Jordan needs to allocate more bandwidth to civilian uses or miss the chance to become a global competitor in the next century. Dire as it may seem, this warning should be taken seriously by any development-minded policymaker before it is too late for any policy to make a difference.
The International Telecommunications Union allocates to every country the same amount of spectrum. The choices made by the telecom regulatory bodies of these countries affect the efficient utilization of the spectrum they have been allotted. Once the spectrum is used up, there is no more.
Since technology is demanding more and more bandwidth, countries that have no bandwidth to allocate, or those who allocate after their competitors have done so, are the losers in the next century.
The US president Bill Clinton recently announced that more bandwidth will be allocated for civilian uses in a move to maintain the US lead in the telecom and IT sectors. This statement by the leader of the most advanced country in IT economy, birthplace of the Internet and the most liberalized telecom market in the world, is a lesson in humility to any one aspiring to make policy for a nation.
The first lesson pertains to the making of policy. In the new economy, one must act, not react. Diverting bandwidth from military and security uses to private uses attracts investments and advances in telecommunications.
Through this action, the US president is paving the way for further development via a $200 billion investment by telecom companies over the next four years. Clinton is tackling a very difficult and important issue — vacating military and security forces from bands. This is indeed a difficult and expensive undertaking.
The military, as the custom is in most countries around the world, is most likely to request compensation for relocating from one frequency to another and for the purchase of new equipment. The bill usually runs in the hundreds of millions. More importantly, relocating takes time; something which nations that are in the race for a competitive position cannot afford.
The lesson for a developing country like Jordan is that it should attempt to move quickly or risk losing investments which, experience has taught us, do not stand in line waiting to come in; they go elsewhere to larger, more profitable and, yes, more competitive markets.
So what is to be done? Like in the US, more bandwidth should be made available, something of which the new telecom leadership is well aware and seems to be working towards. Furthermore, a systematic and institutional approach must be designed to help the armed forces (as is done worldwide) vacate frequencies well in advance of future demand, again because present demand cannot wait.
While allocating funds for this purpose may seem initially a task solely for the public sector, the private sector can carry some of the responsibility. Thus, telecom companies may opt to establish a fund that would aid the gradual relocation of the military from one frequency to another.
Even if the government bears the sole financial responsibility for the changeover, it will collect from the private sector many times over the amount of money paid to the military to vacate, either directly in terms of fees from licensing — the United States made $10 billion from the auction of its spectrum a few years ago — or indirectly from the overall increase in investment and economic activity.
Moreover, any government has the choice of privatizing its civilian band and hiring a private sector company to manage the spectrum for a fee, which would bring significant additional investments.
Jordan cannot afford inaction. Let's not wait too long. — ( Jordan Times )
By Yusuf Mansur
© 2000 Mena Report (www.menareport.com)