Internet providers welcome proposed regulatory legislation

Stabroek News
October 28, 1999

The manager of a leading internet service provider (ISP) has welcomed proposed legislation on regulation of the industry and hopes that emphasis will be placed on the monopoly the Guyana Telephone and Telegraph Company (GT&T) enjoys on bandwidth, the 'pipeline' that connects ISPs to the phone company and then to the rest of the global internet network. GT&T refuted this charge and others and did not rule out the possibility of it entering the ISP market now that the fledgling industry is taking off.

The ISPs contention is that the charges, US$3,200 for a bandwidth of 64 kilo bits per hour and US$5,800 for 128k, were exploitatively high as American ISPs pay around $1,200 for 64k per month. The source acknowledged that rates were comparable with Barbados and Trinidad, but noted that the number of users in Guyana was considerably lower due to economics and available phone lines.

GT&T furnished Stabroek News with a three-page facsimile concerning this objection amongst others. On the issue of the bandwidth fees being too high GT&T states that: "It would be unfair to compare the charges for bandwidth with the US... since GT&T's charges are reflective of the costs associated with the satellite circuit required for terminating internet service to Guyana. GT&T's mark up is minimal. Also while the bandwidth in the US travels by fibre, in the case of Guyana it must be brought from the US by satellite or submarine cable. It is the cost of bringing the service from the US that influences the fees."

The statement stresses that there are only 2,000 customers in Guyana compared to millions in the US and simple economies of scale influence the lower prices in the US.

Another allegation by the ISPs is that GT&T also provides internet to some businesses, thus undercutting them.

GT&T's response to the charge of it operating as an ISP was: "No, GT&T has not been operating as an ISP in the true sense of the word... We have been providing backbone services to have sold pipelines to certain large users... When a few years ago, Internet became available through GT&T it was widely anticipated that the company would have been the provider of the service. It could have established itself as an ISP... It was GT&T which took the corporate decision to encourage entrepreneurship and proposed independent Service Providers. We subsidised the Internet service when it was turned up, so that it got off the ground."

GT&T claimed that this helped local ISPs to break even in a shorter time than in other Caribbean countries. It went on: "Access to internet users is free, regardless of their location in Guyana." The company warns though, "We will not, however, rule out the possibility [of providing internet service] since we can do so, we believe, with greater efficiency, fully satisfied that more than adequate time has been given to allow local ISPs to establish a sound footing and develop their business."

The Public Utilities Commission (PUC) under the authority of the recently passed Public Utilities Act is looking to regulate "in addition to companies and individuals providing telephone service, also persons providing certain other services like the internet and cable television.

"With a view to making the switch over into regulated industry as cordial as possible," the PUC is requesting in an advertisement that all such internet service providers make contact with the PUC to fill out a questionnaire which will, according to officials at the PUC, provide information about the companies. From this information and proposed discussions between the PUC and the companies, a consensus will be reached on how best to devise regulations pertinent to any issues that the industry might face.

There are currently four internet service providers in Guyana; Solutions 2000, Internet Works, GuyanaNet and the UN-based SDMP.

One leading ISP said that when GT&T was awarded the contract to run the country's phone services back in 1991, the still to be born Internet was not named on the agreement as being part of the monopoly. This source contends that the monopoly the phone company enjoys is hampering the expansion of the internet in Guyana. Another ISP, who also believes that the charges for the bandwidth are "on the high side" said that even if the ISPs were to receive information from the world wide web directly they would still be dependent on GT&T for outward transmissions. It was the opinion of one ISP that the 1991 agreement was deliberately vague in describing GT&T's monopoly to be on transmission of data. The ISPs are also solely dependent on the phone company for lines for which they pay $4,000 per month.

Another problem in the present system, according to a number of ISPs, is that GT&T's own pipeline to the global internet is too "narrow" for a fast flow of information. One possible solution, according to sources in the internet community, is to bypass GT&T with the use of satellites and have direct and thus faster, less expensive communications with the world wide web.

GT&T did not wish to refer to recent court action it had taken to prohibit an ISP from making direct satellite links, however it affirmed: "GT&T has a monopoly for all international transmission of data and voice and any ISP, seeking to bypass GT&T's system, is in breach of GT&T's rights and its contract with the company; unless permitted to do so by GT&T. We should, however, ask the question. Why should GT&T subsidise the operations of one ISP at the cost of other ISPs and telephone subscribers? There must be a level playing field."

GT&T revealed that it is to invest in a submarine cable, which will provide all the capacity required and has already invested in an E1 connection. GT&T stated that the Internet "is still considered an elite service in Guyana. Only those who could afford computers could use it; and it remains a burden on the majority of subscribers."

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Guyana: Land of Six Peoples