Digital underground | The Daily Star
12:00 AM, February 18, 2009 / LAST MODIFIED: 12:00 AM, February 18, 2009

Digital underground

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.
First a little background: under the caretaker government, tenders were requested for setting up three international voice gateways (IGW), two domestic voice gateways (ICX) and one international internet gateway (IIG). Why there was a single IIG license for the private sector (the other was for BTCL) is still unclear since setting them up is relatively inexpensive. That should have been an early warning signal.
Mango Teleservices won the right to become Bangladesh's sole private sector IIG-operator. According to regulations in other parts of the telecom sector, "last-mile" service providers -- i.e. those who bring phone and internet services to the customer -- were deemed ineligible to bid for these licenses to operate exchanges. That is why the big mobile phone operators were ineligible to bid for the licenses to the IGW or ICX. The rationale behind such regulation is pretty obvious: to prevent one company from becoming the monopoly service provider. Yet here was Mango Teleservices, an exchange/gateway operator, bidding for the license to become a "last-mile" service provider using Wimax, a move that potentially hurt consumer interest, thanks to BTRC changing the rules of the game at the last moment.
Despite many within the industry expressing their unhappiness, this glaring irregularity has been ignored by the mainstream media. Such was the level of silence that reports on the exit of the ex-chairman of BTRC failed to mention this controversy. This was the same person under whose stewardship the BTRC gave out licenses to set up the exchanges, held the auction of the Wimax licenses, and conducted the anti-VoIP drives that were so popular with the media.
Where does all this leave us?
One company potentially controlling the infrastructure from the international exchange to the consumer. A thousand little VoIP operators out of business, most likely adding their numbers to the "expatriate labour force" of Bangladesh.
At least the chattering classes can crow on about "record remittances" while blissfully unaware of the potential for employment generation at home.

Shaheen Ahmed is a blogger ( The author is grateful to technologist Zakaria Swapan for sharing his detailed knowledge of this sector, without which this piece would not have been possible.

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