Slovenia out of luck as pioneers out for lunch

Slovenia ranks high when it comes to the penetration rate of ultrafast fibre optic cable in homes. It challenged the European Union (EU) data retention directive, as well as the secretly negotiated Anti-Counterfeiting Trade Agreement (ACTA). It went ahead with net neutrality legislation and it is a pioneer in IPv6 deployment, with all major Slovenian mobile providers offering the new internet protocol. So is Slovenia one of those small countries in the EU, where policy innovation takes place?

Yes, says the CEO and cofounder of the go6 Institute, Jan Zorz, the national focal point for internet protocol IPv6. Hardly today, responds Bostjan Makarovic of Aphaia, a communications policy consultancy, who has advised the Slovenian government on internet-related policy issues. This article provides a status check on this former republic of the Yugoslav federation.

The introduction of IPv6, the new IP protocol, has been put on the official EU policy agenda for some time, but adoption has been slow. While it will allow innovation in the networks, there is a chicken-egg problem for this change. Slovenia leaped ahead in this. A blueprint for IPv6 deployment - the Slovenian move has been called by people such as Martin Levy, Director and IPv6-expert at Hurricane Electric, back in 2012.

There where the big operators in larger telecom markets in the EU had a slow start at best, Slovenia leaped ahead. All major Slovenian network operators, plus the three mobile providers Mobitel, Tušmobil und Simobil offered IPv6 connectivity before the IPv6 launch day, in mid-2012, a proud Minister, academic Ziga Turk, announced back then. The national broadcaster, a national search engine and the government itself could be reached over IPv6.

IPv6: learning to cooperate in the area of technology politics

While the small size and the just two million population may be an advantage in such a technological migration, Zorz adamantly applauds the way the regulatory authority and the government intervened to bring this about. The regulator APEK, government representatives, telecom operators and stakeholder groups sat together, Zorz recounts. They exchanged information on the transition from the older IP addresses - which were about to run out - to the new, longer version 6 addresses. “When we finished the meeting, everybody went home and did their job and started to push things forward.”

The regulator was able do a lot to raise awareness – sending questionnaires about the status quo to operators, content providers and others – and lending credibility to the project, Zorz explains. The government also financially supported free-of-charge training offered to the private sector in Slovenia. Many people, Zorz said, were envious about the cooperative and coordinated process displayed during the IPv6 rollout in Slovenia.

Along with the recession kicking in, the budget for training was cut by a new Minister in place. Yet, two things were preserved: the benefits from the early adopter role in IPv6 and an experience in what some call “multi-stakeholder cooperation.” When the notorious 2012 World Conference on International Telecommunication (WCIT-12) came along, public consultations were held nationally and, the voice of stakeholders was heard, Zorz believes.

Internet fibre penetration slowed down

The development of the communications market in this small country, situated between the Alps and the Adria, certainly illustrates that just like their larger sisters in the EU, the small pionieers were affected by the financial crisis. This is best illustrated with the leap of the Slovenian market through the Fibre to the home (FTTH) rollout. In a race between incumbent telecom provider Telekom Slovenije and Vahta (T-2), large cities soon saw two or more broadband options available at their building.

The country has reached 39 percent of households passed by optical cables this year, ahead of most large EU countries (only Andorra, Lithuania, Portugal and Latvia have higher rates). Yet, the figure is far from the 100 percent coverage, announced in 2008 according to the FTTH Council Europe, an industry organisation. As soon as the bankruptcy of T-2 , slowed down the challenger, incumbent Telekom Slovenije also stopped “racing.”[1]

Meanwhile, Vahta is back on its rollout campaign, challenging its arch-rival Telekom Slovenije with statements saying that rural area Fiber to the Home/Building (FTTX), is possible.

“Slovenia used the EU regulatory framework for the late, but successful creation of a competitive telecoms market,” says Makarovic, of Aphaia. “However, Slovenia could currently hardly be seen as avant-garde in communications policy.” Makarovic thinks that there is still a general lack of competitive market-based thinking amongst policy-makers and the delayed privatisation of the incumbent operator “serves as a poor proxy for a comprehensive infrastructure rollout.“

Makarovic also deplores that e-commerce has, “despite some brilliant start-ups, largely fallen victim to corporatist mentality and cronyism.” For years, according to recent Slovenian media reports, the sale of state-owned corporations like Telekom Slovenije had been delayed due also to the fact that individuals or groups related to the ruling politicians could be on the losing side (see Reuters). Meanwhile due to Slovenia’s financial crisis, plans for a 100 percent privatisation of the state operator (of which several officials were recently sentenced for bribery) have been confirmed.

The work of the well-respected Commission on the prevention of Corruption (CPC) seems to prove that cronyism and corruption is a long neglected problem in the country, with reports on former Slovenian Prime Minister Janez Janša and other officials being convicted by a Liublijana court for bribery in June 2013.

Yet some of the internationally hailed e-commerce start-ups from the country also vanish to reemerge as San Francisco based newcomers with much more investment funds in the bank - see the curious vanishing of Vox.io (a challenger to Gmail calling) and the following start of Layer (a platform to allow easy integration of voice, video and text messages in apps), both co-founded by Slovenian start-up pioneer Tomaž Štolfa. Layer looks like a broader, and especially better funded (1.5 Mio Dollars venture capital) version of Vox.io.  

More pioneers necessary

Marakovic is also a sceptic of Slovenia's strict net neutrality law, which puts the country on the list of forerunners for a possible EU solution to internet infrastructure standards. The legislation hailed by supporters as a progressive step is not addressing “real-life issues.“ Instead, Marakovic would like to see the end of a restrictive incumbent bitstream. “Effective wholesale regulation might be more important than net neutrality,” he insists.

Considerations by Ziga Turk's successor as Minister of Education, Science and Sport, Jerney Pikolo (in the new government of Slovenia's first female Prime Minister, Alenka Bratušek) about structural separation and a special plan that would provide for Next Generation Access infrastructure would be a “welcome and fresh policy initiative.” Structural separation has been put on the agenda during the recent telecom package renewal in the EU as one rather bold measure to end potential vertical integration.

Where does this look at Slovenia's internet and telecommunication policy lead us to? Much more should be said about the cautious reluctance to provide for additional copyright enforcement projects or the complaints that privacy activists have with regard to the lack of debate on biometric passports or intelligence services legislation. Certainly in a country the size of Slovenia, individuals will be relied upon to push pioneer projects – and where this happens, the effect is visible. More pioneers in IT policy will be necessary, if Slovenia is to become an internet policy innovator.

Footnote

[1] The story of T-2 in itself, is singular – as it has been funded by investment company Zvon Ena, a member of Gospodarska Rast Group, a consortium of the Archdiocese of Maribor.