While the debate over ownership and financing of the East Africa Submarine Cable System (EASSy) continues, land-locked countries in Africa have the most to lose if a closed consortium model is adopted. What are the implications for these countries, and can their interests be protected?

Why is EASSy so important?

Lowering the costs of broadband internet connectivity have been shown to boost a countries' international trade – something that is sorely needed to support socio-economic development in Africa. But despite new alternatives to costly satellite connectivity -- most significantly the SAT3/WASC/SAFE submarine cable down the West coast of Africa -- prices for internet connectivity remain disappointingly high. This is particularly true in the Central and Eastern regions of Africa, where some countries still do not have internet exchange points and therefore rely on overseas operators in Europe and North America to route their traffic to neighbouring countries.

The East Africa Submarine Cable System is looked to by many to solve the problem of high international connectivity costs in Africa. EASSy will be 9,900 km of fibre optic submarine cable running down the East coast of Africa, from Port Sudan in Sudan to Mtunzini in South Africa. Bandwidth capacity totally 320GB/s is expected to become available some time in 2007, although current delays in agreeing on a financing model are holding back the project.

So who will own and operate it?

Ownership of EASSy is currently a hot topic for debate. But at the lastest NEPAD meeting to discuss EASSy, on 06 April, it was apparent that the issue is not simply one of suporters of an Open Access model of ownership pitted against those that support a closed consortium arrangement. Rather, it comes down to which of the Special Purpose Vehicles (SPV) proposed so far, would make everyone happy.Governments involved in the EASSy initiative, under the leadership of NEPAD, are in the process of deciding who can be a shareholder, and who should be on the board. Currently, only operators with an international gateway license can invest in the cable – with NEPAD/EASSy defending this decision, and certain governments and civil society organisations arguing it will exclude a growing number of operators, as the ICT market changes and more operators are awarded licenses.

At present, the EASSy MOU signitaries work on the basis of the more money a member puts in the pot, the greater their say. But there have been cases of new, qualifying investors being excluded from this "club". Balancing Act provide a good analysis of these issues here: EASSY consortium reaches crunch point for choices about pricing, access and governance – interview with project co-ordinator, John Sihra.

What ever SPV model is agreed upon, it should take account of significant changes in the market for internet connectivity, seen since the SAT3 cable came online. Equally important will be the ability of regulators to keep wholesale bandwidth prices low enough, so that ultimately EASSy becomes a tool for socio-economic development and not another technological advance accessible only to the well-off.

The issue for land-locked countries

EASSy is set to become a big issue for the land-locked countries with a stake in the cable. These are Rwanda, Malawi, Zimbabwe, Zambia, Botswana, and potentially Lesthoto, Swaziland and Burundi. Simply put, these countries can only access bandwidth via an intermediary country with a landing station. It is crucial that the SPV model chosen contains measures to protect these countries from this potentially exploitative situation.

Added to the possibility of inflated bandwidth costs, are those of using cross-country backhaul routes and internconnection rates. This scenario may actually create a situation for some, in which satellite connectivity becomes cheaper. The World Bank report on the policy issues around EASSy provides further insight into this topic, see: Key Regulatory and Policy Issues to Ensure Open Access to Regional Backbone Infrastructure in Africa

This means EASSy could become a big issue for land-locked countries, with far-reaching consequences. Firstly, it puts into question the long-term certainty of EASSy becoming a key enabler of socio-economic development, should their governments, and regulators, are unable to influence the price at which broadband capacity can be acquired. Secondly, it brings to the fore the delicate question of who will have control over their international gateway? This comes in the context of many countries now considering bandwidth to be an essential resource. For example, in South Africa there is pressure on the Department of Communications to declare the SAT3 gateway an essential resource, thus ending the incumbent's monopoly ownership of the international gateway (for more information see this news article: SAT3 declaration 'unlikely in short-term').

In Africa, almost all incumbents are either entirely, or partially state-owned. This means land-locked governments may to some extent become beholden to a foreign power for international connectivity. This issue has already come to light in the refusal of the government of Mali to purchase SAT3 bandwidth from Sonatel in Senegal. Sonatel is actually 46% owned by France Telecom. For more on current telecommunications news across Africa, see: Balancing Act News Update - African internet developments.

The debate

At the NEPAD meeting on 06 April, land locked countries were vocal in their demands that any SPV must protect their interests. EASSy therefore has the potential for political turmoil in the region. Already there have been regional disputes over the price of SAT3 bandwidth offered by coastal countries. As bandwidth increasingly becomes a precious commodity, will control over a countries' international gateway/s be added to the list of causes of instability on the continent?

Tell us what you think of these issues.

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¹ An Open Access model of financing, is based on the premise that any operator can buy capacity at a standard, cost price, with profits made on the sale of auxiliary services and not on the infrastructure itself. Supporters of Open Access include the World Bank and most, if not all, of the African governments involved. They are determined to avoid a similar situation to the SAT3 cable, where a closed consortium model of ownership has resulted in no significant drop in international connectivity costs for Africans.