TERF: NCC Extols IXPs, Bares Out Mind on VAS & Interconnect, Others

The Nigeria Communications Commission (NCC) has described the Internet Exchange Points (IXPs) as the focal point of the internet and are therefore critical for the development of the internet in any country.

The Commission said the IXPs not only do they reduce the cost of internet traffic by keeping local traffic local, but more importantly, they enable additional applications, which have a considerable multiplier effect on the economy.

This was contained in a keynote speech by Professor Umar Danbatta, executive vice chairman of NCC, at the Telecoms Executives and Regulatory Forum (TERF) 2016 edition held in Lagos on Thursday, adding that it is estimated that Internet Exchange Point of Nigeria (IXPN) saves the nation above N2 Billion annually, which would have been paid out to international carriers in US dollars if this facility was not available in Nigeria.

IXPN
The EVC who spoke through Engineer Ubale Maska, executive commissioner (Technical Services) of the Nigerian Communications Commission, said that IXPN as an initiative of the Commission enables Internet Service Providers, Telcos, Content Providers and Educational Institutions to exchange Internet traffic locally within Nigeria.

“The NCC also provided the seed funding that set up IXPN as a not-for-profit organisation with the key objective of improving the ICT ecosystem. The Nigerian IXP is now the 2nd largest IXP in Africa, I’m sure we  can be the 1st  based on the commissions initiative on local content and access to broadband for all.

“It also reduces the delays associated with routing local traffic internationally; this drop in latency increases speed and better quality of service to end users. For every internet content hosted locally it saves us foreign exchange which would have been paid to foreign companies, this ensures that local data centres flourishes, hence creating more jobs and increase technical competency for our engineers.

“The Internet exchange Point of Nigeria has become a very critical national resource that has made it possible for Nigeria to host critical Internet resources such as the E-Root, F-Root and J-Root Domain Name Servers (DNS).

“These server are the anycast instance of the 13 DNS root servers that resolve lookups for domain names all over the world and form a critical part of the global Internet infrastructure. It offers referrals to the name servers run by each Global Top Level Domain (gTLD) and Country Code Top Level Domain (ccTLD). Consequently, this translates to faster website download and better user experience to all networks in Nigeria”, the EVC insisted.

VAS & Interconnect
While giving some regulatory insights into some of the topics discussed at the Forum, especially with regards ‘The Impacts of Interconnect and VAS Debts in the Nigerian Telecom Industry’, he said the Commission’s approach to interconnect and VAS debts in the telecom industry is persuasive.

He said, “The regulator is not interested in micro managing financial and relationships between, and among service providers, that have been substantially protected by subsisting commercial agreements.

“Interconnect debts have not been really a big issue in the industry except in cases of disputes. But there have been cases of interconnect fees disputes between service providers. In such cases, the regulator has intervened. In the past one year, such intervention has resulted in payments of about N10.5 Billion from about reported N17 Billion disputed interconnect debts. Agreements have also been reached for the settlement of outstanding debts.

“On the VAS segment, we believe that the absence of detailed regulation with appropriate market segmentation is responsible for interconnect disputes. We have received reports, especially from the VAS providers, of alleged exploitation by the big operators. On the other hand, the service providers have complained about the parasitic nature of this service.   There is also a fusion of roles between the identified market segments, resulting in distortions in the market”.

Prof. Danbatta added that the Commission has conducted a consultative process and is about concluding arrangements for introduction of a regulation to guide the activities of the VAS market. This will substantially address the issues arising from VAS interconnect debt.

Funding Telecom Investments in Nigeria
On funding telecom investments in Nigeria, he said that the Nigerian telecom market thrives on private sector investment.

For about 20 years from 1990 to 2001, the industry could only record some paltry US$60 Million private sector investments.

“The partial deregulation of the industry with Decree 72 of 1992 did not change this investment climate. However, the digital mobile licensing process of 2001, and the Nigerian Communications Act of 2003, which grew the investor confidence has resulted in the attraction of sector investment from 2001 to 2016, to about $68 Billion.

“This is huge, but it is by no means adequate for one of the fastest growing telecommunications market in the world. The capital intensity of the industry, the need for service providers to increase their infrastructure deployment to satisfy the ever-increasing demand, creates room for double the size of this investment in the next ten years. We have about 40 million Nigerians yet to be reached with basic infrastructure and services”.

He added that the Commission’s roadmap for broadband has created new frontiers for investment, as the quest for data and social media enables services, as well as the increasing value added creates new frontiers for investments.

Earlier, Mr. Olusola Teniola, ATCON President said that the Forum is one of their growth initiatives for the telecom industry in Nigeria.

“Specifically, he said, “it is designed for the purpose of creating a veritable opportunity for key industry players to interact with the industry regulator, with the aim of building a continual good working relationship between industry players and the regulator.

“It is also aimed at creating a platform for the regulator to update the industry on the regulatory direction and plans for the industry in the coming years. This hopefully, would enable industry stakeholders to understand how best to cooperate with the regulatory agency in ensuring the effectiveness and success of policies and regulations in the industry,” Teniola added.