Over the weekend, it was reported by the Thisday newspaper that Dr. Adenuga, the Chairman and owner of Globacom Limited, Nigeria’s second national carrier has made a proposal to the Federal Government of Nigeria to acquire controlling interest in Nigerian Telecommunications Limited (NITEL) for USD 450 Million, through a Special Purpose Vehicle. This particular acquisition is likely to throw up myriads of competition/anti-trust issues that will require the intervention of Nigerian Communications Commission (NCC).
Section 90 of the Nigerian Communications Act, 2003 (NCA) empowers NCC “to determine, pronounce upon, administer, monitor and enforce compliance of all persons with competition laws and regulations, whether of a general or specific nature, as it relates to the Nigerian communications market”. The basis for NCC’s intervention is to prevent communications’ licensees from engaging in anti-competitive practice having the effect of “substantially lessening of competition” (SLC) in any aspect of the communications market (Section 91 (1), NCA). Section 26 of the Competition Practice Regulations 2007 (CPR) made under the NCA also empowers the NCC to review all mergers, acquisitions and takeovers in the Communications market. Transactions coming within the ambit of NCC’s review procedures are; transactions that involve the acquisition of more than 10% of the shares of a Licensee; or any other transaction that results in a change, in control of the Licensee; or any transaction that results in the direct or indirect transfer or acquisition of any individual licence, previously granted by the [NCC] pursuant to the Act (Section 27 CPR a-c). In other words for the review powers of the NCC under section 27 CPR to be activated first there must be the existence of a transaction that falls within the definition of the above listed transaction and secondly, the question of whether or not the transaction will lead to a SLC situation. The NCC is not required to attempt the second question if it is of the opinion that the transaction does not meet the specification of Section 27 CPR. However neither the NCA nor the CPR provides further guidance that will aid in answering these questions.
As already stated, a transaction must meet any of the three criteria above to constitute a transaction requiring the NCC to apply its review procedures. In the particular instance, Adenuga’s intention to acquire NITEL is the most obvious example of the application of Section 27 CPR and meets the jurisdictional threshold of both subsections a and b.
The second question is the application of the SLC test. The term “substantial lessening of competition” is not defined in the NCA but NCC published copious guidelines in the CPR which clarifies the meaning of SLC and determines whether particular conduct will constitute a SLC situation.
Where competition exists, Communications’ licensees contend with each other to grow their subscriber base, NCC is required to consider the instant transaction in terms of the effect it will have on the competition. In a fully competitive market, no one single operator will have market power and hence will not be able to influence market conditions, but must however respond to this competition by offering better prices or quality of service or quantities to attract customers.
An acquisition giving rise to a SLC situation would have a significant effect on the competition in the long run and therefore put more burdens on operators to improve upon their competitive edge. Such transaction would obviously impact negatively on consumer welfare. Irrespective of the commercial rationale for the transaction from the perspective of each of the parties, it still remains a possibility for the acquisition to give rise to a SLC situation through coordinated effects, especially as both GLO and NITEL (if acquired by Dr. Adenuga) may recognize their mutual interdependency and decide that they can reach a more profitable outcome if they coordinate their effort to limit the competition between them, this is even more probable as both companies are the only two companies holding a National Carrier License in Nigeria. Such coordination may be explicit or tacit and may take the form dividing market or by allocating contracts among themselves in a bidding competition. In practice this coordination is detrimental to consumers by eg. limiting production or stifling innovations. In such a case, NCC is required to consider the impact of this acquisition on the likelihood and effectiveness of the coordination.
NITEL also occupies a Dominant position in the communications market since it has control of essential network facilities or similar infrastructure built for and paid for by the Federal Government which gives it numerous competitive advantages over other operators. Access to these essential facilities is required by competing Licensees and that cannot, for commercial or technical reasons, be duplicated by competing Licensees. The holding of a dominant position is not prohibited but it is the abuse of a dominant position that is capable of a SLC situation. A conduct may be in breach of the NCA, the CPR and a communications license condition. For instance discriminating in the provision of interconnection or other communications services or facilities to competing Licensees... under Section 8 (b) of the CPR for example, NITEL may provide interconnection to GLO within a week but delay this interconnection to other operators for months. This conduct would be clearly breaching the communications license condition prohibiting undue discrimination and may also be an abuse of a dominant position contrary to Part V prohibition of the CPR. It is also important to note that agreements relating to any acquisition may still be anti-competitive especially if it is capable of resulting to any of the state of affairs enumerated under Section 13 of the CPR.
Evidence of such detrimental effect will play a key role in determining whether or not a SLC condition actually exists. NCC’s review to determine whether or not there exists a SLC situation is premised on the identification of the relevant market and the competitive effect of the acquisition. Finally, NCC as the sector regulator tasked with promotion of fair competition and protection against the misuse of market power or other anti-competitive practices, pursuant to Part 1of Chapter VI of the NCA would be required in the circumstance to apply mitigating measures such as denying approval for the acquisition/transaction, to recommend that component units of NITEL be acquired, to restructure the transaction, or give conditional approval where regulatory oversight would be used to check mate anti-competitive practices to prevent a SLC situation.
Monday, August 1, 2011
Monday, July 25, 2011
An Innovative way of Improving Quality of Service in Mobile Telecommunications Service with the Nigerian Sovereign Wealth Investment Fund
With a teledensity of 64.70 per cent and a total connected lines (GSM and CDMA) of 115,140,681 (and still counting), network congestion has continually been the bane of poor quality of service (QoS) levels in mobile telecommunications services in Nigeria, Africa’s largest telecommunications market. This article seeks to propose an innovative way of applying the Infrastructure Fund created by the Nigerian Sovereign Wealth Authority Act to fund projects expanding mobile network capacity by building additional base stations. This investment decision would not only be consistent with the statutory objective of assisting the development of critical infrastructure in Nigeria that will attract and support foreign investment, economic diversification and growth, but would have the resultant effect of improving the QoS levels currently experienced in mobile telecommunications service in Nigeria.
On the 10th of May, 2011, the Senate passed the Nigerian Sovereign Wealth Investment Authority Bill into Law, this was subsequently followed by passage of the same Bill by the House of Representatives on the 19th of May, 2011. The Bill now an Act establishes the Nigerian Investment Authority which is statutorily charged inter alia with the mandate to enhance the development of Nigerian Infrastructure by establishing the Nigerian Infrastructure Fund. The Nigerian Infrastructure Fund is part of the Nigerian Sovereign Wealth Investment Fund and is primarily set up to support through investment predicated financial returns the development of basic, essential and efficient critical infrastructure in Nigeria (such as mobile telecommunications networks) in order to stimulate the growth and diversification of the Nigerian economy and create jobs for Nigerians.
This article proposes that part of the Infrastructure Fund should be applied to funding projects expanding mobile networks by building additional base stations only in geographic areas where QoS parameters such as network coverage, service accessibility and service retainability are perceived by mobile telecommunications users to be low. The proposed structure would involve the grant of long term (say 25 years) soft loan to cover at least 70 per cent of the cost building these base stations to the project company or the Special Purpose Vehicle (SPV) set up by Mobile Telecommunications Service Providers in Nigeria. This SPV would be specifically incorporated to build-own-operate (BOO) the additional base stations throughout its lifecycle. In line with this arrangement, the project company would also be required to enter into a long term Infrastructure Service Agreement with the existing mobile telecommunications service providers (both GSM & CDMA service providers). This contractual arrangement is similar to an Offtake contract or Power Purchase Agreement (used for a project producing electricity) which assures; on one hand, the GSM & CDMA service providers (the purchasers) that these mobile networks will always be available and on the other hand, that the SPV will have a ready market to lease out the base stations on a long term basis at a preagreed price.
As this is a type of public sector funding, arguments against this approach would contend that it lacks the discipline inherent in private sector financing. Typical due diligence undertaken where a private sector lender is involved usually entails the careful evaluation of all the risks involved in the project and their proper allocation to parties other than the SPV. This practice is derived from the principle that risks should be allocated to the party best able to manage it; however the argument supporting this investment approach contends that the Infrastructure Fund would provide a form of low-cost public sector finance for mobile network expansion that retains the benefit of private sector management and control (since the SPV is constituted by both the GSM and CDMA service providers), this is beside the fact that long term investment like this would also improve upon the return for the Sovereign Wealth Investment Authority (as the major investor), taking advantage of the fact that debt is actually cheaper than equity. The major point argued is that why not have the project benefit from the best of both worlds by having the public sector provide the project with debt, in partnership with equity stakes to be held by the private sector investors in the SPV.
Improving the QoS of mobile telecommunications services by investing in the construction of additional base stations is likely to have an effect on deciding potential locations of foreign direct investments as the nature of an economy’s overall infrastructure plays a key role in its ability to respond to changes in demand and prices or to take advantage of other resources. In terms of economic growth, additional investment in telecommunications infrastructure would see an improvement of the GNP and the production of higher value added services and products driven by the secondary or tertiary telecommunications industries. As the economy grows and telecommunications services improves, there is likely to be a correlating increase in investments by foreign companies (such as Alcatel-Lucent, Nokia, Siemens, Ericcson) dealing in modern communications technologies.
No doubt it goes without saying that telecommunications services drive the development of new businesses, as evidenced by the enormous growth throughout the world in recent years of cellular and internet-based business models. In return, the growth of these business activities would drive demand for telecommunications services, thus forming a virtuous circle. Increasingly as businesses, especially private businesses develop in Nigeria, the need to address and develop the market for advanced telecommunications services will also arise. One consequence is a strong support to the development and transition of the economy as a whole which is given impetus by the rationale for investing with the Nigerian Sovereign Wealth Fund.
On the 10th of May, 2011, the Senate passed the Nigerian Sovereign Wealth Investment Authority Bill into Law, this was subsequently followed by passage of the same Bill by the House of Representatives on the 19th of May, 2011. The Bill now an Act establishes the Nigerian Investment Authority which is statutorily charged inter alia with the mandate to enhance the development of Nigerian Infrastructure by establishing the Nigerian Infrastructure Fund. The Nigerian Infrastructure Fund is part of the Nigerian Sovereign Wealth Investment Fund and is primarily set up to support through investment predicated financial returns the development of basic, essential and efficient critical infrastructure in Nigeria (such as mobile telecommunications networks) in order to stimulate the growth and diversification of the Nigerian economy and create jobs for Nigerians.
This article proposes that part of the Infrastructure Fund should be applied to funding projects expanding mobile networks by building additional base stations only in geographic areas where QoS parameters such as network coverage, service accessibility and service retainability are perceived by mobile telecommunications users to be low. The proposed structure would involve the grant of long term (say 25 years) soft loan to cover at least 70 per cent of the cost building these base stations to the project company or the Special Purpose Vehicle (SPV) set up by Mobile Telecommunications Service Providers in Nigeria. This SPV would be specifically incorporated to build-own-operate (BOO) the additional base stations throughout its lifecycle. In line with this arrangement, the project company would also be required to enter into a long term Infrastructure Service Agreement with the existing mobile telecommunications service providers (both GSM & CDMA service providers). This contractual arrangement is similar to an Offtake contract or Power Purchase Agreement (used for a project producing electricity) which assures; on one hand, the GSM & CDMA service providers (the purchasers) that these mobile networks will always be available and on the other hand, that the SPV will have a ready market to lease out the base stations on a long term basis at a preagreed price.
As this is a type of public sector funding, arguments against this approach would contend that it lacks the discipline inherent in private sector financing. Typical due diligence undertaken where a private sector lender is involved usually entails the careful evaluation of all the risks involved in the project and their proper allocation to parties other than the SPV. This practice is derived from the principle that risks should be allocated to the party best able to manage it; however the argument supporting this investment approach contends that the Infrastructure Fund would provide a form of low-cost public sector finance for mobile network expansion that retains the benefit of private sector management and control (since the SPV is constituted by both the GSM and CDMA service providers), this is beside the fact that long term investment like this would also improve upon the return for the Sovereign Wealth Investment Authority (as the major investor), taking advantage of the fact that debt is actually cheaper than equity. The major point argued is that why not have the project benefit from the best of both worlds by having the public sector provide the project with debt, in partnership with equity stakes to be held by the private sector investors in the SPV.
Improving the QoS of mobile telecommunications services by investing in the construction of additional base stations is likely to have an effect on deciding potential locations of foreign direct investments as the nature of an economy’s overall infrastructure plays a key role in its ability to respond to changes in demand and prices or to take advantage of other resources. In terms of economic growth, additional investment in telecommunications infrastructure would see an improvement of the GNP and the production of higher value added services and products driven by the secondary or tertiary telecommunications industries. As the economy grows and telecommunications services improves, there is likely to be a correlating increase in investments by foreign companies (such as Alcatel-Lucent, Nokia, Siemens, Ericcson) dealing in modern communications technologies.
No doubt it goes without saying that telecommunications services drive the development of new businesses, as evidenced by the enormous growth throughout the world in recent years of cellular and internet-based business models. In return, the growth of these business activities would drive demand for telecommunications services, thus forming a virtuous circle. Increasingly as businesses, especially private businesses develop in Nigeria, the need to address and develop the market for advanced telecommunications services will also arise. One consequence is a strong support to the development and transition of the economy as a whole which is given impetus by the rationale for investing with the Nigerian Sovereign Wealth Fund.
Sunday, May 29, 2011
NaijaCyberHacktivism, Cyber threats and the failure of the National Assembly to Strengthen the Arm of the Nigerian Law
On the 1st of March, 2011 the Federal House of Representatives led by outgoing speaker Hon. Dimeji Bankole killed An Act To Provide For The Establishment Of The Cyber Security And Information Protection Agency Charged With The Responsibility To Secure Computer Systems And Networks And Liaise With The Relevant Law Enforcement Agency For The Enforcement Of Cyber Crimes Laws, And For Related Matters (HB 154), the reason been that the provisions of the Bill overlapped with the provisions of some existing legislations such as the Economic and Financial Crimes Commission (Amendment) Act 2007. HB 154 was supposed to provide the legal framework for the establishment of an independent Cybercrime Agency and would have legislated on various Cybercrimes and Cyber-Security offences. These offences are either committed against the integrity, availability and confidentiality of computer systems and telecommunications networks or using such networks to commit offences. In particular HB 154 sought to apply to; offences against the confidentiality, integrity and availability of computer data and systems (hacking, unlawful interception, denial-of-service attacks, system interference, etc); computer related offences (fraudulent electronic mail, spamming, impersonation, copyright infringement); content related offences (child pornography); data retention; lawful & unlawful Interception; designation of critical information systems; and admissibility of electronic evidence.
Fast-forward to May 25th, 2011 where the cyber activist group going by the name Naija Cyber Hacktivist group brought down the website of Niger-Delta Development Commission’s (NDDC) website in protest of the federal government’s planned expenditure of almost 1 billion Naira on the presidential inauguration of Dr. Goodluck Ebele Jonathan. This protest which took the form of a denial-of-service attack has once again brought to the fore the inability of our extant legal framework to combat cyber threats or security threats against computer or telecommunications networks. This denial-of-service attack is a type of system interference which seeks to make computer resources unavailable by saturating it with external communications request to prevent it from responding to legitimate traffic, translated to simple English, it generally means that this cyber attack will prevent an internet site or service from functioning efficiently or at all, temporarily or indefinitely.
It becomes important to mention that Section 13 of the already dead HB 154 criminalizes this type of conduct with a term of imprisonment not less than seven (7) years or by imposing a fine of 2 million naira; in particular it provided that:
Any person who without authority or in excess of authority intentionally denies or interferes with access to any computer or network so as prevent any—
a) part of the computer from functioning; or
b) denying or partially denying any legitimate user of any service of such computer or network;
commits an offence and shall be liable on conviction to a fine of not less than N2,000,000 or imprisonment for a term of not less than 7 years or to both such fine and imprisonment.
The particular aim of this section was to bring within its ambit the intentional prevention of the lawful use of a computer system including telecommunications facilities by using or influencing computer data. We must also note that the protected interest here is the right of the network operator or us, the system users being able to have them function optimally (me continues to think how this provision or similar provisions embedded in HB 154 overlapped with any provision of the EFCC Act 2007). This prevention definitely refers to actions that will interfere with the proper functioning of the computer or network system and will usually take the form of imputing, transmitting, damaging, deleting, altering or suppressing computer data. No doubt the 24 hour unavailability of NDDC’s website and the current threat is serious enough to warrant the intervention of HB 154’s section 13.
However while not attempting to call any bluff here, we must note that we have been promised another dose of cyber attacks against the networks of all financial institutions, e-payment platforms, telcos and government if the federal government goes ahead with its planned expenditure for the presidential inauguration, we can only do but wait and see how the long arm of the Nigerian law intends to catch up with this category of cyber robin hood and his band of merry men when this promise is fulfilled.
On a last note, I end with a quote from Johnson and Post in Law and Borders-The Rise of Law in Cyberspace’, Stanford Law Review, 48, (1996): 1367, 1375 that:
the rise of an electronic medium that disregards geographical boundaries throws the law into disarray by creating entirely new phenomena that need to become the subject of clear legal rules that cannot be governed, satisfactorily, by any current territorially based sovereign
Fast-forward to May 25th, 2011 where the cyber activist group going by the name Naija Cyber Hacktivist group brought down the website of Niger-Delta Development Commission’s (NDDC) website in protest of the federal government’s planned expenditure of almost 1 billion Naira on the presidential inauguration of Dr. Goodluck Ebele Jonathan. This protest which took the form of a denial-of-service attack has once again brought to the fore the inability of our extant legal framework to combat cyber threats or security threats against computer or telecommunications networks. This denial-of-service attack is a type of system interference which seeks to make computer resources unavailable by saturating it with external communications request to prevent it from responding to legitimate traffic, translated to simple English, it generally means that this cyber attack will prevent an internet site or service from functioning efficiently or at all, temporarily or indefinitely.
It becomes important to mention that Section 13 of the already dead HB 154 criminalizes this type of conduct with a term of imprisonment not less than seven (7) years or by imposing a fine of 2 million naira; in particular it provided that:
Any person who without authority or in excess of authority intentionally denies or interferes with access to any computer or network so as prevent any—
a) part of the computer from functioning; or
b) denying or partially denying any legitimate user of any service of such computer or network;
commits an offence and shall be liable on conviction to a fine of not less than N2,000,000 or imprisonment for a term of not less than 7 years or to both such fine and imprisonment.
The particular aim of this section was to bring within its ambit the intentional prevention of the lawful use of a computer system including telecommunications facilities by using or influencing computer data. We must also note that the protected interest here is the right of the network operator or us, the system users being able to have them function optimally (me continues to think how this provision or similar provisions embedded in HB 154 overlapped with any provision of the EFCC Act 2007). This prevention definitely refers to actions that will interfere with the proper functioning of the computer or network system and will usually take the form of imputing, transmitting, damaging, deleting, altering or suppressing computer data. No doubt the 24 hour unavailability of NDDC’s website and the current threat is serious enough to warrant the intervention of HB 154’s section 13.
However while not attempting to call any bluff here, we must note that we have been promised another dose of cyber attacks against the networks of all financial institutions, e-payment platforms, telcos and government if the federal government goes ahead with its planned expenditure for the presidential inauguration, we can only do but wait and see how the long arm of the Nigerian law intends to catch up with this category of cyber robin hood and his band of merry men when this promise is fulfilled.
On a last note, I end with a quote from Johnson and Post in Law and Borders-The Rise of Law in Cyberspace’, Stanford Law Review, 48, (1996): 1367, 1375 that:
the rise of an electronic medium that disregards geographical boundaries throws the law into disarray by creating entirely new phenomena that need to become the subject of clear legal rules that cannot be governed, satisfactorily, by any current territorially based sovereign
Monday, December 6, 2010
INEC dragged to court over Direct Data Capture (DDC) machines: My Opinion.
It was reported in Vanguard of 26th November, that a Lagos-based firm, Technocrat Consult and IT Systems Limited (Technocrat IT), dragged the Independent National Electoral Commission (INEC) before a Federal High Court sitting in Lagos, challenging the legality of the award of contract for supply of the Direct Data Capture machines to three firms without its consent.
Technocrat IT is demanding N8billion as damages, claiming that it invented the technique, a portable telecommunication device used in biometric identification covered by patent right No RP: NG/P/2010/283. According to Technocrat IT, this invention is comprised of a portable and lightweight fingerprint apparatus (biometric capture agent application), which can scan and record fingerprint images in the field and wirelessly transmit the said images to a central unit (biometric database) for the purpose of providing immediate identity and background checks on the individuals being fingerprinted.
This piece analyzes the strength of Technocrat IT’s case before the court. A convenient place to start in this analysis would be the caveat contained in section 4(4) of the Patent Act which says that “Patents are granted at the risk of the patentee and without guarantee of their validity.” In essence, this means that the fact that you own a patent right does not guarantee the validity of that patent.
Some of the requirements for patenting an invention under the Patent Act are set out as: if the invention is new, results from an inventive activity and is capable of industrial application or it constitutes an improvement to an earlier invention.
Having construed Technocrat IT’s patent claim as explained and displayed on their website at www.technogratgroup.co.uk , it seems that their patent though capable of an inventive activity, has not met the standard of patentability of been new/novel, neither has it resulted from an inventive activity.
It is important to mention here that on the 25th of December, 1998, an International Application (with number PCT/US98/20089) was presented for filing under the Patent Cooperation Treaty (PCT) with the International Bureau (IB) of the World Intellectual Property Organization (WIPO), a similar application covering the same invention has also been filed before the United States Patent and Trademark Office. This application relates to a MOBILE BIOMETRIC IDENTIFICATION SYSTEM and the summary of the Invention states that:
“The present invention may be embodied in a distributed biometric identification system having highly mobile user workstations. More particularly, the invention may be embodied in a distributed, mobile biometric identification system and architecture for rapidly identifying individuals using fingerprint and photographic data. The disclosed architecture includes a centralized server, and a plurality of distributed, mobile client workstations that are remotely located from the centralized server. The mobile workstation includes a substantially portable two-way communications link (e. g., a land-based or satellite-based mobile radiotelephone) that may be used to place the mobile workstation in communication with the centralized server”
This earlier invention primarily practices the invention now claimed by Technocrat IT, I must also say that Technocrat IT’s invention/patent is not an improvement to this earlier invention), it is important to note that in determining the novelty of an invention or as to whether it results from an inventive activity, the Patent Act states that the invention itself must not form a part of or obviously follow (either as to the methods, or the product which it concerns, or as to the industrial results it produces) from the state of the art which the Patent Act defines under Section 1 (3) as:
concerning that art or field of knowledge which has been made available [not necessarily patented] to the public anywhere [in the world] and at anytime whatever…before the date of filing of the patent application…
The court in interpreting the above provision will exercise flexibility and will not be restricted to only evidence of the state of the art available in Nigeria neither would it be limited to evidence of a prior Patent grant obtained in Nigeria as the standard of been made available does not necessarily entail the prior grant of a Patent but rather that information concerning the patent or claimed invention has been previously disclosed to the public by way of a written or oral description, by use or in any other way.
In the English case of Windsurfing International Inc. v Tabur Marine (GB) Ltd. [1985] RPC 59, the plaintiff were the manufacturers of the first commercial windsurfer/sailboard and patented their design for sailboard with a Bermuda rig and a wishbone spar in the UK and elsewhere. The plaintiffs subsequently sued another company for patent infringement as a result of making and selling a similar sailboard in the UK. The validity of the patent was challenged by an the defendant on the fact that in 1958, at least 10 years before the grant of the patent a 12 year old boy called Peter Chilver had built an early version of a sailboard which was evidenced by film footage taken off the coast of Hayling Island. They alleged that this proved that the subject of the plaintiffs' patent had been anticipated
The Court upheld the defendant's claim that the boy's invention predated the plaintiff's application for a UK patent and the patent was rendered invalid notwithstanding that Chiver’s sailboard was of a slightly different design.
Conclusively, this evidence of an earlier invention which predates Technocrats IT’s Patent grant will not only destroy their case but nullify the earlier grant of the Patent under Section 9 (1) a of the Patent Act since it does not meet the standards of Patentability (Novelty/New and resulting from an Inventive Activity) as set out under Section 1 of the Act.
PS: On a lighter note, reading over the weekend about the injunction obtained against INEC on a similar ground of Copyright/Patent Infringement, I am beginning to be concerned as to when exactly I would be able to make my vote count.
Technocrat IT is demanding N8billion as damages, claiming that it invented the technique, a portable telecommunication device used in biometric identification covered by patent right No RP: NG/P/2010/283. According to Technocrat IT, this invention is comprised of a portable and lightweight fingerprint apparatus (biometric capture agent application), which can scan and record fingerprint images in the field and wirelessly transmit the said images to a central unit (biometric database) for the purpose of providing immediate identity and background checks on the individuals being fingerprinted.
This piece analyzes the strength of Technocrat IT’s case before the court. A convenient place to start in this analysis would be the caveat contained in section 4(4) of the Patent Act which says that “Patents are granted at the risk of the patentee and without guarantee of their validity.” In essence, this means that the fact that you own a patent right does not guarantee the validity of that patent.
Some of the requirements for patenting an invention under the Patent Act are set out as: if the invention is new, results from an inventive activity and is capable of industrial application or it constitutes an improvement to an earlier invention.
Having construed Technocrat IT’s patent claim as explained and displayed on their website at www.technogratgroup.co.uk , it seems that their patent though capable of an inventive activity, has not met the standard of patentability of been new/novel, neither has it resulted from an inventive activity.
It is important to mention here that on the 25th of December, 1998, an International Application (with number PCT/US98/20089) was presented for filing under the Patent Cooperation Treaty (PCT) with the International Bureau (IB) of the World Intellectual Property Organization (WIPO), a similar application covering the same invention has also been filed before the United States Patent and Trademark Office. This application relates to a MOBILE BIOMETRIC IDENTIFICATION SYSTEM and the summary of the Invention states that:
“The present invention may be embodied in a distributed biometric identification system having highly mobile user workstations. More particularly, the invention may be embodied in a distributed, mobile biometric identification system and architecture for rapidly identifying individuals using fingerprint and photographic data. The disclosed architecture includes a centralized server, and a plurality of distributed, mobile client workstations that are remotely located from the centralized server. The mobile workstation includes a substantially portable two-way communications link (e. g., a land-based or satellite-based mobile radiotelephone) that may be used to place the mobile workstation in communication with the centralized server”
This earlier invention primarily practices the invention now claimed by Technocrat IT, I must also say that Technocrat IT’s invention/patent is not an improvement to this earlier invention), it is important to note that in determining the novelty of an invention or as to whether it results from an inventive activity, the Patent Act states that the invention itself must not form a part of or obviously follow (either as to the methods, or the product which it concerns, or as to the industrial results it produces) from the state of the art which the Patent Act defines under Section 1 (3) as:
concerning that art or field of knowledge which has been made available [not necessarily patented] to the public anywhere [in the world] and at anytime whatever…before the date of filing of the patent application…
The court in interpreting the above provision will exercise flexibility and will not be restricted to only evidence of the state of the art available in Nigeria neither would it be limited to evidence of a prior Patent grant obtained in Nigeria as the standard of been made available does not necessarily entail the prior grant of a Patent but rather that information concerning the patent or claimed invention has been previously disclosed to the public by way of a written or oral description, by use or in any other way.
In the English case of Windsurfing International Inc. v Tabur Marine (GB) Ltd. [1985] RPC 59, the plaintiff were the manufacturers of the first commercial windsurfer/sailboard and patented their design for sailboard with a Bermuda rig and a wishbone spar in the UK and elsewhere. The plaintiffs subsequently sued another company for patent infringement as a result of making and selling a similar sailboard in the UK. The validity of the patent was challenged by an the defendant on the fact that in 1958, at least 10 years before the grant of the patent a 12 year old boy called Peter Chilver had built an early version of a sailboard which was evidenced by film footage taken off the coast of Hayling Island. They alleged that this proved that the subject of the plaintiffs' patent had been anticipated
The Court upheld the defendant's claim that the boy's invention predated the plaintiff's application for a UK patent and the patent was rendered invalid notwithstanding that Chiver’s sailboard was of a slightly different design.
Conclusively, this evidence of an earlier invention which predates Technocrats IT’s Patent grant will not only destroy their case but nullify the earlier grant of the Patent under Section 9 (1) a of the Patent Act since it does not meet the standards of Patentability (Novelty/New and resulting from an Inventive Activity) as set out under Section 1 of the Act.
PS: On a lighter note, reading over the weekend about the injunction obtained against INEC on a similar ground of Copyright/Patent Infringement, I am beginning to be concerned as to when exactly I would be able to make my vote count.
Monday, November 15, 2010
WILL ALL VOICE CALLS IN NIGERIA BE SUBJECT LAWFUL INTERCEPTION: A BRIEF COMMENTARY OF THE PROPOSED TELECOMMUNICATIONS FACILITIES (LAWFUL INTERCEPTION OF INFORMATION) BILL, 2010.
Introduction
The impressive growth recorded in the Nigeria telecommunications market has unfortunately been challenged by criminal activities. Recent evidence emanating from Law Enforcement Agencies have indicated that criminal activities such as [Armed] Robberies, Advance Fee Fraud (aka 419 named so after the popular section 419 of the Nigerian Criminal Code) and more recently detonating an explosive device have been facilitated with the aid of mobile phones.
The House of Representative in responding to these threats initiated legislative proposal titled HB: 395 titled “An Act Requiring Telecommunications Facilities To Facilitate The Lawful Interception Of Information Transmitted By Means Of Those Facilities And Respecting The Provision Of Telecommunications Subscriber Information; And For Other Matters Connected therewith”[1] This Bill in its explanatory memorandum states:
This bill seeks to require telecommunications service providers to put in place and maintain certain capabilities that facilitate the lawful interception of information transmitted by telecommunications and to provide basic information about their subscribers to the Nigeria police force and the state security service.
The legal question therefore becomes will all voice calls be subject to lawful interception taking into consideration the rate at which telecommunications services have evolved in Nigeria from a teledensity of about 508,316 connected lines in 1999 to about 74,000,000 connected lines in 2009.[2]
This question will form the basis of my commentary.
As can be gleaned from the Bill’s explanatory memorandum, the Bill will require that that all telecommunications service providers have technical capability for lawful interception. The Bill sets forth assistance capability requirements, compelling telecommunications service providers to build and sustain their equipment in a manner that allows authorized law enforcement agents to lawfully intercept communications. The Bill therefore preserves the ability of law enforcement agencies to execute authorized electronic surveillance by requiring that telecommunications service providers have the technical capability to intercept communications.
Interception under section 53 (1) (c) of the Bill “includes listen to, record or acquire a communication” Lawful Interception generally refers to the lawfully authorized interception and monitoring of communications traffic (which could either be voice, data, audio or a combination of any or all of them) pursuant to the order of an authorized person for the purpose of gathering evidence or forensic analysis.
With the rapidly expanding telecommunications infrastructure, Nigeria currently has capability for two types of voice calls; telephone calls made through a telecommunications facilities or network as rightly defined under Section 53 of the Bill and Voice over Internet Protocol (VoIP) which is voice communications over the internet or any packet switching network; the most popular of these been Skype and Yahoo Messenger Call.
It is important to note that VoIP services is derived from Internet services, the meaning of which was neither provided for in the Bill nor was it defined in the earlier Nigerian Communications Act, 2003, however the internet in its most fundamental level is simply the interconnection of computer networks that is so seamless as to appear to the user as one network, this service in itself is entirely different in terms of technical architecture and communications protocols from Telecommunications Service.
Going forward, Section 53 of the Bill defines communications as any “communication effected by means of telecommunications and includes any related transmission data or other ancillary information” while telecommunications service under the same section is defined as a “service or a feature of a service, that is provided by means of telecommunications facilities, whether the provider owns, leases or has any other interest in or right respecting the telecommunications facilities and any related equipment used to provide the service”. It is important to note that the use of the words “Telecommunications Services” is intended to exclude other forms of internet services like email, Internet, Voice-over-Internet Protocol (VoIP) provided by internet service providers.
However, the implication of this provision is subject to Section 6 of the Bill which retains the capability of telecommunications service providers to intercept communications, even when they offer new services, as long as such a service is provided through their network. In essence, where a telecommunications service provider provides other forms of information services like internet services or VoIP through its network, such a service would be subject to intercepts by law enforcements agents.
The long and short of this legal analysis is that VoIP services provided by internet service providers are not subject to the proposed bill unless such services is provided via telecommunications service networks, however it is important to note that Section 147 of the Nigerian Communications Act, 2003 will subject both telecommunications service providers and internet service providers to lawful interception on the determination of the Nigerian Communications Commission.
Friday, October 1, 2010
NETWORK NEUTRALITY LAW AND ACCESS TO BROADBAND SERVICES IN NIGERIA
2010, Nigeria; the International Internet Connectivity (ICC) is currently dominated by three major players providing bandwidth access on a wholesale and retail basis to the Nigerian end users. These players are the state owned Nigerian Telecommunications Limited (NITEL) providing access via the SAT-1 submarine cable, Glo through the GLO-1 submarine cable and MainOne Cable company via the MainOne submarine cable, of these cables, only the GLO-1 and MainOne submarine cables have broadband (or high speed) internet access capability.
In recent times, global policy issues on broadband internet access have focused on network neutrality, that is whether broadband network operators should be allowed to favor (or as is emotionally argued; discriminate) one data traffic over another one that passes through its network.
This is the main thrust of this paper. Arguments in support of network neutrality have tended to lean towards the belief that discriminating data traffic is anti-consumer and may be capable having an anti-competitive effect under certain conditions. With the current expansion of internet services in Nigeria and particularly the current investment in broadband infrastructure, the need arises to revisit the issue of network neutrality in the Nigerian context. In considering the question of network neutrality, guidance is sought from the Nigeria Communications Act 2003 (NCA) and the relevant regulations made under the Act.
NETWORK NEUTRALITY
The internet in its simplest terms refers to a system of decentralized, interconnected network of computer networks that allows computers to communicate with each other. The internet has come a long way since 1960 when it was then known as the Advanced Research Projects Agency Network (ARPANET), the first operational packet switching network owned by the United States Department of Defense. The internet as we know it today has evolved rapidly and extended far beyond the territory of the United States. As at 2008, almost 1.6 billion people worldwide had access to the internet, of these figures only 23, 982, 208 had access from Nigeria.
The growing rate of internet penetration in Nigeria has closely been linked to the Global System for Mobile Communications (GSM) revolution; where GSM service providers have also been capable of providing access to the internet via their mobile network infrastructures.
Today, the geometric growth rate of the Nigerian telecommunications market has created a demand for bandwidth intensive application such as cloud computing (especial software-as-a-service; SaaS), streaming media and Voice-over-internet protocol (VoIP) services which has necessitated the investment in the provision broadband services.
Network neutrality as a principle recommends that all internet traffic passing through a network should be treated alike irrespective of the source of the traffic, destination or nature of the traffic. According to Google, Network neutrality is the principle that Internet users should be in control of what content they view and what applications they use on the Internet. The Internet has operated according to this neutrality principle since its earliest days... Fundamentally, net neutrality is about equal access to the Internet. This definition is based on the notion of a free and fair internet and that broadband should be available to users who have paid to access this service. This definition is centered on the four basic “Internet Freedoms”.
The concept of network neutrality can be traced to the end-to-end principle which sees the internet as a “dumb” network designed to treat all data traffic equally. In this sense, the network doesn’t ask questions about the sender of the traffic, the recipient or its content; it simply analyzes the traffic and passes it onward for delivery to the end user through the next available node.
A related concept to network neutrality is access tiering which refers to the models used by a particular network operator in treating its traffic. This can be manifested by the network operator in giving bandwidth priority to websites and online service providers that pay for Quality of Service (QoS), websites owned by or in partnership with; or that have paid a premium to the network operator This ultimately means that the content of such favored websites/online service providers would ride faster over the operators last mile to the subscribers.
The different models (which are the subject of network neutrality) used for access tiering are:
a) The “best efforts” rule. Here, the network operator treats all data traffic equally. By this rule, the first data traffic in, is the first the data out. The rule however is subject to variable performance and periods of congestion. This rule seems to assume a similar stance with the maxim in equity … the first in order of time shall prevail.
b) “Needs-based discrimination” treats all data traffic in accordance with the best effort rule until such a time when there is network congestion. At this point certain time sensitive data traffic (such as live streaming or internet telephony data streams ) are moved to the front of the queue for onward delivery to the recipient.
c) “Active discrimination” This is forms the subject of this discourse. The discrimination occurs where a network operator without any reasonable justification prioritizes data for delivery to the end-user in accordance with pre-defined rules. This discrimination may be as a result of the origin, destination or nature of the data traffic.
In the words of American Professor of Law Tim Wu, ”The basic principle behind network [neutrality] regime is to give [internet] users the right to use non-harmful network attachments or applications, and give innovations the corresponding freedom to supply them.” The principle of network neutrality works to prevent the unnecessary restriction of how the end-user accesses the internet, this no doubts creates value in the use of a particular network. These discriminatory practices are well illustrated by these hypothetical cases.
a) Service provider discrimination: An operator such as MainOne Cable Company may enter into company with (or even own) live streaming service A under which A’s content is favored over the contents of live streaming service B. In such scenarios, it’s possible for the internet end users who subscribe to B’s services to become frustrated at the slow pace at which they receive B’s service, this may result in their migration to A’s service due to the faster and better performances offered.
b) Application discrimination: Though this form is not relevant under the current discourse, nevertheless a network operator may discriminate against time sensitive applications such as streaming services or VoIP applications over less time sensitive data traffic like emails.
This priorisation and de-priorisation of internet traffic (otherwise known as access tiering) forms the core of the network neutrality debate. This debate has assumed some measure of popularity in the United States where many have been prompted to ask whether some form of regulatory intervention should not be introduced to curtail instances of internet data discrimination. The fear in the United States is hinged on what network operators might be tempted to do rather than what they are currently doing in the absence of any network neutrality law. The Madison River case further lays credence to this claim. In that case, an Internet Service Provider (ISP) allegedly blocked its customers from accessing a competing VoIP provider. The ISP entered into a consent decree with the sector regulator, Federal Communications Commission (FCC) that prohibited the ISP from blocking ports used for VoIP traffic. The ISP also made a voluntary payment of $15,000 to the US treasury.
It is important to bear in mind that this debate is two sided, on one side are the operators of internet/broadband networks who claim that any form of network neutrality regime is likely to impede broadband internet access and may actually be disadvantageous to innovation. Their belief is that effective network management strategies may require that certain internet data traffic be favored over others. They also contend that a small number of end users can degrade network performances through the use of bandwidth-intensive applications such as live streaming video services and peer-to-peer (p2p) applications. They further contend that network resources may not be capable of accommodating such situations and that network expansion may be expensive, leaving them with the only viable alternative of the cost effective method of network management. On the issue of technology innovation, advocates argue that network operators should be allowed to innovate freely with their different service offering which is the real essence of competition, for them any network neutrality regime is a restriction of new types of competition which in turn restricts innovation. According to them experimenting freely with new service offerings is likely to benefit competition and enhance efforts in innovations in the belief that where failures result from such innovations, network operators are likely to learn from their mistakes in other to compete effectively in the market.
ASSESSMENT OF NETWORK NEUTRALITY UNDER NIGERIAN COMPETITION LAW
The primary aim of all Competition regimes is to ensure the existence of a state of affairs in which output is maximized, price is minimized and the consumers are able to make their own choices. The overall intention of Competition policies is to protect the consumers from unfair market practice. For this, there arises the need for the Government to intervene to stimulate and preserve a competitive environment. Phrases like “substantially lessening of competition,” “anti-competitive agreements and practices” and “abuse of dominant position” are relevant and come within the scope of a Competition regime.
As no general competition law currently exist in Nigeria at the moment, the relevant competition provisions are embedded in the NCA & its subsidiary Competition Practices Regulations (CPR) 2007 which are both applicable in the Nigerian Communications market.
The competition concerns of network neutrality can be viewed from various angles in Nigeria, for instance and depending on the particulars of a conduct, it seems likely that blocking access to broadband access (for the purpose of inducing a subscriber to migrate to another service) or discriminating in favor of a service provider with whom the broadband network provider has some sort of contractual relationship with, is likely to be caught by Sections 9 e and 14 e of the CPR which respectively provides:
discriminating in the provision of interconnection or other communications services or facilities to competing Licensees, except under circumstances that are objectively justified based on supply conditions, such as discrimination based on differences in the costs of supply; and
exclusive dealing agreements, pursuant to which a Licensee enters into an agreement with another party for the supply of products or services on an exclusive basis, and where that exclusivity has or may have the effect of substantially lessening competition in related communications markets.
For instance an exclusive dealing agreement precludes a supplier’s competitors from doing business with the buyer during the agreed period. In the broadband market, an ISP might enter into agreement with content or application providers to provide exclusive, or preferential, access to consumers. In such instances, an ISP might arrange to allow access only to a single service provider and the other service providers are then be denied last-mile access to that ISP’s customers or end users.
In enforcing these provisions, the Nigerian Communications Commission (NCC), the sector regulator will be guided by the provisions of Section 91 (2) of the NCA and Section 6 of the CPR which both emphasize that in assessing whether any conduct is capable of “substantial lessening of competition” reference will be made to the following circumstances; the relevant economic market, the impact of the conduct on existing market players, the impact of the conduct on barriers to market entry and the impact of the conduct on consumers. The test here is to determine the extent of encumbrance against market competition which results in a significant injury to either the competitors or consumers or both. In the case of an exclusive dealing arrangement the assessment goes beyond the number of competitors closed out, as competition authorities worldwide seem to have a convergent opinion in assessing exclusive dealing arrangements where the market definition, the amount of foreclosure in the relevant market, the duration of the contracts, the extent to which entry is deterred, and the reasonable justifications, if any, for the exclusivity are all taken into account.
While a conduct capable of “substantial lessening of competition” seems like a potential threat to the consumers access to broadband services, the claim by proponents of network neutrality that internet data discrimination is anti-competitive seems to be forward looking as the major concern as is in the United States is focused on not what broadband network providers are currently doing, but rather on what they are capable of doing.
THE CURRENT NIGERIAN POSITION ON NETWORK NEUTRALITY
Though no specific Network Neutrality Law currently exists in Nigeria, however (bearing in mind that one of the primary goals of the NCA is to ensure that fair competition exists in the communications sector and that the rights of all consumers and service providers are protected) in the context of interconnection and access to network facilities/services embedded in Sections 96-103 of the NCA, 2003, in particular Section 97 b mandates that all interconnection agreement comply with the principles of neutrality [emphasis mine], transparency, non-discrimination, fair competition, universal coverage, access to information, equality of access and equal terms and conditions. Though neither this section nor the NCA has given a proper description of what constitutes neutrality, however it is safe to assume that this section intends to ensure the absence of prioritization measures or differential treatment of communications traffic when interconnecting with other licensees or providing access to network facilities to interested parties.
Another passive instance of network neutrality can be found in the grant of a licence for the provision of internet services under Section 32 of the NCA. In particular condition 5 of the Licence provides:
5.1 The Licensee shall not (whether in respect of charges or other terms or conditions applied or otherwise) show undue preference to or exercise undue discrimination against any particular person or persons of any class or description in respect of;
a) the provision of a service under this Licence; or
b) the connection of any equipment approved by the Commission.
5.2 The Licensee shall be deemed to have shown such undue preference or to have exercised such discrimination if it unfairly favours to a material extent a business carried on by it or by its lawful telecommunications associates in relation to any of the matters mentioned in paragraph 5.1 so as to place at a significant competitive disadvantage persons competing with that business.
These provisions without mentioning “network neutrality” has in some implicit way taken a stance in favour of network neutrality by making it a license condition that internet access providers must not show “undue preference to” any person. The subsequent provision goes further in defining a conduct indicative of “undue preference” as indiscriminately giving preference in the provision of internet service and or in the connection of any equipment approved by the commission to the business of its “lawful telecommunications associates.” A breach of these provisions is likely to entitle the NCC to revoke the internet license of the licensee.
CONCLUSION
The reality on ground is that the Nigerian broadband access market is still very much in its infancy stage, more market entry is needed for the market to be more competitive. The argument here is that increased broadband market participation is likely to reduce discriminatory practices as was noted in the US by AT & T Chairman Ed Whitacre that “Any [network] operator that blocks access to content is inviting customers to find another provider. And that’s just bad business.” Whether the likelihood of broadband discrimination is real or imagined in the absence of any network neutrality regime in Nigeria, notice must be taken of the vision of the NCA and the National Communications policy which includes inter alia, the promotion of easily accessible communications services for Nigerians.
Whichever way the pendulum swings, effective consumer protection will be needed for effective market competition to be sustained. In this vein, Service Level Agreement that addresses consumer protection concerns will play a role in clearly spelling out the terms of different broadband packages, these material terms may include traffic management practices of the network operator, after all of what use would be the effect of a competition regime if the consumers are not able to exercise their right to choose.
The dabate on network neutrality is likely to change how data is transmitted and consumed online while the question of broadband service discrimination remains alive, however, sight must not be lost of the principles surrounding network neutrality should a law for it become inevitable. These principles as stated by the US Federal Communications Commission (FCC) in its Broadband policy statement adopted on August 5th, 2005 revolves round the rights of broadband consumers to; access lawful content of their choosing, use applications and services of their choosing, connect network devises that to not degrade network performances and finally are entitled to competition among the various service providers. These principles will guarantee that these four basic “Internet Freedoms” are protected and preserved.
In recent times, global policy issues on broadband internet access have focused on network neutrality, that is whether broadband network operators should be allowed to favor (or as is emotionally argued; discriminate) one data traffic over another one that passes through its network.
This is the main thrust of this paper. Arguments in support of network neutrality have tended to lean towards the belief that discriminating data traffic is anti-consumer and may be capable having an anti-competitive effect under certain conditions. With the current expansion of internet services in Nigeria and particularly the current investment in broadband infrastructure, the need arises to revisit the issue of network neutrality in the Nigerian context. In considering the question of network neutrality, guidance is sought from the Nigeria Communications Act 2003 (NCA) and the relevant regulations made under the Act.
NETWORK NEUTRALITY
The internet in its simplest terms refers to a system of decentralized, interconnected network of computer networks that allows computers to communicate with each other. The internet has come a long way since 1960 when it was then known as the Advanced Research Projects Agency Network (ARPANET), the first operational packet switching network owned by the United States Department of Defense. The internet as we know it today has evolved rapidly and extended far beyond the territory of the United States. As at 2008, almost 1.6 billion people worldwide had access to the internet, of these figures only 23, 982, 208 had access from Nigeria.
The growing rate of internet penetration in Nigeria has closely been linked to the Global System for Mobile Communications (GSM) revolution; where GSM service providers have also been capable of providing access to the internet via their mobile network infrastructures.
Today, the geometric growth rate of the Nigerian telecommunications market has created a demand for bandwidth intensive application such as cloud computing (especial software-as-a-service; SaaS), streaming media and Voice-over-internet protocol (VoIP) services which has necessitated the investment in the provision broadband services.
Network neutrality as a principle recommends that all internet traffic passing through a network should be treated alike irrespective of the source of the traffic, destination or nature of the traffic. According to Google, Network neutrality is the principle that Internet users should be in control of what content they view and what applications they use on the Internet. The Internet has operated according to this neutrality principle since its earliest days... Fundamentally, net neutrality is about equal access to the Internet. This definition is based on the notion of a free and fair internet and that broadband should be available to users who have paid to access this service. This definition is centered on the four basic “Internet Freedoms”.
The concept of network neutrality can be traced to the end-to-end principle which sees the internet as a “dumb” network designed to treat all data traffic equally. In this sense, the network doesn’t ask questions about the sender of the traffic, the recipient or its content; it simply analyzes the traffic and passes it onward for delivery to the end user through the next available node.
A related concept to network neutrality is access tiering which refers to the models used by a particular network operator in treating its traffic. This can be manifested by the network operator in giving bandwidth priority to websites and online service providers that pay for Quality of Service (QoS), websites owned by or in partnership with; or that have paid a premium to the network operator This ultimately means that the content of such favored websites/online service providers would ride faster over the operators last mile to the subscribers.
The different models (which are the subject of network neutrality) used for access tiering are:
a) The “best efforts” rule. Here, the network operator treats all data traffic equally. By this rule, the first data traffic in, is the first the data out. The rule however is subject to variable performance and periods of congestion. This rule seems to assume a similar stance with the maxim in equity … the first in order of time shall prevail.
b) “Needs-based discrimination” treats all data traffic in accordance with the best effort rule until such a time when there is network congestion. At this point certain time sensitive data traffic (such as live streaming or internet telephony data streams ) are moved to the front of the queue for onward delivery to the recipient.
c) “Active discrimination” This is forms the subject of this discourse. The discrimination occurs where a network operator without any reasonable justification prioritizes data for delivery to the end-user in accordance with pre-defined rules. This discrimination may be as a result of the origin, destination or nature of the data traffic.
In the words of American Professor of Law Tim Wu, ”The basic principle behind network [neutrality] regime is to give [internet] users the right to use non-harmful network attachments or applications, and give innovations the corresponding freedom to supply them.” The principle of network neutrality works to prevent the unnecessary restriction of how the end-user accesses the internet, this no doubts creates value in the use of a particular network. These discriminatory practices are well illustrated by these hypothetical cases.
a) Service provider discrimination: An operator such as MainOne Cable Company may enter into company with (or even own) live streaming service A under which A’s content is favored over the contents of live streaming service B. In such scenarios, it’s possible for the internet end users who subscribe to B’s services to become frustrated at the slow pace at which they receive B’s service, this may result in their migration to A’s service due to the faster and better performances offered.
b) Application discrimination: Though this form is not relevant under the current discourse, nevertheless a network operator may discriminate against time sensitive applications such as streaming services or VoIP applications over less time sensitive data traffic like emails.
This priorisation and de-priorisation of internet traffic (otherwise known as access tiering) forms the core of the network neutrality debate. This debate has assumed some measure of popularity in the United States where many have been prompted to ask whether some form of regulatory intervention should not be introduced to curtail instances of internet data discrimination. The fear in the United States is hinged on what network operators might be tempted to do rather than what they are currently doing in the absence of any network neutrality law. The Madison River case further lays credence to this claim. In that case, an Internet Service Provider (ISP) allegedly blocked its customers from accessing a competing VoIP provider. The ISP entered into a consent decree with the sector regulator, Federal Communications Commission (FCC) that prohibited the ISP from blocking ports used for VoIP traffic. The ISP also made a voluntary payment of $15,000 to the US treasury.
It is important to bear in mind that this debate is two sided, on one side are the operators of internet/broadband networks who claim that any form of network neutrality regime is likely to impede broadband internet access and may actually be disadvantageous to innovation. Their belief is that effective network management strategies may require that certain internet data traffic be favored over others. They also contend that a small number of end users can degrade network performances through the use of bandwidth-intensive applications such as live streaming video services and peer-to-peer (p2p) applications. They further contend that network resources may not be capable of accommodating such situations and that network expansion may be expensive, leaving them with the only viable alternative of the cost effective method of network management. On the issue of technology innovation, advocates argue that network operators should be allowed to innovate freely with their different service offering which is the real essence of competition, for them any network neutrality regime is a restriction of new types of competition which in turn restricts innovation. According to them experimenting freely with new service offerings is likely to benefit competition and enhance efforts in innovations in the belief that where failures result from such innovations, network operators are likely to learn from their mistakes in other to compete effectively in the market.
ASSESSMENT OF NETWORK NEUTRALITY UNDER NIGERIAN COMPETITION LAW
The primary aim of all Competition regimes is to ensure the existence of a state of affairs in which output is maximized, price is minimized and the consumers are able to make their own choices. The overall intention of Competition policies is to protect the consumers from unfair market practice. For this, there arises the need for the Government to intervene to stimulate and preserve a competitive environment. Phrases like “substantially lessening of competition,” “anti-competitive agreements and practices” and “abuse of dominant position” are relevant and come within the scope of a Competition regime.
As no general competition law currently exist in Nigeria at the moment, the relevant competition provisions are embedded in the NCA & its subsidiary Competition Practices Regulations (CPR) 2007 which are both applicable in the Nigerian Communications market.
The competition concerns of network neutrality can be viewed from various angles in Nigeria, for instance and depending on the particulars of a conduct, it seems likely that blocking access to broadband access (for the purpose of inducing a subscriber to migrate to another service) or discriminating in favor of a service provider with whom the broadband network provider has some sort of contractual relationship with, is likely to be caught by Sections 9 e and 14 e of the CPR which respectively provides:
discriminating in the provision of interconnection or other communications services or facilities to competing Licensees, except under circumstances that are objectively justified based on supply conditions, such as discrimination based on differences in the costs of supply; and
exclusive dealing agreements, pursuant to which a Licensee enters into an agreement with another party for the supply of products or services on an exclusive basis, and where that exclusivity has or may have the effect of substantially lessening competition in related communications markets.
For instance an exclusive dealing agreement precludes a supplier’s competitors from doing business with the buyer during the agreed period. In the broadband market, an ISP might enter into agreement with content or application providers to provide exclusive, or preferential, access to consumers. In such instances, an ISP might arrange to allow access only to a single service provider and the other service providers are then be denied last-mile access to that ISP’s customers or end users.
In enforcing these provisions, the Nigerian Communications Commission (NCC), the sector regulator will be guided by the provisions of Section 91 (2) of the NCA and Section 6 of the CPR which both emphasize that in assessing whether any conduct is capable of “substantial lessening of competition” reference will be made to the following circumstances; the relevant economic market, the impact of the conduct on existing market players, the impact of the conduct on barriers to market entry and the impact of the conduct on consumers. The test here is to determine the extent of encumbrance against market competition which results in a significant injury to either the competitors or consumers or both. In the case of an exclusive dealing arrangement the assessment goes beyond the number of competitors closed out, as competition authorities worldwide seem to have a convergent opinion in assessing exclusive dealing arrangements where the market definition, the amount of foreclosure in the relevant market, the duration of the contracts, the extent to which entry is deterred, and the reasonable justifications, if any, for the exclusivity are all taken into account.
While a conduct capable of “substantial lessening of competition” seems like a potential threat to the consumers access to broadband services, the claim by proponents of network neutrality that internet data discrimination is anti-competitive seems to be forward looking as the major concern as is in the United States is focused on not what broadband network providers are currently doing, but rather on what they are capable of doing.
THE CURRENT NIGERIAN POSITION ON NETWORK NEUTRALITY
Though no specific Network Neutrality Law currently exists in Nigeria, however (bearing in mind that one of the primary goals of the NCA is to ensure that fair competition exists in the communications sector and that the rights of all consumers and service providers are protected) in the context of interconnection and access to network facilities/services embedded in Sections 96-103 of the NCA, 2003, in particular Section 97 b mandates that all interconnection agreement comply with the principles of neutrality [emphasis mine], transparency, non-discrimination, fair competition, universal coverage, access to information, equality of access and equal terms and conditions. Though neither this section nor the NCA has given a proper description of what constitutes neutrality, however it is safe to assume that this section intends to ensure the absence of prioritization measures or differential treatment of communications traffic when interconnecting with other licensees or providing access to network facilities to interested parties.
Another passive instance of network neutrality can be found in the grant of a licence for the provision of internet services under Section 32 of the NCA. In particular condition 5 of the Licence provides:
5.1 The Licensee shall not (whether in respect of charges or other terms or conditions applied or otherwise) show undue preference to or exercise undue discrimination against any particular person or persons of any class or description in respect of;
a) the provision of a service under this Licence; or
b) the connection of any equipment approved by the Commission.
5.2 The Licensee shall be deemed to have shown such undue preference or to have exercised such discrimination if it unfairly favours to a material extent a business carried on by it or by its lawful telecommunications associates in relation to any of the matters mentioned in paragraph 5.1 so as to place at a significant competitive disadvantage persons competing with that business.
These provisions without mentioning “network neutrality” has in some implicit way taken a stance in favour of network neutrality by making it a license condition that internet access providers must not show “undue preference to” any person. The subsequent provision goes further in defining a conduct indicative of “undue preference” as indiscriminately giving preference in the provision of internet service and or in the connection of any equipment approved by the commission to the business of its “lawful telecommunications associates.” A breach of these provisions is likely to entitle the NCC to revoke the internet license of the licensee.
CONCLUSION
The reality on ground is that the Nigerian broadband access market is still very much in its infancy stage, more market entry is needed for the market to be more competitive. The argument here is that increased broadband market participation is likely to reduce discriminatory practices as was noted in the US by AT & T Chairman Ed Whitacre that “Any [network] operator that blocks access to content is inviting customers to find another provider. And that’s just bad business.” Whether the likelihood of broadband discrimination is real or imagined in the absence of any network neutrality regime in Nigeria, notice must be taken of the vision of the NCA and the National Communications policy which includes inter alia, the promotion of easily accessible communications services for Nigerians.
Whichever way the pendulum swings, effective consumer protection will be needed for effective market competition to be sustained. In this vein, Service Level Agreement that addresses consumer protection concerns will play a role in clearly spelling out the terms of different broadband packages, these material terms may include traffic management practices of the network operator, after all of what use would be the effect of a competition regime if the consumers are not able to exercise their right to choose.
The dabate on network neutrality is likely to change how data is transmitted and consumed online while the question of broadband service discrimination remains alive, however, sight must not be lost of the principles surrounding network neutrality should a law for it become inevitable. These principles as stated by the US Federal Communications Commission (FCC) in its Broadband policy statement adopted on August 5th, 2005 revolves round the rights of broadband consumers to; access lawful content of their choosing, use applications and services of their choosing, connect network devises that to not degrade network performances and finally are entitled to competition among the various service providers. These principles will guarantee that these four basic “Internet Freedoms” are protected and preserved.
Monday, June 28, 2010
SUSTAINING THE COMPETITION, PROTECTING THE CONSUMERS AND MOBILE NUMBER PORTABILITY IN THE NIGERIAN TELECOMMUNICATIONS MARKET
The Nigerian mobile telecommunications market has continued to grow in leaps and bounds creating opportunities for further investments. These investments have continued to increase exponentially in proportion to the increase in the subscribers’ base which currently stands at 96,110,538 connected lines. This has made the Nigerian telecommunications market the largest in the whole of Africa and the fastest growing from a developing nation. The service providers have continued to introduce innovative service offerings to their numerous customers. The latest addition to this is the proposed mobile number portability to be superintended by the Nigerian Communications Commission (NCC) which is supposed to go live on the network of all mobile service providers before the end of September 2010. This service will enable mobile subscribers to retain their mobile numbers when changing service providers.
No doubt, this will create more value for mobile subscribers who will not have to incur more costs when switching service providers.
This article highlights instances where competition and or consumer protection issues are likely undermine the rationale of NCC for mandating mobile number portability in the Nigerian telecommunications market. It also looks at the new role of the NCC as the sector regulator in stemming the tide of these issues.
MOBILE NUMBER PORTABILITY (MNP)
Mobile number portability is a process that enables a mobile subscriber to retain his mobile number when changing from one service provider to another. This is a tremendous improvement from the traditional method where customers were instead required to give up their numbers when switching providers. As a result of this, customers were saddled with the possibility of missing calls from people who do not yet know their new number, printing new contact cards, notifying all their important contacts about a change of their number, e.t.c. This inability to port numbers generally increased the reluctance of subscribers to change service providers, even when they were experiencing poor quality of service (QoS).
According to the NCC, the rationale for the introduction of MNP are the removal of barriers to the freedom of choice of the mobile subscribers in choosing their favorite service provider, ensuring further competition among service providers in service delivery, acts as an incentive for service providers to improve on their services and removal of barriers to market entry. This is the major policy emphasis of a liberalized telecommunications sector.
The international operational standard for implementing MNP is for a subscriber wishing to port his number to contact his new service provider who then arranges the porting process with the old service provider. This is known as the ‘recipient-led’ porting. The other method implementing the porting process is known as ‘donor-led’ where the customer wishing to port his number approaches his service provider (donor) for a port authorization code (PAC) which is given to his new service provider (recipient) for the activation of the porting service.
COMPETITION AND CONSUMER PROTECTION ISSUES
Sustaining open market competition and ensuring that telecommunications’ subscribers are protected in the Nigerian telecommunications market underscores the reason for implementing MNP. A key issue here usually concerns the cost incurred by subscribers when switching service providers as this can be a barrier to entry and or distortion of competition. Without regulatory prompting, service providers see no incentive in providing MNP, since they fear the depletion of their customer base arising from poor quality of service, thus MNP has a significant role to play in ensuring that not only are switching costs kept to a minimum, it can also provide a competitive edge to service provides who have in place, better service delivery mechanisms. By improving customer satisfaction, MNP is seen as a useful tool in encouraging and sustaining open competition in the telecommunications market.
Some of the pertinent competition and or consumer protection issues likely to undermine the benefits associated with the implementation of the MNP process are:
1. Switching costs
In a sufficiently competitive market, telecommunications subscribers will usually switch from a service provider that fails to provide adequate service to another one that provides better service. Doing this, subscribers will usually incur costs if they decide to change their service provider. While many of these costs are non-pecuniary, they may have a significant impact on the total call value of a subscriber or may pose a barrier to the late market entry of a competitor. Some of the costs incurred when switching to another service provider are: - the need for a compatible equipment in instances where a GSM service subscriber may wish migrate to the network of a CDMA service provider, in switching, the subscriber will usually acquire a new handset compatible with the CDMA network. The second source usually involves the transaction cost of the switching process as subscribers may be required to register and apply to port their numbers as the process may be charged for a fee. Another source of worry is the cost (usually time and money) spent in printing new stationary with your new numbers and informing your current contact list about this change of number.
When these costs are substantial, it’s likely to result to subscriber lock-in effect to networks of particular service providers even when competing brands offer lower prices and better service quality. In addition to this, some service providers may actually require that subscribers intending to port their numbers pay an exorbitant fee. In close proximity to this would be the penalty fee to be paid by post paid (contract) subscribers who may wish to terminate their contracts so as to switch to another service provider. As these subscribers have contractually bound themselves to the service providers for specified periods of time, they are liable to pay termination fees if they choose to terminate their contract at an earlier time.
When these fees border on the high, it tends to inhibit switching and may constrict the subscriber’s choice. This may also be a source of competition worry as new market entrants may not be able to attract customers away from incumbent service providers.
2. Port Duration
This is the time it takes from when a porting process is initiated till the time it ends. The NCC recommended timeframe is 2 working days based on the existing network capability in Nigeria. Despite this recommendation, the possibility still remains that service providers may use slow procedures in churning a subscriber so as to discourage them from switching. An incumbent service provider with a large subscriber base can actually manipulate the timeframe by either denying or prolonging the porting process, if this happens, then it would be contrary to NCC’s intention for the porting duration and be in direct conflict with section 12 of the Consumer Code of Practice Regulations 2007 which provides that: licensees shall provide services within any service supply time targets set out in the Commission’s Quality of Service Regulations…
3. Subscribers Win-back Strategies
MNP will introduce new strategies for service providers in retaining or winning back their subscribers. These strategies may take the form of marketing calls to subscribers of rival service providers offering discount or promoting selective offers with the main aim of poaching them. A standard feature of a winback strategy is that it is targeted at only a portion of the competitor’s customers who were once customers of the incumbent. As this strategies are a form of selective price discrimination towards the competitors customers, it may constitute anti-competitive behavior aimed at marginalizing new entrants. The post-Chicagoan school of economic thought posits that such selective discount offered to theses former customers is likely to have an adverse effect on the competition by suppressing long-term efficient entry into the market. This school of thought believes that the main purpose of any form of predatory pricing is to drive out the competition. The competition implication of winback strategies continues to be an important factor in any liberalized sector.
4. Tariff Transparency
Without MNP, subscribers are usually able to identify the service providers through their number prefixes. With MNP, this identification is lost since the number prefix does not automatically indicate the network ascribed to a given number. As a result, if calling prices differ between different networks (as is usually the case), subscribers may be unaware of the exact charges for placing calls to mobile networks, a similar scenario to this from an economic perspective is that the consumers will have no knowledge of the price of goods or service they wish to purchase.
Previous studies have indicated that service providers may have incentives for increasing rates for terminating calls on their networks based on the ignorance of the subscribers about the relevant prices. This study has also suggested that MNP may deteriorate the customers’ price information. Full tariff transparency is therefore lost and unless NCC as the regulator intervenes for the prices to be changed, callers may actually have to pay more than expected for certain calls.
THE WAY FORWARD
As rapid technological changes continue to shape the Nigerian Telecommunications market, the behavior of subscribers will continue to be impacted, presenting new challenges for the NCC. The main focus of this challenge will be to ensure that favorable market conditions exist which thrives on technological innovations, whilst still ensuring that the interests of subscribers are protected.
When competition is sustained, then the subscriber’s right to exercise his choice is unimpeded. As switching costs have an implication for the structure and competitiveness of the markets where telecommunications technology incompatibility in the mobile phone industry makes both physical capital and human investment into particular service unassignable. To ensure that consumer enjoy the benefits of migrating to the network of their choice service provider, NCC must play a role in ensuring that switching costs are kept to a minimum. Service providers must be deterred from even the slightest possibility of leveraging on the size of their (locked-in) subscribers by arbitrarily raising the price of their service.
The NCC recommended timeframe for porting should be religiously complied with and rigorously enforced so as not to discourage the churning of subscribers. An intentional contravention of this directive will amount to a breach of both the QoS and Competition Practices Regulations, making the defaulting service provider liable to enforcement measures from the NCC.
Even though, it is NCC’s intention not to implement restrictions to customers win-back by service providers, it must take cue from competition authorities in North American and European countries, where win back strategies have come under serious scrutiny. For instance, in 2004, the Kansas Corporation Commission enforced a win-back prohibition forbidding the incumbent from attempting to win back a customer within 30 days of the switching. NCC should toe the post-Chicagoan way by recognizing that win-back strategies under certain conditions may have the effect of lessening the competition.
The ability of customers to be able to predict calls they place must not be eviscerated by MNP. NCC recommends that this capability shall be provide in real time by a beep, a display of the tariff or service information on the subscriber’s terminal screen or voice recorded announcement before a call to a ported number is going to incur a different cost than it would have been charged before the number was ported. The regulatory best practice is to ensure that subscribers are well informed about prices, NCC must work diligently to ensure that service providers comply with this best practice.
The role of the NCC in Nigeria is not a static one, it continues to shift according to the dynamics of the telecommunications market, it is primarily focused on achieving a sustained competition that guarantees the protection for the rights of the subscribers. The implication flowing from this will be the attraction of more investments into the market.
Finally the goal of all liberalized markets is to ensure competition, once this is achieved, the right of the consumers to choose remains unrestricted. The NCC in all case must be ready to intervene if this competition comes under threat.
MNP does actually stimulate competition, if implemented properly will lead to a lowering of switching cost, resulting in added value to the existing services already been enjoyed by the Nigerian telecommunications subscribers.
No doubt, this will create more value for mobile subscribers who will not have to incur more costs when switching service providers.
This article highlights instances where competition and or consumer protection issues are likely undermine the rationale of NCC for mandating mobile number portability in the Nigerian telecommunications market. It also looks at the new role of the NCC as the sector regulator in stemming the tide of these issues.
MOBILE NUMBER PORTABILITY (MNP)
Mobile number portability is a process that enables a mobile subscriber to retain his mobile number when changing from one service provider to another. This is a tremendous improvement from the traditional method where customers were instead required to give up their numbers when switching providers. As a result of this, customers were saddled with the possibility of missing calls from people who do not yet know their new number, printing new contact cards, notifying all their important contacts about a change of their number, e.t.c. This inability to port numbers generally increased the reluctance of subscribers to change service providers, even when they were experiencing poor quality of service (QoS).
According to the NCC, the rationale for the introduction of MNP are the removal of barriers to the freedom of choice of the mobile subscribers in choosing their favorite service provider, ensuring further competition among service providers in service delivery, acts as an incentive for service providers to improve on their services and removal of barriers to market entry. This is the major policy emphasis of a liberalized telecommunications sector.
The international operational standard for implementing MNP is for a subscriber wishing to port his number to contact his new service provider who then arranges the porting process with the old service provider. This is known as the ‘recipient-led’ porting. The other method implementing the porting process is known as ‘donor-led’ where the customer wishing to port his number approaches his service provider (donor) for a port authorization code (PAC) which is given to his new service provider (recipient) for the activation of the porting service.
COMPETITION AND CONSUMER PROTECTION ISSUES
Sustaining open market competition and ensuring that telecommunications’ subscribers are protected in the Nigerian telecommunications market underscores the reason for implementing MNP. A key issue here usually concerns the cost incurred by subscribers when switching service providers as this can be a barrier to entry and or distortion of competition. Without regulatory prompting, service providers see no incentive in providing MNP, since they fear the depletion of their customer base arising from poor quality of service, thus MNP has a significant role to play in ensuring that not only are switching costs kept to a minimum, it can also provide a competitive edge to service provides who have in place, better service delivery mechanisms. By improving customer satisfaction, MNP is seen as a useful tool in encouraging and sustaining open competition in the telecommunications market.
Some of the pertinent competition and or consumer protection issues likely to undermine the benefits associated with the implementation of the MNP process are:
1. Switching costs
In a sufficiently competitive market, telecommunications subscribers will usually switch from a service provider that fails to provide adequate service to another one that provides better service. Doing this, subscribers will usually incur costs if they decide to change their service provider. While many of these costs are non-pecuniary, they may have a significant impact on the total call value of a subscriber or may pose a barrier to the late market entry of a competitor. Some of the costs incurred when switching to another service provider are: - the need for a compatible equipment in instances where a GSM service subscriber may wish migrate to the network of a CDMA service provider, in switching, the subscriber will usually acquire a new handset compatible with the CDMA network. The second source usually involves the transaction cost of the switching process as subscribers may be required to register and apply to port their numbers as the process may be charged for a fee. Another source of worry is the cost (usually time and money) spent in printing new stationary with your new numbers and informing your current contact list about this change of number.
When these costs are substantial, it’s likely to result to subscriber lock-in effect to networks of particular service providers even when competing brands offer lower prices and better service quality. In addition to this, some service providers may actually require that subscribers intending to port their numbers pay an exorbitant fee. In close proximity to this would be the penalty fee to be paid by post paid (contract) subscribers who may wish to terminate their contracts so as to switch to another service provider. As these subscribers have contractually bound themselves to the service providers for specified periods of time, they are liable to pay termination fees if they choose to terminate their contract at an earlier time.
When these fees border on the high, it tends to inhibit switching and may constrict the subscriber’s choice. This may also be a source of competition worry as new market entrants may not be able to attract customers away from incumbent service providers.
2. Port Duration
This is the time it takes from when a porting process is initiated till the time it ends. The NCC recommended timeframe is 2 working days based on the existing network capability in Nigeria. Despite this recommendation, the possibility still remains that service providers may use slow procedures in churning a subscriber so as to discourage them from switching. An incumbent service provider with a large subscriber base can actually manipulate the timeframe by either denying or prolonging the porting process, if this happens, then it would be contrary to NCC’s intention for the porting duration and be in direct conflict with section 12 of the Consumer Code of Practice Regulations 2007 which provides that: licensees shall provide services within any service supply time targets set out in the Commission’s Quality of Service Regulations…
3. Subscribers Win-back Strategies
MNP will introduce new strategies for service providers in retaining or winning back their subscribers. These strategies may take the form of marketing calls to subscribers of rival service providers offering discount or promoting selective offers with the main aim of poaching them. A standard feature of a winback strategy is that it is targeted at only a portion of the competitor’s customers who were once customers of the incumbent. As this strategies are a form of selective price discrimination towards the competitors customers, it may constitute anti-competitive behavior aimed at marginalizing new entrants. The post-Chicagoan school of economic thought posits that such selective discount offered to theses former customers is likely to have an adverse effect on the competition by suppressing long-term efficient entry into the market. This school of thought believes that the main purpose of any form of predatory pricing is to drive out the competition. The competition implication of winback strategies continues to be an important factor in any liberalized sector.
4. Tariff Transparency
Without MNP, subscribers are usually able to identify the service providers through their number prefixes. With MNP, this identification is lost since the number prefix does not automatically indicate the network ascribed to a given number. As a result, if calling prices differ between different networks (as is usually the case), subscribers may be unaware of the exact charges for placing calls to mobile networks, a similar scenario to this from an economic perspective is that the consumers will have no knowledge of the price of goods or service they wish to purchase.
Previous studies have indicated that service providers may have incentives for increasing rates for terminating calls on their networks based on the ignorance of the subscribers about the relevant prices. This study has also suggested that MNP may deteriorate the customers’ price information. Full tariff transparency is therefore lost and unless NCC as the regulator intervenes for the prices to be changed, callers may actually have to pay more than expected for certain calls.
THE WAY FORWARD
As rapid technological changes continue to shape the Nigerian Telecommunications market, the behavior of subscribers will continue to be impacted, presenting new challenges for the NCC. The main focus of this challenge will be to ensure that favorable market conditions exist which thrives on technological innovations, whilst still ensuring that the interests of subscribers are protected.
When competition is sustained, then the subscriber’s right to exercise his choice is unimpeded. As switching costs have an implication for the structure and competitiveness of the markets where telecommunications technology incompatibility in the mobile phone industry makes both physical capital and human investment into particular service unassignable. To ensure that consumer enjoy the benefits of migrating to the network of their choice service provider, NCC must play a role in ensuring that switching costs are kept to a minimum. Service providers must be deterred from even the slightest possibility of leveraging on the size of their (locked-in) subscribers by arbitrarily raising the price of their service.
The NCC recommended timeframe for porting should be religiously complied with and rigorously enforced so as not to discourage the churning of subscribers. An intentional contravention of this directive will amount to a breach of both the QoS and Competition Practices Regulations, making the defaulting service provider liable to enforcement measures from the NCC.
Even though, it is NCC’s intention not to implement restrictions to customers win-back by service providers, it must take cue from competition authorities in North American and European countries, where win back strategies have come under serious scrutiny. For instance, in 2004, the Kansas Corporation Commission enforced a win-back prohibition forbidding the incumbent from attempting to win back a customer within 30 days of the switching. NCC should toe the post-Chicagoan way by recognizing that win-back strategies under certain conditions may have the effect of lessening the competition.
The ability of customers to be able to predict calls they place must not be eviscerated by MNP. NCC recommends that this capability shall be provide in real time by a beep, a display of the tariff or service information on the subscriber’s terminal screen or voice recorded announcement before a call to a ported number is going to incur a different cost than it would have been charged before the number was ported. The regulatory best practice is to ensure that subscribers are well informed about prices, NCC must work diligently to ensure that service providers comply with this best practice.
The role of the NCC in Nigeria is not a static one, it continues to shift according to the dynamics of the telecommunications market, it is primarily focused on achieving a sustained competition that guarantees the protection for the rights of the subscribers. The implication flowing from this will be the attraction of more investments into the market.
Finally the goal of all liberalized markets is to ensure competition, once this is achieved, the right of the consumers to choose remains unrestricted. The NCC in all case must be ready to intervene if this competition comes under threat.
MNP does actually stimulate competition, if implemented properly will lead to a lowering of switching cost, resulting in added value to the existing services already been enjoyed by the Nigerian telecommunications subscribers.
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