The General Management of a Jordanian Private ISP in Jordan: The Steps to Establish an ISP are Simple but Require a Huge Budget to Start With [Archives:2000/17/Science & Technology]

Walid Abdulaziz Al-Saqqaf

In a reply to the question “What should a person who wants to establish his own ISP do?” he said.
“The steps to establish an ISP are simple but require a huge budget to start with. The steps can be summarized as follows:
1- Getting the license:
The Committee for Organization Communications is an independent committee responsible for organizing the links among the ISPs, and with the JTC. It is the organization that formulates the conditions for grant of a license for an ISP, and is the one responsible for examining every application to see if the applicant eligible for the grant of the license. To get the license, you need to pay JD 25,000 over 10 years, that is JD 2,500 every year.
2- Signing an agreement with JTC and getting the uplink:
Even though companies still need to sign agreements with the local telecommunication company, because Jordan has signed the GAT treaty, it will have to abide by one of its conditions which is to open the national market to foreign companies and investors by the year 2002. Hence, until 2002, the applicant must consider linking his company to JTC. In the mean time, ISPs can get its uplink through JTC, while the downlink can always be taken from any satellite. Eventually, any country that signed the GAT treaty will have to abide by it and open the market for foreign ISPs and communication companies, which will not only be able to penetrate the national markets and compete with national telecommunication companies in providing Internet services, but can do so in the field of voice telecommunication as well. Hence, if you want to continue with your application procedures, you must agree on linking with JTC.
Once you sign the agreement, you will need to buy what is called a “Half circuit” which is basically the uplink that connects you to the JTC and hence to the backbone. You use the uplink to send data, and a downlink to receive data.
3- Getting the downlink through an international company
You then need to get the second “Half circuit” to complete your circuit to the backbone. To get the second half, you must make direct deals with an international telecommunication company in Europe or USA.
4- Buying the Internet Port
Now you have the circuit and you are connected to the backbone. However, you still are not effectively linked to the Internet because any link to the Internet needs a circuit plus what is called an Internet Switching Port. The circuit is provided by a carrier, such as JTC, AT&T, and MCI. Some International carriers, such as AT&T have their switching equipment, which enable you to log into the voice analog circuit, or the digital circuit. You need to buy the Internet Port (sometimes called Teleport) from these companies. Hence, the Internet Port along with the circuit are the two components that assure you an effective link to the backbone and to the Internet world.
5- Installing your servers and software
Of course, you need to install the servers routers, modems, and other electronic devices that would receive dialup requests and connect users to the Internet, plus all the associated software to run on them to ensure high quality 24-hour dialup service.
6- Finally, you are required to operate all of these machines together. You most probably would need to recruit experts from abroad for months to do this for you, which will cost you hundreds of thousands of dollars. But if you know how to do them yourself, such as in our case, you will save a lot of expenses. WE are proud to tell you that we were able to do all the technical work on our own, thanks to my strong communications and computer background.
Coming to the costs of all these steps, he continued:
“The cost of renting half circuits depends on the bandwidth you request. For example a 256 kb/s bandwidth half circuit costs around JD 19,000 per month. The problem in this is that in the west, USA, they use the US standard rate of T1, which is 1.5 mb/s. However in Europe, they use their own standard called E1 which is of speed 2.048 mb/s. If your company is in the USA, renting a T1 half circuit costs around $800 per month and is dependent on how far you are from the node. However, in Jordan, the cost jumps to JD 27,000 (around $40,000). I believe that is a matter of demand and supply. An ISPs in the USA do not need much effort to connect themselves to the backbone because USA actually contains the largest share of the backbone in the world. However, we need to rent satellites links from Telsat, etc., to connect because we are not close to the backbone. This rent is paid on a monthly basis to the company, and once you delay payment they suspend your link, causing connectivity to be deactivated. This will cause you embarrassment with all the subscribers. Hence, before entering this business, one must guarantee the profit and continuous financial backup.
JD 19,000 is the approximate rent cost of the downlink half circuit alone. Beside we have the uplink, half circuit through JTC.
Then you have the servers, routes, modems, adapters, cables, slots, and other equipment that we must install inside the company. These servers and equipment are still very costly today. For an average-sized (depending on the number of subscribers) ISP, you need to spare around JD 500,000 (around $750,000) for the machines and software only.
Add to all of that, the money you would pay to the experts that would come to install and run the software and hardware. The amount spent here is much more than the total of all the amounts mentioned earlier. The reason for that is the lack of IT experts, not only in Jordan, but also in the world. In the USA, there are 500,000 vacant positions for IT people every year, and the number is rapidly increasing.
The overall high cost of establishing and running an ISP, is not the only problem. After running the ISP for some time, you will discover that you will not be able to break even for years to come. The reason for that is the low level of subscribers compared to the west because of financial difficulties and high cost of subscription and telephone bills. We have 40,000 subscribers in Jordan so far, that includes the subscribers to all ISPs. The number is quite low compared to USA, where 100,000 subscribers join every month. This sometimes devastates and unbalances the ISP budget, but in the long run, it will definitely pay off.
Talking about his own experience of profit, he said,
“Just a short time ago, even we reached the level of breaking. Today, I can tell you that positive signs are showing up, and we are getting a little profit. We have invested in this project more than JD 1,000,000 (around $ 1,500,000.) I have discovered during my period in office that the banks I have dealt with are no more than exchange offices. They do not offer any loan unless they guarantee it back with profit, which means that they will never get into a deal that has even 1% risk in it, and when you omit risk, you omit business as well. I am sad to tell you that all the money I spent was my own and I could not get any loan from the banks in Jordan.”

The final question asked was about proxies, these damn firewalls that prohibit users from entering certain sites, to which his reply was:
“We in Jordan do not have any restrictions or regulations enforcing proxies. Proxies have positive and negative aspects. However, the negative ones by far exceed the positive ones. The main objective is to prevent users from viewing sexually explicit material. I believe it is a matter of self-respect and values that should be taught to a child during his childhood, and should not be left for a company to teach grown up men about. However, this is not always a good solution, because there are several ways to bypass the proxy. At the same time, thousands of such sites open every month, and it would be quite impossible to block all of them because they come in different addresses and in different contents.
I believe that if a person is to be prohibited from viewing sexual contents online, he can easily switch his satellite TV and see what is even more outrageous. In the globalizing world of today, blocking any page is considered a drawback. Any person must have the right to open whatever he wants. He has his own head and can think about what is wrong and what is right, what is beneficial and what is a waste of time. However seekers for sexual contents will eventually realize that it is no more than a waste of time and just willfully avoid it in the future. However, when he is held back, he will continue to feel curious and ambitious to know where is being hidden from him. Add to this the technical delay -even if short- that is caused by the proxy when analyzing the address or contents of a certain page, and the confusion in blocking non-sexual sites because the proxy thought of a medical name is an indecent word. It is not more than a cat and mouse chase that continues for ever, as such contents can get in through email or through any other medium. I am surprised that you still have proxies used in your country. I wonder if their operators believe in their efficiency.”Finally, as I ended my interview with the manager, I expressed my gratitude to the manager for his warm reception and long and open discussion. I shared his happiness at accomplishing his goal of a successful company with extensive publicity in Jordan. As I left the building I thought to myself, “can such a genuine effort be permitted by the government in Yemen? Can we one day interview the manager of a Yemeni private ISP?
It was a stray thought I had. But I realized that it is too early to judge. I took a cab, and headed for my hotel to fly the next morning back to my beloved city, Sanaa.

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