar Nigam Ltd's earlier avatar. A quirk of fate finds them designing policy for mobile telephony of tomorrow for which they have been provided neither exposure nor training. With no symmetry between authority and consequence, between work and appreciation, self-respecting people must resent being reduced to their present pass. When spewing out penalty notices becomes a defence mechanism, you sense that these people may be present physically but they have seceded emotionally! What is true of telecom is equally true of several other sectors. The old is dying and the new cannot be born!

Having two policy institutions for telecom, DoT and Trai, was always a crazy idea, an outcome of confused intention and timid disposition. Like in every advanced international jurisdiction, telecom policy formulation should have been tasked to the regulator from its inception. Now, better late than never! But for this Trai will have to step up its game. Amending the Trai Act is a mere first step. The regulator would be tested on its sector knowledge, in widening the talent pool to attract the best, in the quality of its output, in the confidence inspired in investors, in the moral authority exerted, and in the thought leadership provided to India and to the world.

India is at a juncture where the absence of quality governance institutions is strangling growth. This has been the single biggest cause of the economic downturn. Second-generation reforms are not about mindlessly repeating what was done 20 years ago. They require dismantling mental blocks and building quality governance institutions for at least half-a-dozen sectors, of which telecom is one. This fond wish must now await any new government. Meanwhile, the Telecom Commission and the Empowered Group of Ministers should rally in support of the Trai recommendations."

I have written about a possible way forward-Providing a competition policy framework to our regulation. The article is titled "Of Airwaves, Incumbents & Good Governance-The Urgent Need for A Robust Competition Policy Framework"

Access Regulation as Important as Nationwide Backhaul

I have been repeatedly stressing on the importance of competition as a means to ensure not only universal service and access to telecommunications but also sustained growth of the telecommunications sector.  Even in situations where there is  platform competition, due attention needs to be paid to competition is copper line access networks. 

As reported in a news item from Telecomputer.com 

"Access regulation remains a necessity in the Netherlands to ensure effective competition between fixed networks, according to a report from Ecorys for Tele2. Most EU countries have just one national access network, based on copper. Regulation is aimed at creating a 'ladder of investment', providing alternative operators various ways to deliver services. The tariffs and conditions should be structured in such a way to encourage alternative operators to invest in their own networks and equipment, allowing them to differentiate their offering, according to the report. The last step on the ladder is deploying a competitive local loop. 

In the Netherlands, the country benefits from DSL, cable and FTTH infrastructure for broadband. The roll-out of fibre will mean an eventual end to the use of the copper network. The telecom regulator has always found that "two is not enough" with the copper and cable networks and supported third-party providers with wholesale access regulation. The report concludes that access regulation will remain necessary to support this in future and during the transition to fibre. "

For the market to remain competitive, competition on copper must continue, and the position of alternative DSL providers such as Tele2 and Online must be protected. This should include access to a regulated virtual local access service and a continuation of subloop unbundling.

Competition in  last mile connectivity is particularly important in developing countries like India where platform competition is very limited. The Indian situation is that unbundling is not mandated and has not taken place and 3G wireless services are largely unavailable in rural and remote areas. USOF  India's wireless broadband scheme that would have introduced competitive provision of the same in rural areas was criticized by the regulator as being premature and in conflict with 3G roll out obligations and never took off. This is one of the major reasons for the minimal wire line broadband penetration in India. 

Please also see my previous posts on Wire Lines in India, Broadband Networks, National Broadband Plans and Competition

The Problems of Monitoring certain USF schemes

I am always wary of USF schemes that pose too heavy a burden in terms of monitoring. USOF India had a scheme for rural household connections which posed exactly such a burden and has thankfully been discontinued.

Even with its presumably more advanced regulatory and administrative abilities, FCC seems to find it hard to keep fraudulent claims out of its similar lifeline programme. A recent news item speaks about penalties being imposed for claiming  ineligible connections and for fraudulent duplication in claims . It is said that,

"FCC Commissioner Ajit Pai said federal Lifeline reimbursements to phone companies grew to $2.2 billion in 2012, up from $817 million in 2008. He said a "significant amount" of that growth was due to increased waste, fraud and abuse."

I would have thought that FCC would consider closing this programme or redesigning it altogether.

Please see previous posts on (Reforming) U.S.A's Universal Service programme. Also readers may like to view my article "Monitoring for Effective service Delivery-The case of USO Funded Schemes"

News for USOF India

Apart from its Scheme for its scheme for subsidised Mobile Phones and tablets, USOF India has been in the news lately on two counts.

This is first on account of the telecoms regulator's (TRAI) recent recommendations on improving connectivity in the North Eastern states of India. It is reported that based on Department of Telecom's request, TRAI has suggested inter alia that:

(i) A 2 per cent discount be provided in licence fee, charged annually, of those telecom operators who cover at least 80 per cent of the habitations with a population of 250 and subsidies for installation of solar power units at telecom towers.

(ii) Providing seamless connectivity across National Highways in the North East region covering Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim and Tripura.

(iii) Providing subsidy from Universal Services Obligation fund for bandwidth charges through satellite connectivity.

Also [t]he regulator has asked state governments in North East to address issues raised by the telecom operators on priority so that they are encouraged to roll-out services faster, provide land, government building, power for mobile towers, single-window clearance system for all telecom related issues among others.

My comments are that this is a welcome initiative. However, I do not find merit in a roll out based discount.  Past experience has shown that roll out is very difficult to establish conclusively. It also tends to encourage fraudulent coverage claims. I would prefer output based subsidy for clearly targeted interventions.

The second news item states that USOF has been asked by DoT for its views on viability gap funding required for achieving DoTs green telecom targets. It is reported that USOF, "is likely to advice the government based on findings of Indian Council for Research on International Economic Relations (ICRIER) on this issue."

Also that, 

"The telecom department plans to urge Asian Development Bank to extend long-term soft loans to India's cash-strapped telecom sector which has been clamouring for viability gap funding (VGF) as a precondition to invest in capex-intensive green energy technologies mandated by the government. ....Discussions on incentivising green energy were triggered by DoT's refusal to ease targets linked to renewable energy deployment for running towers sites. The green policy requires telcos to migrate 50% of all cell towers in rural areas and 20% in urban areas to hybrid power by 2015. By 2020, operators will need to run 75% and 33% of cell towers in rural and urban zones, respectively, on hybrid supplies. Hybrid power has been defined as a mix of grid supplies and renewable energy based on solar, wind, biomass or fuel cells."

USOF has previously encouraged use of solar and solar-wind hybrid renewable energy in its subsidised mobile infrastructure project but the scheme remained in pilot phase. It also liaised with the Ministry of New and renewable Energy in this regard. There is a DoT report on this subject titled "Hybrid Wind/Solar Power for Rural Telephony- Green Solution to Power Problems" 

Public Funding of Incumbent-Centric Broadband Networks

In a post titled, "Incumbents and national Broadband Networks-Broadband Deliver U.K Project" under the label "Broadband Deliver U.K Project" I had written about U.K's Public Accounts Committee's criticism about lack of competition in choice of implementing agency for this project. Another recent news item  talks about PAC's doubts about misuse of public funding. There are allegations of predatory pricing and misguiding/ intimidating customers in local markets.

Fears have been expressed about recreation of BT's monopoly in fixed line broadband. A telling critique goes as follows, " There are many other providers around the country which are delivering future-proof networks today, both in the community sector and the private sector. All of those face the danger of being overbuilt – having their networks overbuilt by BT turning up with state funding. That seems to be entirely the wrong way round.”

This is the point I make in my posts about National Broadband Plans. I believe that public funding of incumbent-centric optic fibre roll outs is a classic case of repeating past mistakes. It goes against competition and will ultimately affect long term growth, innovation and customer service.

Regulation-Competition, Operator Profits and Customer Welfare

The constant tussle between firms' profits, customer welfare (prices and quality) and the regulatory burden of balancing theses interests in the real world (less than perfect markets) is a worldwide phenomenon. 

A recent news item about Canada's Competition and Radio-TV and Communications Regulators issuing a joint statement to the effect that they would work together to "ensure access to services at competitive prices" also informs us that large  domestic firms are up in arms against the government's decision to allow foreign participation in spectrum auctions. The government justifies its decision as it finds that "Canadians pay some of the highest wireless rates in the developed world and that more players would help boost competition." Three big operators insist that "wireless rates in Canada are competitive with those in the United States." 

My question is that is U.S.A the correct benchmark?

The Importance of Being Connected

I quote below from two studies.They highlightsthe importance of connectivity for political, social and economic development and underline how ICTs help bridge the lack of infrastructure in developing countries, thereby contributing to citizens' empowerment and growth.

The first is  "Measuring the Impact of Broadband on Income" by Ericsson. The second is a study by Vodafone Institute for Society & Communications titled "Mobile Technologies the Digital Fabric of our Lives."   The first study focuses on impact of broadband access and speed on income. It indicates inter alia that for Brazil, China & India(BIC), even a 0.5 Mb broadband connections increases household income by USD 800 per annum. Further, "[i]n  BIC countries, upgrading from 0.5 to 4 Mbps increases income by USD 46 per month." (Access to more sophisticated services " boosts personal productivity and teleworking and telecommuting allow for more flexible work arrangements."

A longer quote (below) from the second study reiterates the importance of mobile phones which continue to predominate in countries like India with very low fixed line penetration.

"In developing countries, mobile phones have changed everyday lives for many people. Often, mobile phones are the only accessible and functioning infrastructure. As a result, it is unsurprising that people have become inventive by using their mobile phones to replace or create other societal and economic institutions thatwere inefficient or sometimes non-existent. M-Pesa, for instance, has enabled millions of Kenyans to transfer money without having to travel. It is the most successful mobile banking service in the world, but by far not the only one: around the globe, more than 150 mobile banking systems have been introduced, mainly in developing countries. A similar pattern was found regarding the impact of mobile phone subscriptions on social development. 

• [M]odels show that more mobile phone subscriptions correlate with more democratic participation, less gender inequality and more time in education. Our results support this evidence on the macro-level across a sample of 202 countries. They show a significant relationship between the number of mobile phone subscriptions and the voice and accountability index, which is taken as a proxy for democratisation. This relationship is more pronounced in developing countries as there is naturally more scope for improvement in relation to political participation. 
• Women and girls are often the most vulnerable members of communities in developing countries. Their access to the outer world is often very limited and they have to cope with numerous hurdles. First and foremost, they have to ensure the health and well-being of their families and changing their traditionally assigned roles is often the only way forward. The connectedness and   communication without intervention by (male) others can facilitate such a change and reduce gender inequality. Our model across 148 countries supports this idea based on macro-economic data. It shows that with increasing mobile phone subscriptions gender inequality decreases. Again, the effect is most visible in developing countries.
• Mobile phones can have two major types of effects on education:the most direct impact is the use of education via SMS texts or mobile applications, which can reach children as well as adults tend to be larger in developing countries. 
•  In practice, mobile phones fill the gap that other poor or non-existent infrastructure in these countries leave wide open. It is therefore not surprising that many innovations related to mobile phones are adopted more quickly in developing countries than in developed countries. 
• Finally, mobile phones are often the first and only way of communication without having to travel under difficult circumstances. 

The Economist says it Best

I am an ardent fan of the Economist magazine and have been reading it for decades. I love it for its language and  variety. A recent article titled, "A World Turned Upside Down with a catch line" Giant state-owned firms have fallen back out of fashion" captures an important lesson in economics (which I hapr on frequently in this blog) in a most engaging fashion with pop music analogies and irreverent certainty of its line of argument.

It states that,

"These vast organisations are not going away; most still make huge profits, often boosted by cheap public funding. But governments must recognise that the slump in their valuations is a sign they are allocating capital badly. That is in no one’s interest. Petrobras has made a baby step by allowing outside shareholders to appoint a director, while China sometimes mutters about modest reforms of its industrial fiefs. But the hybrid model of a firm beholden to both investors and politicians is as full of contradictions as Karl Marx said capitalism was. Privatisation is the best way to resolve these tensions. Businesspeople, at least, can now be a little less dazzled by state firms. To outlast the average pop star’s career, companies need a culture of innovation, financial discipline and, increasingly, global reach. These are things only a few managers are able to deliver—and which no government can."

I have nothing against the public sector but I do feel that a level playing field is imperative for healthy growth of a liberalised sector/economy. I am against ill analysed public funding of PSUs and believe that they must compete (and be allowed to compete) on equal terms with private counterparts to create value for customers. This applies also to Broadband Networks and National Broadband Plans. 

There is more to Broadband Penetration than Physical Infrastructure

This is a theme that runs through by blog. In this case I am speaking not only about broadband enabled services and capacities of stakeholders but also the need for a vibrant market with multi-stakeholder participation and abundant competition at every level, infrastructure, services and content.

An article in the Economic Times titled "Why Broadband is Stuck"  by Mr Pradip Baijal, draws attention to the heavy reliance on PSU incumbents in India to the detriment of outcomes. An example cited by him is the present NOFN scheme which is still in the roll out phase. He speaks about the need for sharing available infrastructure including the aspect of unbundling available fixed line infrastructure. There is also a mention of spectrum sharing. 

What this boils down to is Telecom Regulation. I have argued time and again in  this blog about the need for regulation to keep customer interest in focus and that encouraging competition is one of the best ways of doing so. As regards, the regulatory issues in universal access to broadband services in the Indian context, my article titled "Universal Service Policy in India-Theory and Practice" pointed out the damage done to rural wire line and broadband penetration by regulation that favoured the incumbent at the cost of competition and growth  of services. This paper was written in 2010 but we perhaps have not progressed much in practice as is evident from USOF India's current activities.

Broadband for Sustainable Development

Sustainable development demands that economic growth is inclusive and balanced in terms of trade offs between short term gains and long term consequences.

Broadband Commission's new report,  “Transformational solutions for 2015 and Beyond"  explores the importance of broadband for sustainable growth. It states that,

" while national broadband plans increasingly recognize broadband’s role in socio-economic development, much more needs to be done to support this ‘invisible technology’ transforming our world. A regulatory environment that encourages widely accessible and affordable broadband deployment is the only way to realize its potential to advance sustainable development – for example through proactive policy on spectrum and the protection of inventions.

As far as comprehensiveness of National Broadband Plans goes, the figure below is telling

Inclusion of Socio-Economic Elements in National Broadband Plans 2013

Encouragingly more and more countries include education, employment and health as important elements in national broadband plans. However, the lack of emphasis on universalizing access is evident from the last 4-5 bars. Broadband cannot work its magic unless it is universally accessible, relevant and affordable.

The report makes 10 recommendations to fully leverage the potential of broadband in this regard:

1. Make ICT and high speed broadband universally available at affordable cost for all.

2. Ensure that ICT and broadband are embedded in all of the universal goals and national targets to be defined as part of the Post-2015 global development agenda to fully capture transformative, sustainable solutions.

3. Deploy national development policies and plans to actively drive cross-sector integration of economic and social outcomes deliverable and scalable through ICT and broadband.

4. Create a streamlined and enabling regulatory environment for the broadband era that accelerates removal of barriers to market entry for broadband ICT uptake.

5. Provide consumer incentives and harness government procurement to drive demand and stimulate private sector innovation and investment.

6. Twin broadband innovation and investment with sustainable multi-stakeholder business models to capitalize on the transformative potential of universal ICT

7. Drive the game-changing potential of mobile broadband through the optimized use of radioelectrical frequency spectrum for universal ICT for development penetration

8. Promote the utilization of global standards to enable the harmonization and interoperability of ICT and broadband-enabled services and applications, putting special emphasis on affordability and accessibility.

9. Establish a comprehensive monitoring framework for broadband deployment and robust accountability mechanisms to track development progress via industry-wide broadband ICT metrics and indicators.

10. Develop appropriate solutions to maximize resource mobilization, innovation and investment in broadband for both developed and developing countries.

The report also analyse broadband's actual and potential role in achieving sustainable development goals such as ending poverty, hunger and gender inequality and provides best practices from across the globe.  

Please also see previous posts on National Broadband Plans and Broadband Ecosystemhttp://ictsforall.blogspot.in/search/label/Broadband%20Ecosystem

NBN-Changes Ahead

Australia's Financial Review carries an article titled "Coalition mulls NBN Co split to speed construction"
The new government is considering creating two separate entities -one in charge of construction and the other,operations. This article stats that,

The proposal comes as the NBN rollout struggles to ramp up and meet its targets. Under Labor, the NBN rollout missed several key construction targets. NBN Co’s 2012 corporate plan forecast it would pass 359,000 homes and businesses with fibre by June 30, 2013, but it only reached 207,500 premises.

The delays were frequently blamed on labour shortages, planning issues and a range of other problems that resulted in dissatisfaction among unions, contractors and sub-contractors.

Leaked internal forecasts showed NBN Co was set to miss its target of connecting fibre-optic cabling to 1.13 million existing homes and businesses by June 30, 2014, by 273,065 premises.

Service Stream, one of the key companies building the NBN, reported a 672 per cent fall in net profit as it pulled out of the project.


My views on massive  incumbent-centric state sponsored broadband roll outs can be seen under the labels National Broadband Plans, Broadband Networks. I believe lack of competition is a major concern in such initiatives. 

Regulate in Haste Repent at Leisure-Comments from India and EU

I have used this title for another post  under the label Telecom Regulation, but I feel compelled to use it again.

 I read a very interesting article in the Financial Express yesterday. It is called, "A little less lazy pragmatism please" While its focus is monetary policy, it makes an interesting observation which applies across the board,

"In India, we have largely abandoned basing policy and reforms on theory and empirical evidence. Instead, we have chosen to justify badly structured ad hoc policy changes on pragmatism and reality."

It also states that,the label 

"...Only when policies are based on theory and empirics and not on the insiders' insistence on pragmatism does market efficiency increase."

I agree wholeheartedly with this thinking. I believe that In India policy making and regulation could benefit greatly from sound theoretical and empirical analysis rather than the current trend of short cuts and literally what the author of the above mentioned article calls "lazy pragmatism". Correcting this problem calls for greater role of subject specialists in policy making. They are in fact slowly being allowed into the Government regardless of a  bureaucracy who believe they are smart enough to manage anything through a common sense approach and don't a theoretical basis for their decision making. 

It is interesting to note that  BEREC, the body of European electronic communications regulators has come out in similar criticism of the European Commission's draft regulation on a single telecoms market. Please see my post titled "Bold Brave Telecom Reforms in EU."

They are quoted to have said that, they fear that these proposed reforms will be "rushed through the European legislature without proper explanation and full exploration of its potential consequences..... the proposals represent an aggregation of several unrelated measures, whereas the EU Framework is a complex regulatory ecosystem that should be approached as a coherent whole." It is said that "BEREC is concerned that the draft regulation will jeopardise the integrity of the EU framework and its achievements, in terms of investment, competition and consumer benefit."

Given that EU's regulatory framework for electronic communications is indeed an excellent one so far I would hope that they are not right.