Towards a Unified Arab Charter Internet: Regulations and Communications

1. Towards a Unified Arab Charter Internet: Regulations and Communications Dr. Kamal Shehadi Chairman/ CEO Telecommunications Regulatory Authority February 24-26, 2009 InterContinental Phoenicia Hotel, Beirut, Lebanon

2. Efforts to build a solid information society should encompass the following

3. Although reform has started with the establishment of the TRA, most telecommunications markets in lebanon are stagnant and suffer from lack of competition Current Indicators Penetration Number of SP Private / State-owned Level of Competition Mobile Market 35% 2 State-Owned Monopoly Fixed Market 63% (*) 1 State-Owned Monopoly Internet Market 32.5% (*) ~ 16 Private Competition ADSL Market ~ 7.7% (*) ~ 8 MoT / Ogero Private (bitstream, line sharing) Limited Competition (*) per household

4. The TRA has assessed the strengths and opportunities of the telecommunications market in its reform and liberalization process Strengths Weaknesses Opportunities Fixed Voice • Relatively good copper infrastructure • Regionally competitive price per minute • De jure MoT monopoly • Lowincentive to upgrade the infrastructure and introduce new technologies • Low penetration rate • Stagnant growth • High pent-up demand and important growth potential in all telecom markets • Appropriate Regulatory framework to attract investors. • Consumer behavior: Early adopter of telecom services. • Pent up demand for Mobile services • High Mobile revenues • High charges • Lag behind in terms of new technologies • Low market penetration • Limited choice in mobile bundled tariffs packages • Shortage of adequate investments Mobile • Relatively competitive • Lucrative segment • New wireless technologies deployed • Pent-up demand for data and internet services • Shortage in international bandwidth • Access controlled by the MOT • High int’l bandwidth prices, and non optimal allocation of bandwidth among providers • Incomplete Regulatory framework Data

5. Further to the consultation process, the TRA is minded to propose in its Liberalization Roadmap the introduction of competition across all telecommunications markets while allowing LibanTelecom exclusivity over some services for a limited period of time * ** 3 1 ? ? 2 *** 3 **** 2 Open licensing Market Review License Award Notes • * The privatization of the mobile sector will depend on the regional and international financial markets conditions • ** Two mobile operators and Liban Telecom • *** Two mobile operators and Liban Telecom • **** Two National Broadband Licenses, subject to CoM’s decision

6. Table Broadband Roadmap The TRA plans to issue two types of Broadband Licenses • National Broadband Licenses (NBLs) with: • Rights to build/offer (fixed and spectrum based) Access, National Backbone and International network/services • Obligations to meet access and national backbone rollout conditions with minimum build for fiber • Exclusivity period to interconnect new sites of other BAL providers via its national backbone • Broadband Access Licenses (BALs) : • National or regional • With or without spectrum, • Existing Data Service Providers continue to use their national Microwave backbone to backhaul existing sites • BALs originally rely on the NBLs for new site connectivity Broadband Deployment Timeline Draft RFA for Consultation (including BB License) Spectrum Re-farming & RTU fees Broadband Policy Statement ROW & Duct s Decree NBL Auction July 09 December 09 Jan 09

7. TRA plans to issue licensing through an international Public auction in order to establish across Lebanon, best in class core, Metropolitan, and access networks competition

8. Licensing of the NBLs will provide Lebanon with leading edge technologies and applications Technologies Applications • Existing Infrastructure • DSL over copper loop • Cable Modem over Cable TV network • New Infrastructure • Fiber to the x ( FTTx) • Hybrid Fiber Coaxial ( HFC) • Wireless Infrastructure • Fixed wireless Access ( FWA) • Wireless Lan ( Wi-Fi) • IMT 2000 ( 3 G- Mobile) • High Speed WLL. • Personal Services • High Speed Internet Access (1 MB and above) • Multimedia • Govts. Public services • E-governance • E-education • Tele-medicine • Commercial services • E-commerce • Corporate Internet • Videoconferencing • IPTV • VoIP • Video and Entertainment services • Broadcast TV • Video on Demand • Interactive gaming • Music on Demand • Online Radio

9. The regulatory framework and the public consultation process adopted by TRA aim at ensuring the success of liberalization Drafting Stage Draft Ready Stage Consultation Stage Final Review (TRA Board) Issued Significant Market Power Regulation Unbundling Regulation VOIP Policy Statement Spectrum Refarming and Packaging Plan Liberalization Roadmap Broadband Policy Statement National Roaming • Decisions: • VSAT, • Trial IPTV • Spectrum trial Allocation for MoT / OGERO Accounting Separation Regulation Improving FM Broadcasting Numbering Regulation Universal Service Digital Migration Strategy for TV Broadcasting Licensing Regulation CS / CPS Interconnection Regulation Access to Information Regulation Pricing Regulation Type Approval Regulation * Interconnection Interim Pricing Decision Quality of Service Regulation Spectrum Pricing Opinion Decision for establishment of call centers Spectrum Management and Licensing Regulation Lebanese National Frequency Table * Decision approved by the board, but will be issued concurrently with the Mobile Auction Award. National Numbering Plan Consumer Affairs Regulation

10. Broader legal reforms must be taken into consideration in order to create an environment condusive to the growth of ICT • The Code of Civil Procedure (المدنيةقانون أصول المحاكمات) issued by virtue of the Legislative decree No. 90 dated 16/9/1983 (and its amendments) should be amended in a way containing a stipulation about electronic proof in addition to the written and other proof means mentioned in the chapter related to proof issues (articles 143 and the following…)  • Code of Obligations and Contracts (قانون الموجبات والعقود) issued in 1932 and particularly the part related to contracts (articles 165 and the following) should be reviewed as follows: • - Article 179 related to the acceptance of an offer should be amended in way including a statement authorizing the acceptance of the offer via electronic means. • Article 184 and 185 related to negotiations (draw-up contracts) should be amended in a way including a statement authorizing negotiations (draw-up contracts) via electronic means.  • Code of Commerce: • -Convocation Procedures (article 193) : • Convocation should be made easy so as to encourage meetings to be held: We should aim, even if under strict conditions, at allowing convocation by (1) facsimile telecommunication, (2) and electronic mail. • -Right of shareholders to have access to documents (articles 182-190-197) by electronic ways. • We should aim at allowing Visio conferencing in order to facilitate the participation of the largest possible number of shareholders at the meetings.

11. Lebanon's commitment • Bring the country back to the international telecommunications scene through market liberalization • Reconnect the Lebanese population with the world by building a thriving, innovative, and competitive telecommunications market place, driven by a technologically advanced infrastructure-based sector and offering services at internationally competitive prices and quality • Promote the interests of telecom Lebanese consumers in the market to make sure they are getting good quality of service at affordable and competitive prices and that their right to safe, secures and confidential access to telecommunications is safeguarded