Internet, Telecommunications Reform And Economic Development In Haiti

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PART II: TELECOMMUNICATION AND INTERNET POLICY REFORM

The Policy Framework
In general, from a policy perspective, the telecommunications sector in Haiti, and its Internet sector in particular, have good potential for sustainable growth. There is hope that the privatization of Teleco will lead to improved service, including to rural areas. Despite the inadequacies of the telecommunications infrastructure, there is sufficient profit motivation for the private sector to succeed in making Internet and wireless services available in urban areas. It could even be said that the telecommunications in Haiti is beginning to resemble in its infancy, the type of dynamic, privately-led environment encouraged by the United States.
Among other things, the definition of a national plan for telecommunications, wholesale restructuring of first the telecommunications services sector and then the regulator, consistent application of the rule of law, and a demonstrated commitment to transparency and accountability should effect a transformation in Haitian telecommunications worthy of its citizens.

The United States supports five main principles in the area of telecommunications policy reform. The elements of this model are the basic principles of the Global Information Infrastructure:
• Encouraging private investment
• Promoting competition
• Providing open access
• Creating a flexible regulatory environment
• Ensuring universal service

Telecommunications liberalization, competition, and privatization are viewed by many as key tools for a nation's progress and integration into the global economy. From the United States' perspective, these three together provide the best means of spurring telecommunications development and attaining universal service goals rapidly. Further, we believe that the objective of liberalization and privatization efforts, as well as the promotion of a competitive marketplace, should be to enhance efficiency in both the government and business community, increase accessibility to a variety of services, and improve the quality of those services.

Policy Directions for the Haitian Government
In keeping with this model, we favor several recommendations which give practical effect to these principles, and which promote development of the overall telecom environment in a given country. If implemented, among other things, these recommendations can provide the foundation necessary to sustain a robust Internet community.

• First, establish a defined time frame for introducing full competition in telecommunications network, services, and equipment.
• Second, permit immediate, extensive competition in wireless services, regardless of the timetable for competition in basic services.
• Third, permit resale of network services.
• Fourth, permit privatization, with the goal of enabling the state-owned firm to function like a commercial enterprise.
• Fifth, mandate fair, non-discriminatory, transparent and timely interconnection.
• Sixth, reduce prices for international services.
• Seventh, strengthen the regulatory authority, and
• Eighth, participate in multilateral trade negotiations.

Of these eight recommendations, Haiti has embarked to some degree on five very important ones. First, private investment is permitted and is occurring in both the wireless and Internet sectors. Haiti is also preparing to permit private investment in basic wireline services through the privatization of its incumbent operator, Teleco. The Haitian Parliament passed a law requiring Teleco to be privatized, and the World Bank has had a team working there since September of 1998 to make the appropriate valuations and other necessary actions that precede such a sale. Thus, private investment is or will be permitted in most major areas of telecom service: wireline, cellular/PCS, value-added services, and Internet.

Relatively healthy competition exists in the wireless and Internet sectors. There are four cellular/PCS companies and five Internet Service Providers (ISPs). The cellular/PCS companies are in various stages of operation, but by spring three of the four were expected to be operational.
While one does not yet see competition for basic wireline service in Haiti, and plans to introduce competition in this sector have not been enunciated by the government or the regulator, the existing telecom law, promulgated in 1977, does not forbid this. Further, it appears that wireless carriers do indeed substitute (and thus compete) for wireline service currently, as they represent the only viable alternative to Teleco. Indisputably, even Internet service is provided most reliably via wireless means. And the fact that at least one wireless company, Haitel, has a license to provide international service, indicates some official intent to permit the wireless sector to substitute for and compete against Teleco.

Interconnection occurs between wireless carriers successfully, although interconnection between wireless carriers and Teleco's public switched network occurs less successfully. Thus, to some degree, interconnection works in Haiti, which means that technical and pricing issues have been effectively handled to some extent. It is possible, then, to build on what is working, expand and apply it more broadly to achieve a workable interconnection regime for all parts of Haiti's telecommunications sectors -- cellular, Internet, wireline, satellite.
In tandem with its efforts to pave the way for privatization of the telephone company, the World Bank is also in the process of examining ways to restructure the regulatory environment and strengthen the regulator, CONATEL. Separation of posts and telecom, and initial separation of the regulator from the incumbent, Teleco, have already occurred. These actions represent solid beginnings of reform.

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