Ansa McAl chairman, Norman Sabga, in the context of the $1 million loss by Guardian Media Ltd., said Facebook, Twitter and other international companies were able to sell media (and other services) in T&T without paying taxes, have no employees on the ground—a huge advantage to them—and when paid, they receive foreign exchange. This undermines the local media houses.
Sabga calls for a level playing field with them, which does not exist at present, since Ansa McAl has local property, pays taxes, business levy and every other cost associated with the market and employs 600 workers.
Sabga joins TSTT which complains that the existence of such offshore Internet services as Skype, Messenger, Instagram and WhatsApp are in competition with the local providers who as a result are losing money while these offshore providers pay no local taxes etc.
Indeed, Morocco’s Telecommunications Authority has banned these Internet VOIP (voice over IP) providers because they do not have a local telecoms licence. In Argentina consideration was given to creating an Internet intermediary register, which threatened the survival of citizen and discussion platforms. China has blocked Facebook, Twitter, Instagram, YouTube and many other OTT services. These offshore services that use the Internet and hence the local networks of our providers are called OTT (over the top) Internet services, which also include the international digital transfer of money, Netflix, Airbnb and others.
The issues surrounding these OTTs include taxation, privacy, security obligations, local content, universal service etc. If we are to regulate these, what is important is that we do not harm users’ rights in order to maintain the competiveness of local entrepreneurs or try to restrict the free and open Internet. Though the focus is on some OTTs, all information on the Internet goes over the top of the telecoms infrastructure. Hence, a self-hosted video blog and any “app” for games are OTT services. Indeed, the term could be applied to everything we use to communicate or chat on-line. For example, from T&T we can provide a personal security alarm/response command protection service for the whole region without setting foot in any of the islands, an OTT service.
What has presented us with this situation are the new digital technologies that allow many kinds of information (voice, video, data, controls) to be digitised and transferred shoulder to shoulder over the Internet at real time speeds from anywhere in the world. The local provider also delivers some of these services locally and international connectivity and in so doing their networks connect us to the Internet and the world of OTTs. Further, the digital on-line financial services allow us to pay for some of these services without these off-shore providers having a local footprint- some in competition with TSTT and Ansa McAl.
The fourth Industrial Revolution, like its predecessors has presented us with disruptive technologies that engendered new services that are in competition with the traditional. Recall that the motor car as a new invention was in direct competition with the horse-drawn carriage, which it eventually rendered obsolete. Email has eroded the role of the post office.
We are again at that stage that Schumpeter defined many years ago, where the rules that govern our economy have to be adjusted to cope with the new innovative products and services, while protecting our privacy, providing security of information but refraining from violating our right to use these new services. Traditional newspapers that delivered information daily, television and radio that did so on the hour are in direct competition with news (even false news!) delivered to our smart phones continuously from anywhere in the world and with our ability to comment in our chat groups on what is taking place. Such access is even straining the conventional bounds of copyright.
Many Internet service providers do not own their own networks and depend on the consumers having access to the Internet. Hence the local telecoms providers, besides putting their own service on the Internet, offer such access to these consumers at a price, which includes a connection fee and a charge for data transferred. Thus, a major topic of concern should be the pricing of Internet access and the bandwidth, without discrimination, made available to the user.
The digital technologies have given the world the Internet, which gives access to us all to information from those who can also connect to the Internet and wish to share, even at a price. This information may simply be communication among persons in which the material may range from the traditional telephone conversations, to news, to games, to whatever you can imagine. This gives us in T&T the opportunity to create our own OTTs and service the world.
Like the ANSA McAl company, all affected T&T companies have to respond to the competition from the OTTs, innovate and provide competitive products/services or, as Schumpeter tells us, die!
— St Clair King co-wrote this article
• Mary King is an economist