the-lebanon.com

Friday, February 03, 2006

Arrival of DSL in Lebanon fraught with problems
By Meris Lutz
Special to The Daily Star

Over a month ago, the Ministry of Telecommunications announced it had signed a Memorandum of Understanding (MOU) with local data and internet service providers (ISPs) to bring DSL to Lebanon, which would increase the speed of Internet connection and possibly jumpstart a struggling information technology sector.

However, Lebanon's international cable does not have the capacity to offer DSL on a large scale, causing the ministry to charge data providers an artificially high price for access to the cable and state-owned telephone lines DSL uses.

The ministry sets the tariff for access to the international cable, rent of local switches [collocation] and of the last mile to a household modem, the most costly being the international connection.

"It's very expensive when compared to the international benchmark, or even the regional benchmark," Sodetel chairman, Patrick Farajian said of the tariff.

This cost is passed onto the customers, who are expected to pay between $40-$50 a month, not including a $100 startup fee - more than twice as much as in Jordan and Cyprus.

Telecommunications Minister Marwan Hamade admitted there is a bottleneck for the international cable, but that the ministry is working to expand capacity.

"The ministry has been paralyzed for years while the main items discussed were conflicts with the mobile companies," he said. "Now that we are out of this mess we can address the issue of broadband."

In addition, he said educational institutions will receive special preference for DSL access, and that while the cost of DSL will be high, the ministry is planning an overall reduction in tariffs, which would make existing dialup cheaper.

But many outside the ministry - ISPs, consultants, and analysts - say the government has had plenty of time to increase broadband and remain
skeptical of the MOU.

"The cost is prohibitive, it's meant to discourage use," said Kamel Shehadi, managing director of Connexus Consulting, a telecom regulation
consulting agency. "They cannot meet the demand of any user who asks for it; the government has not done enough in the past 4-5 years to increase bandwidth."

Shehadi said he thinks influential actors who invested heavily in satellite and wireless services discouraged the acquisition of more broadband because it would provide a cheaper alternative.

"There are vested interests against Lebanon having greater international connection," he said. "These vested interests can only be overcome if the minister continues to force the acquisition of greater bandwidth."

Riyad Bahsoum from the United Nations International Telecommunications Union attributed the ministry's failure to acquire more broadband to the "lack of sustainable regulatory environment."

"This is the reason why I believe it will not be deployed," he added.

Hamade said that the creation of the Telecommunications Regulatory Committee is "imminent."

In addition to the relatively high estimated price of DSL, the ministry has yet to finalize this and other terms of use necessary before the initial pilot phase of the MOU can begin.

The plan to offer DSL is broken down into two stages: The first is a pilot phase due to begin around late March, which allows six ISPs to offer DSL to 360 customers each in Beirut. Six months after the initial pilot, providers are planning to offer DSL to the rest of the country.

"Before being put into practice [the pilot], some decrees need to be issued," IT director of Ogero Toufic Chebaro said.

The fact that many of the logistics of the MOU have not been finalized is causing some ISPs to doubt the project will be launched on schedule.

"When you say decrees, things take time," Farajian said.

In addition to determining leasing fees, the ministry has yet to finalize the licensing of the data providers, many of which are currently only allowed to provide wireless.

Copyright (c) 2006 The Daily Star"