01-07 November 2000

New Economy – same old monopolies

While talk abounds over the advent of the new economy, e-commerce and e-government in private and government circles – the truth of the matter is that government is blocking the healthy development of the integral Internet sector, contends Waldonet General Manager and Chamber of Commerce spokesperson for Internet Service Providers, David Thake.

David Lindsay spoke to Mr Thake about the truths and the fallacies of the telecommunications liberalisation plan and on the way forward toward a free and open marke

As ISPs, we are very disturbed by the prices that we are being forced to pay for international bandwidth
What is the local Internet market scenario as it currently stands?

At the moment, the Internet in Malta has been liberalised since 1995, when government issued Internet licences to ISPs. The Internet has remained a liberalised market, albeit with the number of problems and issues that have been repeatedly taken up with the regulator with little or no success. One of the issues that has been brewing for the last couple of years has been whether or not ISPs would be able to utilise a network other than Maltacom’s.
The initial ISP license had bound ISPs to use Maltacom’s infrastructure to deliver their services to their clients. So if we had a client that wanted an ISP service, that client would have to connect to the ISP through Maltacom’s infrastructure.

ISPs were against this from day one. At the time it didn’t make sense but it was allowed to be placed on the backburner because, at the time, Maltacom was the only network provider. Therefore, it was useless to make an issue out of it because there was simply no one else.

About two years down the line, Melita Cable began indicating their intentions to go into the data market. We have absolutely no problem with that, in fact, the issue we took up with the government was that we would like to use Melita’s services, just as we use those of Maltacom, to deliver our services. Or rather, in the same way that we buy services from Maltacom to sell to our customers – because its not fair to discriminate against Melita Cable in favour Maltacom. Why should ISPs be bound to Maltacom and therefore be prohibited from buying from Melita Cable?

This was never discussed and things came to a head in 1999. Melita Cable adopted the attitude that it was going to provide Internet via its cable network and it was going to do so on its own. It would not allow ISPs to buy services from itself and, in effect, Melita Cable wanted another monopoly over its cable network.

Technically speaking, are there any problems with ISPs utilising Melita Cable’s network for the provision of Internet services?

Absolutely not. We have maintained this from day one.

Melita Cable has decided that it wanted to go into the market alone – without selling their services to ISPs and they claimed technical problems to reinforce their stance.

Melita Cable continued to insist that it wanted to provide its service alone, without the inclusion of ISPs and government seemed to take their side on the issue.

We had a number of meetings with the Minister for Transport and Communications, Censu Galea, and with the regulator.

The bottom line was that Melita Cable started testing their Internet over cable, ISPs took the stand that if Melita Cable would not allow us to access their network, then we would not allow them to access ours.

Within a week, new regulations we published by government, which granted ISPs the right to buy services from any transport provider. We don’t have anything for free, as we operate now, we buy all our services from Maltacom, nothing in this sector is gratis.

However, Maltacom does not only sell its services to Terranet, its own ISP, which is what Melita is trying to do with its services.

Next page: Melita cable reaction, what is taking place at the moment, EU regulations...

New Economy – same old monopolies | 1 | 2 | 3 |

The Business Times, Network House, Vjal ir-Rihan San Gwann SGN 07
Tel: (356) 382741-3, 382745-6 | Fax: (356) 385075 | e-mail: editorial@networkpublications.com.mt